Delhi District Court
Smt. Bimla Malhotra vs M/S. United India Insurance Co. Ltd on 20 January, 2011
Suit No. 285/02 -1- Dated 20/01/2011
IN THE COURT OF SH. ABHILASH MALHOTRA,
CIVIL JUDGE, CENTRAL-02, TIS HAZARI COURTS, DELHI
Suit No. 285/02
1. Smt. Bimla Malhotra,
w/o. Late Sh. P.L. Malhotra,
2. Sh. Harish Malhotra,
s/o. Late Sh. P.L. Malhotra
3. Sh. Ashok Malhotra,
s/o. Late Sh. P.L. Malhotra
............plaintiffs
Vs.
M/s. United India Insurance Co. Ltd.
Regd. Office at 24, Whites Road,
Madras-600014
And also office at:
Division No. 11, 501-502,
5th Floor, Kailash Building,
Kastruba Gandhi Marg, New Delhi-110001.
..........defendant
Date of Institution:10/10/95
Date of reserve of Judgment:22/12/10
Date of Judgment:20/01/11
JUDGMENT
1. The present suit has been filed by plaintiffs seeking a decree for possession, decree for a sum of Rs. 30,000/- and damages/mesne profits @ Rs. 2,500/- per day from date of institution till handing over of possession.
Pages 1/29Suit No. 285/02 -2- Dated 20/01/2011
2. It is a case of plaintiffs that they are owners/landlords of flat bearing no. 502, 5th Floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi. (measuring 710 sq. feet). It is stated that defendant was given lease of aforesaid flat w.e.f. 01.06.1985 for a period of five years @ Rs. 4,970/- per month. The said lease was renewed for a second terms of five years w.e.f. 01.06.90 after escalation of 20% and rent was increased to Rs. 5,964/-. It is stated that defendant was liable to pay electricity, water, house tax etc. It is stated that second term of lease expired on 31.05.95 by efflux of time and defendant became liable to hand over the possession. A notice dated 13.07.95 was sent to defendant terminating the lease w.e.f. 31.08.95 and requesting the defendant to hand over the possession. It is stated that by said notice defendant was intimated that in case of failure to hand over the possession defendant will be liable to pay damages / mesne profits @ Rs. 2,500/- per day. By said notice defendant was also instructed to pay difference in house tax. It is stated that defendant instead of handing over possession sent letter dated 20.07.95 alongwith a cheque of Rs. 54,670/- towards arrears of rent till 30.05.95 as per their estimate. Plaintiff replied to said letter and intimated that amount remitted has been appropriated firstly towards the outstanding interest and the balance toward arrears of rent. It is stated that since defendants have failed to hand over the possession they are liable for damages / mesne profits @ Rs. 2,500/- per day w.e.f. 01.09.95 and are further liable to pay interest @ 25% per Pages 2/29 Suit No. 285/02 -3- Dated 20/01/2011 annum. In the plaint statement of account has been given by plaintiff in para 8:
a) Rent /damages w.e.f. 01.06.1995 to
31.08.1995 @ Rs. 5964/- pm Rs. 17892/-
b) Damages/mesne profits w.e.f. 1.9.1995
to 25.09.95 @ Rs. 2500 per day Rs. 62500/-
c) Arrears of house tax as referred above.
d) Interest on house tax and other arrears
@ Rs. 25% per annum.
3. However, plaintiff has restricted the claim to Rs. 30,000/- and have claimed damages / mesne profits @ 2,500/- per day from the date of filing of suit till handing over of the possession.
4. Defendant in their written statement has taken a preliminary objection that the suit is not maintainable because of non-joinder and mis-joinder of parties. It is stated that the property in question belongs to M/s. P.L. Malhotra & Others which is a HUF. It is stated that Karta Sh. P.L. Malhotra has expired on 21.10.94 and all the co- parceners have not been made party. It is also stated that plaintiff no. 2 and 3 are not necessary parties as they have already relinquished their share vide relinquishment deed dated 06.03.95 in favour of plaintiff no. 1. It is also stated that the relationship between the said HUF and defendant is of licencesor and licensee. It is stated that in case of licence, jurisdiction value of the suit become total cost of Pages 3/29 Suit No. 285/02 -4- Dated 20/01/2011 premises which is not less than Rs. 5 lacs and due to which the court has no pecuniary jurisdiction and the suit is not maintainable. It is further stated that tenancy has not been terminated according to law as the property belongs to HUF and notice has not been served on behalf of said HUF. It is also stated that present suit is not maintainable as defendants are perpetual licensee in view of the licence deed and defendants can retain the premises as long as they are willing to renew the licence. It is also stated that the suit has been filed as a counter blast of letter of defendant informing the plaintiff regarding the fire in premises and non payment of charges during that period.
5. In replication plaintiff has reaffirmed the avernments made in the plaint. It is stated that the defendants on the one hand are relying upon relinquishment deed dated 06.03.1995 and on other hand are taking objection of non-joinder and mis-joinder of parties, which is inconsistent. It is stated that plaintiffs have become landlords on death of Sh. P.L. Malhotra and there is no other person who is landlord. It is stated that in view of provision of order 1 rule 9 CPC the suit cannot be dismissed on ground of mis-joinder of parties. It is stated that license deed has not been executed between HUF and the defendants. It is stated that even in P.L.Malhotra (HUF) there had been only four members i.e. present three plaintiffs and Late Sh. P.L. Malhotra and on death of Sh. P.L. Malhotra his share has Pages 4/29 Suit No. 285/02 -5- Dated 20/01/2011 been inherited by present plaintiffs. It is stated that there are no minor or other co-parceners except the present plaintiffs. Plaintiffs have denied that in license deed dated 16.01.1986 there is no clause entitling the defendant to renew the lease by increasing the charges by 20% of license fees after every five years.
6. Upon completion of pleadings following issues were framed in the present case by my Ld. Predecessor by order dated 29.01.1998:-
(i)Whether the suit is not maintainable as alleged in para no. 2 of the preliminary objection of written statement? OPD
(ii) Whether the suit is bad for non-joinder and misjoinder of parties as stated in para no. 1 of preliminary objection of written statement? OPD
(iii) Whether this court has no pecuniary jurisdiction to try the suit ? OPD.
(iv) Whether there was relationship of licensor and licensee in between the parties ? If it effect ? OPD.
(v) Whether the tenancy of the deft has been validly terminated by a notice ? OPP
(vi) Whether the suit premises are public premises and this court has no jurisdiction as per provision of Public Premises (Eviction of Unauthorized Occupants) Act, 1971?OPD
(vii) Whether the plaintiffs are entitled to recovery of Rs. 30,000/ - as arrears of charges as claimed ? OPP.
(viii) Whether the plaintiffs are entitled to mesne profits ? If Pages 5/29 Suit No. 285/02 -6- Dated 20/01/2011 so at what rate and for what period ? OPP
(ix) Whether the plaintiff is entitled to claim interest ? If so, at what rate ad for what period? OPP
(x) Relief.
7. The issuewise findings in the present case is as follows:
Issue no. 1 & 2 Both these issues are taken together.
Issue no. 1 "whether the suit is not maintainable as alleged in para no. 2 of the preliminary objections of written statement? OPD"
Issue no. 2 "Whether the suit is bad for non-joinder and misjoinder of parties as stated in para no. 1 of preliminary objections of written statement? OPD".
7a. The onus to prove both these issues was on defendant. In this regard it is submitted by defendant that suit premises is owned by Sh. P.L.Malhotra and others HUF, of which Sh. P.L.Malhotra was karta. After his death on 21.10.1994, all co-parceners in said HUF including minor male members namely Gautam and Mahesh become joint co-owners of suit property. It is stated that in view of aforesaid position termination of tenancy by only some of the co-parceners has no legal validity and present suit is bad for non-joinder of necessary parties. It is stated that suit is not maintainable because all the co- parceners have not terminated the tenancy and have not been joined as plaintiff.
Pages 6/29Suit No. 285/02 -7- Dated 20/01/2011 7b. It is submitted by plaintiff that in a suit for ejectment only the
relationship of landlord and tenant has to be established and once tenant admits relationship of landlord and tenant, Section 116 of Evidence Act estoppes the tenant from denying ownership of landlord.
7c. Perusal of documents PW1/1, PW1/2, PW1/3 and PW1/4 shows that defendant is paying rent to plaintiff no. 1. DW1 in his testimony has clearly admitted that:
"As per law all legal heirs of Sh. P.L. Malhotra namely Smt. Bimla Malhotra, Sh. Harish Malhotra and Sh. Ashok Malhotra are our landlord. We are giving rent to Smt. Bimla Malhotra on account of disclaimer, indemnity bond and affidavit exhibits DW1/D3, DW1/D2 and DW1/D1 respectively"
7d. Ex. DW1/D1 is affidavit dated 06.03.1995 executed by plaintiff no. 1 in which she has declared that Sh. P.L.Malhotra has left behind following legal heirs:
a) Smt. Bimla Malhotra
b) Sh. Harish Malhotra
c) Sh. Ashok Malhotra
It also declares that Sh. P.L.Malhotra did not leave behind any other legal heirs except aforesaid heirs.
7e. Ex. DW1-D3 is registered disclaimer deed dated 06.03.1995 by
Pages 7/29
Suit No. 285/02 -8- Dated 20/01/2011
which Sh. Harish Malhotra and Sh. Ashok Malhotra endorsed the fact that there are no other legal heirs except aforesaid. By this document Sh. Harish Malhotra and Sh. Ashok Malhotra have relinquished their share in favour of Smt. Bimla Malhotra. It is also clarified in this document (para
2) that Smt. Bimla Malhotra will be entitled to get monthly rent in her name from M/s. United India Insurance Company Ltd(defendant) and releaser including their heirs, successors, executors, administrators etc. are left with no right title, interest and claim in the monthly rent and the same shall vest absolutely in Smt. Bimla Malhotra (para 3). The relevant paras of disclaimer deed are reproduced below:
"2) That the releasee will get the aforesaid monthly rent in her name from M/s. United India Insurance company Limited regularly.
3) That the releasee including their heirs, successors, executors, administrators etc. are left with no right title, interest and claim in the monthly rent and the same shall vest absolutely in Smt. Bimla Malhotra, releasee mentioned hereinabove.
iv) That the releasee will pay house tax and other taxes of any kind whatsoever due or claimed by local government/ authorities and observe the terms and conditions of Licence Deed dated 16.01.1986 in respect of said flat."
7f. Ex. DW1-DW2 is indemnity band dated 06.03.1995 executed by Smt. Bimla Malhotra in favour of defendant. This document incorporates facts of relinquishment by plaintiff no. 2 and plaintiff no. 3 in favour of plaintiff no. 1 and states that on the basis of documents submitted by plaintiff, the defendant has agreed to release rent in the name of Smt. Pages 8/29 Suit No. 285/02 -9- Dated 20/01/2011 Bimla Malhotra, subject to indemnity. The relevant portion is reproduced below:
"AND WHEREAS the other legal heirs i.e. Sh. Harish Malhotra and Sh. Ashok Malhotra had executed Relinquishment deed dated 06.03.1995 and gave authorization letter dated 03.02.1995 for the release of rent in respect of above flat in the name of the Executant;
AND WHEREAS on the basis of the documents submitted by executant M/s. United India Insurance Company Ltd. have agreed to release the rent in the name of Executant subject to the condition that the Executant shall keep harmless and indemnified M/s. United India Insurance Company Ltd. against any loss, damage, action, penalty of any kind whatsoever, which may be sustained by the company arising out of release of rent in the name of Executant"
Sh. P.L. Malhotra died on 21.10.94. The aforesaid document have been executed on 06.03.1995. Lease was terminated by notice dated 13.07.95 w.e.f. 31.08.95/01.09.95. Present suit has been filed on 10.10.95. PW1/2 to PW1/4 shows payment of rent to Smt. Bimla Malhotra on 10.03.97, 23.04.97 and 05.05.97.
7g. From aforesaid documents it is clear that payment of rent was made to Smt. Bimla Malhotra only after deposit of documents DW1/D1(affidavit) Ex. DW1/D2 (indemnity bond) and Ex. DW1/D3(disclaimer bond.) By disclaimer deed Plaintiff no. 2 and 3 including their heirs, successors, executors, administrators etc have relinquished their right , title, interest and claim in monthly rent and it absolutely vest in Smt. Bimla Malhotra.
Pages 9/29Suit No. 285/02 -10- Dated 20/01/2011 Document DW1/D2 acknowledges the execution of relinquishment deed dated 06.03.1995 and it is clearly states that only the basis of documents submitted defendant has agreed to release the rent in name of Smt. Bimla Malhotra.
In simple words it is only after getting assurance that Smt. Bimla Malhotra is the only right holder in respect of suit property rent was paid to Smt. Bimla Malhotra (plaintiff no. 1).
7h. Since plaintiff no. 2 and 3 have already relinquished their shares in favour of plaintiff no. 1, therefore question of impleading minor male members i.e. Gautam and Mahesh who are children of plaintiff no. 2 and 3 does not arise. The fact of relinquishment has been admitted by defendant in para 1 of preliminary objection of its written statement. Smt. Bimla Malhotra has all the right in property (this fact is proved by documents relied by defendant itself) and is very much in capacity to institute the present suit. Document Ex. DW1/D2 and DW1/D5 shows that defendant had accepted Smt. Bimla Malhotra as landlord and has already acted upon it. Testimony of DW1 also support the fact that Smt. Bimla Malhotra is accepted by defendants as landlord.
7i. It is settled law that tenant cannot question title of the landlord(section 116, Evidence Act). In a suit between landlord and tenant the question of title to leased property is irrelevant. (Mrs. (Dr.) P.S.Bedi Vs. P.E.C, AIR 1994 Del 255).
Pages 10/29 Suit No. 285/02 -11- Dated 20/01/2011
7j. In view of the aforesaid discussions it can be concluded that :
a) DW1 has categorically accepted that plaintiff nos. 1, 2, 3 are
landlords.
b) Defendant has knowledge about relinquishment by plaintiff no. 2 and
3 in favour of plaintiff no. 1 and only on said assurance defendant paid rent to Smt. Bimla Malhotra.
c) Smt. Bimla Malhotra has all the right in respect of suit property and plaintiff no. 2 and 3 and their heirs(children) have no right in the property.
d) Landlord-tenant relationship is admitted and proved between defendant and Smt. Bimla Malhotra
e) Defendant are estopped from questioning title of landlord in view of Bar under section 116, Evidence Act.
It cannot be said that minor male members are necessary parties and suit is bad for non-joinder /mis-joinder.
This issue decided in favour of plaintiff against defendant.
8. Issue no. 4 Issue no. 4 is decided first as it is necessary to determine nature of relationship lease/licence before deciding Issue no. 3.
8a. The onus to prove present issue is on defendant. This issue pertains to the questions whether the relationship between the parties is of lease or of licence. Defendant in order to discharge his onus is relying on document Pages 11/29 Suit No. 285/02 -12- Dated 20/01/2011 DW 1/1 which is licence deed dated 16.01.86. This document is admitted by the plaintiff. It is the case if defendant that none of the terms of the lease are inconsistent with the concept of grant of license under section 52 of the Indian Esasement Act, 1882.
8b. Before proceeding to decide this issue it will be relevant to reproduce various clause of licence deed dated 16.01.86, DW 1/1. The relevant extracts are reproduced below:
"THIS DEED OF LICENCE executed at New Delhi on this 16th day of January 1986 between (1) Shri P.L. Malhotra and others, E/41, Greater Kailash, Part-II, New Delhi (hereinafter referred to as LICENCEE, which term shall include his legal representatives and assign) AND (2) United India Insurance Company Limited, a limited Company incorporated under the Companies Act, having its Registered office at 24, Whites Road, Madras-600014 and represented herein by Sh. J.P. Shrivastava, Manager, power of Attorney Holder (hereinafter referred to as Sub-Licencee, which terms shall include its successors-in-interest).
WHEREAS THE LICENCEE has offered to give this premises (described in the Schedule hereinunder and hereinafter referred to as Demised Premises), to the sub- licencee, for a compensation at the rate of Rs. 7/- per square foot per month which offer has been accepted by the Sub- Licencee, subject to the term and conditions set out hereunder:-"
II. The licence will be for a period of five years from 01.06.85 and the Sub-licencee shall have the option to renew the Licence for a further periods of 5 years on payment of increased compensation at 20% of the last paid.
III (3) He will be paying promptly and regularly all the Pages 12/29 Suit No. 285/02 -13- Dated 20/01/2011 taxes, rents and levies due in respect of the Demised Premises, to the Government. Local Body.
III (4) The sub-licencee shall not assign or sub-licence the whole of the premises or any part thereof without the previous consent in writing of the licencee but use the said premises for commercial offices with the option to use the same for the sub-licencee's own offices or for the offices of their subsidiaries and/or sister concerns or companies of the same group.
III (6) To permit the sub-licences paying the agreed compensation hereby reserved and observing the convenants on their parts herein contained, to use, occupy and enjoy the premises without any disturbance or interruption by the Licencee/owner or any person lawfully claiming by, through or under him or in trust for him.
IV (3) Pay the water and electricity charges to the respective authorities, promptly and regularly.
IV (4) Permit the Licencee/Owner and persons authorised by him/her to enter, inspect and/or attend to the necessary repairs relating to the Demise premises. They should undertake to repair etc. as in the past.
V. If house tax is increased at any later date the difference between the present house tax and the revised house tax be borne by the sub-licencee. That if the demised premises is damaged by the Sub-licencee and/or its employees and agents etc. beyond normal wear and tear then the sub-licencee shall compensate the Licencee/Owner in respect of such damage.
VI (1) If the sub-licencees and desirous of vacating the premises before the expiry of the licence period they shall be at liberty to do so on giving a month's notice and they shall not be liable for payment of rent for the unexpired portion of the licence period"
8c. The relevant provisions of law with respect to the concept of lease and Pages 13/29 Suit No. 285/02 -14- Dated 20/01/2011 licence are:
Transfer of Property Act, 1882
105. Lease defined "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.
Lessor, lessee, premium and rent defined : The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent."
Indian Easements Act, 1882 "52. "Licence" defined Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence."
8d. To understand the concept of lease and licence some precedents are reproduced below:
Associated Hotels of India Ltd. v. R. N. Kapoor, AIR 1959 SUPREME COURT 1262 "25...............But, it is the substance of the agreement that Pages 14/29 Suit No. 285/02 -15- Dated 20/01/2011 matters and not the form, for otherwise clever drafting can camouflage the real intention of the parties.
27. There is a marked distinction between a lease and a licence. S. 105 of the Transfer of Property Act defines a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under S. 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is therefore a transfer of an interest in land. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor. Whereas S. 52 of the Indian Easements Act defines a licence thus:
"Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon the immoveable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence."
Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive Pages 15/29 Suit No. 285/02 -16- Dated 20/01/2011 possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington, 1952-1 All ER 149, wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155:
"The result of all these cases is that, although a person who is let into exclusive possession is, 'prima facie', to he considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy."
The Court of Appeal again in Cobb v. Lane, 1952-1 All ER 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At p. 1201, Somervell L. J., stated :
". . . . . . . . . . . . .. .. . . . . the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties."
Denning L. J. said much to the same effect at p. 1202:
"The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land?"
The following propositions may, therefore, be taken as well- established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues Pages 16/29 Suit No. 285/02 -17- Dated 20/01/2011 with the owner, it is a licence; and (4) if under the document 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. Judged by the said tests, it is not possible to hold that the document is one of licence. Certainly it does not confer only a bare personal privilege on the respondent to make use of the rooms. It puts him in exclusive possession of them, untrammeled by the control and free from the directions of the appellants. The covenants are those that are usually found or expected to be included in a lease deed. The right of the respondent to transfer his interest under the document, although with the consent of the appellants, is destructive of any theory of licence. The solitary circumstance that the rooms let out in the present case or situated in a building wherein a hotel is run cannot make any difference in the character of the holding. The intention of the parties is clearly manifest, and the clever phraseology used or the ingenuity of the document-writer hardly conceals the real intent. I, therefore, hold that under the document there was transfer of a right to enjoy the two rooms, and, therefore, it created a tenancy in favour of the respondent."
In B. V. D'Souza, Capt. v. Antonio Fausto Fernandes, AIR 1989 SUPREME COURT 1816, it was observed that "4. The document has been placed before us by the learned counsel for the appellant. Although as stated earlier, it has been described as an agreement of leave and licence and the parties as the "Licensor" and the "Licensee", its provisions unmistakably indicate that the appellant was being let in as a tenant on the monthly rental of Rs. 350/- (besides water and electricity charges) to be paid regularly on or before the 5th day of each consecutive month. By clause 5, it was agreed that the appellant "shall not sub-let, under-let or part possession of the premises to any stranger Pages 17/29 Suit No. 285/02 -18- Dated 20/01/2011 nor shall he keep the premises vacant for more than 3 months without the consent of the Licensor", that is, the respondent. The question of executing a sub-lease or sub- letting can arise only by a tenant. If a licensee inducts any person in the property as his tenant, it cannot be described as sub-letting. In clause 15 it is stated that on the expiry of the period, the deed "shall be renewable thereafter at the will of the licensee"; and in the event of the licensee not desiring to renew, "shall give one month's notice in writing". These terms are not consistent with the respondent's case of licence, and indicate that an interest in the property was created in favour of the appellant in pursuance of which he was put in possession with a right of renewal. When compared with the terms of the documents set out in the judgments in Associated Hotels of India Ltd. v. R. N. Kapoor :
(1960) 1 SCR 368 : (AIR 959 SC 1262) and Sohan Lal Naraindas v. Laxmidas Raghunath Gadit : (1971) 3 SCR 319, relied upon by the learned counsel for the appellant, which were construed by this Court as creating lease in spite of their description as licence deeds, the appellant's case stands out as stronger. If the approach adopted by the courts below in interpreting the document is accepted, it shall defeat the object of the Rent Acts, by permitting the parties to camouflage the real nature of the transaction by resorting to skillful drafting." (emphasis supplied) In Bharat Petroleum Corporation Ltd. Vs. Municipal Corporation of Delhi, 64(1996) DLT 237, Hon'ble Delhi high court observed that :
"16 Para 6 of the licence agreement dated October 29, 1958 grants the power to the petitioner to sub-let, mortgage, assign or transfer the privileges granted to them vide para 1 with the permission in writing of the Railway Administration. Admittedly a licensee does not have any power to transfer or sub-let a property to any person. Only a lessee/tenant has got this power. This is again a clear indication which shows Pages 18/29 Suit No. 285/02 -19- Dated 20/01/2011 that the intention of the parties was to create a lease and not a licence."
In Achintya Kumar Saha v. M/s. Nanee Printers, AIR 2004 SUPREME COURT 1591 it was observed that:
"7. Before coming to the arguments, we may point out that in cases where Courts are required to consider the nature of transactions and the status of parties thereto, one cannot go by mere nomenclatures such as, licence, licensee, licensor, licence fee etc. In order to ascertain the substance of the transaction, we have to ascertain the purpose and the substance of the agreement. In such cases, intention of the parties is the deciding factor. In order to ascertain the intention, we have to examine the surrounding circumstances including the conduct of the parties. In the present case, the High Court was right in examining the terms of agreement coupled with the circumstances surrounding the agreement in question like exclusive possession of the premises being given to respondents Nos. 1 and 2 for monetary consideration for 11 years with a clause of renewal of the licence for further 11 years; payment of Municipal taxes by respondents Nos. 1 and 2, the rent receipts issued by Smt. Madhuri Bose, the premises being let out for business purposes in a residential locality and conduct of the plaintiffs in not examining Ajoy Kumar Bose (respondent No. 4) who is held to have consented to the agreement in question. All the above circumstances taken together show that respondents Nos. 1 and 2 were not trespassers. They show that the agreement was a tenancy in disguise of a licence."
8e. A lease is therefore a transfer of an interest in property. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that Pages 19/29 Suit No. 285/02 -20- Dated 20/01/2011 the lessee gets that right to the exclusion of the lessor. However if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property.
8f. The right to transfer his interest under the document, although with the consent of the appellants, is destructive of theory of licence. The question of executing a sub-lease or sub-letting can arise only in case of lease. The terms in document giving right of renewal and payment of taxes by the licencee is also inconsistent with the concept of licence.
8g. The examination of licence deed DW1/1 shows the presence of following covenants:
a. Right of renewal is with defendants. It has been also admitted by DW1 in his testimony.
b. All taxes, rents and levies had to be paid by the defendant. c. Sub-licensing can be done by defendant with previous permission of plaintiff.
d. Defendant is permitted to use, occupy and enjoy the premises without any disturbance or interruption from the plaintiff. e. The suit premises can be inspected and repaired only after taking permission of the defendant. Moreover DW1 has also admitted that lock and key of the suit premises are with defendant company and none else. No one can without the permission of defendant company enter into the Pages 20/29 Suit No. 285/02 -21- Dated 20/01/2011 premises.
f. House Tax and any difference due to revision in rates of house tax has to be paid by the defendant.
g. Defendant can vacate the premises after giving one month notice.
8h. The presence of aforesaid clauses in licence deed Ex DW 1/1 are inconsistent with the concept of licence. Defendant is in possession of suit premises untrammeled by the control and free from the directions of the appellants. The substance of agreement shows that intention of parties was to execute the lease and not licence.
In the light of law laid down by Hon'ble Supreme Court and Hon'ble Delhi High Court it is clear that document Ex DW1/1 is lease deed and not licence deed.
This issue is decided in favor of the plaintiffs and against the defendant.
9. Issue no. 3 9a. The onus to prove this issue was on defendant. The suit has been filed seeking relief of possession, recovery of Rs. 30000/- and mesne profits. Plaintiff has valued suit for the purpose of possession at annual rent @ Rs. 5964/- and has paid court fees on the same. For the purpose of recovery of arrears plaintiff has paid court fees on Rs. 30000/-. It is submitted by the defendant that in case where relationship is not of landlord and tenant valuation cannot be done under section 7(xi) (CC) of Court Fees Act. It is stated that suit has to be valued at market value of suit property which is not less than Rs. 5 lakhs.Pages 21/29
Suit No. 285/02 -22- Dated 20/01/2011 9b. Plaintiff submits that as per documents Ex. DW1/1, lease rent for the period of 5 years, w.e.f. 01.06.85 was Rs. 4970/- and thereafter from 31.05.90 till 31.05.95, it was Rs. 5964/-. It is also submitted that plaintiff had paid the court fees of annual rent of Rs. 5964/- pm. It is also stated that plaintiff had paid appropriate court fees towards recovery of Rs. 30000/- as per law.
9c. We have already arrived at finding in Issue no. 1,2 and 4 that document DW1/1 is licence deed and relationship is of landlord and tenant. It is settled position under law that court fees in respect of suit for possession between landlord and tenant is covered by section 7(xi) (CC) of Court Fees Act, 1874. Court fees in such cases has to be paid according to the amount of rent payable for the year next before the date of presenting the plaint.
9d. Suit in present case was filed on 10.10.95 and admittedly rent for the said period was Rs. 5964/-. Plaintiff has valued the relief of possession on one year rent. Prescribed court fees has been paid on relief of recovery of arrears of Rs. 30000/-. Court fees on mesne profits can be paid as per section 11 of Court Fees Act, 1870. This court has pecuniary jurisdiction to try the present case.
This issue is decided in favour of plaintiff and against defendant.
Pages 22/29Suit No. 285/02 -23- Dated 20/01/2011 10.Issue no. 5
10a. The onus to prove this issue was on defendant. It is the case of defendant that suit property is a HUF property and notice dated 13.07.1995, (PW 1/5) was sent only on behalf of plaintiffs in their individual capacity and not on behalf of the other coparcernes. Therefore the notice only on behalf of some of the copraceners cannot validly terminate the tenancy. Defendant has admitted the receipt of this notice Ex. PW 1/5.
10b. In view of the findings given in issue no 1,2 and 4 it is no more in dispute that there is landlord and tenant relationship between the parties and document DW1/1 creates a lease. The objection regarding non- inclusion of other co-parcerners is also not maintainable in view of the findings arrived at in issue no 1 & 2.
10c. It is settled law that a lease for a period of more that one year is required to be registered and in case of non-registration its contents cannot be looked into (Section 49 Registration Act). Document DW1/1 is unregistered and creates lease for a period of 5 years. This document is hit by provision of Section 49 Registration Act. In the absence of any contract, lease is on month to month basis as per provision of Section 106 Transfer of Property Act, 1882 and the lease can be validly terminated by giving 15 days notice. Reference in this regard can be made to judgment in the case of AJAY AHUJA & ANR versus M/S SUBHIKSHA TRADING SERVICES LTD., CS(OS) No. 241/2010 dated 03.12.2010 wherein Hon'ble Delhi High Court observed that :
Pages 23/29Suit No. 285/02 -24- Dated 20/01/2011 "9. Section 17(1)(b) of Registration Act provides that non- testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property shall be compulsorily registered. Section 49 of Registration Act, to the extent it is relevant, provides that no document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall affect any immovable property comprised therein, unless it has been registered. Thus, since the lease deeds executed between the plaintiffs CS(OS)No.241/2010 Page 7 of 22 and the defendant being for more than one year were required to be compulsorily registered and has not been got registered, it does not confer any right on the defendant to continue to be a tenant for the term stipulated in these deeds. As a result, the tenancy of the defendant in respect of the suit premises became a month to month tenancy, which could be terminated by giving notice to the defendant under Section 106 of Transfer of Property Act, which to the extent it is relevant provides that in the absence of a contract or local law or usage to the contrary, a lease of immovable property, for any purpose other than agricultural or manufacturing purposes, shall be deemed to be a lease from month to month, terminable on the part of either lessor or lessee by 15 days notice. The above-referred provision of Section 106 of Transfer of Property Act would apply only if there is no contract to the contrary between the parties. The question which comes up for consideration is as to whether the term of tenancy stipulated in the lease deed Ex.PW-1/2 and supplementary deed Ex.PW-1/3 can be looked into, despite the fact that these documents, though compulsorily registrable, were not got registered."
10d. The fact that lease is for period of more than one year is admitted Pages 24/29 Suit No. 285/02 -25- Dated 20/01/2011 and undisputed position in present case. The lease in present case has been terminated by notice dated 13.07.1995, Ex PW 1/5. The receipt of said notice is not disputed by the defendant in their written statement (Para 4 of Reply on Merits in WS.). DW1 has admitted that PW 1/8 i.e AD card bears its company's seal. Plaintiff has terminated the lease as per the provisions of Section 106 Transfer of Property Act, 1882, which is valid termination in case of unregistered lease deeds. The lease is validly terminated.
This issue is decided in favor of the plaintiffs and against the defendant.
11. Issue no. 6 11a. The onus to prove this issue was on defendant. Defendant has not lead any evidence on this issue. In written submission filed by defendant on record this issue has not been pressed. Even otherwise Public Premises (Eviction of Unauthorised occupants) Act, 1971 does not apply to present case, as it is admitted case of defendant that the suit premises belongs to H.L. Malhotra & HUF. It is not the case of defendant that the suit premises in present case are public premises belonging to, taken on lease or requisitioned by central government. Moreover the law is well settled that the relationship of government when it is a lessee qua the owner of the premises is that of the tenant and the landlord and the provisions of Public Premises (Eviction of Unauthorised occupants) Act, 1971 do not apply (see Inder Kumar Kapoor Vs. United India Insurance Pages 25/29 Suit No. 285/02 -26- Dated 20/01/2011 Company Limited, 76 (1998) DLT 879).
This issue is decided in favor of the plaintiffs and against the defendant.
12. Issue no 7, 8 and 9 12a. These issue are taken up together as they pertains to determination rent mesne profits & interest thereon, period till which rent is paid and period from which unauthorised occupation started and mesne profits/damages become payable.
The onus to prove this issue was on plaintiff. In para 8 of the plaint plaintiff is claiming following sum:
a. Rent 01.06.95 to 31.08.95 @ Rs. 5964/- pm Rs. 17,892/-
b. Damage/Mesne profits Rs. 62,500/-
01.09.95 to 25.08.95 @ Rs. 2500/- per day c. Arrears of House Tax and interest d. Interest on house tax and other arrears @ 2.5% per annum 12b. In respect of aforesaid defendant has abandoned his claim and has restricted his claim to Rs. 30,000/- only. So far as arrears of rent is concerned PW 1/1 i.e letter dated 20.07.95 written by the defendant show that rent has been paid till 30.05.95. Defendant has also admitted this payment in para 5 of its written statement. Defendant have admitted in para 1 of their written statement that rent of the premises was Rs. 7 per Sq. Feet in June 1985 and was to be increased by by 20% every five years (i.e. Rs. 7 x 1.20 x 710 sq feet = Rs. 5964). It is also admitted by Pages 26/29 Suit No. 285/02 -27- Dated 20/01/2011 defendant that difference due to such increase was paid. The payment of difference is also proved by Ex. PW 1/1. It is clear that rent has been paid till 30.05.95 and the tenancy has been terminated w.e.f. 31.08.95. Therefore, plaintiff is entitled to rent @ Rs. 5,964/- from 30.05.95 to 31.08.95. However, since plaintiff has abandoned their claim they are only entitled to Rs. 30000/- for rent and mesne profits till filing of case.
12c. It is admitted fact that monthly rent at the time of termination tenancy was Rs. 5,964/-. It is also admitted position that rent was paid only till 30.05.95 (PW 1/1). It is the case of plaintiff that tenancy was terminated by notice dated 13.05.1995 (PW1/5) w.e.f 31.08.95 and mesne profits are payable from 01.09.95. The receipt of said notice is not disputed. In view of the findings given in issue no 5 it has been already proved that tenancy has been validly terminated. Now the only dispute pertains to the calculation of quantum of mesne profits/damages. Plaintiff is claiming mesne profits at the rate of Rs 2,500/- per day on the basis of fact that in notice terminating tenancy it was intimated to the defendant that in case of failure to handover possession he will liable to pay Rs. 2,500/- per day towards use and occupation charges. In order to prove rate of mesne profits/damages plaintiff has brought on record lease deed dated 30.05.97 Ex. PW3/1 of flat no 1011 situated in the same building. PW3 has been examined to prove this lease deed. PW3 has deposed that rent of the said premises is Rs. 85 per sq feet. DW 1 in his testimony has stated that his company has got offers in the same building ranging from Rs. 25 to 35 per Pages 27/29 Suit No. 285/02 -28- Dated 20/01/2011 Sq. Feet. However he has failed to produce any supporting evidence to prove the same.
12d. It is settled law that after termination of tenancy, tenant become illegal occupant and is liable to pay damages/mesne profits till handing over of the possession. The lease in present case is terminated w.e.f 31.08.95. It has been already concluded in issue no 5 that the lease has been validly terminated, therefore plaintiff is entitled to mesne profits and interest thereon. From aforesaid document is clear that prevailing lease rental in that area at that juncture i.e on 30.05.97 was 85 sq feet. But court cannot ignore the fact that lease rentals in Delhi are increasing from time to time. It is admitted case of parties that they have agreed to increase lease rental by 20% after every 5 years.
12e. Plaintiff is awarded mesne profits as follows:
a. From institution of suit till 31.08.2000 85 per sq ft.
b. From 01.09.2000 to 31.08.2005
(enhanced by 20 %) 102 per sq ft.
c. 01.09.2005 to 31.08.2010 (enhanced by 20 %) 122.40 per sq ft.
d. 01.09.2010 till handing over of possession 146.88 per Sq, ft.
It is clarified that it is a admitted position and not in dispute that the area of suit property is 710 sq ft.
However, it is clarified that plaintiff has filed on record statement of rent paid by defendants from October 1997 to November 2010 on 03.12.2010. This statement shows that defendant has paid to plaintiff a Pages 28/29 Suit No. 285/02 -29- Dated 20/01/2011 sum of Rs. 8,59,499/- during this period. It is clarified that this amount will be adjusted against the amount decreed in present suit and plaintiff will be entitled to interest @ 6 % p.a only on the amount outstanding after adjustment.
Issued no 7,8 and 9 are decided in favor of plaintiff and against the defendant.
13. Relief In view of findings given above suit is decreed in favour of plaintiff and against defendant. A decree of possession of flat bearing no. 502, 5 th Floor, Kailash Building, 26 Kasturba Gandhi Marg, New Delhi (measuring 710 sq. feet) is passed in favour of plaintiff and against defendant. A decree for a sum of Rs. 30000/- alongwith interest @ 6% per annum from date of institution of suit till payment is passed in favour of plaintiff and against defendant. A decree of damages/mesne profits as stated in para (12e) of this Judgment alongwith interest @ 6% per annum from date of institution of suit till payment is passed in favour of plaintiff and against defendant. Costs are awarded in favour of plaintiff.
Decree sheet be prepared accordingly.
File be consigned to record room as per rules.
Announced in the open (ABHILASH MALHOTRA)
court on 20/01/2011 CIVIL JUDGE, CENTRAL-02
TIS HAZARI COURT, DELHI
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