Delhi District Court
M/S Mukul Consultants & Estate Agencies ... vs Pijush Kanti Paul on 27 February, 2012
IN THE COURT OF SH. R.K. GAUBA: DISTRICT JUDGE
(SOUTH)-CUM-ADDITIONAL RENT CONTROL TRIBUNAL,
SAKET, NEW DELHI
ARCT No. 44/2011
ID No.: 02406C0226192011
M/s Mukul Consultants & Estate Agencies Ltd.
Corporate Office at 311/90,
Mansarovar Building, Nehru Place,
New Delhi110019.
Through its Director Mr. Mahesh Gupta ... Appellant
Versus
1 Pijush Kanti Paul,
S/o Late Sh. Mahanand Paul,
R/o 52/108, Chittranjan Park,
New Delhi110019.
2 M/s Sharla Computers Technology Pvt. Ltd.,
112, Erose Apartments, 56,
Nehru Place, New Delhi. ... Respondents
Instituted on: 03.09.2011
Judgment reserved on: 27.02.2012
Judgment pronounced on : 27.02.2012
J U D G M E N T
1. This appeal under Section 38 of Delhi Rent Control Act (hereinafter referred to as the "DRC Act") has challenged the correctness, legality and propriety of the judgment dated 03.08.2011 ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 1 of 17 passed by Sh. Sandeep Yadav, Rent Controller (South) in eviction case no. E73/2008 (2007), whereby the petition of the respondent no. 1 herein seeking the order of eviction U/s 14 (1)(b) of the DRC Act in respect of tenanted premises described as part of the shop no. 114/90, (Cabin No.1), Mansarovar Building, Nehru Place, New Delhi, admeasuring 126 sq. feet (hereinafter referred to as "the tenanted premises") was decreed, on the finding returned that the appellant, the tenant, had sublet the tenanted premises in favour of respondent no.2 without the written consent of the landlord.
2. The appeal has been resisted by respondent no.1. Respondent no.2 did appear in answer to the notice at one stage. But then, it would not appear or contest and, thus, has suffered these proceedings in this Court exparte.
3. I have heard Sh. Atul Nigam, Advocate for appellant and Sh. P.C. Sharma, Advocate for respondent no.1. I have gone through the record which has been requisitioned for the present purposes.
4. The facts of the case have been taken note of at some length in the impugned judgment. For the purposes of this appeal, the same can be summarized as indicated herein below.
5. The tenanted premises was let out in favour of the appellant by the original owner Mr. Gurdyal Singh Mann through a lease ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 2 of 17 agreement (described as license agreement) dated 19.05.1987 for a period of three years. It is admitted case that the arrangement was actually in the nature of leasehold rights in favour of the appellant granted for a period of three years through the said document by the erstwhile owner, the conditions including the payment of rental at the rate of Rs.3,000/ (Rupees Three Thousand) per month excluding electricity and maintenance charges. It is undisputed that the tenancy continued almost on the same terms beyond the said stipulated initial period of three years.
6. Mr. Gurdyal Singh Mann died and was succeeded by his widow Smt. Amrit Kaur, daughter Simrit Katyal and sons Rajpal Singh Mann and Harmohinder Singh Mann. The appellant has conceded that on the death of Mr. Gurdyal Singh Mann his said legal heirs became the landlord and he attrorned in their favour.
7. Respondent no.1 claimed in the petition to have purchased the property in question from the said legal heirs of Mr. Gurdyal Singh Mann. He filed the petition inter alia on the basis of attornment letter dated 20.03.2007 issued in his favour of which a notice was also stated to have been sent to the appellant no.1. Though in the pleadings the appellant did raise an issue as to the status of the respondent no.1 qua the property in question denying he to be the landlord, in the face ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 3 of 17 of finding returned against the denial by the Rent Controller in the impugned judgment, based on the evidence led that the transfer of the right, title and interest in the property by way of agreement to sell and other documents having been duly proved in favour of respondent no. 1 and further with proof also having been adduced of the letter of attornment having been duly addressed and sent by registered post to Mr. Mahesh Gupta, (RW1, Director of the appellant/company), it has been now fairly conceded that there exists the relationship of landlord and tenant between the respondent no.1 on one hand and the appellant on the other. The said finding, thus, is no longer being challenged and has attained finality.
6. The case of the respondent no.1 (hereinafter referred to as "the landlord") against the appellant (hereinafter "the tenant") was that it had sublet, assigned or otherwise parted with the possession of the tenanted premises in favour of respondent no.2, a private limited company duly incorporated, without the consent in writing of the landlord and, thus, within the mischief of the provisions contained in Section 14 (1)(b) of the DRC Act. This was denied by the tenant in the written statement. It was claimed that the tenant continued to be in exclusive and legal possession of the property and that respondent no. 2 had only been allowed temporary use of the tenanted premises on ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 4 of 17 terms of service charges payable on hourly basis while the legal possession has always remained with the tenant.
7. The case was contested. In the course of trial both parties led evidence. While respondent no.1 appeared as PW1, adducing his evidence through affidavit Ex. PW1/1. He also examined certain other witnesses including Mr. Kirpal Singh, PW2, an occupant of a neighbouring shop; Mr. Subhash Maini (PW3), similarly a businessman running his business from an adjoining premises; Mr. Raj Pal Singh Mann (PW4), one of the legal heirs of the original owner/landlord; Mr. S.L. Bhardwaj (PW5), an official of Municipal Corporation of Delhi; and Mr. Rakesh Kumar (PW6), an Officer from the Department of Sales Tax/VAT. On the other hand, Mr. Mahesh Gupta, the Director of the tenant appeared as RW1.
8. Both sides seem to have affirmed their respective case through the evidence led. What turned out to the most crucial document however, has been produced as Ex. PW6/4, copy whereof was taken by the landlord from records of the Sales Tax Department. This document is Memorandum of Understanding executed on 29.03.2003 between the tenant and respondent no.2. It is basically on the construction of this document that the Rent Controller has reached the conclusions and returned the findings upholding the case of the ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 5 of 17 landlord about the subletting. Some of the terms and conditions of this documents need to be taken note of in extenso.
9. The document Memorandum of Understanding (MOU), admitted to have been executed in the shape as it was brought on record vide Ex. PW6/4 indicates that it was entered into because the tenant company intended to "divestify its business activities in the best interest of the company and also to make optimum use of its premises (the tenanted premises)". The MOU further makes it clear that it was an arrangement entered into upon the respondent no.2 approaching the tenant "to share its vast business experience and management expertise and also to use the premises and other infrastructure available with them in the management of its computer related business/services as decided by the (respondent no.2) for the mutual benefit".
10. The terms and conditions as set out in this document (MOU) may be extracted as under (wherein the expression "First Party"
connotes the tenant while the expression "Second Party" indicates the respondent No.2):
"That the "FIRST PARTY" and the "SECOND PARTY"
have agreed to work together for the mutual benefit and in cooperation with each other and for the purpose both the parties have agreed to as under:
ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 6 of 17 THAT the FIRST PARTY has agreed:
(a) To provide management services guidance and conferences etc. for improving the business of the "SECOND PARTY"
as and when desired by the "SECOND PARTY" . Such conferences / discussion will be limited to a maximum of 20 hours in a month. In case, total conferences exceed 20 hours in a month then "SECOND PARTY" shall pay @ Rs. 500/ per hour in addition to the service charges hereinafter reserved.
(b) To plan marketing strategies of the "SECOND PARTY" and also to help in marketing the products/services of the "SECOND PARTY"
.
(c ) To help in the recruitment of the staff of the "SECOND PARTY"
.
(d) To allow the use of their office at 114/90, Mansarovar Building, Nehru Place, New Delhi admeasuring about 126 sq. ft. at First Floor and mezannine floor built in the same premises including the use of Furniture, Fixtures and Fittings as per Annexure "a".
(e ) Any other Services requested by the "SECOND PARTY" for the successful operation of the business.
(2) For the total services all together as mentioned herein above, the "SECOND PARTY" shall pay to the FIRST PARTY Service Charges of Rs.
11,500/ (Rs. Eleven Thousand Five Hundred only) per month as compensation for the above services ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 7 of 17 irrespective of the results of the business which shall be solely run by the "SECOND PARTY"
, as they deem fit. However, the Said Service Charges shall be increased to Rs.12,000/ (Rs. Twelve Thousand only) per month from the 7th month of the Calender Month. In fact, Post dated cheques for 11 (Eleven) months as per Annexure "A" have actually been delivered to the FIRST PARTY at the time of execution of MOU itself and thereafter
11 Post Dated cheques will always be delivered in advance before the end of every 11 months.
(3) In case, the conferences/ discussions exceeds 20 hours in a month the "SECOND PARTY" shall pay additional service charges @ Rs.500/ per hour to the FIRST PARTY.
(4) That this understanding commence from 1st December 2003 and shall be in force for 11 months ending on 31st October 2004 and the " SECOND PARTY" shall have an option to renew the same for another two terms of Eleven months each, on the same terms and conditions herein contained, save and except that the service charges, shall be increased by 15% after the end of 22 months from the date of this MOU on the last service charges paid, provided that the "SECOND PARTY"
has given an advance notice of three months in writing to the FIRST PARTY , indicating its desire to renew before the expiry of period of subsisting term of understanding. Thereafter, Service Charges shall be increased by minimum 15% after every 22 months, in case this understanding is extended after ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 8 of 17 66 months, understanding can be renewed only on mutually agreed terms. In case, no understanding is reached, the "SECOND PARTY" shall have to leave the premises and all the services will be discontinued.
(5) In the event, the "SECOND PARTY" default in making payment of monthly service charges or dishonouring of cheque for two consecutive months due to any reason whatsoever, the understanding, hereby agreed upon shall stand automatically terminated and the FIRST PARTY shall have the right and authority to withdraw all the facilities being provided by the FIRST PARTY under this understanding including to refuse permission to use the above said premises.
(6) The "SECOND PARTY" shall be at liberty to add and / or change the items of its business in due consultation with the FIRST PARTY, and the FIRST PARTY shall continue to provide the services as mentioned herein above to the best of their ability.
(7) The "SECOND PARTY" shall pay water, electricity and maintenance charges as demanded by the concerned authorities w.e.f. 1st December 2003. In case some of the dues are found outstanding pertaining to period prior to 1 st December 2003, the FIRST PARTY shall be responsible for the same.
(8) The "SECOND PARTY" shall not be responsible for Property / House Tax and / or any other charges levied on the above said premises by ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 9 of 17 DDA/MCD and or any other body(ies) empowered to do so. The FIRST PARTY shall be responsible for the same.
(9) The "SECOND PARTY" shall ensure that the premises along with all the furniture, fixture and fittings are restored at the time of vacation, in the same condition that is at the time of occupation and will repair at its cost any type damage or deterioration that may be caused during its occupancy to the satisfaction of FIRST PARTY. (10) That "SECOND PARTY" has paid to the FIRST PARTY a sum of Rs.36,000/ (Rs. Thirty Six Thousand only) as interest free Security Deposit by cheque No. 936699 dated 27.11.2003 on ICICI Bank Ltd., Nehru Place, New Delhi110019 (subject to realization) to be returned to the "SECOND PARTY", on expiry of this understanding including handling over the premises alongwith total furniture and fittings etc. to the FIRST PARTY by the "SECOND PARTY", after adjusting any and all dues outstanding on that day.
(11) It is clearly understood and agreed by both the parties that this understanding is on the package basis and all the clauses shall run simultaneously and dispute, if any, arising out of the same shall be referred to an Arbitrator appointed for the purpose with mutual consent.
(12) The PARTIES will be at liberty to terminate this understanding as mentioned in this agreement on giving three month's notice in writing to the ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 10 of 17 other of service charges in lieu thereof. The account will be settled accordingly under the various clauses this agreement.
(13) This understanding/agreement has been affected with effect from Ist December 2003."
(emphasis supplied)
10. The Rent Controller, in the impugned judgment, has observed that the above terms and conditions of the MOU indicate that the tenant did not have an unconditional right to take back the possession of the property in question since such right to recover the possession was subject to certain conditions which included the exigency wherein no understanding would be reached regarding renewal of the period beyond the one indicated, if there was a default committed in the payment of the periodical consideration (described as 'service charges') or on expiry of the notice period. The Rent Controller concluded that the document indicates that the tenant had divested itself of the possession of the tenanted premises.
11. The tenant had also contended before the Rent Controller that the subsequent developments showed that the arrangement was not in the nature of it divesting itself of the possession in that the respondent no.2 had since shifted itself from the premises on 06.07.2010 during the pendency of the eviction petition with the arrangement coming to an end. The Rent Controller, however, held that this even could not ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 11 of 17 extinguish the cause of action that had accrued in favour of the landlord and in this context referred to the view taken by Hon'ble Supreme Court in Gajanan Dattatraya Vs. Sherbanu Hosang Patel & Ors. reported as (1975) 2 Supreme Court Cases 668.
11. The tenant is aggrieved with the view taken by the Rent Controller. The contentions raised before the Rent Controller have been reiterated and it has been argued that the law laid down in Gajanan Dattatraya Vs. Sherbanu Hosang Patel & Ors. (supra) would have no application to the case in hand, in as much as the said case was in the context of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the relevant clause contained in Section 13(1)(e), whereof had a different phraseology as compared to Section 14 (1) (d) of the DRC Act.
12. It has also been argued on the strength of Puran Singh Sahni Vs. Sundari Bhagwandas Kripalani (Smt) and others reported as (1991) 3 Supreme Court Cases 180 and Vayallakath Muhammedkutty Vs. Illikkal Moosakutty reported as (1996) 9 Supreme Court Cases 382, that a mere grant of licence does not amount to subletting. The appellant has also referred to Vishwa Nath and another Vs. Chaman Lal reported as AIR 1975 Delhi 117 and ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 12 of 17 Abdul Hamid and another Vs. Nur Mohd. reported as ILR (1976) II Delhi 250. The submission is that no evidence has been led to show that the tenant had divested itself of the legal possession over the tenanted premises.
13. The landlord, on the other hand, besides relying on Vishwa Nath Vs. Chaman Lal (supra) and Abdul Hamid and another Vs. Nur Mohd (supra) also refers to Joginder Singh Sodhi Vs. Amar Kaur reported as 2005 1 SCC 31, to argue that it having been shown that the tenant had put a stranger in the tenanted premise, the onus to explain the presence of the stranger would shift on to the tenant and that in the face of the MOU referred to above, in the present case it has been duly demonstrated that the tenant had actually put a stranger in total and exclusive control of the tenanted premises and, thus, had divested itself of the legal possession, thus, attracting the clause contained in Section 14 (1)(b) of the DRC Act inviting the eviction order.
12. I have given my considered thoughts to the contentions raised. I am of the view that the Rent Controller has appreciated the evidence in its correct perspective. The MOU though couched in a language indicative of a business arrangement, itself reveals that it was a camouflage to actually put a stranger in the control of the premises to ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 13 of 17 the exclusion of the tenant. Though the consideration against which the stranger has been brought in is described as service charges, it is clear from a reading of the document in its entirety that it was primarily for the purposes of the business of the stranger rather than of the tenant. The terms and conditions of the document itself show that the premises was handed over with the entire furniture, fixture and fittings to the respondent no.2. The very fact that at the end of the period indicated in the document there would be a restoration of the possession of the premises to the tenant shows that the right to hold on to the premises during the currency of the said arrangement would be that of the stranger rather than with the tenant. The Rent Controller has correctly concluded on the basis of the terms of the MOU that right of the tenant to take back the premises to be a conditional one. It would have to either wait for the expiry of the period for which the arrangement had been made or invoke the default clause in relation to the monetary payments receivable therewith or bring an end to it by issuing and serving a legal notice.
13. It may be that the provision contained in Section 14 (1)(b) DRC Act differs from the language employed in the corresponding provision of the Bombay Act as was referred to in the case of Gajanan Dattatraya Vs. Sherbanu Hosang Patel and others ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 14 of 17 (supra). But then, the basic legal position remains the same. Here, there is sufficient proof of monetary consideration flowing from the stranger put in exclusive possession of the tenanted premises to the tenant. The said monetary consideration payable on monetary basis may have been described as service charges. In the given facts and circumstances, it being the consideration payable for use of the premises and fixtures, furnitures etc. therein primarily for the purposes of the business of the stranger, it was actually in the nature of rental. Even if this were to be ignored, the mere fact of the tenant having handed over the premises to the stranger divesting itself of the right to take back as and when required or felt necessary renders it a case of "parting with possession" within the meaning of the expression used in Section 14 (1)(b) DRC Act.
14. In above context, the following observations in para 30 and 31 of judgment in Vishwanath may be referred:
"So long as the lessee retains the legal possession of the whole of the premises he does not commit a breach of law against parting with possession by the allowing other people to use the same. A tenant cannot be said to part with the possession of any part of the premises unless his agreement with the licensee wholly ousts him from the legal possession of that part. If there is anything in the nature of a right to concurrent user there is no parting with ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 15 of 17 possession (1931) 1 Ch. D 470 and 1966 Delhi LT
28. Clause (b) of the proviso to S. 14 (1) uses three expressions, namely, 'sublet' 'assign' and 'otherwise parted with possession'. These three expressions deal with different concepts and apply to different circumstances. In subletting, there exists the relationship of landlord and tenant as between the tenant and his subtenant and all the incidents of letting or tenancy have to be found, namely, the transfer of an interest in the estate. Payment of rent, and the right to possession as against the tenant in respect of the premises sublet. In assignment the tenant has to divest himself of all the rights that he has a tenant. The expression 'parted with possession' undoubtedly postulates parting with legal possession. Parting with possession means giving possession to persons other than those to whom possession has been given by lease and "parting with possession"
must have been by the tenant. The mere user by other persons is no parting with possession so long as the tenant retain the legal possession himself or, in other words, there must be vesting of possession by the tenant in an other person by divesting himself not only of physical possession but also of the right to possession. The divestment or abandonment of the right to possession is necessary in order to invoke the clause of parting with possession. 1972 Ren CR 74 (Delhi)".
14. Similarly, in case of Abdul Hamid (supra) Hon'ble High Court observed as under:
ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 16 of 17 "The expression "part with possession" has to be understood in the legal sense. The mere fact that the tenant himself was not in physical possession of the tenancy premises for any period of time would not amount to parting with possession, so long as, during his absence, the tenant has a right to return to the premises and be in possession thereof, Divestment or abandonment of the right to possession is necessary in order to invoke the clause 'parting with possession".
15. Since the document referred to as MOU (Ex.PW6/4) unmistakably shows that the tenant had put a stranger in the legal possession of the premises, it not being a case of concurrent user, the conclusion that it had divested itself of the right of possession for the period the former was using the premises has been correctly held brought home.
16. For the foregoing reasons, I do not find any merit in the appeal. It is, thus, dismissed.
17. A copy of this judgment be sent to the learned trial court with trial court record.
18. File of the appeal be consigned to Record Room. Announced in open Court today on this 27th day of February, 2012 (R.K. GAUBA) ARCT (South & South East) Saket/New Delhi.
ARCT No. 44/11 Mukul Consultant Vs. Pijush Kanti Paul & Anr. 17 of 17