Delhi District Court
Judge 03 (East) vs M/S Shree Cement Ltd on 6 March, 2020
IN THE COURT OF SH. M.P. SINGH, ADDITIONAL DISTRICT
JUDGE 03 (EAST), KARKARDOOMA COURTS, DELHI
CS No. 1360/16
Sh. R. K. Taparia,
S/o Sh. G. L. Taparia,
R/o D15, Navkunj Apartments,
87, I. P. Extension, Delhi - 110092 ...... Plaintiff
Versus
1. M/s Shree Cement Ltd.,
G6, Hans Bhawan, 1,
Bahadurshah Jafar Marg,
New Delhi - 110092.
Also at: 122123, Hans Bhawan,
1, Bahadurshah Jafar Marg,
New Delhi - 110002
Also at: Bangur Nagar, Beawer,
Rajasthan - 305901
Also at: Flat no. 16, Vardan Apartments,
64, I. P. Extension,
Delhi - 110092
2. Sh. R.K. Bharani (impleaded vide order dt. 05.11.2015)
S/o Late M.L. Bharani,
Flat No. 18, Vardan Apartments,
64, I.P. Extension,
Delhi - 110092 ......Defendants
Suit instituted on - 17.07.2014
Arguments heard on 24.02.2020
Date of decision - 06.03.2020
JUDGMENT
1. In this landlordtenant dispute, possession of the tenanted premises was delivered to the plaintiff on 21.09.2018 pursuant to a decree passed on 03.04.2018 under Order XII Rule 6, CPC. The present suit is now only qua the rental arrears and damages/mesne profits.
CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 1 of 212. Issues, framed on 03.04.2018, are as follows:
1. Whether the plaintiff is entitled for arrears of rent as claimed, if so, from defendant no. 1 or defendant no. 2 or from both the defendants?
2. Whether the plaintiff is entitled for damages/mesne profits as claimed, if so, at what rate and for what period?
3. Relief.
3. Facts, as set out in the amended plaint (amendment allowed vide order dt. 31.07.2017) are as follows: Plaintiff leased out flat no. 16, Vardan Apartments, 64, I. P. Extension, Delhi - 92 to defendant no.1 vide a Lease Deed dt. 29.05.1997 (Ex. PW1/5) for an year commencing from 01.06.1997 to 31.05.1998. The premises were leased out to defendant no.1 for residential use of defendant no.2 Mr. R.K. Bharani. Defendant no.2 Mr. R.K. Bharani was Manager (Secretarial) of defendant no.1. The terms of this Lease Deed (Ex. PW1/5) between the plaintiff and defendant no.1 are as follows: "Whereas the Lessor is the only lawful owner of the house bearing flat No. 16, Vardan Apartments, 64, I.P. Extn. Delhi 92. Whereas the Lessee desires to take the aforesaid premises for the purpose of residence on rent for a term of one year commencing from 1st June, 1997 on the terms and conditions hereafter contained:
1. That the lessee shall pay monthly rent of Rs. 4,500/ (Rupees Four Thousand Five Hundred Only). The lessee shall also pay the monthly maintenance charges levied by the society either directly to the society or through the lessor. At present the monthly maintenance charges are Rs. 150/ (Rupees One Hundred Fifty Only). The charges for the electricity consumed will be paid by the lessee.
2. That the House Tax, Ground rent and other local taxes etc., imposition and outgoings payable either now or in future of the demised premises shall be paid by the Lessor. The first rent cheque will be issued by the lessee and thereafter monthly rent cheques will be issued by Mr. R.K. Bharani on behalf of the lessee. If Mr. R.K. Bharani fails to deliver the payment in time, CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 2 of 21 the lessee and will start paying the rent cheques directly to the lessor till the expiry of the lease.
3. That the above premises is being leased out for the residential use of Mr. R.K. Bharani, Manager (Secretarial) of the lessee, and his family only. Mr. R.K. Bharani will have no tenancy right. In case the said executive is transferred out of station or leave the services of the lessee or vacates the said premises for any reason whatsoever, the lessee will not put any one else in the possession of the said premises without the approval of the lessor.
4. That the lessee shall deposit security of Rs. 13,500/ (Rupees Thirteen Thousand Five Hundred only) with the lessor which will be refunded to the lessee on the termination of the lease and the entire responsibility of vacating the premises from the occupant on termination of the agreement will be of lessee.
5. That the rent shall be paid monthly in advance on or before the 7th of the month.
6. That at the time of vacating the premises the occupant shall restore sanitary, electrical and other fittings and fixtures in the premises in the same condition in which they were at the time when possession of the premises was taken by him, natural wear and tear excepted.
7. That routine daytoday repairs of the said premises will be undertaken by the occupant but major repairs including structural repairs, as and when required will be done by the lessor.
8. That the occupant can install air conditioners, coolers, refrigerators, televisions and cooking range etc., in the premises according to the regulations of the society.
9. That the lessee shall not make any structural additions of alterations in the building or layout without prior written consent of the lessor.
10. That the lessee shall permit the lessor or any of the authorised representative/s to enter upon the demised premises at the reasonable time with prior appointment for inspection and to carry out repairs etc., as and when necessary.
11. That the lessee shall not sublet, assign or otherwise part with the possession of the premises to anybody.
12. That the terms of this lease shall be for one year commencing CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 3 of 21 from 1st June, 1997 and on its expiry, further renewal will be done with suitable increase in rent if both parties agree.
13. That the agreement may be terminated by the lessee by giving one month's notice to the lessor or by payment of one month's rent in lieu thereof. The lessor shall also have right to terminate the agreement but only after expiry of the first one year of the term hereby created and in the event he genuinely requires the flat for his personal use, by giving lessee one month's notice in writing.
14. That the tenant will abide by all the terms and conditions of local society authority if H.W.F or any other authority of Delhi Admn., or Union Govt.
15. That the lessee agree to deliver peacefully the said premises at the end or otherwise on sooner termination of the lease in proper and good conditions subject to normal wear and tear.
16. That the tenant if contravenes and conditions of this rent agreement then the lessor shall have rights to get the rented premises vacated from the custody of the lessee immediately."
4. After expiry of the Lease Deed dt. 29.05.1997 (Ex. PW1/5), no fresh Lease Deed was entered into between the parties. However, the rent was enhanced from time to time and the monthly rent till 30.04.2014 was Rs. 13,500/ excluding electricity, water and maintenance charges. As such under the law, according to the plaintiff, a month to month tenancy continued in favour of defendant no.1 qua the premises.
5. Of late defendant no.2 Mr. R.K. Bharani became a persistent defaulter in payment of rent on behalf of defendant no.1. During the period from 01.04.2012 to 31.03.2014 total rent calculated at the rate of Rs. 13,500/ per month was to the tune of Rs. 3,24,000/ against which defendant no.2 paid only Rs. 1,14,000/ (Rs. 6,000/ cash payment on 08.08.2013, a cheque payment of Rs. 94,500/ on 27.01.2014 for seven months' rent from 01.07.2013 till 31.01.2014 and another cheque payment of Rs. 13,500/ on 20.03.2014 for rent of February 2014). Plaintiff's repeated requests to the defendants to clear the rental arrears CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 4 of 21 were of no avail. Defendant no.1 was thus in rental arrears of Rs. 2,10,000/. As per the plaintiff, as on 30.04.2014, defendant no.1 is in rental arrears of Rs. 2,23,500/ (Rs. 2,10,000 + Rs. 13,500/ for April 2014).
6. Plaintiff then served a legal notice dt. 21.03.2014 (Ex. PW1/7) under section 106 of Transfer of Property Act thereby terminating the tenancy with effect from 30.04.2014 vide speed post/acknowledgment due and courier. Defendant no.1 did not reply to this notice. However, defendant no.2 Mr. R.K. Bharani, through his counsel, sent a reply dt. 08.04.2014 (Ex. PW1/20) to this notice. It is pertinent to mention here that in this reply dt. 08.04.2014 (Ex. PW1/20) Mr. R.K. Bharani stated that he was the tenant of the plaintiff.
7. Plaintiff avers that there has been no extinguishment, abandonment, relinquishment, surrender, assignment, or forfeiture of the tenancy of defendant no.1 that had come into inception vide Lease Deed dt. 29.05.1997 (Ex. PW1/5); that he (plaintiff) and defendant no.1 always remained and continued in the contractual relationship which had commenced vide Lease Deed dt. 29.05.1997 (Ex. PW1/5); that defendant no.1 remained a tenant by holding over till 30.04.2014 i.e. the date of termination of tenancy and thereafter defendant no.1 became a tenant at sufferance; that defendant no.2 is merely an occupier of the premises; that mere payment of rent by defendant no.2 will not make him the tenant; that privity of contract still exists between him (plaintiff) and defendant no.1; that defendant no.1 was bound to put him (plaintiff) in possession of the tenanted premises; that defendant no.1 never handed over nor informed nor requested, impliedly or expressly, to him (plaintiff) to take possession of the premises; that defendant no.1 cannot unilaterally put an end to its contractual obligations; that inter se relationship between the two CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 5 of 21 defendants is their internal affair; that an employee of the tenant cannot be considered to be in actual possession of the tenanted premises; that employee is allowed to use the tenanted premises only with the permission of his employer by virtue of his contract of employment with his employer; that an employee cannot claim any legal right of his own to occupy or remain in possession of the tenanted premises; and that there is no privity of contract between him (plaintiff) and defendant no.2.
8. Plaintiff seeks mesne profits/damages at the rate of Rs. 20,000/ per month. Damages for the months of May, June and July 2014, as claimed by the plaintiff, amounts Rs. 60,000/. Thus, the total of the rental arrears and damages, as claimed by the plaintiff, till July 2014 is Rs. 2,83,500/. Besides this, plaintiff seeks Rs. 20,000/ per month towards pendente lite and future damages/mesne profits. On these averments, plaintiff seeks following reliefs:
i) Grant to the plaintiff against the defendant no.1 and 2 a decree for possession qua the suit premises i.e. flat no. 16, Vardan Apartments, 64, I.P. Extn. Delhi 92, more particularly described in red colour in the site plan, placed on record;
ii) Grant to the plaintiff against the defendant no.1 a decree for recovery of Rs. 2,83,500/ along with pendente lite and future interest @ 18% per annum on the amount of Rs. 2,83,500/;
iii) Grant to the plaintiff against the defendant no.1 a decree for recovery of pendente lite and future damages/mesne profits at the rate of Rs. 20,000/ p.m.;
iv) Grant to the plaintiff against the defendant no.1 the entire costs of the suit;
v) Any other or further relief(s) which this Court may deem fit and proper in the facts and circumstances of the case may also be passed in favour of the plaintiff and against the defendant no.1 and 2 to meet the ends of justice.
9. Defendant no.1, in its written statement to the amended plaint, filed CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 6 of 21 on 09.10.2017, takes the stand that tenantlandlord relationship between it and the plaintiff had come to an end on expiry of one year lease period on 31.05.1998 and that thereafter it was Mr. R.K. Bharani with whom the plaintiff had entered into an independent tenancy agreement. It avers that contractual relationship between it and the plaintiff was never renewed in terms of clause 12 of Lease Deed (Ex. PW1/5) and as per which renewal was to be done with suitable increase in rent if both parties agreed. It states that on expiry of the Lease Deed (Ex. PW1/5), plaintiff neither contacted it nor ever insisted upon a fresh contract. It thus urges that no privity of contract subsists between it and the plaintiff. It submits that Mr. R.K. Bharani had left its services in year 2002 and this was well within plaintiff's knowledge. It states that the premises in question had been in possession of Mr. R.K. Bharani, a tenant of the plaintiff, for more than a decade and it is in fact Mr. R.K. Bharani who is paying the rentals as mutually negotiated and enhanced from time to time on his own behalf. It also states that no notice on correct facts was served on it. It further states that desire to terminate the tenancy was communicated to the plaintiff in last week of April 1998; that plaintiff came to its office in last week of April 1998 for surrendering possession and he was told that it (D1 company) did not want further extension. Besides this, it avers that the unregistered Lease Deed (Ex. PW1/5) is unenforceable and that the suit is a collusive one between the plaintiff and Mr. R.K. Bharani. Denying other averments, defendant no.1 seeks dismissal of the suit.
10. Defendant no.2 in his written statement, filed on 02.01.2016, states that no tenantlandlord relationship exists between him and the plaintiff; that the written rent agreement was between the plaintiff and defendant no.1; that plaintiff is not the owner of the tenanted premises; that tenant as per plaintiff's pleadings is defendant no.1; that as per the Lease Deed (Ex.
CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 7 of 21PW1/5) he had no tenancy rights; that no notice had been served upon him; that perusal of the notice dt. 21.03/2014 (Ex. PW1/7) shows that it was addressed to defendant no.1 only; that plaintiff's averments visàvis payment of rentals are false and cooked up; that no rental arrears are due; that possession of the premises was handed over to him in terms of oral agreement to sell entered into between him and the plaintiff. Besides this, he states that unregistered Lease Deed (Ex. PW1/5) is unenforceable; that the suit is time barred and the same is not valued properly. Denying other averments, defendant no.2 seeks dismissal of the suit.
11. Plaintiff in his replication, filed on 04.01.2018, to the pleadings of defendant no.1 reiterated and reaffirmed his averments as set out in the plaint and refuted those of the latter.
12. Plaintiff in his replication, filed on 27.02.2016, to the pleadings of defendant no.2 reiterated and reaffirmed his averments as set out in the plaint and refuted those of the latter.
13. Relevant would it be to note here that defendant no.2 suffered the proceedings ex parte vide order dt. 02.05.2017. On 31.07.2017 counsel Mr. Anuroop for defendant no.2 had appeared, but thereafter defendant no.2 never appeared.
14. In plaintiff's evidence, plaintiff (PW1) was the sole witness. In the evidence of defendant no.1, Mr. A.K. Talwar (authorized signatory and power of attorney holder of defendant no.1) was examined as DW1.
15. Arguments heard. Record perused.
16. Issuewise findings are as follows:
17. Issue No.1 - This issue is to the following effect, "Whether the plaintiff is entitled for arrears of rent as claimed, if so, from defendant CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 8 of 21 no. 1 or defendant no. 2 or from both the defendants?"
18. Witnesses are said to be eyes and ears of a Court. Thus, in order to depose, a witness would not require any specific authorization from the organization / company / firm with which he is engaged/connected. Order XXIX, CPC does contain a provision for filing of a plaint by the authorised persons as mentioned therein. However, there is no provision in the entire CPC which mandates that for a witness to depose in a court of law, he must first furnish an authorization from the firm / company/ organization with which he is engaged/connected. There is neither any such provision in Indian Evidence Act. In this context, decision reported as Central Bank of India v. Tarseema Compress Wood Manufacturing Company & Ors., AIR 1997 Bom 225 can be referred to, wherein it was observed, "In my view, this argument, has no merit. Anybody can come and give evidence in Court provided that he is acquainted with the facts of that case. No power of attorney or authorization is necessary for any witness to give evidence in Court. It may be for filing the plaint, or signing the plaint or signing a written statement an authorization may be necessary, but to give evidence on oath, anybody, who is acquainted with the facts can give evidence." Therefore, the arguments touching on this aspect can be of no avail.
19. Now to the aspect whether Lease Deed (Ex. PW1/5) required compulsory registration. In terms of section 17 (1) (d), Registration Act, 1908 lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent requires compulsory registration. Lease Deed (Ex. PW1/5) is not year to year. It is not for any term exceeding one year. It was exactly for 12 months i.e. an year. It neither reserved a yearly rent. Rather, the rent was payable on month to month basis. As such, going by written text of section 17 (1) (d) of CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 9 of 21 Registration Act, Lease Deed (Ex. PW1/5) required no compulsory registration.
20. Now to section 107 of Transfer of Property Act. The first part of this provision provides that a lease of immovable property from year to year, or for any term exceeding one year, or reserving an yearly rent, can be made only by a registered instrument. The second part of section 107 of Transfer of Property Act gives exception to the first part and provides that all other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Thus, going by the first part of this provision Lease Deed (Ex. PW1/5) again required no compulsory registration.
21. In Satish Kumar v. Zarif Ahmed & Ors., (1997) 3 SCC 679 the question was whether a month to month lease or a lease of 11 months, if reduced to writing, required compulsory registration. It was observed:
7. The question, therefore, that arises is whether a lease of im movable property from month to month or for 11 months is a com pulsorily registerable document, though it was reduced to writing as an instrument defined under Section 2(14) of the Stamp Act. A con joint reading of the first part of Section 107 read with Section 17(1)
(d) of the Registration Act, as extracted hereinbefore, does indicate that a lease of immovable property from year to year, or for any term exceeding one year or reserving an yearly rent should be made only by a registered instrument and all other instruments, though re duced to writing and possession is delivered thereunder, are not compulsorily registerable instruments.
8. xxxx
9. ........The combined effect of all the provisions is that an unregistered lease deed executed from month to month, for a period not exceeding 11 months, though reduced to writing and possession is delivered thereunder to a tenant, is not a compulsorily registerable instrument and, therefore, the prohibition contained in Section 49 of the Registration Act is inapplicable. Therefore, the document is ad missible in evidence to consider the effect of the immovable prop erty contained therein or to receive as an evidence of any transaction visàvis such property.
CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 10 of 2122. It is thus held that Lease Deed (Ex. PW1/5) did not require com pulsory registration.
23. Plaintiff (PW1) in his crossexamination deposed, inter alia, as follows: "It is correct that rent agreement had stated that the same shall expire on 31.5.98. Vol. Premises was not vacated by the tenant. It is correct that there is no further written agreement extending the tenancy thereafter between plaintiff and defendant no.1. The defendant no.1 remain in the possession of the suit property through defendant no.2 who was their employee. It is wrong to suggest that defendant no.1 was not in possession of the suit property after the expiry of the rent agreement. It is wrong to suggest that a separate oral was entered between plaintiff and defendant no.2. The rent kept increasing after every two years. I do not remember as to the month or the year when the rent was enhanced for the first time. It is correct that there was no written consent of the defendant no.1 at the time of any enhancement of rent. It is correct that I did not give any notice or intimation to D1 whenever the rent was enhanced. It is correct that it was defendant no.2 who paid rent to me all through out the period. Vol. The same has already been agreed in the written agreement between me and defendant no.1 that the rent shall be paid through defendant no.2. It is wrong to suggest that the rent was increased with the consent of defendant no.2 which was with respect to fresh tenancy between me and defendant no.2 after expiry of the rent agreement. It is correct that there was no written consent of defendant no.1 through defendant no.2 at the time of increasing of rent. Vol. Defendant no. 2 had conveyed that he had already taken oral permission from defendant no. 1 for enhancement of rent."
24. There is a handwritten document dt. 01.07.2013 (Ex. PW1/6) under the signatures of Mr. R.K. Bharani. This reads as follows: I, Rajendra Kumar Bharani, hereby give this undertaking voluntarily that the flat no. 16 of Vardan Apt. at 64 IP Extn, Delhi 92 would hand over back to Shri R K Taparia in the month of January 2014. And also the rent due from today till the handing over the vacant and peaceful possession would also be paid by me.
25. Tenancy in terms of the Lease Deed (Ex. PW1/5) expired on 31.05.1998. Clause 12 of the Lease Deed (Ex. PW1/5) required that further renewal would be with 'suitable' increase in rent if both parties CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 11 of 21 agree. There is admittedly no agreement in writing between the plaintiff and M/s Shree Cement Ltd. extending or renewing the tenancy. There is also no evidence, much less pleadings, of any oral agreement between the plaintiff and M/s Shree Cement Ltd. extending or renewing the tenancy. Lease Deed (Ex. PW1/5) contained no clause about the quantum of increase (whether by 5% or 10%, or 15% or any other figure) in the rentals in the event of renewal. All that it said was 'suitable' increase. However, the plaintiff kept on enhancing the rent after 31.05.1998 and continued to take payment towards the monthly rent from Mr. R.K. Bharani. And this was sans any agreement between plaintiff and M/s Shree Cement Ltd. as the Lease Deed (Ex. PW1/5) is completely silent about the extent of the enhancement and duration after which the enhancement would take place. It would be evident that Lease Deed (Ex. PW1/5) contains no clause as to after how much duration the rent would be enhanced, i.e. whether it would be enhanced after 1 year or 02 years, or any other period. But the plaintiff (PW1) in his evidence says that 'the rent kept increasing after every two years'. It is difficult to comprehend as to on the basis what agreement with M/s Shree Cement Ltd. was the rent being increased after every 02 years. There is no evidence, much less any pleadings, of any oral agreement between the plaintiff and M/s Shree Cement Ltd. that rent would be enhanced after every 02 years. Neither there are evidence and/or pleadings of any oral agreement between the plaintiff and M/s Shree Cement Ltd. about the extent of enhancement in the rentals. There is no material on record to show as to how the quantum of 'suitable' increase in the rent was determined between the plaintiff and M/s Shree Cement Ltd. It is significant to note that between 01.06.1998 and just before issuance of the legal notice dt. 21.03.2014 (Ex. PW1/7) there was never any communication between the plaintiff and M/s Shree Cement Ltd. in relation to the tenancy, much less in relation to the CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 12 of 21 renewal of the tenancy, rental enhancement, or payment of rent. Sixteen years (between 01.06.1998 and 17.07.2014) is too long a period. The fact that with effect from 01.06.1998 till the next 16 years the plaintiff kept enhancing the rent every two years sans any agreement to this effect with M/s Shree Cement Ltd. does indicate that he (plaintiff) had entered into a fresh tenancy agreement with Mr. R.K. Bharani. This is bolstered by the fact that for the next 16 years (between 01.06.1998 and till 2014) there was never any communication between plaintiff and M/s Shree Cement Ltd. visàvis the tenancy. This view is again bolstered by the fact that for the next 16 years (between 01.06.1998 and till 2014) on no occasion did M/s Shree Cement Ltd. pay any rent. This further strengthened by the fact that plaintiff never, during the course of next 16 years, gave any notice or intimation to M/s Shree Cement Ltd. about rental enhancements at any point of time or for any other purpose connected with the tenancy. Further, the handwritten document dt. 01.07.2013 (Ex. PW1/6) clearly shows that plaintiff had taken the undertaking to vacate the premises from Mr. R.K. Bharani and not from M/s Shree Cement Ltd. The point is, if in plaintiff's scheme of things, it was M/s Shree Cement Ltd. that continued to be the lessee, then why should he not have taken the undertaking from M/s Shree Cement Ltd. The point again is if the tenancy with M/s Shree Cement Ltd. did actually subsist, then why did the plaintiff not invoke clause 4 of the Lease Deed (Ex. PW1/5) and ask M/s Shree Cement Ltd. to discharge its responsibility of having the premises vacated. Next, plaintiff in his plaint (paragraph no.7 of amended plaint) avers that Mr. R.K. Bharani, on behalf of M/s Shree Cement Ltd., defaulted in payment of rent during the period from 01.04.2012 to 31.03.2014. According to him, during this period Mr. R.K. Bharani had paid Rs. 6,000/ in cash on 08.08.2013, Rs. 94,500/ through cheque on 27.01.2014 and Rs. 13,500/ through cheque on 20.03.2014. Going by this, it does appear that the first CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 13 of 21 default in payment of rent took place qua the month of April 2012. The point therefore is that when the first default in payment of rent had taken place in April 2012, why the plaintiff did not, if the tenancy with M/s Shree Cement Ltd. actually subsisted, write / communicate to M/s Shree Cement Ltd. that there has been default in payment of rent and that it (M/s Shree Cement Ltd.) must make payment of the same. The point again is, if the tenancy with M/s Shree Cement Ltd. did actually subsist, why the plaintiff did not invoke clause 2 of the Lease Deed (Ex. PW1/5) thereby calling upon the latter to pay the rent directly to him.
26. The agreement that rent would be enhanced after every two years by a certain fixed amount must have been between the plaintiff and Mr. R.K. Bharani. There was no such agreement between the plaintiff and M/s Shree Cement Ltd. Needless to say, a contract of lease would require consensus ad idem between the landlord and the party taking the premises on lease. In the case at hand, there was never any consensus ad idem between the plaintiff and M/s Shree Cement Ltd. about renewal and/or extension of the tenancy. There was neither any consensus ad idem between the plaintiff and M/s Shree Cement Ltd. that rent would be enhanced after every two years. There was also no consensus ad idem between the plaintiff and M/s Shree Cement Ltd. as to by what amount rent would be enhanced. There was again no consensus ad idem between the plaintiff and M/s Shree Cement Ltd. fixing the monthly rental at Rs. 13,500/ in year 2014.
27. The aforesaid circumstances unmistakably show that plaintiff, by his own conduct, had started to treat Mr. R.K. Bharani as his tenant directly under him and deal with him as such on and after 01.06.1998 and continued to do so for the next 16 years till year 2014.
28. Under the law, M/s Shree Cement Ltd. and Mr. R. K. Bharani are CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 14 of 21 two different personalities. M/s Shree Cement Ltd. being a corporate entity has a separate personality of its own under the law, distinct from either its directors, employees, or shareholders. It can sue and be sued in its own name. DW1 Mr. A.K. Talwar in his evidence deposed that Mr. R. K. Bharani had left the services of M/s Shree Cement Ltd. in year 2002. This Court does not intend to go into the question of Mr. R. K. Bharani quitting the services of M/s Shree Cement Ltd. Reason being that the fact that Mr. R. K. Bharani happened to be an employee of M/s Shree Cement Ltd. will not and cannot fasten the latter company with any liability visà vis the inter se dealings of the plaintiff and Mr. R. K. Bharani.
29. Plaintiff's counsel argued that in terms of clause 3 of the Lease Deed (Ex. PW1/5) Mr. R. K. Bharani had no tenancy rights and as such Mr. R. K. Bharani could not be said to be the tenant. This argument overlooks the fundamental fact that Mr. R. K. Bharani was to have no tenancy rights in terms of the Lease Deed (Ex. PW1/5) only so long as the tenancy with M/s Shree Cement Ltd. subsisted. When the tenancy with M/s Shree Cement Ltd. was no longer in vogue due to plaintiff's own conduct, it could not be said that terms of the Lease Deed (Ex. PW1/5) were still in vogue and that Mr. R. K. Bharani continued to occupy the premises only as an occupant and not as a tenant. When the plaintiff by own conduct over the course of 16 years started to treat Mr. R. K. Bharani as a tenant directly under him, there can arise no question of invoking the terms of the Lease Deed (Ex. PW1/5). The plaintiff by his own conduct over the course of 16 years had treated the Lease Deed (Ex. PW1/5) as having lapsed. And indeed, the Lease Deed (Ex. PW1/5) was only for one year i.e. till 31.05.1998.
30. Plaintiff's counsel next pointed out that during subsistence of the tenancy, the first cheque of the rent was issued by M/s Shree Cement Ltd.
CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 15 of 21and thereafter payment of the rentals were made by Mr. R. K. Bharani. He thus urged that it is for this reason that plaintiff continued to take the monthly rentals from Mr. R. K. Bharani, albeit on behalf of M/s Shree Cement Ltd. even after 31.05.1998. What the plaintiff seems to ignore is that this arrangement (clause 2 of the Lease Deed) was in place only so long as the tenancy with M/s Shree Cement Ltd. subsisted. Once the tenancy with M/s Shree Cement Ltd. was no longer in vogue, it could not be said that Mr. R.K. Bharani was paying the rent for and on behalf of M/s Shree Cement Ltd.
31. It was next the submission of Ld. Counsel for the plaintiff that defendant no.1 M/s Shree Cement Ltd. had never handed over possession of the tenanted premises on or after 01.06.1998 to the plaintiff. But the point is there was nothing left to be handed over to the plaintiff. Plaintiff by his own conduct had handed over corpus of the tenancy, i.e. the tenanted premises to Mr. R.K. Bharani. The plaintiff by own conduct had started to treat Mr. R.K. Bharani as a tenant directly under him. Besides this, if plaintiff was aggrieved by the fact that M/s Shree Cement Ltd. had not handed over possession of the tenanted premises to him, then he did not soon after the expiry of the Lease Deed (Ex. PW1/5) write to the latter raising such a grievance. He neither soon after the expiry of the Lease Deed (Ex.PW1/5) on 31.05.1998 sue M/s Shree Cement Ltd. seeking possession of the tenanted premises. This argument is thus of no avail.
32. Plaintiff's legal notice dt. 21.03.2014 (Ex. PW1/7) was dispatched to M/s Shree Cement Ltd. vide speed post/acknowledgment due and courier. M/s Shree Cement Ltd. in its pleadings evasively admits receiving this legal notice. It states, inter alia, in paragraph 8 of reply on merits of its written statement to the amended plaint, "It is submitted that no notice on correct fact has been served by the plaintiff." It is thus taken CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 16 of 21 that there is an admission on the part of M/s Shree Cement Ltd., in terms of Rules 3, 4 and 5 of Order VIII of CPC, that it had received plaintiff's legal notice dt. 21.03.2014 (Ex. PW1/7). M/s Shree Cement Ltd. did not respond to this legal notice. The question is whether not responding to this legal notice by itself can fasten liability on M/s Shree Cement Ltd. The answer to this has to be clearly in the negative for the following multiple reasons.
(i) Assuming that failure to answer such legal notice as an admission yet such an admission cannot be conclusive proof of the matters admitted in terms of section 31, Evidence Act.
(ii) Even assuming that failure to answer the legal notice operates as an admission yet the Court may, in its discretion, require such admitted facts to be proved otherwise than by such admission on the anvil of the proviso to section 58, Evidence Act. In the instant lis, this Court would not, on the basis of the sole circumstance of failure of M/s Shree Cement Ltd. to answer the legal notice hold that it is liable to make payment to the plaintiff. It is fit and apposite that proviso to section 58, Evidence Act is invoked here (assuming that failure to answer the legal notice operates as admission). This Court accordingly does so. I may note that the proviso to Order VIII Rule 5 (1), CPC is to the similar effect.
(iii) There are cases in which Courts have held defendant's failure to answer plaintiff's notice to be deemed admission of the assertions made therein. But then those cases would be distinguishable on facts. For example, in Kalu Ram vs. Sita Ram, 1980 Rajdhani Law Reporter (Note) 44, an owner sued a trespasser for possession. The defendant therein instead claimed that he was a CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 17 of 21 tenant and further that the owner had agreed to sell him the property. The court found no evidence in support of both the pleas of the defendanttrespasser. Plaintiff had established his plea of trespass. It was in this backdrop that it was held that trespasser's failure to answer the legal notice showed that he had nothing to deny and it was fit case for raising adverse presumption against him. It is settled that ratio decidendi of a case must understood in the background of the factual matrix obtaining therein. {Javed Akhtar & Anr. v. Jamia Hamdard & Anr., MANU/DE/0179/2007}. Reference in this regard can also be had to Bharat Petroleum Corporation & Anr. v. N. R. Vairamani & Anr., AIR 2004 SC 778.
(iv) Apex Court in Union of India v. Watkins Mayor & Co., AIR 1966 SC 275 has held that mere failure to answer plaintiff's notice cannot be deemed to be an acceptance of the averments contained therein on the part of the defendant. It was observed in paragraph 7 of the judgment as under:
"It was pointed out that the plaintiff had given notice to the defendant claiming rent at the rate of Rs. 4/ per ton per month and there was no protest on behalf of the defendant and, therefore, it must be taken that there was an implied agreement between the parties that rent would be paid at that rate i.e. at the rate of Rs. 2400 per month. We do not think there is any warrant for this submission. Merely because the plaintiff had claimed storage charges at the rate of Rs. 4 per ton per month and there was silence on the part of the defendant, it cannot be deemed that there was acquiescence on the part of the defendant and that there was an implied undertaking on its part to pay godown rent at that rate."
(v) In Wiedemann v. Walpole (1891) 2 QB 534 Queens Bench in an action for breach of promise of marriage held that the mere CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 18 of 21 fact that the defendant did not answer letters written to him by the plaintiff in which she had stated that he had promised to marry her, without any other circumstance, was no evidence corroborating plaintiff's testimony in support of such promise. The Court in its judgment held, "A man might day by day write such letter, which, if they are not answered would be brought forward as evidence of the truth of the charges made in them. The ordinary and wise practice is not to answer them to take no notice of them unless it is made out to be ordinary practice of mankind to answer. I cannot see that not answering is any evidence that the person who receives such letters admits the truth of the statements contained in them. I have, therefore, no doubt that the mere fact of not answering a letter stating that the person whom it is written has made a promise of marriage is no evidence whatever of any admission that he did make the promise and therefore no evidence in corroboration of the promise. ................ It would be a monstrous thing if the mere fact of not answering a letter which charges a man with some misconduct was held to be evidence of an admission by him that he had been guilty of it."
(vi) Supreme Court of United States of America in A. B. Leach & Co. Inc. v. Peirson, 275 US 120 (1927) held: "A man cannot make evidence for himself by writing a letter containing the statements that he wishes to prove. He does not make the letter evidence by sending it to the other party against whom he wishes to prove the facts. He no more can impose a duty to answer a charge than he can impose a duty to pay by sending goods. Therefore failure to answer such adverse assertions in the absence of further circumstance making an answer requisite or natural has no effect as an admission."
(vii) A Division Bench of Andhra Pradesh High Court in Manepalli Udaya Bhaskara Rao v. Kanuboyina Dharmaraju 2003 SCC OnLine AP 1129 = (2004) 1 ALD 269 held that mere CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 19 of 21 failure to answer a notice is no deemed admission. It was observed:
"15. From the above discussion, it makes clear that the admission has to be spelled out only from the positive acts on the part of the party, but cannot be culled out or cannot be based on any presumptions. The exchange of notices would only at the most constitute, a demand and refusal in writing, but the absence thereof would not either way constitute an admission. Even failure to issue a notice cannot be said to be an absence of demand nor the failure to reply to such notice would amount to an admission of the claim made therein. Such omission would not amount to a tacit consent in respect of the demanded liability."
33. Not replying to the aforesaid legal notice will at the most show conduct of M/s Shree Cement Ltd. in terms of section 8, Evidence Act. But such a conduct, without anything more, would be an extremely weak evidence and it would not suffice to fasten a liability. Such a conduct together with other attending circumstances could have acted as corroborative evidence only.
34. Thus, the sum and substance of this is that relationship of landlord tenant between plaintiff and M/s Shree Cement Ltd. did not subsist on and after 01.06.1998 and this continued to be so for the next 16 years till the filing of the suit. Thus, M/s Shree Cement Ltd. is not liable to pay any rental arrears to the plaintiff.
35. Plaintiff in the prayer clause of his plaint does not seek rental arrears against defendant no.2 Mr. R.K. Bharani. It is a fundamental rule that in a civil suit, relief to be granted can be only with reference to the prayers made in the pleadings {Bachhaj Nahar v. Nilima Mandal & Anr., (2008) 17 SCC 491}. Not only this, to grant such a relief against defendant no.2 Mr. R.K. Bharani may seriously prejudice him. This is for the reason that Mr. R.K. Bharani stopped appearing and did not CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 20 of 21 join/participate the trial, perhaps under the belief that reliefs of rental arrears and/or damages/mesne profits had been claimed against him. To now hold that Mr. R.K. Bharani, whom plaintiff did not sue for rental arrears and/or damages/mesne profits, is liable to pay the same, would be to seriously prejudice him.
36. This issue is concluded by holding that plaintiff is not entitled to rental arrears from defendant no.1 M/s Shree Cement Ltd. Plaintiff, having omitted to seek the relief of rental arrears from defendant no.2 Mr. R.K. Bharani, is not entitled to the same from him too.
37. Issue No.2 This issue is to the following effect, "Whether the plaintiff is entitled for damages/mesne profits as claimed, if so, at what rate and for what period?" It has already been held hereinabove that landlordtenant relationship between plaintiff and M/s Shree Cement Ltd. ceased to subsist on and after 01.06.1998 and this continued to be so for the next 16 years till the filing of the suit. For this reason, M/s Shree Cement Ltd. is not liable to pay any damages/mesne profits to the plaintiff. Further, plaintiff, having omitted to seek the relief of damages/mesne profits from defendant no.2 Mr. R.K. Bharani, is not entitled to the same from him too.
38. Relief - This suit stands qua the reliefs of rentals arrears and damages/mesne profits is liable to be dismissed. It is ordered accordingly. Parties are left to bear their own costs. Decree sheet be drawn up. File be consigned to record room.
ANNOUNCED IN THE OPEN COURT ON 06.03.2020 (M. P. SINGH) ADJ03 (EAST) KKD/COURTS DELHI/06.03.2020 CS No. 1360/16 R.K. Taparia v. M/s Shree Cement Ltd. & Anr. Page 21 of 21