Delhi High Court
W.H. Brady & Co. Ltd vs Sarita Jain on 9 November, 2017
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 9th November, 2017
+ RC REV.No.508/2017
W.H. BRADY & CO. LTD. .... Petitioner
Through: Mr. Lalit Gupta & Mr.
Siddharth Arora, Advs. with
Mr. S.M. Mishra, Branch
Manager of the petitioner
company.
Versus
SARITA JAIN ...... Respondent
Through: Mr. Nagender Yadav, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This Rent Control Revision Petition under Section 25-B(8) of
the Delhi Rent Control Act, 1958 (Rent Act) impugns order [dated 8th
May, 2017 in Eviction Petition No.E-235/2017 of the Pilot Court
(Central District), Tis Hazari Courts, Delhi] of dismissal of the
application filed by the petitioner for leave to defend the petition for
eviction under Section 14(1)(e) of the Rent Act filed by the respondent
and the consequent order of eviction of the petitioner from ground
floor of property No. 7530-B forming part of property bearing
Municipal No. 7530 situated at Tel Mill Street, Ram Nagar, Pahar
Ganj, New Delhi.
2. The matter came up first before this Court yesterday when
counsel for the respondent / landlady appeared on advance notice and
substantial arguments were heard. Further arguments have been heard
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today and copies of the Trial Court record annexed to the paper book
perused.
3. I have, at the outset, enquired from the counsel for the petitioner
/ tenant, whether the petitioner / tenant disputes ownership of the
respondent / landlady of the premises in the tenancy of the petitioner /
tenant from which the petitioner / tenant has been ordered to be
evicted and the existence of relationship of landlord and tenant
between the parties.
4. The counsel for the petitioner / tenant fairly states that though in
the application for leave to defend a dispute in this regard was raised
but the petitioner / tenant before this Court is not disputing that the
respondent / landlady is the owner of the premises with respect to
which the order of eviction has been passed and that the petitioner /
tenant was a tenant under the respondent / landlady in the said
premises.
5. The respondent / landlady sued for eviction of the petitioner /
tenant under Section 14(1)(e) of the Rent Act inter alia pleading i) that
the premises were let out to the petitioner / tenant by the predecessor-
in-interest of the respondent / landlady as far back as in the year 1966
at a rent of Rs.572.65 paise and the petitioner / tenant at the time of
institution of the petition for eviction was paying rent of Rs.770/- per
month to the respondent / landlady; ii) that though the premises had
been let out for commercial purposes but had been lying closed for
some time under the lock and key of the petitioner / tenant and the
petitioner / tenant had not been paying the electricity and water
charges of the premises also which were in arrears of over Rs.1 lacs;
RC REV No.508/2017 Page 2 of 15
iii) that the respondent / landlady has three growing sons viz. Sajal
Jain, Lakshya Jain and Pulkit Jain, aged 22 years, 21 years and 17
years respectively; iv) that the respondent / landlady wants the
premises in the tenancy of the petitioner / tenant for settling her son
Lakshya Jain who wants to establish gems and diamond polishing and
identification etc. business therefrom and in which skill the said son of
the respondent / landlady had acquired qualification; v) that the
respondent / landlady or her son did not possess any other alternate
suitable premises; vi) that the upper floors of the said property were
not suitable for setting up the said business; vii) that the petitioner /
tenant is a private company having corporate office at Mumbai and
having branch offices all over India including at Connaught Place in
New Delhi; viii) that the respondent / landlady is also the owner of
Ground Floor of property No.7575, Tel Mill Street, Ram Nagar, Pahar
Ganj, New Delhi which is in occupation of tenants and generating a
rent of Rs.90 lacs per month; ix) that the respondent / landlady, to
settle her elder son Sajal Jain, had appointed the said son as attorney
of the said property; and, x) that seeking eviction of tenants from the
said other property would result in huge financial loss to the elder son
of the respondent / landlady.
6. The petitioner / tenant applied for leave to defend pleading i)
that the premises in the tenancy of the petitioner / tenant are not
required bona fide by the respondent / landlady for herself or for any
members of her family dependent upon her; ii) that the respondent /
landlady has been regularly inducting tenants in the other portions of
the property and has failed to occupy the said portions in order to
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demand more and more rent from the portions which were falling
vacant; iii) that in the year 2014, the respondent / landlady issued a
notice to the petitioner / tenant to increase rent upto Rs.25,000/- and
on the basis of the said notice filed a Civil Suit for recovery of
possession of the premises from the petitioner / tenant; iv) that
however subsequently on 22nd December, 2016 the said suit was
withdrawn; v) that the demand for increase in rent showed that the
respondent / landlady had no requirement for the tenancy premises; vi)
that Lakshya Jain, son of the respondent / landlady, completed the
diamond polish course on 25th August, 2014 and the respondent /
landlady had not disclosed as to what the said Lakshya Jain was doing
thereafter and from where was he carrying on his diamond polishing
business; vi) that when the said Lakshya Jain, son of the respondent /
landlady, had waited from 25th August, 2014 onwards for a place to
start his diamond polishing business, there was no requirement for the
premises; vii) that even otherwise, since the respondent / landlady and
her sons are receiving rent of Rs.90 lacs per month, there was no
financial crisis for said Lakshya Jain to carry on any business; viii)
that the diamond polishing machines do not require any big area for
installation thereof and the said business can be carried on from a
small but secure place; ix) that the said business can also be carried on
by Lakshya Jain, son of the respondent / landlady from his residence
in Karol Bagh; x) that even Karol Bagh has a posh jewellery market
and is a hub of diamond jewellery; xi) that on the contrary there are no
big jewellers around the premises in the tenancy of the petitioner /
tenant; xii) that the premises in the tenancy of the petitioner / landlord
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are largely used as a godown for storage of goods and are not feasible
for setting up of a diamond polishing business; xiii) that the
respondent / landlady has let out a portion of the ground floor of the
property No.7575, Tel Mill Street, Ram Nagar, Pahar Ganj, New
Delhi to one Sh. Sunil Kumar with effect from 1 st April, 2017 i.e.
shortly prior to the institution of the petition for eviction from which
this petition arises on 10th April, 2017; xiv) that if the respondent /
landlady had bona fide requirement for any premises, she would not
have given the said premises on rent.
7. The respondent / landlady, in her reply to the application
aforesaid of the petitioner / tenant, pleaded i) that she is living with her
husband and her three matured sons in the house in Karol Bagh
constructed over 44 sq. yds. and comprising of two floors and in a
purely residential locality and there is no space available therein for
her younger son to carry on business therefrom; ii) that the property
No.7575, Tel Mill Street, Ram Nagar, Pahar Ganj, New Delhi, ground
floor of which is owned by the respondent / landlady, is already
occupied by three tenants since the year 2012 and the lease thereof
gets renewed from time to time and the said fact has already been
disclosed in the petition for eviction; iii) that Lakshya Jain, younger
son of the respondent / landlady, after acquiring qualification on 25 th
August, 2014 joined various organizations, private businesses to
acquire experience and practical knowledge of the trade and business;
iv) that installation of diamond polishing machines, besides requiring
space, require commercial electricity connection, manpower etc.; v)
that in comparison to the ground floor of premises No.7530, Tel Mill
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Street, Ram Nagar, Pahar Ganj, New Delhi in the tenancy of the
petitioner / tenant which opens on two sides and has approximately 26
feet wide road in front, the property No.7575, Tel Mill Street, Ram
Nagar, Pahar Ganj, New Delhi is only one side open and having a
narrow road in front where even a car or tempo cannot come and go
easily; and, vi) that for this reason also the property in the tenancy of
the petitioner / tenant is more suitable for the business of diamond
polishing required to be set up by Lakshya Jain, son of the respondent
/ landlord.
8. Before proceeding further, I may record that though the
application for leave to defend filed by the petitioner / tenant besides
the contents reproduced hereinabove also contains general denials of
the contents of the petition for eviction and certain vague pleas but
neither has the counsel for the petitioner / tenant argued the same nor
is the need to record the same hereinabove has been felt inasmuch as
the law is settled that Section 25B(5) of the Rent Act of Delhi requires
the tenant to, in the leave to defend application, disclose facts which
would disentitle the landlord from obtaining an order of eviction under
Section 14(1)(e) of the Act and mere denials, even if specific of the
averments of the landlord in the petition for eviction, as would have
sufficed in a written statement, do not suffice in an application for
leave to defend and do not disentitle the landlord from an order of
eviction under Section 14(1)(e) of the Act.
9. The first ground urged by the counsel for the petitioner / tenant
is that the respondent / landlady, vide legal notice dated 13th June,
2014, having demanded market rent from the petitioner / tenant, was
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not entitled to in April, 2017 seek eviction of the petitioner / tenant on
the ground of requirement of the tenancy premises.
10. A perusal of the notice dated 13th June, 2014 shows that the
demand of the respondent / landlady for market rent which the
respondent / landlady had then assessed at Rs.25,000/- per month was
in the wake of the view then prevalent amongst the legal fraternity of
Delhi that Sections 6 and 9 of the Rent Act providing for fixation of
standard rent having been struck down, the landlord becomes entitled
to demand prevalent market rent from old tenants paying old rent.
However, ultimately, the Division Bench of this Court in Santosh
Vaid Vs. Uttam Chand (2012) 188 DLT 293 (DB) held the same to be
not the correct position and the landlords of premises within the ambit
of the Rent Act i.e. which were fetching the rent of upto Rs.3,500/- per
month, being not entitled to any increase in rent save as provided
under Section 6A of the Act i.e. of 10% every three years by following
the procedure therefor, notwithstanding the provisions relating to
standard rent having been struck down. Merely, because the advocate
of the respondent / landlady also was of the opinion, which was then
prevalent, leading to a large number of such suits as the respondent /
landlady is claimed to have filed, cannot disentitle the respondent /
landlady's claim for eviction on the ground of her requirement being
considered in accordance with law.
11. It cannot also be lost sight of that the respondent / landlady has
sued for eviction on the ground of requirement of her son Lakshya
Jain whose age in the petition for eviction was disclosed as 21 years at
the time of filing of the petition in April, 2017 and which fact was not
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disputed by the petitioner / tenant in his application for leave to
defend. Lakshya Jain, who at the time of filing of the petition in
April, 2017 was 21 years of age, in the year 2014 would have been 18
years of age. Even if Lakshay Jain by the year 2014 had acquired
qualification in diamond polishing, nothing wrong is found in his not
wanting to start his own business immediately on acquiring
qualification and instead wanting to gain some experience and
practical knowledge in the said business by becoming a apprentice
with others carrying in the same business and only after about three
years wanting to launch his own business.
12. I have in fact enquired from the counsel for the petitioner /
tenant whether not it is the same position in the practice of law and
whether not generally a fresh law graduate, before setting up his own
office, works in another advocates office to gain experience and
practical knowledge of the legal profession.
13. The counsel for the petitioner / tenant has next argued that the
respondent / landlady has acquired vacant possession of the floor
above the premises in the tenancy of the petitioner / tenant and the
requirement of the respondent / landlord can be fulfilled therefrom.
14. I have enquired from the counsel for the petitioner / tenant
whether the said argument is open to a tenant and whether the same
has not been negatived by the Supreme Court in Dhannalal Vs.
Kalawatibai (2002) 6 SCC 16 and in Uday Shankar Upadhyay Vs.
Naveen Maheshwari (2010) 1 SCC 503. Supreme Court in the said
judgments has unequivocally held that a accommodation situated on
the first floor cannot be said to be an alternative suitable
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accommodation for carrying on business, in comparison to the ground
floor; a shop on the first floor cannot attract the same number of
customers and earn the same as a shop situated on the ground floor
would do; it is well known that shops and businesses are usually
conducted on the ground floor because the customers can reach there
easily; the Court cannot dictate to the landlord which floor he should
use for his business - that is for the landlord himself to decide. It was
held that the view taken by the High Courts in those cases that the
landlord should do business on the first floor was wholly arbitrary and
could not be sustained.
15. The counsel for the petitioner / tenant who is well versed in the
field of rent laws has argued no further.
16. The counsel for the petitioner / tenant has next argued that the
petitioner / tenant is entitled to leave to defend owing to the admitted
position that the respondent / landlady is the owner of another
property i.e. property No.7575, Tel Mill Street, Ram Nagar, Pahar
Ganj, New Delhi and which is stated to be barely 15 / 50 yards away
from the premises in the tenancy of the petitioner / tenant which the
respondent / landlady has been letting / re-letting. It is argued that the
rent fetched by the said premises is in excess of Rs.3,500/- per month
and the Rent Act is not applicable thereto and even if the respondent /
landlady had let out the ground floor of property No.7575, Tel Mill
Street, Ram Nagar, Pahar Ganj, New Delhi in the year 2012, the
respondent / landlady ought not to have renewed the lease thereof
thereafter when the requirement on the basis of which petition for
eviction has been filed accrued.
RC REV No.508/2017 Page 9 of 15
17. I have at the outset enquired form the counsel for the petitioner /
tenant that what is the need for trial on the said aspect, for leave to
defend to be granted. The facts are not in dispute. Though the
respondent / landlady is possessed as owner of another property i.e.
property No.7575, Tel Mill Street, Ram Nagar, Pahar Ganj, New
Delhi in the vicinity of the premises in the tenancy of the petitioner /
tenant but has let out the same in the year 2012 and has shortly before
or after the requirement, pleading which the petition for eviction has
been filed, has renewed the said lease. What has to be decided is,
whether the said fact disentitles the respondent / landlady from
obtaining an order of eviction of the petitioner / tenant.
18. The criteria as aforesaid, prescribed in Section 25B(5) of the
Rent Act for grant of leave to defend is whether the leave to defend
application of the tenant discloses facts which would disentitle the
landlord from an order of eviction under Section 14(1)(e). If facts so
disclosed are disputed by the landlord, the same have to be adjudicated
by trial. However, if the facts which are disclosed are not in dispute,
the decision whether they disentitle the landlord from an order of
eviction under Section 14(1)(e) of the Rent Act or not is to be taken at
the stage of leave to defend only and there is no need for grant of
leave to defend which leads to filing of written statement, examination
and cross-examination of witnesses. Owing to the docket explosion
even before the Rent Controllers, once a petition for eviction is put to
trial, it generally takes years, if not decades to decide.
19. I have in this context further enquired from the counsel for the
petitioner / tenant that once it has been held in Shiv Sarup Gupta Vs.
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Dr. Mahesh Chand Gupta (1999) 6 SCC 222, Ragavendra Kumar
Vs. Firm Prem Machinery & Co. (2000) 1 SCC 679 and Sait Nagjee
Purushotham & Co. Ltd. Vs. Vimalabai Prabhulal (2005) 8 SCC 252
that the landlord has an absolute choice of the premises with which to
fulfill his requirement, whether not it is open to such a landlord to,
instead of fulfilling the requirement from a premises yielding high rent
and forming the bread and butter of the landlord and his family
members, fulfill the said requirement from a low rent yielding
property. The test, to be applied at the stage of granting leave to
defend, is of genuineness of the need/requirement. A need to fulfill
the requirement for premises from low rent yielding property and not
from a high rent yielding property cannot in my view be said to be not
genuine. It is in this context only that Supreme Court in Anil Bajaj
Vs. Vinod Ahuja (2014) 15 SCC 610 has held that even where the
landlord is carrying on business from other premises, as long as there
is nothing to suggest that the landlord will after eviction of the tenant
not carry on business from the premises in the tenancy of the tenant,
the landlord cannot be deprived of an order of eviction.
20. The counsel for the petitioner / tenant in response has referred
to my order dated 20th September, 2017 in RC.REV. No.439/2017
titled Sushma Khanna Vs. Rajwant Kaur and to Vijay Kumar
Ahluwalia Vs. Bishan Chand Maheshwari (2017) 3 SCC 189.
21. In Sushma Khanna supra, I allowed the Revision Petition of
the tenant against the order of refusal of leave to defend, finding the
landlord to have in response to the plea in the application for leave to
defend of other shops being available to the landlady, pleaded the said
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shops to have been transferred to the son of the respondent and
without giving any particulars of the Sale Deed vide which the said
shops had been transferred. The facts thereof are not comparable to
the present case. The petitioner / tenant in the present case has
admitted rather than disputed that Lakshya Jain, son of the respondent
/ landlady had acquired qualification of diamond polishing and had not
disclosed that the said Lakshya Jain is doing any other business or
from any other place. Thus the requirement of premises for Lakshya
Jain to set up his business is not in dispute. In this view of the matter,
I am unable to entertain any doubt as to the genuineness of the
requirement pleaded by the respondent / landlady and once it is so, the
dismissal of application for leave to defend and consequent order of
eviction have to follow.
22. In Vijay Kumar Ahluwalia supra, Supreme Court granted leave
to defend finding i) the claim of ownership of the premises and which
was disputed by the tenant, to be based on alleged adoption deed set
up after 17 years; ii) the facts disclosed by the tenant in the application
for leave to defend prima facie causing a doubt as to the bona fide
requirement of the person who had filed the petition for eviction and
availability of alternative accommodation; and, iii) that the tenant had
not even attorned to the person who had filed the petition for eviction
as the landlord and there being no other evidence of the existence of
relationship of landlord and tenant between the parties.
23. Merely because Supreme Court in the facts of that case held a
case for grant of leave to defend to have been made out, cannot be a
precedent for all tenants against whom petitions for eviction on the
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ground of requirement have been filed, being granted leave to defend.
Cases of requirement deal with human beings and each human being
is different and his needs / requirements and circumstances are
different. A judgment in such case cannot be applied as precedent
without considering the facts.
24. The counsel for the petitioner / tenant has lastly handed over a
compilation of orders of Supreme Court in Special Leave Petitions
(SLPs) filed and tagging the same with an earlier SLP in which notice
was issued. It is argued that the Supreme Court in the said bunch of
petitions is re-considering the dicta of the Supreme Court in Satyawati
Sharma Vs. Union of India 2008 (5) SCC 287.
25. Neither of the orders handed over contain any indication of
Satyawati Sharma supra as being re-considered. Moreover, the said
orders are of Benches of strength of two Hon'ble Judges as the Bench
which pronounced Satyawati Sharma supra. The matter is not found
to have been referred to a larger Bench. I am therefore unable to even
prima facie form an opinion of the dicta of the Supreme Court in
Satyawati Sharma supra being not binding on me and cannot entertain
this petition on that ground.
26. No other arguments have been urged.
27. Before parting, I may record that the petitioner / tenant indeed is
found to be a large public limited company, shares whereof trade at a
high value in the Stock Exchange. Supreme Court in Malpe
Vishwanath Acharya Vs. State of Maharashtra (1998) 2 SCC 1,
while dealing with determination and fixation of rent under the
Bombay Rents, Hotel and Lodging House Rates Control Act, 1947,
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held that one of the reasons for enacting the rent control legislation is
to prevent exploitation of the tenants by the landlords, it is true that
whenever a special provision, like the Rent Control Act, is made for a
section of the Society it may be at the cost of another section, but the
making of such a provision or enactment may be necessary in the
larger interest of the society as a whole but the benefit which is given
initially if continued results in increasing injustice to one section of
the society and an unwarranted largess or windfall to another, without
appropriate corresponding relief, then the continuation of such a law
becomes arbitrary. The provisions in the Act relating to standard rent
were found to be archaic and held to be arbitrary and unreasonable. In
Prabhakaran Nair Vs. State of Tamil Nadu (1987) 4 SCC 238, the
Supreme Court stressed the need for rationalizing the rent legislations
and the need for striking a balance between rival interests of rent and
demand in the prevalent economic and social scenario. The Division
Bench of this Court in Raghunandan Saran Ashok Saran (HUF) Vs.
Union of India (2002) 95 DLT 508 (DB) also noted that it is not
uncommon that commercial properties rented long back are fetching
very meager rents, while the tenants running their trades in those
properties are earning huge profits; this is an unjust and unreasonable
situation. The present is found to be a case where a large corporate is
found to be holding on to a property of which it fortuitously became a
tenant half a century ago.
28. While in the said half a century, the share price of the said
petitioner / tenant company has multiplied hundreds of times, the
petitioner / tenant company is choosing to exploit the rent laws by
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continuing to pay to the owner of the property the same rent at which
it had taken the premises more than half a century ago.
29. The Act, as it exists, also provides for fixation of standard rent
of the tenancy premises. The Division Bench of this Court in
Raghunandan Saran Ashok Saran (HUF) supra was concerned with
a challenge to the provisions in the Act relating to standard rent on the
ground of same being violative of Articles 14(1)(g) and 21 of the
Constitution of India. It was found that Rs. 229.59 paise of 1998 had a
value equivalent to Rs. 2.97 of 1939 and therefore the landlord, owing
to the provisions of the standard rent, in terms of actual money value
gets only Rs. 2.97 instead of Rs. 229.59 paise. It was held that the
control of rents and evictions which initiated in the wake of the
partition and population explosion in Delhi served a salutary purpose
in the then prevailing situation but over the years the restrictions and
limitations imposed and continued by various Rent Control
Legislations had curtailed the growth of housing in general and rental
housing in particular; even the amendments with effect from 1 st
December, 1988 had failed to provide solutions to the problem.
30. There is thus no merit in the petition.
Dismissed.
No costs.
RAJIV SAHAI ENDLAW, J.
NOVEMBER 09, 2017 'gsr'..
(Corrected & released on 4th January, 2018) RC REV No.508/2017 Page 15 of 15