Delhi High Court
Akash Ganga Builders & Engineers (P) ... vs G.P. Seth Huf & Anr. on 20 May, 1999
Equivalent citations: 1999IVAD(DELHI)371, 80(1999)DLT579, 1999(50)DRJ589, ILR1999DELHI510, 1999RLR410, AIR 1999 DELHI 362, (1999) 2 RENCR 132, (1999) 2 RENTLR 399, (1999) 50 DRJ 589, (1999) 80 DLT 579
Author: Madan B. Lokur
Bench: Madan B. Lokur
ORDER Usha Mehra, J.
1. Akash Ganga Builders and Engineers Pvt. Ltd. has assailed the order passed by the learned Additional District Judge, Delhi, thereby decreeing the suit of the respondent, granting decree of possession and mesne profits.
2. The impugned judgment and decree have been assailed primarily on the grounds: (i) That the noticeterminating the tenancy under Section 106 of the Transfer of Property Act (hereinafter called the T.P.Act) dated7th May,1996 was not valid. Hence in the absence of valid notice decree could not have been passed.(ii) That as per oral agreement the period of tenancy could be extended at the option of the lessee (appellant herein). The appellant/lessee exercisedthat option seeking extension of lease for another period of ten years. Since the tenancy was subsisting it could not have terminated by efflux of time. (iii) That there was no admissions made by the appellant on the basis of which decree could be passed under Order 12 Rule 6 CPC, and finally (iv) the amount of rent had already been paid in excess to the respondent, therefore, the appellant was not liable to pay any mesne profit rather the excess amount already paid was required to be refunded or adjusted for future rent.
3. In order to appreciate the challenge raised, we may have a quick glance to the facts relevant for the determination of the same. Briefly stated the facts are that the respondents herein are the owners/landlords of the property bearing flat No.407, Inder Prakash Building,Connaught Place, New Delhi, measuring super area 726 sq.ft.This premises was letout to the present appellant on 28th June,1990 by an unregistered lease deed.Premises was let out on a monthly rent of Rs.24/-per sq.ft.It was initially let out for a period of three years. The monthly rent worked out to Rs.17,424/- payable in advance. The initial lease period expired in June,1993.The parties by exchange of letters extended the period of tenancy for another period of three years beginning from 1st July,1993. The rent was enhanced by 20% over and above the existing rent and made it to Rs.28.80 paise per sq.ft. per month. On calculation it worked out to Rs.20,910/- per month. That the period of lease expired by efflux of time on 30th June,1996.
4. However as an abundant caution tenancy was also terminated by a legal notice. The rent for the period from June,1996 and seven days of July,1996 had not been paid. The appellant was also to pay proportionate amount of maintenance charges in lieu of services provided by the builders. Hence the appellant was called upon to pay the outstanding amounts towards maintenance charges. It was also pleaded that the prevalent market rent of such like premises was Rs.270/- per sq.ft. per month.Thus the respondent (plaintiff before trial court) claimed damages of Rs.1,63,350/- for 25 days. The other ground taken was that the appellant herein had without the consent of the respondent/landlord sub-let the tenanted premises.
5. The appellant herein in its defense had taken the plea that the notice alleged to be under Section 106 T.PAct was not a valid notice. That no breach of the terms of the lease had been committed, therefore, the suit was not maintainable.The suit suffered from mis-joinder and non-joinder ofnecessaryparties.
6. Moreover there did not exist any privity of contract between the plaintiff No.1 HUF and the defendant.The premises, in fact was leased out by Shri G.P.Seth and Smt.Sheeba Seth for a period of three years in 1990 and not by a HUF. Lease was given orally on the condition that it could be extended in accordance with the wishes and desire of the lessee but by increasing rent at the rate of 10% after every three years. After the expiry of three years, lease was extended orally by increasing rent at the rate of 10%. Thereafter on the expiry of further three years, the lease was to get automatically revived.
7. It was only when the rent was not enhanced that the lease could come to an end. Since the appellant had expressed its readiness to enhance the rent by 10% on the previous rate and demanded adjustment of excess amount paid hence the lease automatically stood extended. That as per the unregistered lease the appellant was required to pay rent for the super area of 726 sq.ft. whereas in fact it was subsequently found that the premises comprised of total super area of 595 sq.ft. The respondent had thus charged excess amount for an area of 131 sq.ft.since the inception of the lease. Therefore, the excess amount required to be adjusted. The excess amount appellant was not liable to pay. That the lessor had orally agreed to extend the period of lease for a further period of ten years on the same terms and conditions already settled including the maintenance charges to be paid, if any. The lessor also agreed to adjust the excess rent eceived.The lessor, however, failed to honour these commitments, instead filed the suit by suppressing these material facts.It was also averred in the written statement that the lease being an unregistered lease could not be admitted in evidence.
8. In the background of the facts narrated above, the learned Additional District Judge on the following admitted facts namely relationship of landlord and tenant between this appellant & plaintiffs namely G.P.Seth & Sheeba Seth being admitted beside lease stood terminated by efflux of time and rent being more than Rs.3,500/- per month hence passed the decree on these admitted facts under Order 12 Rule 6 CPC. Admittedly from the pleadings of the parties it stood established and proved that the relationship of landlord and tenant was not in dispute. Since the rent of the premises was more than Rs.3,500/- per month hence the premises fell outside the purview of Delhi Rent Control Act.Tenancy was created by an unregistered lease-deed. Receipt of the notice dated 7th May,1996 is admitted. Major thrust of Mr.S.S.Vats argument was on the validity of the notice under Section 106 of the T.P.Act.Moreover, tenancy never stood terminated by efflux of time.Induction of the appellant was by a un-registered lease deed. It was executed in the year 1990 for a period of three years with a option to renew it for another period of three years subject to enhancement of rent. There is no denial of these facts by the appellant. It is also an admitted fact on record that after the expiry of first three years, parties extended the period of the lease by mutual consent. Letters exchanged in this regard were placed on record.
9. Tenure of the tenancy thus stood extended for another period of three years ending on 30th June,1996. Mr.Vats wants us to hold that since appellant exercised the option orally for the extension of lease period for further period of ten years hence the lease could not have come to an end by efflux of time.The learned trial court did not find any material o subscribe this view. We see no reason to disagree with the conclusion arrived at by the Court below on this aspect.Alternatively, Mr. Vats urged that since the Trial Court held it be a month to month tenancy, it could only be terminated by serving a valid notice under Section 106 of the T.P.Act thereby terminating the tenancy with the end of the tenancy month. But reading of the notice dated 7th May,1996 show that it did not determine the tenancy with the end of the tenancy month hence it was not the tenancy with the end of the tenancy month hence it was not a valid notice. The notice dated 7th May,1996 called upon the appellant to vacate and handover the premises on 8th July,1996. Hence the notice being defective and not in accordance to the provisions of Section 106 of the TP.Act, hence Court below should not have passed the impugned judgment and decree.
10. On the first blush the argument of Mr. Vats looked very convincing.But if we go through the documents on record and peruse the provision of Section 106 of T.P.Act we find that his argument has no substance, it merits rejection for the reasons which are going to deal presently. It is an admitted case of the parties that the tenancy was created by an unregistered lease deed, therefore, it could not amount to a written contract. In the absence of written contract, a lease of immovablepropertyother thanagriculturalor manufacturing purposes shall be deemed to be a lease from month to month, terminable, on the part of either party by ifteen days notice expiring with the end of a month of the tenancy.Respondent herein had issued notice dated 7th May,1996 vide which the respondent asked the appellant herein to vacate the premises by or before 8th July,1996 by handing over the peaceful and vacant possession.Receipt of this notice is admitted.But what appellant conveniently ignored in this notice and which unfortunately the learned Trial Court failed to note is that this notice was in continuation to respondent's letter dated 2nd February,1996. Reading of the letter dated 7th May,1996 clearly brings out the fact that intention not to renew the lease and of terminating the tenancy was communicated by the respondent to the appellant vide letter dated 2nd February,1996.The letter of 7th May,1996 was a reiteration of respondent's intention conveyed vide letter dated 2nd February,1996 whereby it was intimated to appellant that respondent had no intention to keep the appellant as tenant after the expiry of the lease period which was expiring on 30th June,1996.Mr.Vats' contention that we could not look into the contents of respondent's letter dated 2nd February,1996 because it had not been placed on record has no force. No doubt the letter of 2nd February,1996 was not placed on record but the mention of the same find place in the notice dated 7th May,1996. The receipt of which is admitted.At no stage appellant denied the receipt of the letter dated 2nd February,1996 the mention of which in no uncertain terms find place in the notice dated 7th May,1996. Even otherwise to do substantial justice and to pronounce correct judgment, this Court can call for a document even if it had not been produced earlier.To support this conclusion reliance can be placed on the provisions of Order 41 Rule 27 CPC.Rule 27 of Order 41 CPC gives ample power to the Court while exercising the appellate jurisdiction to call for a document. Rule 27 eads as under :-
R.27.Production of additional evidence in Appellate Court.-(1) The parties to an appeal shall not be entitled to produce additio- nalevidence, whether oral or documentary, in the Appellate Court.But if-
(a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or]
(b)The Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the appellate court may allow such evidence or document to be produced, or witness to be examined.
(2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record there as on for its admission.
11. Reading of the above provision makes it clear that it is not that a document can be called at the appellate stage at the instance of a party only.The Court in order to do substantial justice can also call for a document. Rule 27(1)(b) empowers the Court to call for a document without the aid of any party.Following decisions support over view: (i) Anantam Veeraju & Ors. Vs. Valluri Venkayya alias Venkamma & Anr. , (ii) Bela Singh V. Chatra reported in Vol.98 (1990) Punjab Law Reporter page 382 and (iii) 1987 Punjab Law Journal page 117. The opinion expressed in these cases is that the appellate court could call for additional documents while hearing and deciding the main appeal.Appellate Court should not reject receipt of a document on the ground that it had not been produced earlier when it was possible to do so as the same would aid in pronouncing the judgment and just disposal of the appeal.Moreover, to remove the cloud of doubt over the case particularly where the evidence has a direct and important bearing on the main issue and the interest of justice clearly rendered it imperative that it be allowed to be brought on record then such a document can be brought on record. Keeping the above principle in view we had allowed respondent to place letter dated 2nd February,1996 on record.
12. In this case as already pointed out above respondent herein vide letterdated 7thMay,1996 mentioned about its earlier dated 2nd February,1996 whereby they conveyed their intention not to renew the lease nor were they interested to keep the present appellantas their tenantafter30thJune,1996.
13. Therefore, it was imperative to read what was stated in the letter dated 2nd February,1996 whereby the respondent herein had conveyed their intention to terminate the tenancy with the end of the tenancy month and told the appellant that w.e.f. 1st July,1996 appellant herein should deliver possession. Merely asking the appellant vide letter dated 7th May,1996 to vacate the premises on or before 8th July,1996 and handover vacant and peaceful possession did not render the notice invalid.Letters dated 2nd February,1996 and 7th May,1996 are reproduced as under:-
REGISTERED A/D / UPC FROM :2.2.96 G.P.SETH (HUF)/SHEEBA SETH, FLAT NO.1, KHAN MARKET, NEW DELHI - 110003.
TO M/S AKASH GANGA BUILDERS & ENGINEERS (P) LTD.
FLAT N0.407, 21, INDRA PRAKASH BUILDING, BARA KHAMBA ROAD, NEW DELHI - 110001.
Dear Sir, This is to inform you well in advance,that, we would be requiring the premises let outto you i.e. Flat No.407, located in 21, Indra Prakash Building, Bara Khamba Road, New Delhi -110001 from 1.7.1996 for our own use. We would appreciate if you could vacate the premises ason the date intimated above and handover the vacant and peaceful possession of the same after clearing all dues towards rent, charges,rates and taxes. (underlining is ours) We may in this context remind you that as of today there is an outstanding of approximately Rs.85,750/- payable by your company to Star Estate Management Pvt.Ltd. the caretaker of Indra Prakash Building in which the flat leased out to you is situated.The liability to pay the above referred charges has been undertaken by your company, which should be cleared immediately. The details of these charges are given hereinbelow alongwith Bill dated 1.1.96 raised for the same purposes, the copies of which are annexed herewith.
1. Common Maintenance & service charges 1.50 per sq.ft. P.M. 3,267
2. Capital Assets Replacement Fund 45 P. per sq.ft. P.M. 980
3. Water Service Charges 10 P. per sq.ft. 218
4. Interest on overdue payments 4,610
5. Arrears76,684 TOTAL 85,750 Apart from the above, we may also point out to you that your company has not only been delaying the payment towards the rent but also, has been issuing cheques, which have bounded on number of occasions.
The officers of your company have adopted a unique methodology for delaying the payment, that is, by delivering the cheque at a much later date than the date mentioned on the cheque, with the result even though, you have undertaken to pay the rent in advance by the 7th of each English calender month, the cheques are received by us almost and constantly by the 3rd week of the month. Such delay in payment creates difficulty for us as we in turn make commitments for payment of monies based on the expectation that the rent will be received on the due date.
This apart,as we have already indicated, that the return of cheques issued by your company towards payment of rent, on ground of insufficient funds has not only embarrassed us but also causeda grave financial difficulties.
In these circumstances, we are hereby putting you to notice that any such delay of payment made through cheques on account of either late delivery or there being dishonoured by your bankers, interest at the rate of 24% per annum shall be leviable. This is without prejudice to our right to initiate appropriate civil and/or criminal proceedings against your company on account of this act of commission or omission.
To substantiate our grievance frequent dishonouring of cheques issued by your company towards payment of rent, we enclose here with copies of letters dated 12.10.95, 21.12.95 and 26.12.95 issued by the bank, which sufficiently demonstrates dishonour of cheque by your company furnished to us.
Kindly note we have not received till date rent for the month of January,1996.
We hope that in future, we shall not have any cause for complain and that your company would take into account our repossession of the premises leased out to you by the above referred date. (underlining is ours.) Yours sincerely, for G.P.SETH(HUF)/SHEEBA SETH sd/-
(S.K.PASSEY) Authorised Signatory LETTER DATED 7.5.1996 REGD.A.D. 7th May,1996 Akash Ganga Builders and Engineers Pvt. Ltd., Flat No.407, 21, Indra Prakash Building, Barakhamba Road, New Delhi-110001.
Kind Attn. Mr.Ashok Arora, Director.
Dear Sir, I am writing to youon behalf of and instruction of my client, Shri G.P.Seth HUF and Smt.Sheeba Seth, permanently residing at 22, Nehru Nagar, Agra (U.P.) My clients have instructed me to address you as under.
My clients have given on lease their property located at 21, Indra Prakash Building, New Delhi (hereinafter referred to as the said property) to Akash Ganga Builders & Engineers Pvt. Ltd.(hereinafter referred to as in short the 'Company'). The lease was effective from 1.7.90. It was agreed between the par ties that the initial lease tenure would be for a period of 3 years. It was also agreed as between my clients and the company that the rent of the premises would be in the sum of Rs.17,424/- per month, which would be paid in advance on or before 7th day of each calendar month.It was further agreed between the parties that upon expiry of lease tenure i.e. expiry of period of 3 years as from 1.7.1990, the lease of the demised premises shall be further extended by a period of another 3 years at the lessor's option upon enhancement of rent by 20% over and above the then existing rent. The option to extend lease tenure was only a one time option.
Furthermore, the lesser/company was also required to pay mainte nance/ service charges in respect of the said property to M/s Star Estate Agency, an agency incharge of maintenance of the flats in the Indra Prakash Building.The maintenance charges pertain to common services rendered by the said agency to all occupants of the flat.The company has undertaken the obligation to pay all such maintenance charges directly o Star Estate Agency.
It was in the background of these agreed terms and conditions that the said property was leased out to the company. As the events transpired, the company upon expiry of its initial lease tenure on 20.6.1993, exercised its option to extend the lease tenure by a further period of 3 years.The rent was consequently enhanced by 20% and fixed at Rs.20,910 per month which is the rent presently paid by the company. This being one time option, the present lease of the company expired on 30.6.1996.
My clients not being interested in entering into any fresh agreement with M/s Akash Ganga Builders & Engrs.Pvt. Ltd.are seeking vacation of the said property. My clients had conveyed their intention to this effect in writing to the company vide their letter dated 2.2.1996.Since the company is obliged to pay the rent in advance on or before the 7th day of each English Calendar month, my clients hereby put the company to notice to vacate the said property on or before 8.7.1996 by handing over the peaceful and vacant possession of the said property.
Furthermore, my clients once again call upon the company to pay the arrears towards maintenance charges owed by it to M/s Star Estate Agency, presently amounting to a sum of Rs.95360/- at the earli est definitely before vacating the said property as this is the liability of the company which it obliged to defray before hand ing over possession to them.
My clients hereby put the company to notice that in the event of its failure to vacate the said property on or before the date indicated above and; upon its failure to pay the above referred maintenance charges, they shall be constrained to initiate legal proceedings in court of law as advised,which would be at its sole risk, cost and consequences.
A copy of this notice is retained in my office for record.
(Underlining is ours) Yours sincerely, Sd/-
(RAJIV SHAKDHER)
14. The intention to terminate the tenancy w.e.f. 30th June,1996 and delivery of possession by appellant from 1st July,1996 was conveyed vide letter dated 2nd February,1996. This letter and the intention and request contained therein find mention in the notice dated 7th May,1996.
15. "The validity of the notice to quit" as pointed out by Lord Justice Lindley LJ, in Sidebotham Vs. Holland, reported in (1895) 1 QB 378, "ought not to turn on the splitting of a straw. It must not be read in a hyper critical manner, nor must its interpretation be affected by pedagogic pendant is more overrefined subtlety, but it must be construed in a common sense way." Allahabad High Court in the case of Sita Ram Vs. Moti Lal case, held that notice requiring the tenant to vacate and to give possession on the expiry of 30 days after receipt of the notice could not be called a defective notice. To the same effect are the observations of the Madras High Court in the case of Alphanso Pinto, Vs. Thukru Hengsu wherein it was held that if a notice calls upon the tenant to quit and prescribe time of giving up possession, the notice is valid even though the particulars as regards tenancy are not accurately set out.Allahabad High Court as well as Nagpur High Court in the case of Ghasi Ram Vs.Chaubey Mitra Sen , and Gayaprasad Ganpat Lal Vs. S.S. Munnilal Narayan Prasad, reported in AIR 1952 Nagpur 101 respectively held that a notice to quit need not be worded with accuracy where a monthly tenancy commences from 1st of each month. The notice is not invalid because the tenant has asked to vacate not by the end of the month but by the 1st of next month.The only requirement which is to be looked into under Section 106 is that it must be 15 days clear notice terminating the tenancy with the end of the tenancy month. It is settled law that a notice to quit must be construed not with a desire to find fault in it, which would render it defective, but it must be construed ut res magis valeat quam pereat as held by the Supreme Court in the case of Bhagabandas Agrawalla Vs. Bhagwandas Kanu &Ors. . Notice must be construed liberally. At the same time we have to keep in mind that it should not infringe the essential ingredients of section 106 of the T.P.Act. Even otherwise a tenant holding under a rent note which is inadmissible, as in the present case, for want of registration, is a tenant at Will and no notice is necessary to determine the tenancy. A demand for possession is sufficient which in this case was made vide letter dated 7th May,1996. The receipt of the letter dated 7th May,1996 being admitted and receipt of letterdated2nd February,1996 having not been denied the combined reading of these two clearly brings out the fact that tenancy of the appellant was terminated w.e.f. 30th June,1996. The intention not to renew the tenancy was communicated well in advance on 2nd February,1996.Even otherwise no material had been placed on record by the appellant wherefrom it could be inferred that tenancy was renewed after 30th June,1996. The respondent vide notice dated 7th May,1996 which was in continuation to respondent's earlier letter dated 2nd February,1996 whereby tenancy was terminated called upon the appellant to handover vacant possession of the tenanted premises by or before 8th July,1996. The contention of the appellant that the tenancy was not terminated by a valid notice merits rejection.Section 106 of the T.P.Act envisages the termination of monthly tenancy with the end of the month.From the facts discussed above it is apparent that the tenancy in this case was terminated with the end of the tenancy month.
16. Combined reading of the notice dated 7th May,1996 and the letter dated 2nd February,1996 show that the tenancy stood terminated w.e.f. 30th June,1996. It was only for the handing over possession that time was granted till 8th July,1996. That of course will not make the notice invalid. Hence, it would not be correct for Mr.Vats to urge that tenancy was not validly terminated. Unfortunately Court below gave undue weight to the use of the words "to vacate the premises by or efore 8th July,1996" thereby ignoring the relevant consideration that the landlord vide letter dated 2nd February,1996 had already conveyed that they were not interested to renew the tenancy after 30th June,1996. It was determined w.e.f.30th June,1996 and asked this appellant to deliver the possession from 1st July,1996. Like Mr.Vats, learned Court below thought that since possession was asked to be delivered by 8th July,1996 hence it was not a notice in terms of Section 106 of T.P.Act.But they ignoredthatnotice dated7th May,1996wasin continuation of the letter dated 2nd February,1996. No material was placed on record to show that parties extended the period of lease for another period of 10 years after 30th June,1996. Reliance by appellant on oral argument, to our mind, was rightly rejected by the learned Court below. On the contrary, combined reading of the letters dated 2nd February,1996 and 7th May,1996 clearly points out that the tenancy was never extended after 30th June,1996. It was rather made clear to the appellant that only one time option was available to extend the lease which stood exhausted by extending the lease till 30th June,1996. Thereafter, the lease was not extended and the intention was not to extend the same was communicated to the appellant.
17. Therefore, from whichever angle we may examine the case it is clear the tenancy was validly terminated by efflux of time as well as by notice conveying the intention not to extend the tenancy after 30th June,1996 and asking the appellant to vacate after 30th June,1996. Even otherwise the appellant being tenant holding over, a simple demand notice asking for the possession was sufficient which in this case was also done. Therefore, we find no merits in the submissions of counsel for the appellant on this count.
18. So far as the question of extension of tenancy for another period of ten years is concerned, we have already expressed our view above. There is no material on record to persuade us to form a different view from the one formed by the learned Court below. The submission of the appellant is that there was no admission on its part which could form basis for passing the decree under Order 12 Rule 6, CPC. We find no merit in this submission. From the facts enumerated above it can safely be concluded that facts admitted on record were sufficient for the Trial Court to pass the decree. Lastly Mr. Vats' contention that mesne profit could not be awarded because appellant had paid excess amount.On request of the appellant, Local Commissioner was appointed to find out the correct super-area in ssessionoftheappellant.Mr.ManmohanDayal, Architect was appointed as the Local Commissioner who after visiting the site submitted the report. From the reading of his report it is clear that the grand total of super-area in possession of the appellant is 701 sq.ft. He, however, did not take into consideration the external area, overhead or underground tanks of saleable area, which seems to be the general practice with the developers and builders to include in the super area. Therefore, according to the Architect's report the approximate super area in possession of the appellant is not what was alleged by the appellant i.e. 595 sq.ft. The physical measurement by the Architect show the area probably what was stated by the respondent.On this count too we find no substance in the submission of Mr. Vats. For the reasons stated above we find no merits in this appeal. Dismissed. Parties are left to bear their own costs.