Delhi District Court
M/S Cec International Corporation ... vs Mrs. Amita Puri (New Address) on 25 July, 2011
IN THE COURT OF SH. PITAMBER DUTT; ADJ (CENTRA)17,DELHI
Suit No. 251/09
Unique Case ID No. 02401C0669702008
M/s CEC International Corporation (India) Pvt Ltd.
Race Course Metro Station,
Tuglak Crescent,
Tuglak Road,
New Delhi110001 .......Plaintiffs
Versus
Mrs. Amita Puri (New Address)
wife of Mr. Pawan Puri
B64, GK1, New Delhi
And also at (Old Address)
Kh No. 134, Sultanpur,
Mehrauli Gurgaon Road,
New Delhi .........Defendants
Date of Institution of Suit : 07.05.2008
Date when reserved for orders : 21.07.2011
Date of Decision : 25.07.2011
JUDGMENT
1 Vide this judgment I shall decide a suit for recovery of Rs. 13,50,000/ filed by the plaintiff against the defendant The brief fact necessitating in filing the present suit are given as under: Suit no. 251/09 1/18 2 That plaintiff is a private limited company incorporated under the Companies Act, 1956. The defendant is the absolute owner of the premises bearing No. B64, Third Floor, GK1, New Delhi who was looking for a suitable tenant in the suit property and had advertised for the same. The plaintiff was in the need of suitable premises for setting up its office. Having come to know about the said premises, plaintiff approached the defendant with an oral request to lease the said premises for its office use. The plaintiff made it absolutely clear to the defendant that it needed the said premises for commercial purpose with good quality interiors. The defendant assured the plaintiff that they would not have any problem in running a commercial establishment from the said premises. Defendant assured that in case, some problem would arise in running a commercial establishment, then she would inform the plaintiff and would give 45 days notice to the plaintiff to vacate the said premises without charging any rent for the said period. The plaintiff agreed to take the said premises on rent and paid three months advance rent @ Rs. 3 lacs per month as well as Rs. 9 lacs as security deposit. Both the parties also agreed that the said premises would be let out for a fixed period of three years starting from 01.07.2006. The security amount of Rs. 9 lacs was agreed to be repayable without interest at the time of delivering the possession of the said premises to the defendant on the termination of the tenancy after adjusting all pending bills. The Suit no. 251/09 2/18 defendant on 15.09.2006, suddenly approached the plaintiff without any prior notice and directed it to vacate the said premises immediately because MCD was conducting sealing operation in the area therefore, plaintiff was forced to vacate the said premises in the night of 15.09.2006 at the request of the defendant. The plaintiff demanded refund of the security amount as well as Rs. 4,50,000/ towards one and a half months rent on the very next date, however, defendant refused to refund the aforesaid amount to the plaintiff. The plaintiff was thus compelled to serve a legal notice dated 30.11.2007 upon the defendant which was duly served. Defendant replied the same through her Advocate on 19.12.2007, however, she failed to refund the aforesaid amount of Rs. 13,50,000/ till date. On the basis of the above averments, present suit has been filed by the plaintiff against the defendant.
3 Pursuant to the summons defendant appeared and filed her written statement taking preliminary objections that plaintiff is not a company duly incorporated under the Companies Act, 1956, that Mr. Vijay Kumar is not duly authorized or competent to sign, verify and institute the present suit on behalf of the company. That suit has not been property valued for the purpose of court fees and jurisdiction.
On merit, it is stated that after negotiations between the plaintiff and the defendant, premises was let out vide lease agreement dated 01.06.2006 for a period of three years commencing from Suit no. 251/09 3/18 01.07.2006 at monthly rent of Rs. 3 lacs per month which was payable on quarterly basis. The plaintiff was under contractual obligation to pay the rent @ Rs. 3 lacs per month to the defendant for a period of 3 years at least. However, plaintiff in breach of the said condition of "lockin" period abandoned the possession of the suit premises without even giving any notice to the defendant or paying rent in lieu of the same. She has never given any notice to the plaintiff to vacate the premises much less on the ground of any problem arising from MCD. As per the defendant, plaintiff has failed to pay the rent for the "lock in" period of three years commencing from 01.07.2006 to 30.06.2009 as stipulated in the lease agreement dated 01.06.2006 therefore the defendant is entitled for to the extent of Rs. 13,50,000/ in lieu of her claim of the rent for a period of three years. As per the defendant, plaintiff abandoned the possession of the suit premises which was taken by the defendant only in the month of January 2008. All other averments have also been denied. It is prayed that suit be dismissed with cost.
4 Plaintiff filed replication reiterating the averments made in the plaint and denying the averments made in the written statement. 5 On the basis of the pleadings of the parties, Ld. Predecessors of this Court vide order dated 10.08.2008 was pleased to frame following issues: Suit no. 251/09 4/18
1) Whether the suit has been signed, verified and instituted by a duly authorized person? OPP
2) Whether the plaintiff is entitled to recover the suit amount with interest from the defendant? OPP
3) Whether the defendant is entitled for adjustment of Rs. 13,50,000/ towards her claim of rent for the lockin period of lease?
4) Relief 6 In order to prove its case, plaintiff examined Sh. Vijay Kumar as PW1 who reiterated the averments made in the plaint in his examination in chief. PW1 exhibited the certificate of incorporation of the plaintiff company as Ex. PW1/1, board resolution dated 20.03.2008 Ex. PW1/2, copy of the letter of intent dated 25.05.2006 Ex. PW1/3, legal notice dated 30.11.2007, reply dated 19.12.2007 and rejoinder dated 18.01.2007 Ex. PW1/4 (Colly).
7 In order to answer the claim of the plaintiff, defendant examined her son Sh. Varun Puri as DW1 who reiterated the averments made in the written statement in his examination in chief. DW1 exhibited the special power of attorney Ex. DW1/1. 8 I have heard both the ld. counsel for the parties and perused the pleadings, documents and the evidence led on record. My issuewise findings is as under: 9 Issue No. 1 Whether the suit has been signed, verified and instituted by a duly authorized person? OPP Suit no. 251/09 5/18 The onus to prove issue no. 1 is upon the plaintiff. Plaintiff is a private limited company incorporated under the Companies Act, 1956, therefore have a separate legal entity. It can act only through a duly authorized person on behalf of its board of directors. Present suit has been filed by Mr. Vijay Kumar, Authorized Representative of the plaintiff who has been authorized vide board resolution dated 20.03.2008. The said Mr. Vijay Kumar, AR of the plaintiff has placed on record the certified copy of the certificate of incorporation of the plaintiff company as Ex. PW1/1 issued by the registrar of the companies which clearly shows that the plaintiff is duly registered company under the Registration Act thus having a separate legal entity. Plaintiff has also placed on record the resolution passed by the board of directors Ex. PW1/2 whereby Mr. Vijay Kumar, Administrative Executive has been authorized to institute legal proceeding against the defendant. He has also been authorized to file the present suit and to do all such acts and deeds as may be required to be done on behalf of the plaintiff.
10 PW1 during crossexamination produced the extract of the minute book Ex. PW1/D1 pursuant to which the resolution Ex. PW1/2 was passed. He denied that the minute book of the meetings have been prepared after filing of the suit. He also denied that he is not authorized or competent to file the present suit on behalf of the plaintiff company. Defendant could not bring any material on record Suit no. 251/09 6/18 on the basis of which it can be said that Mr. Vijay Kumar was not a person duly authorized on behalf of the plaintiff company to institute the present suit against the defendant. On the other hand, plaintiff has placed on record the certificate of incorporation Ex. PW1/1, board resolution authorizing Mr. Vijay Kumar to institute the suit against the defendant. Ex. PW1/2 as well as minute book Ex. PW1/D1 pursuant to which resolution was passed.
In view of the above facts and circumstances, I am of the considered view that plaintiff has successfully proved on record that plaintiff is a private limited company incorporated under the Companies Act, 1956 and present suit has been filed by Mr. Vijay Kumar, who was duly authorized by the board of directors of the plaintiff company vide board resolution Ex. PW1/2. The plaintiff has thus successfully proved that present suit has been signed, verified and instituted by a duly authorized person. Plaintiff has thus discharged the onus of Issue no. 1, same is accordingly decided in favour of the plaintiff.
11 Issue No. 2 & 3 Whether the plaintiff is entitled to recover the suit amount with interest from the defendant? OPP Whether the defendant is entitled for adjustment of Rs. 13,50,000/ towards her claim of rent for the lockin period of lease? OPD Suit no. 251/09 7/18 Issue No. 2 & 3 are taken together as they are interconnected. The plaintiff has set up a case that the suit premises was let out to it for a fixed period of three years commencing from 01.07.2011 for a monthly rent of Rs. 3 lacs vide lease deed dated 01.06.2006. As per the plaintiff, defendant demanded three months advance rent and refundable security deposit of Rs. 9 lacs which was paid by the plaintiff to the defendant, however, defendant just after 45 days of actual operation of plaintiff's office on 15.09.2006 suddenly approached the plaintiff without any prior notice and directed it to vacate the suit premises immediately because MCD was conducting sealing operation in the area. Plaintiff was thus forced to vacate the said premises on the night of 15.09.2006 at the direction of the defendant. On the next day, plaintiff demanded refund of security amount and a sum of Rs. 4,50,000/ towards one and half month rental, however, defendant flaterely refused to return the said amount of Rs. 13,50,000/ to the plaintiff.
12 Defendant has set up a case that the suit premises was let out to the plaintiff vide lease agreement dated 01.06.2006 for a period of three years commencing from 01.07.2006. As per the lease deed, the premises had been let out for a lockin period of three years thus, plaintiff was under obligation to pay the rent to the defendant for the said three years period, however, in violation of the said condition, plaintiff abandoned the possession of the suit premises without even Suit no. 251/09 8/18 giving notice to the defendant or paying the rent in lieu of the same. As per the defendant, plaintiff abandoned the possession of the suit premises which was taken by the defendant in January 2008 therefore, the suit amount claimed by the plaintiff stands adjusted towards rent due to the defendant for the said period.
13 In order to prove its case, plaintiff examined Sh. Vijay Kumar as PW1 who reiterated the averments made in the plaint in his examination in chief. During crossexamination, PW1 deposed that before taking any property on lease, the company official inspect the site. He further deposed that one Mr. Arvind , Senior Manager, Administration had inspected the premises before taking the same on lease. He admitted that the property in question is residential in nature and is situated in residential area. He denied that the property was never let out for commercial purposes. He denied that defendant never assured the plaintiff that there would not be any problem in running office from the premises. He also admitted that as per the lease agreement, plaintiff was to comply with the rules and regulations of MCD, DDA which were applicable to the premises. He also admitted that as per MCD, DDA by laws the suit premises could have been used only for residential purposes. He denied that plaintiff had been illegally and without the consent of the defendant was using the suit premises for commercial purposes. He denied that defendant asked the plaintiff to immediately vacate the suit premises. He volunteered Suit no. 251/09 9/18 that they were informed telephonically by the defendant to do so because MCD was about to seal the suit property. He further stated that defendant had not been given any instruction in writing to the plaintiff to vacate the suit property immediately. He admitted that as per the lease, defendant was to give notice in writing before getting the suit property vacated. He denied that defendant never instructed the plaintiff orally to vacate the suit premises immediately. He further deposed that there is no document on record to show that the plaintiff handed over the possession of the premises to the defendant. He also denied that plaintiff was in possession of the premises up to the premises of January 2008. He stated that plaintiff has not issued any notice to the defendant at the time of vacating the premises. He denied that the plaintiff abandoned the possession of the suit premises on its own. He denied that plaintiff is not entitled to the refund of security deposit or of the rent.
14 Defendant examined her son Sh. Varun Puri in support of her case who reiterated the averments made in his examination in chief. During crossexamination, DW1 admitted that on the ground floor commercial entities were having their offices. He admitted that the entire property is residential in nature. He denied that on 15.09.2006, defendant had asked the plaintiff to immediately vacate the suit premises due to sealing drive by MCD in the area. He stated that he is not sure whether on 15.09.2006, defendant was in Delhi or Suit no. 251/09 10/18 not. He was in Delhi between the period of September 2006 to December 2006. He did not visit the suit premises during the period of September 2006 to December 2006 but have been going to the first floor. He further deposed that after first three months, defendant had orally demanded rent for the subsequent three months from Mr. Patric of the plaintiff company but there was no response from the plaintiff. He denied that plaintiff informed the defendant on 15.09.2006 that they are vacating the premises on the request of the defendant. He also denied that plaintiff had immediately demanded the refund of the security deposit as well as of the part rent paid in advance. He stated that no notice was issued by the defendant to the plaintiff demanding the rent and arrears of rent. He stated that he visited the third floor after about 18 months from 15.09.2006. When he visited the property he found all windows and flooring in broken state as well as of the bathroom fittings. He admitted that defendant had not staked any claim for damages of the above damages caused by the plaintiff to the suit property.
15 A Perusal of the pleadings and the evidence led on record shows that both the parties have pleaded that premises was let out through lease deed dated 01.06.2006 for a fixed period of three years. Admittedly there exists no registered lease deed between the parties. Section 107 of the Transfer & Property Act talks about the mode and manner as to how a lease for a period of one year or more can be Suit no. 251/09 11/18 executed. It reads as under: Leases how made A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
(All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
(Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee.) Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.) 16 Perusal of Section 107 makes it absolutely clear that a lease for a period of year or more can only be made through a registered instrument and not otherwise. In Burman Shell Oil Distributing now known as Bharat Petroleum Corporation Ltd. Vs. Khaja Midhadhat Noor reported as AIR 1988, Supreme Court Suit no. 251/09 12/18 147 has held that "Since the lease was for a period of exceeding one year, it can only have been extended by registered instrument executed by both the lessor and the lessee. In the absence of registered instrument, lessee shall be deemed to be "lease from month to month". It is clear from the very language of Section 107 of the act which postulates that a lease of immovable property from year to year or for term exceeding one year or reserving a yearly rent can be made only by a registered instrument. In the absence of registered instrument, it must be a monthly lease. The lessee and sublessee in the fact of this case continued to remain in possession of the property on payment of rent as a tenant from month to month".
17 In the instant case, no registered lease deed was ever executed between the plaintiff and the defendant at any point of time and plaintiff came into the possession of the suit property on the basis of a unregistered lease deed. Therefore no tenancy for three year fixed period came into existence between the parties as pleaded by them. The plaintiff was inducted as tenant on month to month basis as per English Calender w.e.f 01.07.2006.
18 The plaintiff has pleaded that on 15.09.2006, defendant directed it to handover the possession of the premises immediately because MCD was conducting sealing operation in the area therefore, it was constrained to vacate the suit premises on the night of Suit no. 251/09 13/18 15.09.2006. Defendant controverted the said plea and stated that plaintiff had not delivered the possession to the defendant and abandoned the premises without any intimation. The defendant acquired the possession of the premises in January 2008 after it was desealed. Thus plaintiff is liable to pay the rent till date period. Plaintiff has not placed any material on record which can show or suggest that the defendant ever called upon it to handover the possession immediately on 15.09.2006. Plaintiff has also not placed on record any document which can show that it had in fact handed over the possession of the tenanted premises to the defendant on15.09.2006. It is relevant to mention that before filing the present suit, plaintiff served legal notice dated 30.11.2007 Ex. PW1/4 (Colly) upon the defendant. Clause 4 of the said notice stipulates as under: "That on September, 16, 2006, you informed our Client that it was feared that the Municipal Corporation of Delhi is likely to seal the Premises for commercial use of residential property and that they should move their equipment and vacate the premises overnight". 19 The said notice was replied by the defendant vide notice dated 19.12.2007 and plaintiff had given rejoinder notice dated 18.01.2008 in which the above fact mentioned in Clause 4 of the legal notice dated 16.09.2006 was reiterated in Para 11 of the rejoinder notice.
20 A perusal of the legal notice and the rejoinder notice Ex. Suit no. 251/09 14/18 PW1/4 ( Colly) clearly shows that as per the plaintiff, defendant asked it to vacate the suit premises on 16.09.2006 whereas in the plaint, plaintiff has mentioned that defendant demanded possession on 15.09.2006 which was delivered on that day. When the plaintiff had already handed over the possession of the suit premises to the defendant on 15.09.2006 as mentioned in the plaint then, how the defendant again demanded the possession of the suit premises on 16.09.2006 which was handed over by the plaintiff as mentioned in the notice Ex. PW1/4. The aforesaid contradiction appearing in legal notice Ex. PW1/4 in the plaint and in the testimony of PW1 goes to the root of the matter. The aforesaid contradiction has also remained unexplained.
21 As per the defendant, plaintiff had not handed over the possession of the premises at any point of time and it abandoned the same without giving any intimation to the defendant and she obtained the possession of the premises from MCD in January 2008. 22 In order to succeed in the present suit, plaintiff is required to prove on record that, it was called upon by the defendant to deliver the vacant possession of the premises and the possession of the premises was handed over by the plaintiff to the defendant, therefore, the tenancy came into an end by delivering the possession. The plaintiff examined PW1 to substantiate its plea. During cross examination PW1 denied that defendant never instructed the plaintiff Suit no. 251/09 15/18 orally to vacate the suit premises immediately. He deposed that there is no document on record to show that plaintiff handed over the possession of the premises to the defendant. He further stated that the plaintiff has not issued any notice to the defendant at the time of vacating the premises.
A perusal of the above, thus clearly shows that besides the oral testimony of PW1 that defendant demanded possession on 15.09.2006, the plaintiff has not placed any material on record to show that defendant in fact demanded the possession from the plaintiff or it delivered the same. Under Section 106 of Transfer of Property Act, the month to month tenancy could have been terminated by the defendant by giving 15 days notice in writing. No such notice was ever given by the defendant to the plaintiff. The plaintiff could have also surrender the tenancy by giving notice to the defendant but it has also not given any such notice to the defendant. The tenancy of the defendant came in to existence on 01.07.2006.
23 The case of the plaintiff is that defendant demanded possession of the premises on 15.09.2006 due to sealing drive. However, plaintiff made contradictory statement in legal notice Ex. PW1/9 that possession was demanded on 16.09.2006. The above contradiction in the pleadings and legal notice, makes the plea of the plaintiff doubtful. The plaintiff has not placed any other material to prove that defendant ever demanded the possession of the premises Suit no. 251/09 16/18 from it at any point of time or same was handed over by the plaintiff to the defendant.
From the above, it is amply clear that the tenancy of the plaintiff was not terminated by the defendant at any point of time and plaintiff abandoned the premises without giving any notice to the defendant. The tenancy of the plaintiff thus continued until defendant acquired possession of the same from the MCD when the premises was desealed. Therefore, the plaintiff was under obligation to pay the agreed rent to the defendant till she got the possession of the premises.
In view of my above discussion, my issuewise findings is as under: 24 Issue No. 2 Whether the plaintiff is entitled to recover the suit amount with interest from the defendant? OPP The plaintiff has failed to prove on record that defendant ever demanded the possession of the tenanted premises from the plaintiff either on 15.09.2006 or on 16.09.2006. Plaintiff has not given any notice before vacating the suit premises thus made itself liable for payment of rent to the defendant till she recovered the possession of the premises from the MCD. Plaintiff has failed to discharge the onus of Issue no. 2, same is accordingly decided against the plaintiff. Suit no. 251/09 17/18 25 Issue No. 3 Whether the defendant is entitled for adjustment of Rs. 13,50,000/ towards her claim of rent for the lockin period of lease? OPD Defendant has proved on record that plaintiff has abandoned the premises on its own without giving any notice to the defendant. She has also proved on record that the tenancy of the plaintiff was not terminated in accordance with law and same remained continued till she got the possession of the premises. Therefore, plaintiff was liable to pay the agreed rent. Defendant has proved on record that she is entitled for adjustment of Rs. 13,50,000/ towards her claim of rent. The Defendant has discharged the onus of issue no. 3, same is accordingly decided in favour of the defendant.
Relief In view of the above, the suit filed by the plaintiff against the defendant is dismissed. However, both the parties shall bear their cost respectively. Decree sheet be accordingly prepared. File be consigned to record room after due compliance.
Announced in the open court (PITAMBER DUTT)
25th July, 2011 Additional District Judge
Delhi
Suit no. 251/09 18/18
Suit no. 251/09 19/18
Suit No.
Present; None
( PITAMBER DUTT)
ADJ; DELHI
Suit no. 251/09 20/18