Karnataka High Court
Mega City vs T Raghavendra Shetty on 28 March, 2014
Bench: N.Kumar, B.S.Indrakala
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 28TH DAY OF MARCH, 2014
PRESENT
THE HON'BLE Mr. JUSTICE N. KUMAR
AND
THE HON'BLE Mrs. JUSTICE B.S. INDRAKALA
R.F.A. No. 943/2013
BETWEEN :
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1. MEGA CITY (BANGALORE)
DEVELOPERS AND BUILDERS
PRIVATE LIMITED
HAVING REGD. OFFICE AT
MEGA TOWER 120
K.H. ROAD (DOUBLE ROAD)
WILSON GARDEN
BANGALORE - 560 027
REP. BY ITS MANAGING DIRECTOR
Sri. C.P. YOGESHWARA.
AND ALSO AT No. 1
GROUND FLOOR
CHANDRALOK APARTMENTS
PLOT No. 27-2B, 5TH CROSS
GANDHINAGAR
BANGALORE - 560 009.
2. Sri. C.P. YOGESHWARA
S/O. PUTTAMADEGOWDA
AGED ABOUT 50 YEARS
No. 1, GROUND FLOOR
CHANDRALOK APARTMENTS
PLOT No. 27-2B, 5TH CROSS
GANDHINAGAR
2
BANGALORE - 560 009. ... APPELLANTS
(BY Sri. R S RAVI, NARENDRA D GOWDA, ADV.)
AND :
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Sri. T RAGHAVENDRA SHETTY
S/O. LATE GOVINDAPPA SHETTY
AGED ABOUT 59 YEARS
R/A. No. 178, 2ND CROSS
LOWER PALACE ORCHARDS
BANGALORE - 560 003. ... RESPONDENT
(BY Sri. K V SATISH, ADV.)
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THIS R.F.A. IS FILED UNDER SECTION 96 CPC
AGAINST THE JUDGMENT AND DECREE DATED
21.03.2013 PASSED IN O.S. No. 1692/2011 ON THE FILE OF
THE XII ADDL. CITY CIVIL AND SESSIONS JUDGE,
BENGALURU, PARTLY DECREEING THE SUIT FOR
EJECTMENT.
THIS R.F.A. COMING ON FOR ADMISSION THIS
DAY, N. KUMAR, J, DELIVERED THE FOLLOWING;
JUDGMENT
Heard.
Admit.
With the consent of the learned counsel for the parties, the appeal is taken up for final hearing. 3
2. This is a defendant's first appeal challenging the judgment and decree of the trial Court for grant of decree of ejectment, for payment of arrears of rent as well as for damages. For the purpose of convenience the parties are referred as they are referred in the original suit.
3. The subject matter of the suit is a commercial/office premises situated at No. 1, Ground floor, Chandralok apartments, plot No. 27-2B, 5th Cross, Gandhinagar, Bangalore. The case of plaintiff is that he is the absolute owner of the suit schedule property and he had entered into an agreement of lease dated 15.08.1994 with the defendants. The initial period of lease was for three years and the defendants had to pay the rents as under:
Sl. PERIOD AMOUNT (Rs.)
No. (rent payable per
month)
1. 15.08.1994 to 14.08.1995 5,000
2. 15.08.1995 to 14.08.1996 5,000
3. 15.08.1996 to 14.08.1997 5,000
4. 15.08.1997 to 14.08.1998 5,750
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5. 15.08.1998 to 14.08.1999 5,750
6. 15.08.1999 to 14.08.2000 5,750
7. 15.08.2000 to 14.08.2001 6,613
8. 15.08.2001 to 14.08.2002 6,613
9. 15.08.2002 to 14.08.2003 6,613
10. 15.08.2003 to 14.08.2004 7,605
11. 15.08.2004 to 14.08.2005 7,605
12. 15.08.2005 to 14.08.2006 7,605
13. 15.08.2006 to 14.08.2007 8,746
14. 15.08.2007 to 14.08.2008 8,746
15. 15.08.2008 to 14.08.2009 8,746
16, 15.08.1994 to 14.08.2010 10,058
4. It was agreed that the rent has to be enhanced by 15% over the last paid rent every three years from 15.08.1994. The defendants had undertaken to pay the maintenance charges and other outgoing charges for utilization of the common amenities and it was to be paid to the Apartments Owners Association. Defendant No. 1 paid rents up to 31.03.1998. From 01.04.1998 rents have been stopped and likewise monthly maintenance charges 5 have also not been paid. The arrears of rent payable as on 14.01.2010 is at Rs. 10,40,869/- and the maintenance charges is Rs.4,00,000/-. The plaintiff learnt that the defendants have sublet the suit schedule property in favour of a company known as Rajayogi Films Pvt. Ltd., which is in occupation of the suit schedule premises and when enquired defendant No. 2 gave evasive reply. Therefore, the plaintiff caused a notice dated 15.08.2008 terminating the lease agreement and called upon the defendants to vacate the suit schedule property and also called upon them to pay damages at the rate of Rs.1,50,000/- p.m. The said notice was served on the defendants but no reply was given. Again the plaintiff caused another notice on 02.12.2009 calling upon the defendants to vacate the schedule property and also demanded arrears of rent and maintenance charges with interest at 18% p.a. and damages at the rate of Rs.1,50,000/-. When the said demand was also not complied, the plaintiff filed the suit.
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5. After service of suit summons, the defendants entered appearance and filed written statement. The defendants denied the title of the plaintiff over suit schedule property and also arrears of rent. The defendants categorically admitted the allegation that, the defendants had entered into agreement dated 15.08.1994 in respect of the schedule premises for initial period of 3 years which is the subject matter of the suit as true and correct. Further they averred that in the year 1990, these defendants were inducted as tenants of the said premises on oral agreement. The defendants were paying the rent of Rs.5,000/- per month to the plaintiff for which the plaintiff did not issue any rental receipts. Thereafter, oral agreement was reduced into writing, that is, agreement of lease dated 15.08.1994 in respect of the suit schedule premises. After the agreement of lease between the plaintiff and the defendants, the defendants paid the rent by way of cash to the plaintiff till 31.03.1998. The plaintiff did not issue any rental receipt for having received the rent for the said premises. Since the defendant company is a registered company, for the purpose of income tax 7 payments and auditing rental receipts were also required, hence defendants insisted the plaintiff to issue rental receipts for the rent received from these defendants. But the plaintiff refused to do so. When the plaintiff refused to do so, these defendants started suspecting that the plaintiff is the owner of the suit schedule premises. Thereafter the defendants stopped paying the rent to the plaintiff and started searching the real owner of the suit schedule property. When the defendants demanded rental receipts, the plaintiff stopped coming to the suit schedule premises to collect the rent from 01.04.1998 onwards.
6. Later, the defendants came to know that, the plaintiff is not the absolute owner of the suit schedule property. Therefore, he is not entitled to file the suit based on illegal lease deed. They again admitted that from 1.4.1998 the defendants have stopped paying the monthly rent but, they contend that plaintiff is not entitled to receive any rent from the defendants. Further, they contend that defendants are ready to give maintenance charges whatever due to the apartment owner's association of the suit schedule property. They admit the 8 issuance of legal notice. They also admit receipt of legal notice and contend that since the plaintiff is not the owner of the suit schedule property, he cannot terminate the lease. They also admitted that no reply was sent. Therefore, they sought for dismissal of the suit.
7. On the aforesaid pleadings, the trial Court framed the following issues:
1. Whether the plaintiff proves the jural relationship of landlord and tenant between him and the defendants?
2. Whether the plaintiff proves that the defendants are due in a sum of Rs.10,40,869/- towards arrears of rent and Rs.4,00,000/- towards maintenance charges and he is entitled for it with interest at 18% p.a?
3. Whether the plaintiff is entitled for damages at the rate Rs.1,50,000/- p.m.?
4. Whether the defendants prove that the Chairman of the defendant company is a necessary party?
5. What order or decree?9
8. The plaintiff got himself examined as PW.1 and got marked eight documents which are Exhibits P1 to P8 and on behalf of defendants, Executive Director of the defendant company was examined as DW.1 and got marked three documents which are marked as Ex.D1 to D3.
9. The trial Court, on consideration of the aforesaid oral and documentary evidence on record, held that on the day the suit was filed, the plaintiff was not the owner of the property and he acquired the title subsequent to the filing of the suit. In law, it makes no difference as, admittedly, the plaintiff has leased the property to the defendants. It is not in dispute that, he is entitled to maintain the suit for ejectment and also entitled to maintain the suit for arrears of rent. Further, it was held that the defendants in their written statement have categorically stated that they have not paid rents from 1.4.1998. The plaintiff has proved that defendants are due in a sum of Rs.10,40,869/- towards arrears of rent. Further, it held that though the plaintiff has claimed 10 damage at the rate of Rs.1,50,000/- per month, has not adduced any evidence to substantiate his claim. In the view of the trial Court, the plaintiff is entitled to a sum of Rs.40,000/- per month towards damages. Thus, the suit of the plaintiff was decreed partly granting a decree for ejectment directing the defendants to pay arrears of rent and maintenance charges in a sum of Rs.4,58,496/- for a period of three years from March 2008 upto the date of filing of the suit and also damages at the rate of Rs.40,000/- per month from the date of suit till the handing over of vacant possession of the suit schedule premises to the plaintiff.
10. Aggrieved by the said Judgment and Decree of the trial Court, the defendants are in appeal.
11. Learned counsel for appellant-defendants assailing the impugned Judgment and decree contended that, when admittedly the plaintiff was not the owner of the schedule property as on the date of the lease and even on the date of filing of the suit, the plaintiff is not entitled to maintain the suit for ejectment much less, suit for 11 arrears of rent. Secondly, he contended that, the trial Court has recorded a categorical finding that plaintiff has not produced any evidence to show that the plaintiff is entitled to damages. But, still it awarded the damages at the rate of Rs.40,000/- per month which is illegal. There was no evidence on record to show that there was enhancement of rent which has been allowed by the landlord and therefore, that portion of the Judgment is without any legal evidence. Therefore, he submits that, the Judgment and Decree requires to be set aside.
12. Per contra, the learned counsel for the plaintiff submitted that, when once it is admitted that the defendants have taken the schedule property on lease from the plaintiff and was paying rents, he is estopped from denying the title of the property. Moreover, it is not the law that the plaintiff should be the owner before he seeks for ejectment or arrears of rent. Therefore, finding recorded by the trial Court is valid and legal. In so far as enhancement of rent periodically is concerned, it is set out in the agreement which, in turn is set out in the plaint that defendants have admitted the execution of the lease 12 agreement. They have not denied in the written statement the enhancement of rent once in three years. In that view of the matter, the trial Court was justified in granting a decree of arrears of rent on the basis of enhanced rent. In so far as damages is concerned, he submits, though no evidence was adduced, the lease was created in the year 1992, the property is situated in Gandhinagar and therefore, even in the absence of evidence, the trial Court was justified in awarding damages at the rate of Rs.40,000/- per month which cannot be found fault with. Therefore, he submits that, it is not case for interference.
13. In the light of the aforesaid pleadings, the points that arise for our consideration in this appeal are:
1) Whether the suit filed by the plaintiff for ejectment and arrears of rent is maintainable?
2) Whether the plaintiff is entitled to enhanced rant as set down in the plaint?
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3) Whether the plaintiff is entitled to damages at the rate of Rs.40,000/-
per month?
4) Whether the decree for ejectment calls for any interference.?
POINT NO.1:
14. The facts are not in dispute. Plaintiff leased the schedule property to the defendant on 15.8.1994. Though initially it was an oral lease but, subsequently, the lease was reduced into writing. The said lease deed shows the rate of rent, period of lease is not in dispute. It is also not in dispute that the defendants were paying the rent by way of cash. Plaintiff was not issuing any rent receipts. When the defendants demanded receipts for rent, the plaintiff refused to give the receipt. The defendants stopped paying the rent from 1.4.1998. Therefore, the rate of rent is not in dispute, the period from which the rent is not paid is also not in dispute. The enhanced rent claimed is also not disputed in the written statement. The contention urged was, as the plaintiff is not the owner of the schedule premises as on the date the lease was 14 granted and on the date of suit was filed, though he has acquired title subsequently during the pendency of the proceeding, that would not enable him to maintain the suit.
15. The law on the point is very well settled. The Apex Court in the case of Mineral Development Limited vs. Union of India (AIR 1960 SC 1373) has held as under:
"If we turn to the definition of `lease' in S.105 of the Transfer of Property Act, we find that a lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express or implied or in perpetuity in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms. What a lease therefore requires is a transferor and a transferee and a transfer of immovable property on the terms and conditions mentioned in S.105. How the transferor get his title to make a lease is immaterial so long as the transaction is of the nature defined in S.105."
16. From the aforesaid Judgment, it is clear that, a lease therefore requires is a `transferor' or `transferee' and 15 `transfer' of immovable property on the terms and conditions mentioned in S.105. How the transferor gets title to make lease is immaterial so long as the transaction is of the nature defined in S.105. Therefore, for creation of a lease, lessor need not be the owner of the property. Section 116 of the Evidence Act which deals with estoppel of tenant; and of licensee of person in possession, reads as under:
"116. Estoppel of tenant; and of licensee of person in possession - No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property; and no person who came upon any immovable property by the licence of the person in possession thereof, shall be permitted to deny that such person had a title to such possession at the time when such licence was given."
17. The aforesaid provision makes it very clear that no tenant of immovable property shall, during the continuance of the tenancy, permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property. Therefore, 16 even if on the day lease was commenced, the lessor had no title to the property but he transfers the property leased to the tenant, the tenant having taken the schedule premises on lease by paying rent, is estopped subsequently from challenging the title of the lessor to the property. He cannot contend that on the day the tenancy commenced, the landlord did not have title to the property. Therefore, it is clear that, for creation of lawful tenancy, ownership of the property which is the subject matter of the lease, is not a must. All that the law requires is, lessor should be able to hand over the possession of the property which is the subject matter of lease once there is demise, lease comes into existence and also the tenancy and payment of rent is recognized. Therefore, the tenant is estopped from contending that, from the inception of tenancy landlord did not have any title. Therefore, the trial Court rejected the said contention and held that there exists the relationship of landlord and tenant between the plaintiff and the defendants. Initially the period of lease was for three years and subsequently the tenant has continued the tenancy by 'tenancy holding over'. The rent was to be 17 enhanced once in three years. Initially it was Rs.5,000/- per month and admittedly, the tenant has not paid the rent from 1.4.1998. Though a claim was made for Rs.10,40,869/-, the Court has restricted the claim only for a period of three years prior to filing of the suit as the rent for the remaining period is barred by law of limitation. Therefore, the decree passed by the trial Court granting decree for a sum of Rs.4,58,496/- which represents the rent for a period of three years from March 2008 upto the filing of the suit cannot be found fault with. POINT NO.2:
18. In so far as enhancement of rent is concerned, in the plaint, the plaintiff has set out the rent payable in lieu of enhancement of rent for each of three years. The same is based on the lease agreement. It is stated in the written statement that the defendants have paid rent upto 31.3.1998 and they have stopped paying rents from 1.4.1998 as the plaintiff was not the owner of the suit schedule property. The enhancement set out in the plaint and claimed is not denied by the defendant. On the 18 contrary, there is an implied admission. Therefore, the trial Court has decreed the suit granting a decree on the basis of enhancement of rent.
POINT NO.3:
19. In so far as damages are concerned, the plaintiff claimed the same at the rate of Rs.1,50,000/- from the date of notice. However, no evidence has been adduced. In the absence of evidence in that regard, the trial Court has awarded a sum of Rs.40,000/- per month.
The said finding of the trial Court that the defendant is liable to pay the damages at Rs.40,000/- per month is not based on any legal evidence. Therefore, it cannot be sustained.
POINT NO.4:
20. The original period of lease is over. The tenancy is terminated by virtue of issuance of legal notice dated 15.4.2008 as per Ex.P2 and legal notice dted 2.12.2009 as per Ex.P3. Both the notices are duly served but, no reply is given and after issuance of notice. Rent is also not paid.19
Therefore, the contention that tenancy comes to an end cannot be found fault with.
21. In that view of the matter, we pass the following order:
a. The appeal is partly allowed.
b. That the decree of ejectment is confirmed.
c. The decree for payment of arrears of rent is confirmed.
d. The decree for payment of damages is set aside. Parties to bear their own costs.
Sd/-
JUDGE Sd/-
JUDGE LRS/Sk*