Delhi High Court
Mr. Prem Narain Misra vs Faire Brothers Export And Import Ltd. on 12 July, 2007
Author: A.K. Sikri
Bench: A.K. Sikri, Aruna Suresh
JUDGMENT A.K. Sikri, J.
1. The spinal question which needs appraisal is: whether there were adequate admissions made by the defendant/appellant warranting passing of the decree of possession in favor of the respondent herein. The learned Single Judge has allowed the application under Order XII Rule 6 of the Code of Civil Procedure (CPC) moved by the respondent vide order dated 14.12.2004 and consequently passed the decree for possession. The suit is pending further consideration for inquiry about the mesne profits. The appellant is not satisfied with that order and submits that there were no sufficient admissions and/or unambiguous and unconditional admissions on record on the basis whereof such a decree should have been passed. In order to appreciate the controversy, we may note the essential facts of the case and the purported admissions.
2. The respondent is the owner of property bearing Municipal No. B-22/3, Okhla Industrial Area. It entered into a purported license agreement dated 6.6.1998 with the appellant as per which 2300 sq. ft. space in the basement of the said building (hereinafter referred to as the suit property) was given to the appellant. On behalf of the respondent company one Sh. Bhupinder Katyal, its director signed the agreement. license fee was fixed at the rate of Rs. 20,000/- per month and the license was initially for a period of 11 months as provided in Clause 2. This could be extended for another three terms of 11 months each. It seems that after the expiry of the aforesaid license agreement on 30.5.99, no further agreement was entered into immediately. However, the parties thereafter executed another agreement dated 27.4.2000 vide which same premises were let out by the respondent to the appellant at monthly rent of Rs. 20,000/-. As per Clause (1) of the agreement the period of the agreement was six years with effect from the date of possession. In Clause 2 it was provided that agreement shall commence from 27.4.2000 and shall be valid for a term of six years. As per Clause (3), this agreement could be extended at the option of the appellant for one term of five years on the same terms and conditions.
3. Admittedly, the agreement dated 27.4.2000 is an unregistered document executed on a stamp of Rs. 10/-. Therefore, neither it is properly stamped nor it is registered though the registration is compulsory having regard to the fact that period of tenancy was stipulated as six years.
4. The respondent served notice dated 27.10.2003 through its counsel upon the appellant terminating the agreement and giving one week's time to vacate the premises. Termination was on various grounds including the ground that the appellant had failed to pay Rs. 20,000/- per month after March, 2003 which he had been paying earlier. In this notice, the respondent also demanded mesne profits. Thereafter, however, another notice dated 17.12.2003 was also served giving fifteen days' notice to the appellant as provided in the license deed in or order to avoid any technical objections regarding notice period inasmuch as in the earlier notice dated 27.10.2003 only one week's time to vacate the premises was given. It may be mentioned that the stand of the respondent in these notices was that the license agreement dated 25.4.2000 was irregular and invalid as the previous management and particularly Mr. Bhupinder Katyal, who signed the agreement as Director, was acting contrary to the interest of the company and the agreement was the result of illegal and irregular conduct of the previous management.
5. As the appellant did not vacate the premises even after the expiry of the notice period, the suit for possession, mesne profits and perpetual injunction and mandatory injunction was filed by the respondent which was registered as CS (OS) No. 184/2004 on the original side of this Court. In the plaint, the respondent after making the aforesaid averments also submitted in the alternative that in case the license deed is held to be valid and binding, the three terms of 11 months each, as mentioned in the license agreement, the said extended period has already expired on 31.12.2003 and, therefore, with effect from 1.1.2004 the appellant, in any case, was trespasser in the basement portion of the suit property. It was mentioned that the license had come to an end by afflux of time and, nevertheless, the notice of termination was also given.
6. The appellant herein filed the written statement denying that he was in arrears of rent although at the same time it was admitted that rent in respect of premises in question was paid till March, 2003 only. It was also averred that there was no cause to issue notice of termination of the lease and such a action on the part of the respondent was unwarranted. It was also stated that a sum of Rs. 3 lacs was paid by way of cross cheque in the name of the respondent company and another sum of Rs. 2 lacs was given by a cheque in favor of Mr. Bhupinder Katyal, Managing Director of the respondent company, as earnest money which was required to be adjusted against the rent due in respect of part portion of the ground floor.
7. It was submitted that agreement was valid for a period of six years from 27.4.2000 and, therefore, subsisting on the date when the suit was filed and such a suit was pre-mature. It was also contended that notices dated 27.10.2003 and 17.12.2003 were illegal and unwarranted and nonest in the eyes of law. After filing of the written statement, the respondent moved application under Order 12 Rule 6 CPC stating that the execution of the agreement was not in dispute; it was also not in dispute that agreement dated 27.4.2000 was unregistered and, therefore, it could not create any right in favor of the appellant. It was submitted that in view of this, the appellant was a tenant in respect of the premises on month to month basis and this tenancy was terminated by serving notice. After the notices to quit were given, the appellant became unauthorised and illegal occupant and, therefore, was liable for eviction and there were hardly any disputes which needed resolution through evidence.
8. The appellant contested the application by filing the reply. As noted above, the application of the respondent has been allowed. The perusal of the order passed by learned Single Judge would show that in para 5(a) of the plaint, the respondent had specifically averred that the appellant herein signed a license agreement in favor of the respondent company on 25.4.2000 and no one had signed this agreement on behalf of the respondent. It was further mentioned that in case the appellant is in possession of any signed/original copy of of the said document, he may produce the same for consideration, though the respondent did not admit the validity of the said document. In the written statement, the appellant had stated that agreement dated 27.4.2000 was executed which was still subsisting since the period/term of tenancy was expiring only in March, 2006 and, therefore, the appellant could not be dubbed as a trespasser. The learned Single Judge also noted that the appellant had filed only photocopy of the agreement dated 27.4.2000 and had not placed any reliance on the license deed dated 25.4.2000. The learned Single Judge on the basis of the above held that the purported agreement had not been registered though it was compulsory legal requirement and even insufficiently stamped as it was on the stamp paper of Rs. 10/-. On the basis of such unregistered agreement, the appellant could not claim the tenure of six years as of right and to support this conclusion, the learned Single Judge relied upon the Supreme Court Judgments in the case of Bajaj Auto Limited v. Behari Lal Kohli and that of Madras High Court in S. Ranganathan v. S. Venkatesan Air 1995 Madras 146. He, thus, held that the consequence would be to revert back to license agreement dated 25.4.2000 as per which the tenure was 11 months which was long over. Thereafter, notice dated 27.10.2003 was given followed by notice dated 17.12.2003, the respondent terminated the tenancy and asked the appellant to vacate the premises. The result was that there was no subsisting right in favor of the appellant to continue in possession of the suit property. This sums up the reasons given by the learned Single Judge in support of his order.
9. Submission of the learned Counsel for the appellant while challenging the impugned judgment was that the respondent had taken contrary pleas in the notices as well as in the plaint. On the one hand, it was mentioned that the respondent was not accepting the validity of the agreement dated 25.4.2000 which was signed by Sh. Bhupinder Katyal who had allegedly mismanaged the company and on the other hand, notice of termination was given on the basis of the same agreement. This plea is clearly unfounded. Tenor of the notice as well as plaint bespeak that two pleas are not contrary but in the alternative. The respondent did not accept the validity of the agreement because of the aforesaid reason but at the same time contended that if the agreement is held to be valid, it was nevertheless determining the same by the said notice and at least after the termination, the appellant/defendant had become the unauthorised occupant.
10. Other submission of learned Counsel for the appellant was that merely because there was no requisite stamp on the agreement dated 27.4.2000 at this stage and without recording the evidence, the agreement could not have been thrown out inasmuch as the irregularity of non stamping was curative in nature and deficiency could be made up at post issue stage in the manner provided under Section 35 of the Stamp Act. For this purpose, reliance was placed on the Hindustan Steel Ltd. v. Dilip Construction Co. . We are of the opinion that even this submission does not help the appellant. Fact remains that it is an unregistered document. The tenancy period is more than 11 months in respect of immovable property and under Section 17 of the Registration Act the registration was mandatory. In the absence of such registration, this document could not be looked into except for collateral purpose in view of the provisions of Section 49 of the Registration Act.
11. The appellant is conscious of this legal position. That is why endeavor of the learned Counsel of the appellant was to argue that unregistered lease deed could be executed for collateral purpose as held in Rai Chand Jain v. Miss Chandra Kanta Khosla . However, the period for which the tenancy is created is not the collateral purpose but the main term of the agreement. In fact it is the prescription of this period only, which is more than 11 months, that makes the lease deed compulsorily registrable. In the judgment relied upon by the appellant i.e. Chand Jain (supra) the Court held that the purpose of tenancy namely letting out for residence was the collateral purpose. Such a judgment will have no application in the present case as the period of tenancy is not the collateral purpose. If such a contention is accepted, without getting the lease registered a party to the agreement will be in a position to enforce the terms including duration stipulated in the agreement. This would be frustrating the very purpose for which Section 49 of the Registration Act is introduced by the legislature.
12. Last contention of the learned Counsel for the appellant was that there was a dispute about the validity of the notice and the appellant had categorically mentioned that the notices in question were illegal and nonest in the eyes of law. Therefore, at this stage decree could not have been passed on the basis of these notices inasmuch as there was no categorical and unambiguous admission on the part of the appellant. He submitted that in a case like this, provision of Order XII Rule 6 CPC could not be brought into play. He relied upon the Division Bench judgment of this Court in Parivar Seva Sansthan v. Dr. (Mrs.) Veena Kalra and Ors. AIR 2000 Delhi 349 and two judgments of the Supreme Court namely Balraj Taneja and Anr. v. Sunil Madan and Anr. and Hindustan Steel Ltd. v. Dilip Construction Co. (supra). There is no dispute about the principle of law stated in the aforesaid judgment. Before application under Order XII Rule 6 CPC is allowed, the Court has to record the satisfaction that there are admissions contained in the pleadings of the defendants or in other documents etc. and those admissions should be unambiguous and unconditional, warranting passing of the decree. On screening the present case, however, we find that the respondent had passed this test successfully and accomplished on the basis of which the learned Single Judge was right in passing the decree. It has to be borne in mind that the respondent had filed the suit for possession. Admittedly, the rent of the premises was more than Rs. 3500/- per month. Therefore, there is no protection to this tenancy under the provisions of Delhi Rent Control Act. The case is governed by the Transfer of Property Act. It is the contract of tenancy which would determine the terms and conditions of creation of such a tenancy.
13. Two agreements are projected. First is the agreement dated 25.4.2000 as per which the period of license/tenancy was eleven months which could be renewed by three more terms of eleven months each. If one has to act on the basis of this agreement, and even if it is presumed that the appellant had right to avail all three extensions, the last extension expired by December, 2003. Therefore, this tenancy had come to an end by afflux of time. Notwithstanding, notice of termination of tenancy was given on 17.12.2003. These facts are not in dispute. The suit, therefore, is rightly decreed, if one is to act on this agreement.
14. Coming to the second agreement dated 27.4.2000, admittedly only a copy of this agreement is produced on record. Original has not seen the light of the day. Again, the photocopy of the agreement is also signed only by the appellant and nobody has signed this agreement on behalf of the respondent/plaintiff. The agreement is on a stamp paper of Rs. 10/-. There is no dispute that it was insufficiently stamped. The appellant candidly conceded that the agreement was unregistered as well. The only argument raised was that the period of six years mentioned in the agreement is a collateral term and, therefore, agreement could be seen for this purpose. This is purely a legal argument which could be gone into. It was not argued before the learned Single Judge and the submission was made before us. However, we have not found the same to be devoid of any force.
15. Law on creation of tenancy is well settled. A tenancy of immovable property comes into existence, if its duration is more than 11 months and rent is more than Rs. 100/-, by an agreement in writing which is to be properly stamped as per provisions of the Stamp Act and is also to be registered under Section 17 of the Registration Act. In the absence of these requisites, there is no valid tenancy agreement. Legal support for this proposition can be found in the following judgments:
1. Mrs. (Dr.) P.S. Bedi v. Project and Equipment Corporation of India Ltd. .
2. Hitkarini Sabha v. Jabalpur Corporation .
3. Syed Jaleel Zane v. P. Venkata Murlidhar .
4. State of UP v. Lalji Tandon .
5. Naveen Chand v. Nagarjuna Travels and Hotels Pvt. Ltd. .
16. In Lalji Tandon (supra) case, the Supreme Court dealt with the subject exhaustive details. Reading of this judgment would bring out the following principles laid down by the Supreme Court:
(a) In India, a lease may be in perpetuity and the law, either the Transfer of Property Act or the general law abhors a lease in perpetuity. If there is a covenant for renewal in the lease agreement, lessee can exercise his right unilaterally for extension of lease, for which consent of Lesser is not necessary.
(b) Where the principal lease executed between the parties containing a covenant for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain similar clause for renewal depends on the facts and circumstances of each case, regard being had to the intention of the parties as displayed in the original covenant for renewal and the surrounding circumstances.
(c) There is difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease. In the case of extension it is not necessary to have a fresh deed of lease executed. However, option for renewal consistently with the covenant for renewal has to be exercised consistently with the terms thereof and, if exercised, a fresh deed of lease shall have to be executed between the parties.
(d) Failing the execution of fresh deed of lease, another lease for a fixed terms shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for year by year or month by month, as the case may be.
(e) If the language in the lease deed is ambiguous, the court would opt for an interpretation negating the plea of the perpetual lease. Where there is a clause for renewal subject to the same terms and conditions, it would be construed as giving a right to renewal for the same period as the period of the original lease, but not a right to second or third renewal and so on unless, of course, the language is clear and unambiguous. While ascertaining the intention of the parties in this behalf, lease deed has to be read as a whole.
17. Even if we ignore every aspect and were to act on the purported lease deed dated 27.4.2000, fact remains that period of six years as per that agreement as well expired on 26.4.2006. The appellant is in possession of the premises. Even if the appellant were to succeed in his submission qua the period of tenancy, there is no gainsaying that after 26.4.2006, as per the appellant's own showing, he is in unauthorised occupation of the premises. Whether the appellant was in legal occupation prior to 27.4.2006 or not would have relevance only for the purpose of determining the mesne profits. In so far as possession is concerned, the appellant has no reason to continue to occupy the premises. On this ground alone, the appellant is under legal, contractual and moral obligation to vacate the premises. By adopting such shrewed tactics the appellant cannot prolong unauthorized occupation of the premises. The very objective and purpose in enacting the provision like Order 12 Rule 6 CPC is to enable the Court o pronounce the judgments on admission when the admissions are sufficient to entitle the plaintiff to get a decree. Such a provision is enacted to render speedy judgments and save the parties from going through the rigmarole of a protracted trial. The admissions can be in the pleadings or otherwise, namely in documents, correspondence etc. These can be oral or in writing. The admissions can even be constructive admissions and need not be specific or expressive which can be inferred from the vague and evasive denial in the written statement while answering specific pleas raised by the plaintiff. The admissions can even be inferred from the facts and circumstances of the case. See Delhi Jal Board v. Surendra P. Malik 2003 III AD (Delhi) 419, Shikharchand and Ors. v. Mst. Bari Bai and Ors. , Cane Construction v. J.V.G. Finance Limited (2004) III DLT 437, Uttam Singh Duggal and Co. v. Union Bani of India and Ors. , Charanjit Lal Mehra and Ors. v. Kamal Saroj Mahajan (Smt.) and Anr. , Rajiv Saluja v. Bhartia Industries Ltd. and Anr. , Rajiv Sharma and Anr. v. Rajiv Gupta .
18. The upshot of the entire discussion is that the appeal preferred by the appellant has no merit at all. We do not find any infirmity in the impugned judgment and the decree passed by the learned Single Judge. We accordingly dismiss this appeal with costs.