Delhi District Court
2- Sh. Vijay Swarup Singhal vs Smt. Minder Kaur (Senior Citizen) on 10 April, 2012
IN THE COURT OF MRS. SUNITA GUPTA:
RENT CONTROL TRIBUNAL: DELHI
RCT appeal No. 40/2011
Unique ID No. 0240IC0192372011
1- Delhi Cloth and General Mills Ltd.
(DCM Ltd)
Regd Off : Vikrant Tower
Rajendra Place
New Delhi - 110 060
2- Sh. Vijay Swarup Singhal
R/o 23-E, Kalma Nagar
Delhi -110 007.
. . . Appellants
Versus
Smt. Minder Kaur (Senior Citizen)
W/o S. Gurmukh Singh Sachdev
11, Rajindra Park
New Delhi - 110 060
Through Attorney
Sh. Jatinder Singh
S/o Sh. Basant Singh
R/o 4D/5, Old Rajinder Nagar
New Delhi - 110 060
. . . Respondent
Date of institution of appeal : 28.04.2011
Date when final arguments were heard: 02.04.2012
Date of pronouncement of judgment :10.04.2012.
JUDGMENT :-
Appellate jurisdiction of this Tribunal has been invoked by the appellant/tenant, feeling aggrieved by the order dated 02-04-2011 passed by Shri Pritam Singh, Rent (RCT Appeal No.40/2011) (Page 1 of 26) Controller (Central), Delhi whereby eviction order against the Appellant (respondent before the trial Court) on the ground U/s 14(1) (b) of the Delhi Rent Control Act (hereinafter to be referred as "DRC Act") was passed. 2- Briefly stated the facts of the case are that Smt. Minder Kuar - respondent herein (landlady) had filed an eviction petition against the appellants herein on the ground under Section 14(1)(b) of Delhi Rent Control Act (for short "the DRC Act"), in respect of four shops bearing No. 4,5,15 and 16 of the property No. 2492-96 Gali No. 8- 9, Ajmal Khan Road, Karol Bagh, New Delhi which were let out by her predecessor-in-interest to appellant No. 1 (tenant) who claimed to have sublet, assigned or otherwise parted with the possession of demised shops to appellant No. 2 without obtaining the consent in writing of the landlord/petitioner. The said eviction petition was resisted by the appellants/tenants, while denying the averments made in the eviction petition. Vide detailed judgment dated 02/-04/11, learned Addl. Rent Controller allowed the eviction petition, holding that the petitioner has proved the ground u/section 14(1)(b) of DRC Act.
3- Feeling aggrieved of the said eviction order, the appellants filed appeal u/section 38 of the DRC Act inter alia on the grounds that attorney could not depose as witness; that trial court failed to appreciate the fact that appellant No. 2 being the agent of Appellant No. 1 by virtue of agency agreement, was merely using the shops in question, while appellant No. 1 retained legal possession (RCT Appeal No.40/2011) (Page 2 of 26) with itself and right to possession of tenanted premises was with the appellant No. 1 and there was no subletting caused by the appellant No. 1 in favour of appellant No. 2 qua the suit premises.
4- Notice of the appeal was given to the respondent and the trial court record was summoned.
5- I have heard Shri Ajay Malhotra, Counsel for the appellants and Shri K.N. Singh, Counsel for the respondent and have also perused the records carefully. 6- It has been submitted by the learned counsel for appellant that the petition has been filed through the alleged Attorney, Shri Jitender Singh. As per the averments made in the petition, premises were let out by the predecessor of petitioner. It has been merely alleged in the petition that Delhi Cloth & General Mills Limited has stopped production of the clothes and the premises has been sublet to respondent No.2. It is the case of respondents that respondent No.2 is the Agent of respondent No.1 and the premises were taken on rent by respondent No.1 for running his business through its Agent and as per the agency agreement, respondent No.2 is running the business. Respondent No.2 is in lawful occupation of the suit premises as an agent of respondent No.1, initially inducted to run the Delhi Cloth & General Mills Limited Store vide Agency agreement dated 24.02.1972 which was further renewed on 28.07.1976. Although the possession of respondent No.2 in the suit premises was admitted, but it was submitted that it is not (RCT Appeal No.40/2011) (Page 3 of 26) the physical possession which is material in order to prove subletting, assigning or parting with the possession but it is the legal possession which has to be seen. 7- The petitioner herself did not appear in the witness box. Only her attorney appeared who had no personal knowledge and was not authorised to give affidavit on behalf of the petitioner. Reliance was placed on AIR 1005 SC 439, Janki Vashdeo Bhojwani & Another v. Indusind Bank Ltd., & Ors. and 2004(1) RCR 601, Kamla Bakshi v. Union of India & Ors. for contending that power of attorney holder cannot depose in place and instead of Principal. In order to substantiate the averments that there was no subletting, assigning or parting with the possession of the suit premises, reliance was placed on 2003 (2) RCR 302, Smt. Prem Wati v. Ramesh & Others; 2000 (1) RCR, Jagan Nath v. Durga Dutt.; 2002 (2) RCR 74, Radhey Shyam & Another v. Vinodi Lal & Another; and 1994 (2) RCR, Kailash Kumar v. Dr. R.K. Kapur, 1994(2) RCR
36. By relying upon these authorities, it was submitted that the mere fact that respondent No.2 is in possession of the suit premises, does not mean that respondent no.1 has ceased to be in legal possession of the premises. Although, the learned Trial court rightly enunciated the legal preposition, however, did not correctly applied to the facts of the case and as such, the impugned order be set-aside. 8- Per contra, it was submitted by the learned Counsel for the respondent that the attorney is a competent witness. Only those facts, which are not in his personal (RCT Appeal No.40/2011) (Page 4 of 26) knowledge, cannot be deposed. For raising this submission, reliance has been placed AIR 2006 Karnataka 231, Bhimappa & Ors v. Allisab & Ors., and AIR 2002 NOC 178 (Rajasthan), Raees Ahmed v. Shrigopal Prakash & Others. As regards the merits of the case, it was submitted that findings of the learned Trial Court does not suffer from any infirmity. The legal preposition enunciated in various authorities, has been rightly applied by the learned Addl. Rent Controller. It was submitted that respondent No.2 admitted his presence in the suit premises. The evidence amply proves that it is not only the exclusive possession, but respondent No.2 is also in legal possession of the suit premises, inasmuch as it has been established that Delhi Cloth & General Mills Limited has stopped its production and now respondent No.2 is running his own business. No evidence, worth the name, has been produced by respondent No.1 to show that respondent No.2 is working as its agent. In fact, during the pendency of the appeal, an order for depositing of damages has been passed by this Tribunal. Even this order has not been complied with. If Delhi Cloth & General Mills Limited has been in control and possession of the premises they would have deposited the amount. It was submitted that after going through the entire evidence on record, learned Addl. Rent Controller has correctly passed the eviction order which does not suffer from any infirmity which calls for interference. As such, there no infirmity in the impugned order and the appeal is liable to be dismissed.
(RCT Appeal No.40/2011) (Page 5 of 26) 9- I have given my considerable thoughts to the
respective submissions of the learned counsel for the parties and have carefully perused the record. 10- Section 14(1)(b) of the DRC Act empowers a landlord to file an eviction petition against the tenant if after 9th day of June 1952, the tenant has sublet or assigned or otherwise parted with the possession of whole or part of the premises without obtaining the consent in writing of the landlord. Under the General Law, subletting is lawful in the absence of contract or usage to the contrary, as provided by the opening words of Section 108 of Transfer of Property Act. Subletting is not an act forbidden or prohibited by law. The tenant may sublet the premises depending on the terms of the contract between him and the landlord. It is only the absence in writing of the consent of the landlord which makes the subletting by a tenant a ground for ejectment. The law on the question of subletting is fairly well settled. When eviction is sought on the ground of sub-letting, the onus is always on the landlord to prove the same. If the landlord prima facie shows that the occupant who was in exclusive possession of the premises let out for valuable consideration, is not the person who was inducted as tenant then the onus shifts to the tenant to rebut the same. In Kharar Saw Mills Industry & Furniture Production, Industrial Cooperative Society Ltd. & Another v. Prem Kaur (Smt.) & Another, 1995(2) RLR 729, Hon'ble Supreme Court held that burden of proof is on the landlord initially to prove the fact (RCT Appeal No.40/2011) (Page 6 of 26) of subletting. However, the landlord is only to prove that in place of original tenant somebody else is in occupation of the premises independently. Once that is proved, then it is for the sub-lettee to show in which capacity he is occupying the premises. Substantially, similar view was taken in Santosh Devi & Another v. Vir Chand, 1996(1) RCR (Rent) 225 (P&H), where it was held that once parting of possession by the tenant is proved and it is shown that the sub-tenant is in exclusive possession then transfer of possession for a valuable consideration has to be inferred. This view was reiterated in Hanuman Ji Ka Bara Mandir v. Nagar Mal & Another 2004(2) RCR (P&H) 101 .
11- In Bharat Sales Ltd. v. Life Insurance Corporation of India, (1998)3 SCC 1, it was held by the Hon'ble Supreme Court that sub-tenancy or sub-letting comes into existence when the tenant gives up possession of the tenanted accommodation, wholly or in part, and puts another person in exclusive possession thereof. This arrangement comes about obviously under a mutual agreement or understanding between the tenant and the person to whom the possession is so delivered. In this process, the landlord is kept out of the scene. Rather, the scene is enacted behind the back of the landlord, concealing the overt acts and transferring possession clandestinely to a person who is an utter stranger to the landlord, in the sense that the landlord had not let out the premises to that person nor had he allowed or consented to (RCT Appeal No.40/2011) (Page 7 of 26) his entering into possession of that person, instead of tenant, which ultimately reveals to the landlord that tenant to whom the property was let out has put some other person into possession of that property. In such a situation, it would be difficult for the landlord to prove, by direct evidence, the contract or agreement or understanding between the tenant and the sub-tenant. It would also be difficult for the landlord to prove, by direct evidence, that the person to whom the property had been sublet had paid monetary consideration to the tenant. Payment of rent, undoubtedly, is an essential element of lease or sublease. It may be paid in cash or in kind or may have been paid or promised to be paid. It may have been paid to lump sum in advance covering the period for which the premises is let out or sub-let or it may have been paid or promised to be paid periodically. Since payment of rent or monetary consideration may have been made secretly, the law does not require such payment to be proved by a affirmative evidence and the Court is permitted to draw its own inference upon the facts of the case proved at the trial, including the delivery of exclusive possession to infer that the premises were sub-let.
12- In Kala & Another v. Madho Parshad Vaidya, (1998) 6 SCC 573, the Hon'ble Apex Court reiterated the same principle. It was observed that the burden of proof of sub-letting is on the landlord but once he establishes parting of possession by the tenant to third party, the onus would shift on the tenant to explain his possession. If he is (RCT Appeal No.40/2011) (Page 8 of 26) unable to discharge that onus, it is permissible for the court to raise an inference that such possession was for monetary consideration.
13- Following this judgment, in Joginder Singh Sodhi v. Amar Kaur, 2004(2) RCR (SC) 493, it was observed that proof of monetary consideration by the sub-tenant to the tenant is not a sine qua non to establish subletting. 14- In Ms. Celina Coelho Pereira & Ors Vs. Ulhas Mahabaleshwar Kholkar & Ors., JT 2009(13) SC 602, relied upon by the learned Counsel for respondent, Hon'ble Supreme Court referred to judgment, reported as Vaishakhi Ram & Others. v. Sanjeev Kumar Bhatiani, JT 2008 (3) SC 242, which was also a case of subletting under Section 14(1)(b) of the DRC Act, and it was held as under:
"a plain reading of this provision would show that if a tenant has sub-let or assigned or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord, he would be liable to be evicted from the said premises. That is to say, the following ingredients must be satisfied before an order of eviction can be passed on the ground of subletting:
(1) the tenant has sub-let or assigned or parted with the possession of the whole or any part of the premises;
(2) such sub-letting or assigning or parting with the possession has been done without obtaining the consent in writing of the landlord."
................ "It is well settled that the burden of (RCT Appeal No.40/2011) (Page 9 of 26) proving sub-letting is on the landlord but if the landlord proves that the sub-tenant is in exclusive possession of the suit premises, then the onus is shifted to the tenant to prove that it was not a case of sub-letting."
15- Reliance was also placed on Nirmal Kanta (Dead) Through LRs. v. Ashok Kumar and Another [2008 (7) SCC 722], where the Hon'ble Apex Court has held as under:
"What constitutes sub-letting has repeatedly fallen for the consideration of this Court in various cases and it is now well established that a sub-tenancy or a sub-letting comes into existence when the tenant inducts a third party stranger tot he landlord into the tenanted accommodation and parts with possession thereof wholly or in part in favour of such third party and puts him in exclusive possession thereof. The lessor and/or a landlord seeking eviction of a lessee or tenant alleging creation of a sub-tenancy has to prove such allegation by producing proper evidence to that effect. Once it is proved that the lessee and/or tenant has parted with exclusive possession of the demised premises for a monetary consideration, the creation of a sub-tenancy and/or or the allegation of sub-letting stands established."
16- After discussing various decisions, the legal position so far as relevant for our purposes was summarised thus:
(i) In order to prove mischief of subletting as a ground for eviction under rent control laws, two ingredients have to be established,(one) parting with possession of tenancy or part of it by tenant in favour of a (RCT Appeal No.40/2011) (Page 10 of 26) third party with exclusive right of possession and (two) that such parting with possession has been done without the consent of the landlord and in lieu of compensation or rent;
(ii) Initial burden of proving subletting is on landlord but once he is able to establish that a third party is in exclusive possession of the premises and that tenant has no legal possession of the tenanted premises, the onus shifts to tenant to prove the nature of occupation of such third party and that he (tenant) continues to hold legal possession in tenancy premises;
(iii) In other words, initial burden lying on landlord would stand discharged by adducing prima facie proof of the fact that a party other than tenant was in exclusive possession of the premises. A presumption of sub-letting may then be raised and would amount to proof unless rebutted."
17- This being the legal position, let us turn to the case in hand. Perusal of the pleadings of the parties goes to show that the petition has been filed by Smt. Minder Kaur through her attorney Shri Jatinder Singh. It is alleged that the premises was let out to respondent No.1 by Predecessor in interest of the petitioner about three decades ago. The premises has been sublet, assigned or parted with the possession to respondent No.2. The amount of rent charged from sub-tenant is not to the knowledge of the petitioner. Separate written statements were filed by both the respondents. Respondent No.1, in its written statement challenged the authority of Shri Jatinder Singh to file the (RCT Appeal No.40/2011) (Page 11 of 26) eviction petition. It was further alleged that respondent No.1 is having the full power, control, supervision over the possession of the tenanted premises and the tenanted premises is still in lawful and physical possession of respondent No.1. Respondent No.2 is the agent for and on behalf of respondent No.1 and is running the Delhi Cloth & General Mills Limited Store at the tenanted premises under the implied authority of respondent No.1. 18- Substantially, similar plea was taken by respondent No.2 in his written statement and it was alleged that respondent No.2 is in lawful occupation of the shops in question as an agent of respondent no.1 vide agreement dated 24.02.1972 which was renewed on 28.07.1976. Shri Jatinder Singh, attorney of the petitioner examined himself as PW1, who reiterated the averments made in the petition that respondent No.1 had completely stopped the production of clothes and have sublet, assigned or parted with possession of the demised shops to respondent No.2 without obtaining consent in writing of the petitioner. On behalf of respondent No.1, Shri M.K. Sinha appeared as RW1 and admitted that Smt. Minder Kaur is the owner/landlord of the suit premises. However, he deposed that respondent No.1 is having full power, control and supervision over the tenanted premises. Respondent no.2 is the agent for and on behalf of respondent No.1 and is running the business. Respondent No.2 also examined himself as RW2 and reiterated the averments made in the written statement that he is running the business as an (RCT Appeal No.40/2011) (Page 12 of 26) agent of respondent No.1.
19- A perusal of the pleadings of the parties, makes it clear that undisputed facts are :
1) Smt. Minder Kaur is the landlady of the suit premises.
2) The suit premises were taken on rent by respondent No.1, i.e. Delhi Cloth & General Mills Limited
3) the premises were let out to respondent No.1 and the premises are now in exclusive possession and control of respondent No.2.
20- The whole controversy revolves around the fact whether respondent No.2 is in possession of the suit premises as an agent of respondent No.1 or is holding the premises in his own right. In this background, the submission of the learned Counsel for the appellant that Jatinder Singh is not a competent witness to depose as attorney of petitioner is not of much consequences. In Janki Vashdeo Bhojwani & Another (supra), it was held by the Hon'ble Supreme Court that Order 3 Rules 1 & 2 CPC, empowers the power of attorney to act on behalf of the principal. The word `acts' employed in Order 3 Rules 1 & 2, confines only in respect of `acts' done by the power of attorney holder in exercise of power granted by the instrument. The term `acts' would not include deposing in place and instead of the principal. The power of attorney cannot depose for the principal for the acts done by the principal and not by him. He also cannot depose for the (RCT Appeal No.40/2011) (Page 13 of 26) principal in respect of the matter which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined. In that case, in a recovery proceedings before the Debt Recovery Tribunal against the husbands of the Appellant wives, the appellants had filed objections against the attachment of house property and Hon'ble Supreme Court remanded the matter by holding that burden of proving that appellants have share in property, will be on the appellants. It was obligatory on the appellants to have entered the witness box and discharged the burden by themselves. The question whether the appellants have any independent source of income and have contributed towards the purchase of the property from their own independent income can only be answered by the appellants themselves and not by a mere holder of power of attorney from them. The power of attorney holder does not have the personal knowledge of the matter of the appellants and therefore, he can neither depose on his personal knowledge nor can he be cross-examined on those facts which are to the personal knowledge of the principal. With due respect, in view of the peculiar circumstances of that case, it was held by Hon'ble Supreme Court that power of attorney could not depose in place of principal. In Bhimappa & Ors (supra), it was held that there was no express bar made in the provisions of CPC to debar the power of attorney to be examined as a witness on behalf of the parties to the proceedings. Power of attorney is a competent witness and (RCT Appeal No.40/2011) (Page 14 of 26) is entitled to appear as such. His evidence cannot be refused to be taken into consideration on the ground that the parties to the suit do not choose to appear as witness in the witness box. The question whether the general power of attorney holder of a party can be competent witness on behalf of a party has to be answered in the light of Section 118 of the Evidence Act. The power of attorney holder of a party, only on the ground that he holds the power of attorney, cannot be said to be in the category of persons who are incapable of being witness as provided by Section 118 of the Evidence Act.
21- In the instant case, as stated above, the facts are undisputed that the premises were let out to Delhi Cloth & General Mills Limited and the premises are now in exclusive possession and control of respondent No.2. In the circumstances, as rightly observed by the learned Addl. Rent Controller by relying upon Associated Hotel of India Limited v. R.N. Kapoor, AIR 1959 SC 1262, where it was held that if a party gets exclusive possession of the property, prima facie, he is considered to be a tenant but circumstances may be established which negative the intention to create a lease. In a suit by the landlord for eviction of the tenant on the ground of subletting,the landlord discharges the onus by leading evidence showing that occupants are in exclusive possession of the premises. Then the onus shifts on the tenant to rebut that presumption.
22- It is, therefore, to be seen whether the onus is (RCT Appeal No.40/2011) (Page 15 of 26) discharged by the respondents or not. Shri M.K. Sinha, RW1 deposed that he is special power of attorney of Delhi Cloth & General Mills Limited and a special power of attorney has been executed in his favour which is Ex.RW- 1/1. According to him, respondent No.1 is having full power, control and supervision over the possession of the tenanted premises. Respondent no.2 is the Agent for and on behalf of respondent No.1. Respondent No.1 is paying the rent @ Rs.445/- per month to the petitioner. According to him, respondent No.1 took the premises for running the textile business and from the inception of the tenancy, a textile shop, popularly known as DCM Store is being run in the tenanted premises. Respondent No.2 has been appointed retail agent to manage the DCM Store vide agreement dated 113.02.1952. He proved the lease deed as Ex.RW1/2. In cross- examination, he admitted that he is employed with Focus Energy Limited which is not under DCM. He did not prove any resolution of DCM, authorising him to appear in the court. Neither he brought the resolution book nor the minutes book of the Company. He also could not produce any document to show that DCM has given any authority to Shri N.K. Garg on behalf of the company to execute power of attorney in his favour. In the absence of producing any such document on record, he failed to prove that he had any authority to appear on behalf of respondent No.1. He further deposed that he has not brought the record or accounts books to show that the rent of the suit premises is being paid from the account of (RCT Appeal No.40/2011) (Page 16 of 26) respondent No.1. It was admitted by him that respondent No.2 opens and closes the shop. He looks after the shop and the business. He could not say if DCM has sent any cloth to the demised premises and could not deny that DCM has not sent any cloth to the demised premises for the last 10 years. He did not produce any stock register or challan book of DCM. He also failed to produce any document to show that electricity charges or telephone charges are paid by DCM. He admitted that respondent No.2 is depositing the telephone and electricity charges. He did not brought any account of the company to show that the company has reimbursed the telephone and electricity charges to respondent No.2. Although he denied the suggestion that respondent No.2 is in exclusive possession of the shop as a sub-tenant, but did not brought any document to show that DCM has paid any commission to respondent No.2. He denied the suggestion that DCM has closed down its cloth manufacturing unit, but failed to produce any document to show that DCM is still running any unit which is manufacturing cloth. He admitted that lease deed Ex.RW1/2 does not pertain to the suit premises. 23- RW-2, reiterated the averments made in the written statement while deposing that by virtue of agency agreement, he being the agent of RW1, is running the business and the premises has not been sublet, assigned or parted with possession to him. In cross-examination, he deposed that there is one telephone installed at the disputed premises which is in his name. According to him, (RCT Appeal No.40/2011) (Page 17 of 26) he is the Manager of DCM, but admitted that no appointment letter was issued to him. He admitted that he is not maintaining any account. He does not have any stock register of the stock, kept at the shop. He also failed to produced income tax return, although he is income tax payee. According to him, he is the Manager of the Company but admitted that the Company does not pay him any salary. He also admitted for the last 4-5 years, Company has not sent any cloth to the disputed shop and he is selling readymade suits from the suit premises. He tried to feign ignorance if DMC is manufacturing readymade suits. According to him, the Company had sent him some cloth, but he did not have the details as he did not maintain any register where the cloth sent by the Company are entered. The electricity bills are paid by him, which according to him are for and on behalf of the Company. However, he does not have any record to show that the Company reimbursed the electricity bills paid by him. He could not produce any document to show that the rent was paid by the Company. He also could not produce any record of sale and stock at the shop. He admitted that Delhi Cloth Mill has closed its company long time back and now the Company is not producing any cloth as the factory has been closed down.
24- Much reliance was placed on the Agency Agreement which according to respondent No.2 was entered into between him and the Company. Learned Addl. Rent Controller has reproduced the relevant clauses of the (RCT Appeal No.40/2011) (Page 18 of 26) agreement, which are reproduced as under:
Clause2(a) : The premises duly approved by the company, in which the agent shall run the store or stock the goods, will be hired in the company's name. It is, however, agreed mutually that the agent shall be liable for payment of rent to the landlord of the premises on behalf of the company and the amount so paid shall be shown in daily cash account (D.C.A) duly supported by rent receipt from the landlord.
(b) The agent shall not shift the store to any other premises unless prior sanction of the company has been obtained in writing and necessary amendments in Cloth Licence, Sales Tax Registration Certificate and shops & establishments certificate, etc. Incorporating change of address, have been previously got made by respective competent authorities.
Clause 4 : It shall be the responsibility of the agent to employ at his cost and expense adequate staff, which should consist of not less than two men at the store, to cope with the work and rush of customers from time to time. Such members of the staff shall be the employees of the agent and amenable to his control and shall not be entitled to any emoluments, amenities including provident fund, bonus etc. etc. or concessions etc. from the company. However, the agent and his staff shall be amenable to such directions and instructions as may be imparted by the company from time to time in so for as behaviour, treatment and courtesy towards the customers are concerned.
Clause-6 (a) : The agent shall be bound to (RCT Appeal No.40/2011) (Page 19 of 26) maintain in respect of the store true and proper accounts of sales and stocks etc. in such manner as may be directed by the company from time to time. The agent shall be also bound to submit to the company such statements of sales and stocks or such other information as may be required by the company from time to time.
(b) As far as possible the company will supply its standard forms to the agent for the purpose stated in sub-clause (a) above free of cost. Unused forms shall remain the property of the company.
Clause-9 (b) : For all sales made by or through the agent, a regular cash memo shall be prepared and issued on prescribed forms, supplied by the company.
Clause 10 : The sale proceeds shall be remitted by the Agent daily through a bank approved by the company and the company shall pay remittance charges upto six paise percent. If the sale proceeds are not remitted by the next working day, interest at 13% per annum will be charged for the full period for which any amount would remain outstanding with the agent in addition to any civil or criminal action that may be taken against the agent in case the default in remittance is malafide.
Clause 11: During the tenure of this agreement the agent and or his representatives shall not stock, display or sell from or at the store cloth, or any other commodity, Indian or foreign, which has not been supplied to him by the company under the terms of this agreement. Further, the agent shall not engage himself in trading (RCT Appeal No.40/2011) (Page 20 of 26) or manufacturing of such products in which the company may be interested.
Clause15(a) (i) : The agent shall always keep and maintain with the company a cash security deposit for due fulfillment of the terms of this agreement. Such security deposit shall be of such amount as will always cover the value of goods in possession of the agent, but in no case be less than Rs. 20,000/.
(ii) The company shall pay to the agent interest on such security deposit, at the discount rate of the Reserve Bank of India.
(iii) The company shall be entitled, at any time, to adjust from such cash security deposit, any and all amounts due to the company from the agent for value of the goods supplied or otherwise.
(b) The agent shall be required to arrange for Fidelity Guarantee Insurance in favour of the company for such an amount as may be mutually agreed upon between the company and the agent, from the London and Lancashire Insurance Co. Ltd.
(c) (i) The agent shall also be required to execute a surety bond duly approved by the company for such an amount as may be mutually agreed upon by the company, on a nonjudicial stamp paper of the requisite amount at his cost. Surely shall be a person duly approved by the company.
(ii) It shall be the liability of the agent to inform the company of the surety having died or become of unsound mind and/or (RCT Appeal No.40/2011) (Page 21 of 26) having disposed of the property whether by way of mortgage, sale, gift or otherwise and of the change in the address of the surety.
Clause 16 C: The above percentage of commission is liable to be altered at the sole discretion of the company subject to minimum of 4%.
25- A perusal of testimony of RW1 and RW2 goes to show that clauses of this agreement were not adhered to by any of the parties, inasmuch as as per clause 4 of the agreement, it shall be the responsibility of the agent to employ at his cost and expense adequate staff, which should consist of not less than two men at the store. However, it is admitted by respondent No.2 that there is only one employee at his shop, which is in violation of this agreement. Further, clause 6(a) provides that the agent shall be bound to maintain in respect of the store true and proper accounts of sales and stocks in respect of the shop, but it was admitted by respondent No.2 that he did not maintain any such account of sales & stock etc. Similarly, in terms of clause 9 (b), a regular cash memo was required to be prepared and issued on prescribed forms, which was to be supplied by the company, but no documentary evidence has been placed on record to show that any such cash memo was provided by the Company to respondent No.2. Same is the position with regard to the other clauses. It is the case of the petitioner that DCM has stopped its production long back and the premises has been parted with by respondent No.1 in favour of (RCT Appeal No.40/2011) (Page 22 of 26) respondent No.2. It has been admitted by the respondents that DCM has stopped production activities long back and now respondent No.2 is selling readymade garments which are not being manufactured by respondent No.1. Under the circumstances, in order to prove that respondent No.2 is still the agent of respondent No.1, the onus shifted heavily upon them (respondents) which they failed to prove. In complete violation of the agency agreement, neither any stock register is maintained nor any accounts. Although, it is alleged that the rent of the premises are being paid by the Company, however, no such documentary evidence has been placed on record. One cannot lose sight of the fact that if Company pays the rent, necessary entry will be made in their record. The exclusive possession of the premises in favour of respondent No.2 is the admitted case of the parties. In order to prove that despite the fact that respondent No.2 was in exclusive possession of the suit premises, the legal possession remains with DCM, DCM could have placed on record the relevant record to show that the rent of the premises was still being paid by them or that they could have entered the premises at any point of time. The Company would not have paid the rent without making any entry in the relevant record. However, no such documentary evidence has been placed on record. For non-production of the relevant record, an adverse inference has to be drawn against the respondents. For holding this view, I am fortified by the decision in AIR 1968 SC 1413 Gopal Krishanji Vs. Mohd. Hazi; AIR 1960 Patna 223 (RCT Appeal No.40/2011) (Page 23 of 26) Devji Shjivji Vs. Mohan Lal; AIR 1968 P.&.H.72, Subedar Samunder Singh Vs. State; AIR 1978 Delhi 199, Bharat Bhushan v/s. Ved Prakash; AIR 1976 Cal. 389 M/s Burn & Co.Ltd. Vs. State & AIR 1988 DELHI 332 Niranjan Kaur Vs. M/s New Delhi Hotels Ltd. 26- 1975 RLR 289 Bansi Dhar Ganga Prasad Agency Vs. Chamanlal was another case where it was held by Hon'ble Mr.Justice Awadh Behari that :-
"For non production of relevant receipt and account books, adverse inference has to be drawn under Section 114(f) of Indian Evidence Act. Even if burden of proof does not lie on a party, the court may draw an adverse inference if he withholds important document in his possession which would throw light on the facts in issue in controversy. It is not a sound practice that those desiring to rely upon certain set of facts to withheld from the Court best evidence which is in their possession which would throw light upon an issue in controversy. Substantially similar view was taken in JT 1995(2) SC 1614 S.V.P. Mudalrar (dead) by L.Rs Vs. F. Bokari (dead) through L.Rs., where it was held that law permits adverse interference to be drawn where a party is in possession of best evidence withholds the same, even if no onus or proving the fact in question was on him. A party can not rely on abstract doctrine of onus.
27- In Shah Phoolchand Lalchand v. Parvathi Bai 1989(1) RCR 483, the firm was asked to produce income tax returns and account books which the firm could not do. It was held by Hon'ble Supreme Court that findings of (RCT Appeal No.40/2011) (Page 24 of 26) subletting were justified. M/s Nath Oild Company v Kailash Rani Kapoor 2000(1) RCR 59, was again a case where a person other than tenant was occupying the shop. The contention of the tenant was that occupant was his employee. No appointment letter nor any statement with regard to salary nor assessment order nor income tax return was filed. Under these circumstances, it was held by Hon'ble Supreme Court that non-production of the records would definitely lead to the conclusion that had the record been produced it would have gone against the appellant. 28- In the instant case, also despite the fact that ample documentary evidence would have been in power and possession of the respondents, but except the oral and bald testimony of the witnesses, no document, worth the name, has been placed on record to prove that respondent No.1 retained the legal possession of the suit premises. The agency agreement may have been entered into between respondent No.1 and respondent No.2, but the evidence coming on record, clearly reflects that the terms & conditions were never adhered to by the parties. It may be that at one time, the respondent No.2 may be working as the agent of respondent No.1/ DCM, but keeping in view the fact that respondent No.1 has closed production of cloth longtime back and in fact, respondent No.2 is also not selling any cloth of DCM and in fact is selling readymade garments, under the circumstances, it becomes a clear case of assigning or parting with the possession of the suit premises by respondent No.1 in favour of (RCT Appeal No.40/2011) (Page 25 of 26) respondent No.2. Learned Trial Court has dealt with all the aspects of the matters and the impugned order does not suffer from any infirmity which calls interference. Under the circumstances, there is no merit in the appeal and is hereby dismissed.
Let a copy of this order be sent to the trial court while returning the record.
Appeal file be consigned to record room.
Announced in open
court on 10.04.2012 (SUNITA GUPTA)
Rent Control Tribunal:
Delhi.
(RCT Appeal No.40/2011) (Page 26 of 26)