Delhi District Court
Kashmiri Gate Charitable Trust (Regd.) vs Jasmeet Singh on 15 January, 2026
IN THE COURT OF SH. UMANG JOSHI
CIVIL JUDGE-04, CENTRAL DISTRICT
TIS HAZARI COURTS, DELHI
Civil Suit No. 94413/2016
1. Kashmiri Gate Charitable Trust (Regd.)
1333, Sultan Singh Building
Kashmiri Gate, Delhi-110006
Through its trustees
2. RP Bansal
S/o Raghu Nath Sahai Bansal
3. Vinod Bajaj
S/o Lal Chand Bajaj
4. Jai Kumar Jain
S/o Siri Chand Jain
5. Rattan Lal Jain
S/o Sham Lal Jain
6. Sunder Lal Jain
S/o Sham Lal Jain
7. Amit Jain
S/o Shital Prasad Jain
8. Anupam Gupta
S/o MC Gupta
........Plaintiffs
Versus
1. Jasmeet Singh
S/o Surjeet Singh
R/o D-21A, Rajouri Garden
New Delhi
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
17:41:31 +05'30'
Civil Suit no. 94413/2016 Page no. 1 of 43
2. Inder Kaur
Mother of Late Gurpreet Singh
R/o C-28, Rajouri Garden, New Delhi
3. Rashmeet Kaur
W/o Late Gurpreet Singh
R/o C-28, Rajouri Garden, New Delhi
4. Sanya Chandhiok
D/o Late Gurpreet Singh
R/o C-28, Rajouri Garden, New Delhi
5. Varun Arora
S/o Roshan Lal Arora
R/o 2409, IInd Floor
Hudson Lane, Kingsway Camp
Delhi-110009
Also at:
Property no. 1330, First Floor
Sultan Singh Building
Kashmiri Gate, Delhi-110006
........Defendants
Date of Institution : 06.06.2014
Date of Decision : 15.01.2026
SUIT FOR RECOVERY OF POSSESSION AND
DAMAGES/MESNE PROFITS
JUDGMENT
1. Vide this judgment, this court shall dispose of the present suit filed by the plaintiffs seeking recovery of possession along with the relief of damages/mesne profits. The plaintiffs in the present suit have prayed for a decree of possession in respect of the property bearing shop no. 1330, Sultan Singh Building, Kashmiri Gate, Delhi-110006 (hereinafter also referred as the tenanted premises). Additionally, the plaintiffs have also UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:41:44 +05'30' Civil Suit no. 94413/2016 Page no. 2 of 43 prayed for recovery of a sum of Rs. 63,953/- towards damages/mesne profits for the period from 01.05.2014 to 04.06.2014 along with interest @ 12% per annum on the said amount. Furthermore, the plaintiffs have also prayed for grant of future damages/future mesne profits from 05.06.2014 till the date of handing over the actual, vacant and peaceful possession of the tenanted premises along with interest @ 12% per annum.
A. Plaintiffs' case as averred in the plaint:
2. Briefly stated, the factual matrix of the case as averred in the plaint is that the plaintiff no. 1 is a charitable trust and that plaintiffs no. 2 to 8 are the trustees of plaintiff no.1 trust. It is further stated that the movable and immovable properties of plaintiff no. 1 trust are vested in plaintiffs no. 2 to 8 and that they are the owners and landlords of the property bearing no. 1325 to 1337 and 1339 to 1357, Sultan Singh Building, Kashmiri Gate, Delhi-110006. It is further stated that a shop bearing no. 1330, Sultan Singh Building, Kashmiri Gate, Delhi-110006 (without roof rights) admeasuring approximately 515 sq. ft. i.e. the tenanted premises herein was let out by plaintiff no.1 trust to defendant no. 1 and Late Gurpreet Singh at a monthly rent of Rs. 680/- excluding electricity and water charges and all other taxes and that the said tenancy was a monthly tenancy commencing from 1st day of each calendar month. It is further stated that defendant no.1 and Late Gurpreet Singh being the original tenants had sublet, assigned and parted with the possession of the tenanted premises to defendant no.5 without the consent and permission of the plaintiffs and that the said original tenants created a sham and bogus partnership with defendant no.5 and executed a partnership deed dated UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:41:51 +05'30' Civil Suit no. 94413/2016 Page no. 3 of 43 01.05.2004 to camouflage the said act of subletting. The plaintiffs have contended that as per the said alleged partnership deed, a remuneration of Rs. 4000/- per month was to be paid to the partners and therefore the tenanted premises were actually fetching rent exceeding Rs. 3500/- per month and that as such the tenanted premises are not protected by the provisions of the Delhi Rent Control Act, 1958 (hereinafter referred as DRC Act). It is further stated that the plaintiffs had terminated the tenancy by notices dated 31.12.2001 and 30.06.2003 but the defendants failed to deliver the vacant possession of the tenanted premises despite service of the said notices pursuant to which the plaintiffs served another notice dated 04.03.2014 whereby the plaintiffs terminated the tenancy of the defendants qua the tenanted premises by midnight of 30.04.2014 and the defendants were called upon to deliver the actual, peaceful, physical and vacant possession of the tenanted premises to the plaintiffs on 01.05.2014.
3. It is further stated that defendant no. 1 and Late Sh. Gurpreet Singh being the original tenants of the tenanted premises had sublet, assigned and parted with possession of the said premises to defendant no. 5 without the consent and permission of the plaintiffs and that even though the plaintiffs do not admit defendant no. 5 as their tenant, the plaintiffs without prejudice to their rights and contentions had also terminated the tenancy of defendant no. 5 to obviate any objection or claim of defendant no. 5. The plaintiffs have contended that despite service of the notice dated 04.03.2014, the defendants have failed to deliver the actual, vacant and peaceful possession of the tenanted premises to plaintiffs and that the defendants are in illegal and unauthorised occupation and possession of the tenanted premises. Therefore, the present suit has been filed by the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:41:58 +05'30' Civil Suit no. 94413/2016 Page no. 4 of 43 plaintiffs seeking the reliefs as mentioned in paragraph no.1.
4. Perusal of the record shows that written statement was filed by defendant no.1, 2 and 5 on 10.10.2014. Furthermore, defendant no. 3 and 4 could not be served through ordinary process pursuant to which the said defendants were served by way of publication. However, no written statement was filed by defendant no. 3 and 4 and neither any appearance was entered on behalf of the said defendants despite substituted service through publication. Accordingly, the right of defendant no. 3 and 4 to file written statement was closed and defendant no. 3 and 4 were proceeded ex parte vide order dated 04.02.2016.
B. Defendants' case as per the Written Statement:
5. The defendant no. 1, 2 and 5 in their written statement have admitted the existence of the relationship of landlord and tenants between the parties and have averred that the rate of rent of the tenanted premises is Rs. 680/-
per month. However, the said defendants in their written statement have taken certain preliminary objections i.e. that the present suit is barred under Order 2 Rule 2 CPC and is also barred under Section 50 of the DRC Act, that the plaintiffs have no locus standi to file the present suit and that the suit is not properly valued for the purpose of court fees and jurisdiction. On merits, the said defendants have denied the case put forth by the plaintiffs and have averred that defendant no. 1 and Late Gurpreet Singh did not sublet, assign or part with the possession of the tenanted premises in favour of defendant no.5 and that defendant no. 2 to 4 have inherited the tenancy of Late Gurpreet Singh who was one of the original tenants. It is further averred that the tenanted premises is still under the use, occupation and possession of the tenants i.e. defendant no. 1 to 4.
UMANG Digitally signed by UMANG JOSHI
JOSHI
Date: 2026.01.15 17:42:05 +05'30'
Civil Suit no. 94413/2016 Page no. 5 of 43
6. The defendants in their written statement have further denied the service of the notices of termination dated 31.12.2001 and 30.06.2003 but have admitted the service of the notice of termination of tenancy dated 04.03.2014 and have stated that the said notice was duly replied by the defendants. The defendants have contended that the plaintiffs are not entitled to any relief and have accordingly prayed for dismissal of the present suit.
C. Replication:
7. In pursuance of the written statement filed by defendant no. 1, 2 and 5, the plaintiffs filed their replication in which the averments of the plaint have been reiterated and the defence put forth by the defendants in the written statement has been denied.
D. Issues framed in the suit:
8. Perusal of the record shows that the issues in the present suit were initially framed on 23.05.2016. However, subsequently, separate applications under Order 14 Rule 5 CPC seeking amendment of the issues were filed by plaintiffs and by defendant no. 1, 2 and 5. The said applications were thereafter allowed and pursuant thereto, fresh issues were framed by the Ld. predecessor court on 03.06.2019. The present suit is accordingly being adjudicated and decided on the basis of the issues framed on 03.06.2019 and the said issues are as follows:
1. Whether the plaintiffs are entitled for decree of possession, as prayed for? OPP
2. Whether the plaintiff is entitled for a decree for mesne profits, if UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:42:16 +05'30' Civil Suit no. 94413/2016 Page no. 6 of 43 yes then at what rate? OPP
3. Whether the plaintiffs are entitled for any interest, if yes, then at what rate, upon what amount? OPP
4. Whether the suit is barred under Order 2 Rule 2 CPC? OPD
5. Whether the suit is barred by Section 50 of DRC Act? OPD
6. Whether the present suit has been properly valued? OPD
7. Relief.
E. Plaintiffs' Evidence:
9. In order to prove their case, the plaintiffs examined the plaintiff no. 6 namely Sunder Lal Jain being one of the trustees of plaintiff no.1 trust as PW-1. PW-1 tendered his evidence by way of affidavit Ex. PW1/A and relied upon the following documents to prove the case of the plaintiffs which are as follows:
i. Copy of trust deed Ex. PW-1/1 (OSR).
ii. Certified copy of sale deed Ex. PW-1/2. iii. Site plan of premises Ex. PW-1/3.
iv. Certified copy of partnership deed dated 01.05.2004 Ex. PW-1/4. v. Copy of site plan showing additions and alterations carried out by defendants Ex. PW-1/5.
vi. Copy of legal notice dated 31.12.2001 Mark A. vii. Copy of legal notice dated 30.06.2003 Mark B.
viii. Certified copy of order dated 04.07.2008 Ex. PW-1/6. ix. Office copy of legal notice dated 04.03.2014 Ex. PW-1/7. x. Original postal receipts Ex. PW-1/8 to Ex. PW-1/17 (colly). xi. Original acknowledgment card Ex. PW-1/18 to Ex. PW-1/19.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
17:42:24 +05'30'
Civil Suit no. 94413/2016 Page no. 7 of 43
xii. Rent receipts for the period of 01.07.2016 to 30.09.2016 and
01.10.2016 to 31.12.2016 Ex. PW-1/20 (colly).
xiii. Rent receipts for the period of 01.07.2016 to 30.09.2016 and 01.10.2016 to 31.12.2016 Ex. PW-1/21(colly).
xiv. The ledger showing rents Ex. PW-1/22. xv. Passbook showing rents Mark C.
10.However, it is pertinent to mention that despite granting repeated and sufficient opportunities, the defendant no. 1, 2 and 5 failed to cross examine PW-1 pursuant to which the right of the said defendants to cross examine PW-1 was closed vide order dated 22.01.2020. Furthermore, no other witnesses were examined by the plaintiffs to prove their case.
Accordingly, the plaintiffs' evidence was closed and the matter was listed for defendants' evidence.
F. Defendants' Evidence:
11. In order to rebut the case of the plaintiffs, the defendant no.5 namely Varun Arora stepped into the witness box and examined himself as DW-1. DW-1 tendered his evidence by way of affidavit as Ex. DW1/A. Thereafter, DW-1 was duly cross examined by the counsel for plaintiffs.
12.Furthermore, no other witnesses were examined by the defendants and accordingly, the defendants' evidence was closed.
G. Final arguments:
13.Accordingly, the matter was listed for final arguments and thereafter final arguments were heard at length from both the parties.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
17:42:31 +05'30'
Civil Suit no. 94413/2016 Page no. 8 of 43
14.Arguments heard. Record perused thoroughly.
H. Findings on Issues:
Issue no.5: Whether the suit is barred by Section 50 of DRC Act? OPD
15.This court would first proceed to decide and adjudicate issue no. 5 as the same pertains to the maintainability of the present suit and also forms one of the foundational issues of the present suit. The onus to prove the said issue was upon the defendants. The plaintiffs have filed the present suit seeking recovery of possession of the tenanted premises from the defendants along with the relief of damages/mesne profits. It is the plaintiff's case that the movable and immovable properties of plaintiff no. 1 trust are vested in plaintiffs no. 2 to 8 being the trustees of plaintiff no.1 trust and that they are the owners and landlords of the property bearing no. 1325 to 1337 and 1339 to 1357, Sultan Singh Building, Kashmiri Gate, Delhi-110006. The plaintiffs have contended that the plaintiff no. 1 trust had let out the tenanted premises to defendant no. 1 and Late Gurpreet Singh at a monthly rent of Rs. 680/- excluding electricity and water charges and all other taxes but the said original tenants had sublet, assigned and parted with the possession of the tenanted premises to defendant no.5 without the consent of the plaintiffs. The plaintiffs have further contended that the said original tenants created a sham and bogus partnership with defendant no.5 and also executed a partnership deed dated 01.05.2004 so as to camouflage the act of subletting of the tenanted premises. In support of their case, the plaintiffs have placed on record the certified copy of the partnership deed dated UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:42:39 +05'30' Civil Suit no. 94413/2016 Page no. 9 of 43 01.05.2004 Ex. PW-1/4 which was executed between defendant no.1 and Late Gurpreet Singh being the original tenants of the tenanted premises and Varun Arora i.e. defendant no.5. The plaintiffs have contended that the said partnership deed is merely a sham and a camouflage created with the sole object of disguising the unlawful subletting of the tenanted premises in favour of defendant no.5.
16.Ld. counsel for the plaintiffs has argued that defendant no. 1 and Late Gurpreet Singh being the original tenants of the tenanted premises had entered into a sham and bogus partnership with defendant no.5 with the sole intention of subletting the tenanted premises in favour of defendant no. 5 without the consent of the plaintiffs and that defendant no. 5 is in exclusive possession and control of the tenanted premises, thereby conclusively establishing the factum of subletting under the garb of the said sham partnership deed. It is further argued that as per the said partnership deed entered into between defendant no. 1, Late Gurpreet Singh and defendant no.5, the so-called partnership business is being carried out from the tenanted premises and that the profit sharing ratio of the so-called partners is fixed therein as 80% in favour of defendant no.
5 and 10% each in favour of defendant no. 1 and Late Gurpreet Singh which clearly demonstrates that defendant no. 5 is the dominant beneficiary of the said alleged partnership arrangement. Ld. counsel for the plaintiffs has further contended that as per clause 3 of the said partnership deed Ex. PW-1/4, a sum of Rs. 4000/- per month is to be paid as remuneration to all the partners and that the said remuneration is nothing but the amount of rent being paid by defendant no. 5 to defendant no. 1 and Late Gurpreet Singh for the use and occupation of the tenanted premises. Ld. counsel for the plaintiffs has accordingly contended that the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:42:47 +05'30' Civil Suit no. 94413/2016 Page no. 10 of 43 tenanted premises are in fact fetching monthly rent in excess of Rs. 3500/- and consequently the bar of Section 50 of the DRC is not applicable to the present case and therefore the present suit is maintainable.
17.Per contra, Ld. counsel for defendant no. 1 and 5 has argued that the present suit is barred by Section 50 of the DRC Act as the admitted rate of rent of the tenanted premises is Rs. 680/- per month which is less than the statutory ceiling of Rs. 3500/- per month thereby attracting the protection of the said Act. It is further argued that defendant no. 1 and Late Gurpreet Singh being the original tenants of the tenanted premises have not sublet, assigned or parted with the possession of the tenanted premises and that the partnership deed entered into by defendant no. 1 and Late Gurpreet Singh with defendant no. 5 is a genuine and lawful arrangement and that the partnership business is indeed being carried out jointly by the said partners from the tenanted premises. Ld. counsel for defendant no. 1 and 5 has further argued that the mere sharing of profits or payment of remuneration to the partners does not amount to subletting and that the possession and control of the tenanted premises continues to vest with the original tenants.
18.It is pertinent to mention that as per the memo of parties, defendant no.1 is described as Jasmeet Singh who is one of the original tenants of the tenanted premises. Furthermore, defendant no. 2 to 4 are stated to be the legal representatives of Late Gurpreet Singh who was the other original tenant to whom the tenanted premises were let out and therefore, upon the demise of the said tenant, his legal representatives have invariably stepped into his shoes and are jointly and severally bound by the tenancy inheriting all the rights and liabilities attached thereto. Furthermore, UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:42:54 +05'30' Civil Suit no. 94413/2016 Page no. 11 of 43 defendant no. 5 is described as Varun Arora i.e. the person with whom defendant no.1 and Late Gurpreet Singh have allegedly entered into a sham and bogus partnership deed and as per the plaintiffs, the tenanted premises have been unlawfully sublet by the said original tenants in favour of defendant no.5 and that defendant no. 5 is in actual, physical and exclusive possession of the tenanted premises.
19.It is pertinent to mention that defendant no.1, 2 and 5 in their written statement have admitted the existence of the relationship of landlord and tenants between the parties. Therefore, the existence of the jural relationship of landlord and tenants between the plaintiffs and defendant no.1 and Late Gurpreet Singh stands established in the present case and the same is not in dispute. Furthermore, the contents of the partnership deed dated 01.05.2004 Ex. PW-1/4 entered into between defendant no.1 and Late Gurpreet Singh being the original tenants of the tenanted premises with Varun Arora i.e. defendant no.5 is also not in dispute as the said document was itself filed by the defendants before the competent authority (Slum) as has been admitted by defendant no.1, 2 and 5 in their written statement.
20.As already discussed, the onus to prove that the present suit is barred by Section 50 of the DRC Act was squarely upon the defendants. The primary defence put forth by the defendants is that the rate of rent of the tenanted premises is Rs. 680/- per month which is below the threshold of Rs. 3500/- prescribed under Section 3(c) of the DRC Act and therefore this court does not have the jurisdiction to try the present suit. The defendants have further contended that there is no subletting of the tenanted premises and that the tenanted premises continues to be in UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:02 +05'30' Civil Suit no. 94413/2016 Page no. 12 of 43 occupation and possession of the original tenants i.e. defendant no.1 to 4. Therefore, in order to effectively adjudicate the present issue, the question that needs to be determined is that whether defendant no.1 and Late Gurpreet Singh being the original tenants have unlawfully sublet, assigned or parted with the possession of the tenanted premises in favour of defendant no. 5 under the garb of a sham partnership deed and that whether the said alleged partnership is in substance, a sham and bogus arrangement created with the sole object of disguising the unlawful subletting of the tenanted premises.
21.Therefore, it becomes imperative to examine and analyse the contents of the partnership deed dated 01.05.2004 Ex. PW-1/4 entered into between defendant no.1 and Late Gurpreet Singh being the original tenants of the tenanted premises with Varun Arora i.e. defendant no.5. As already discussed, the defendants have not disputed the contents of the said partnership deed as the said document was itself filed by the defendants before the competent authority (Slum) prior to the institution of the present suit. It is pertinent to mention that the partnership deed Ex. PW-1/4 unequivocally records that defendant no.1 and Gurpreet Singh have taken the tenanted premises on rent from the plaintiff no.1 trust at a monthly rent of Rs. 680/-. The said partnership deed Ex. PW- 1/4 further mentions that defendant no. 1 and Gurpreet Singh along with defendant no. 5 have agreed to carry on the business of trading in auto and tractor parts and bearings from the tenanted premises under the name and style of M/s Total International and that the said parties have decided to be the partners of the said firm. The aforesaid recital clearly establishes that the tenanted premises was made the place of business of the said UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:09 +05'30' Civil Suit no. 94413/2016 Page no. 13 of 43 alleged partnership thereby introducing defendant no. 5 into the possession, use and occupation of the tenanted premises.
22. Moving further, clause 3 of the partnership deed Ex. PW-1/4 stipulates that remuneration of Rs. 4000/- per month shall be due and credited to the capital account of the working partners at the end of every month. Furthermore, clause 13 of the said partnership deed deals with the profit- sharing ratio of the firm and stipulates that 80% of the profits of the firm are to be given to defendant no 5 while only 10% each is to be shared by defendant no. 1 and Gurpreet Singh being the original tenants of the tenanted premises. Such a disproportionate profit-sharing arrangement between the parties clearly shows that defendant no. 5 is having the real and dominant control over the so-called partnership business and also over the tenanted premises. Furthermore, such an unequal and unnatural distribution of profits strongly militates against the existence of a genuine partnership firm and it is inconceivable that the original tenants having tenancy rights in the premises would surrender substantial economic interest and control while retaining only a nominal share of profits. Therefore, the terms of the partnership deed Ex. PW-1/4 clearly indicate that defendant no.5 is the real beneficiary and has the dominant control of the alleged partnership business conducted from the tenanted premises.
23. Furthermore, clause 19 of the partnership deed Ex. PW-1/4 stipulates that if any partner retires, dies or becomes insolvent, the outgoing partner shall be entitled to the remuneration in accordance with the partnership deed. The said stipulation is wholly inconsistent with a bona fide partnership arrangement and further exposes the sham and colourable nature of the said alleged partnership. It is pertinent to mention that a partner's right to UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:17 +05'30' Civil Suit no. 94413/2016 Page no. 14 of 43 remuneration is ordinarily co-terminus with the subsistence of the partnership meaning thereby that remuneration, if any, is payable only for active participation in the business and services rendered to the partnership firm. The said clause therefore runs contrary to the very concept of a partnership which is founded on the principle of mutual agency and active participation. An outgoing partner, by necessary implication, renders no services to the firm and therefore a partner who has retired, died or become insolvent cannot act as an agent of the firm and therefore cannot claim any remuneration. The continued payment of remuneration to an outgoing partner irrespective of any participation in the partnership business shows that the said payment is not linked to any business performance or services but is a fixed and assured return. Such a fixed return is antithetical to a genuine partnership arrangement and militates against the genuineness of the alleged partnership firm and strongly indicates that the so-called remuneration is in essence a consideration or rent for use and occupation of the tenanted premises i.e. disguised rent.
24.Evidently, the aforesaid stipulations and recitals of the partnership deed Ex. PW-1/4 are wholly inconsistent with a bona fide partnership arrangement and strongly suggests that the so-called partnership deed is nothing but a sham arrangement devised to camouflage the real act of subletting whereby the possession and control of the tenanted premises was parted with by defendant no. 1 and Gurpreet Singh in favour of defendant no. 5 for a fixed monetary return. In this context, it is pertinent to mention that the court is not bound by the nomenclature of a document and rather the substance of the transaction prevails over its form or nomenclature. Therefore, the court is empowered to lift the veil of a UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:25 +05'30' Civil Suit no. 94413/2016 Page no. 15 of 43 document to ascertain the true nature and substance of the transaction embodied therein rather than being guided merely by the form in which the document is couched. In the present case, the defendant no.1, 2 and 5 being the contesting defendants have sought to justify the presence of defendant no.5 in the tenanted premises on the strength of the partnership deed Ex. PW-1/4. However, merely describing the said arrangement as a partnership does not ipso facto negate subletting of the premises and the real test is whether the tenant has parted with the possession of the premises in favour of a third party and whether such third party is in exclusive or effective control of the premises.
25. At this stage, it is apposite to refer to the decision of the apex court in Munshi Lal vs. Santosh AIR 2017 SC 1057, wherein it was held that where a tenant allows a third person to occupy the tenanted premises under the cloak of a partnership but the real intention is to sublet without the landlord's consent, such an arrangement would amount to subletting and that such subletting cannot be permitted by camouflaging it as a partnership.
26. Furthermore, in Parvinder Singh vs. Renu Gautam 2004 (4) SCC 794, the apex court drew a clear distinction between a genuine partnership and a sham arrangement devised to conceal subletting and held as follows:
"To defeat the provisions of law, a device is at times adopted by unscrupulous tenants and sub-tenants of bringing into existence a deed of partnership which gives the relationship of tenant and sub-tenant an outward appearance of partnership while in effect what has come into existence is a sub-tenancy or parting with possession camouflaged under the cloak of partnership. Merely because a tenant has entered into a partnership he cannot necessarily be held to have sublet the premises or parted with possession thereof in favour of his partners. If the tenant is actively associated with the partnership business and retains the use and control over the tenancy premises with him, may be along with the partners, the tenant may not be said to have parted with possession. However, if the user and control of the tenancy premises has UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:33 +05'30' Civil Suit no. 94413/2016 Page no. 16 of 43 been parted with and deed of partnership has been drawn up as an indirect method of collecting the consideration for creation of sub-tenancy or for providing a cloak or cover to conceal the transaction not permitted by law, the Court is not estopped from tearing the veil of partnership and finding out the real nature of transaction entered into between the tenant and the alleged sub-tenant."
27.Similarly in Celina Coelho Pereira vs. Ulhas Mahabaleshwar Kholkar 2010 (1) SCC 217, it has been held that if the purpose of constituting a partnership by the tenant is ostensible and a deed of partnership is drawn to conceal the real transaction of subletting in a given case, the court may be required to tear the veil of partnership to find out the real nature of transaction entered into by the tenant.
28. In the present case, the so-called partnership deed stipulates a fixed monthly remuneration of Rs. 4000/- to be given to the partners which is grossly disproportionate to the admitted rent of the tenanted premises which is fixed as Rs. 680/- per month. Furthermore, 80% of the profits of the business are allocated to defendant no.5 while defendant no. 1 and Late Gurpreet Singh being the original tenants of the tenanted premises have been relegated to a marginal role. The terms and recitals of the partnership deed Ex. PW-1/4 clearly indicate that defendant no.5 is the real beneficiary and dominant participant in the alleged business carried out from the tenanted premises. Such a grossly disproportionate profit-sharing arrangement coupled with the dominant control of the tenanted premises and business operations by defendant no. 5 completely belies the existence of a genuine partnership and clearly establishes that defendant no. 5 has been inducted into the tenanted premises as a sub-tenant under the guise of a partnership. Therefore, the stipulations and recitals of the partnership deed Ex. PW-1/4 are wholly inconsistent with a bona fide partnership and strongly suggest that the so-called UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:42 +05'30' Civil Suit no. 94413/2016 Page no. 17 of 43 partnership is merely a facade and a cloak to conceal the factum of subletting of the tenanted premises in favour of defendant no.5. Furthermore, the fixing of a monthly remuneration of Rs. 4000/- far in excess of the agreed rent, clearly establishes that the said amount is nothing but rent paid in a disguised form for use and occupation of the tenanted premises.
29.It is pertinent to mention that in support of their case, the plaintiffs had examined plaintiff no. 6 namely Sunder Lal Jain being one of the trustees of the plaintiff no.1 trust as PW-1 who tendered his evidence by way of affidavit as Ex. PW1/A and also relied upon various documents to substantiate and prove the case of the plaintiffs. However, despite granting repeated opportunities, the defendants chose not to cross examine PW-1 pursuant to which the right of the defendants to cross examine PW-1 was closed. In this context, it is pertinent to mention that it is a settled legal principle that a testimony which is not subjected to cross examination must be taken as admitted and unrebutted. The failure of the defendants to cross examine PW-1 resultantly implies that the evidence of PW-1 has remained unchallenged, uncontroverted and unimpeached which further fortifies the case of the plaintiffs.
30. Furthermore, as already discussed, no written statement was filed by defendant no.3 and 4 and no appearance was entered by the said defendants and accordingly the said defendants were proceeded ex parte. Therefore, defendant no.1, 2 and 5 are the only contesting defendants in the present case. However, despite granting ample opportunities, no evidence whatsoever was led by the original tenants i.e. defendant no.1 and also by defendant no.2 being the LR of Late Gurpreet Singh and the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:43:51 +05'30' Civil Suit no. 94413/2016 Page no. 18 of 43 same is indeed inexplicable. Therefore, the original tenants did not even step into the witness box to depose in support of their pleadings nor did they lead any evidence whatsoever to substantiate their plea of continued possession over the tenanted premises. The deliberate omission of defendant no.1 and defendant no.2 to lead evidence and to step into the witness box gives rise to an adverse inference against the said defendants and also undermines the defence put forth by the said defendants.
31.Therefore, it is amply clear that no evidence whatsoever has been lead by defendant no.1 and defendant no.2 to establish that the original tenants are in actual, physical and continued possession of the tenanted premises or to substantiate the plea of the existence of a bona fide partnership. Furthermore, no cogent material whatsoever has been brought on record by the defendants to rebut the plaintiffs' case that defendant no. 1 and Late Gurpreet Singh had entered into a sham and bogus partnership with defendant no. 5 to conceal the act of subletting of the tenanted premises in favour of defendant no.5. Furthermore, the said defendants have also failed to explain the dominant role and exclusive control of defendant no. 5 in the alleged partnership business and also over the tenanted premises which clearly militates against their plea of a genuine partnership. The evidence on record unmistakably shows that the dominant control over the alleged partnership business as well as over the tenanted premises vests entirely with defendant no. 5 and the defendants have not led any evidence whatsoever to rebut the same. The complete silence of defendant no. 1 and 2 on the said material aspects, coupled with their failure to lead any evidence not merely leads to an adverse inference against the said defendants but thoroughly undermines and erodes the credibility of the entire defence put forth by the defendants.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
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32.It is pertinent to mention that the only witness examined by the defendants in the present case is defendant no.5, whose testimony, far from supporting and giving credence to the defendants' case has materially eroded the credibility of the version put forth by the defendants as explained hereunder. DW-1 i.e. defendant no. 5 tendered his evidence affidavit as Ex.DW1/A wherein he stated that the suit property/tenanted premises is still under the occupation and physical possession of defendant no.1 and the legal heirs of Gurpreet Singh i.e. defendant no. 2 to 4. In his evidence affidavit, DW-1 further stated that a theft had taken place in the tenanted premises due to which defendant no.1 and Late Gurpreet Singh had suffered heavy losses and therefore he was inducted as a partner in the business of defendant no.1 and Late Gurpreet Singh. DW-1 further stated he has never been in possession of the tenanted premises and that he has nothing to do with the tenancy and that the tenanted premises is being used and occupied by defendant no.1 and the legal heirs of Late Gurpreet Singh i.e. defendant no. 2 to 4. DW-1 in his evidence affidavit further stated that the partnership has already been dissolved orally and that he has no concern with either defendant no.1 or the tenanted premises.
33.However, during his cross examination, the defendant no.5 examined as DW-1 made several material admissions and gave contradictory statements which has entirely weakened and demolished the defence put forth by the defendants. In his cross examination, the defendant no.5 i.e. DW-1 admitted that he was entitled to 80% share in the profits of the partnership business of Ms/ Total International. DW-1 further deposed that the partnership in the name of M/s Total International was formed in 2004 but the partners of that firm namely defendant no.1, Late Gurpreet UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:44:09 +05'30' Civil Suit no. 94413/2016 Page no. 20 of 43 Singh and himself i.e. defendant no.5 never worked in that partnership and that the said partnership never functioned after 2004. DW-1 in his cross examination further deposed that the partnership namely M/s Total International was never dissolved but the partners did not work in the said partnership. However, in his evidence affidavit, DW-1 i.e. defendant no. 5 has taken a completely contrary stand and has stated that the said partnership has already been dissolved orally. This material inconsistency strikes at the very root of the credibility of DW-1 and renders his testimony wholly unreliable and unworthy of credence and further fortifies the fact that the said partnership was a mere sham. DW-1 in his testimony further admitted that no accounts of the partnership were maintained by the partners and that no income tax return was ever filed on behalf of the said firm. DW-1 further deposed that M/s Total International never functioned meaning thereby that no business activity was ever carried out by the said alleged partnership firm. The aforesaid admissions made by DW-1 i.e. the defendant no.5 during his cross examination further renders the existence of a genuine partnership highly doubtful and unmistakably establishes that the alleged partnership arrangement entered into between defendant no.1 and Late Gurpreet Singh being the original tenants of the tenanted premises with defendant no.5 was nothing but a mere sham. DW-1 in his cross examination further deposed that he keeps on visiting the tenanted premises on a daily basis and at times he visits the same twice or thrice a week stating that defendant no. 1 is his friend. The said assertion is wholly inconsistent with his earlier stand that the partnership firm never functioned after 2004 and that he was never in possession of the tenanted premises. Therefore, the testimony of DW-1 is not merely unworthy of credence but the same is also riddled with material self-contradictions and evasive answers UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:44:18 +05'30' Civil Suit no. 94413/2016 Page no. 21 of 43 rendering it inherently unreliable. Such infirmities strike at the very root of the credibility of DW-1 and the same has resultantly weakened and demolished the entire defence put forth by the defendants.
34.Perusal of the record shows that on 24.03.2021, the Ld. predecessor court had appointed a local commissioner for the limited purpose of ascertaining the location and interiors of the tenanted premises and the said local commissioner was directed to place on record the photographs and the video depicting the interiors of the tenanted premises. Thereafter on 11.06.2021, the local commissioner filed the photographs and the video recording of the tenanted premises and subsequently, the defendant no.5 i.e. DW-1 was confronted with the same during the course of his cross examination. Furthermore, on 27.04.2022, the defendant no. 5 had submitted that he can produce the GST certificate with respect to Amba Automobiles and thereafter the photocopy of the said document was placed on record by defendant no. 5 on the subsequent date of hearing i.e. on 24.05.2022. Perusal of the said GST certificate filed by defendant no. 5 shows that it pertains to one Amba Automobiles which is stated to be a proprietorship firm and whose place of business is mentioned therein as 1330, Sultan Singh Building, Kashmiri Gate, Delhi-110006 which corresponds with the address of the tenanted premises and which clearly and unequivocally demonstrates that the business and commercial activities of the said firm namely Amba Automobiles are being carried out from the tenanted premises. During his cross examination, DW-1 i.e. defendant no. 5 admitted that Amba Automobiles is the proprietorship concern of his father. Furthermore, the defendant no. 5 in his cross examination gave evasive and contradictory answers regarding his possession in the tenanted premises and also failed to identify the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:44:27 +05'30' Civil Suit no. 94413/2016 Page no. 22 of 43 photographs of the tenanted premises taken by the local commissioner and additionally expressed ignorance about the display of traders' association certificates of Amba Automobiles and other business entities which were found hanging on the walls of the tenanted premises. Furthermore, the admission made by defendant no.5 in his cross examination regarding his frequent visits to the tenanted premises coupled with the absence of any cogent explanation for such regular presence further fortifies the inference that defendant no. 5 is in exclusive possession of the tenanted premises. The evidence on record therefore unmistakably and conclusively establishes that defendant no. 5 is in exclusive possession and occupation of the tenanted premises and is carrying out commercial activities from the tenanted premises.
35.The cumulative effect of the recitals of the alleged partnership deed Ex. PW-1/4 as discussed above particularly the wholly disproportionate profit sharing in favour of defendant no.5 and the dominant and exclusive control of the tenanted premises by defendant no.5 when read conjointly with the unrebutted testimony of PW-1, the complete failure of the original tenants to lead any evidence or to step into the witness box and the damaging admissions, inconsistencies and material contradictions emerging from the testimony of defendant no. 5 leads to an irresistible conclusion that the so-called partnership arrangement was a sham, ruse and a mere camouflage devised to conceal the real act of subletting of the tenanted premises in favour of defendant no. 5 without the consent of the plaintiffs. Therefore, it is amply clear that defendant no. 1 and Late Gurpreet Singh had illegally and sublet and parted with the possession of the tenanted premises in favour of defendant no. 5 under the garb of a sham partnership deed Ex. PW-1/4.
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36.Moving further, it is pertinent to mention that the so-called partnership deed Ex. PW-1/4 stipulates that a fixed remuneration of Rs. 4000/- per month is to be paid to the partners therein. However, when the said partnership deed itself has been held to be sham, illusory and a mere ruse to conceal the act of unlawful subletting of the tenanted premises in favour of defendant no.5, the said stipulation relating to the payment of remuneration cannot be examined in isolation or be given any sanctity. Even otherwise, as already discussed, the court is not bound by the nomenclature used in a document and rather the court is entitled to lift the veil of the document to examine and ascertain the real nature of the transaction embodied therein. Evidently, the payment of the so-called monthly remuneration of Rs. 4000/- as mentioned in the partnership deed Ex. PW-1/4 is a fixed and guaranteed sum and therefore bears no nexus with the profits or losses of the alleged partnership firm. Therefore, such a stipulation is wholly inconsistent with the basic concept of a partnership and clearly points towards a pre-determined monetary return. In other words, such a fixed monthly payment and an assured return to the partners completely independent of any profits or losses or any business performance of the alleged partnership firm is wholly inconsistent with the concept of partners' remuneration in a genuine partnership arrangement. Admittedly, the tenanted premises were let out by plaintiff no.1 trust to defendant no.1 and Late Gurpreet Singh at a monthly rent of Rs. 680/- per month. However, the so-called remuneration of Rs. 4000/- per month is manifold higher than the monthly rent of the tenanted premises, clearly indicating that the amount of the so-called remuneration in substance represents the consideration for use and occupation of the said premises and not any payment for services allegedly rendered by the partners. Furthermore, there is no pleading or UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:44:51 +05'30' Civil Suit no. 94413/2016 Page no. 24 of 43 any evidence whatsoever to show that defendant no. 1 and Late Gurpreet Singh had rendered or were rendering any services whatsoever to the alleged partnership business so as to justify the payment of the said monthly remuneration to them.
37.Furthermore, defendant no. 1 and also defendant no. 2 being one of the LR of Late Gurpreet Singh did not even step into the witness box and did not lead any evidence whatsoever to establish any active participation, skill or any managerial contribution of the original tenants in the alleged business carried out from the tenanted premises. In other words, there is no material whatsoever on record to show that defendant no. 1 and Late Gurpreet Singh being the original tenants had rendered any specific services commensurate with such monthly remuneration as stipulated in the partnership deed Ex. PW-1/4 and rather the said payment flows solely because some business is being run from the tenanted premises which thereby shows that the amount of Rs. 4000/- is camouflaged as partners' monthly remuneration and in essence represents rent or consideration for use and occupation of the tenanted premises by defendant no. 5.
38.Therefore, the quantum of the so-called remuneration of Rs. 4000/- per month, being many times higher than the admitted rate of rent of the tenanted premises, when examined in conjunction with the categorical finding that defendant no. 5 is the real beneficiary of the said arrangement and is in dominant control and exclusive possession of the said premises coupled with the fact that the partnership deed Ex. PW-1/4 itself is a sham and further coupled with the complete lack of evidence of any services rendered by defendant no. 1 and Late Gurpreet Singh in the alleged UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:00 +05'30' Civil Suit no. 94413/2016 Page no. 25 of 43 partnership firm clearly establishes that the said fixed monthly payment of Rs. 4000/- is not remuneration in true sense and is merely camouflaged as partners' remuneration and therefore the so-called remuneration is in essence nothing but rent paid in a disguised form under a different nomenclature i.e. disguised rent or consideration paid for the use and occupation of the tenanted premises by defendant no.5. As already discussed, the partnership deed Ex. PW-1/4 has been held to be a mere sham and a bogus arrangement created with the sole object of camouflaging the act of subletting of the tenanted premises in favour of defendant no.5 and for also concealing the true nature of possession of the tenanted premises and therefore merely describing such fixed monthly payment as remuneration cannot change the true nature and character of such transaction and the court is required to pierce the veil to ascertain the true nature and substance of the transaction rather than being guided merely by its form or nomenclature.
39.Accordingly, this court holds that the so-called remuneration of Rs. 4000/- per month stipulated in the alleged partnership deed Ex. PW-1/4 is nothing but a disguised rent or consideration for use and occupation of the tenanted premises by defendant no. 5, camouflaged under the garb of a sham partnership arrangement and is therefore liable to be treated as rent for all legal purposes.
40. In view of the aforesaid discussion, it is amply clear that defendant no.1 and Late Gurpreet Singh being the original tenants of the tenanted premises had unlawfully sublet the tenanted premises to defendant no.5 under the guise of a sham partnership arrangement and that the so-called remuneration of Rs. 4000/- per month, in substance represents the rent UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:08 +05'30' Civil Suit no. 94413/2016 Page no. 26 of 43 received from the said sub-tenant i.e. defendant no.5 for the use and occupation of the tenanted premises and accordingly the inevitable legal consequence is that the tenanted premises were in fact fetching a monthly rent far in excess of the statutory ceiling of Rs. 3500/- per month prescribed under the DRC Act. Therefore, since the payment of Rs. 4000/- per month is in substance nothing but rent or consideration paid in a disguised form for the use and occupation of the tenanted premises, it becomes evident that the tenanted premises were indeed fetching a monthly rent exceeding Rs. 3500/- and consequently the bar of the DRC Act is not attracted in the present case.
41. At this stage, it is apposite to refer to the decision of the Hon'ble Delhi High Court in PS Jain Co. Ltd. vs. Atma Ram Properties Ltd. 1997 (65) DLT 308 (DB) wherein it has been held that for determining the applicability of Section 3(c) of the DRC Act, the court must consider the effective rent fetched by the premises including the rent received from sub-tenant and not merely the rent payable by the tenant to the landlord. It was further held that as long as the tenant is in occupation of the premises physically and is paying monthly rent which is less than Rs.3500/- he may be entitled to the protection of the DRC Act, but once he sublets the premises and when the units which are sublet each fetch above Rs.3500/- per month, the premises becomes one whose monthly rent exceeds Rs. 3500/- and the said premises loses the protection of the DRC Act.
42.In this context, it is imperative to refer to paragraph 11 of the said judgment which reads as follows:
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"In our view, the intention behind Section 3(c) is that a premises which fetches a rent of Rs.3500 p.m. should be exempt and that protection should be restricted to buildings fetching a rent less than Rs.3500 p.m.. In case a tenant paying less than Rs. 3500 p.m. to his landlord has sublet the very same premises - may be lawfully - for a rent above Rs.3500 p.m., then the question naturally arises whether such a tenant can be said to belong to weaker sections of society requiring protection. By sub-letting for a rent above Rs.3500 p.m., the tenant has parted with his physical possession. He is receiving from his tenant (i.e. the sub- tenant) more than Rs. 3500 p.m. though he is paying less than Rs.3500 p.m. to his landlord. The above contrast is well illustrated by the facts of the case before us. The appellant tenant is paying only Rs.900 p.m. to the plaintiff, while he has sublet the premises in two units, one for Rs.40,000 p.m. and another for Rs.4500 p.m. In regard to each of these units, the sub-tenants have no protection of the Rent Act. In our view, the purpose of Section 3(c) is not to give any protection to such a tenant."
43.Furthermore, the law laid down in PS Jain (supra) was reiterated by the Hon'ble Delhi High Court in Atma Ram Properties Ltd. vs. Pal Properties (2001) 91 DLT 438 wherein it was held that for applicability of the DRC Act, the relevant rent is the one which is paid by the sub-tenant to the tenant and where the said rent exceeds Rs. 3500/- per month, the protection of the DRC Act would not apply. Therefore, for determining the applicability of the DRC Act, the court is required to examine the real and effective rent being received for the premises and not merely the figure described as rent in the original tenancy. Furthermore, where the tenant adopts a device to camouflage the true consideration by disguising it as remuneration, the court is duty bound to pierce the said veil and ascertain the true nature of the transaction.
44.Therefore, the legal position that emerges is that so long as the tenant continues to be in physical and legal possession of the tenanted premises and the rent payable to the landlord is less than Rs. 3500/- per month, the tenant is entitled to the protection of the DRC Act. However, once the tenant parts with the possession, by subletting or otherwise transferring the right to use and occupy the premises to a third party and the premises UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:27 +05'30' Civil Suit no. 94413/2016 Page no. 28 of 43 are made to fetch a monthly rent or consideration exceeding Rs. 3500/-, the character of the premises undergoes a material change. In such a situation, the court is not bound by the admitted or the original contractual rent alone but is duty bound to lift the veil and examine the real nature of the transaction so as to ascertain the actual rent or consideration being derived from the premises and in such a case, the premises cease to be governed by the DRC Act by virtue of Section 3(c) of the said Act. In other words, the protection of the DRC Act cannot be extended to a tenant who while paying a nominal rent to the landlord, commercially exploits the premises through a sub-tenant at a much higher consideration. Therefore, the relevant test is not merely the rent payable by the original tenant to the landlord but the rent or consideration paid by the sub-tenant to the tenant i.e. the effective monthly value of the premises in the hands of the person in actual possession of the tenanted premises and once such a rent or consideration exceeds the threshold of Rs. 3500/- per month, as in the present case, the premises fall outside the purview of the DRC Act and the jurisdiction of the civil court stands restored.
45.Upon a conspectus of the factual matrix and the legal position as discussed above, it is concluded that the tenanted premises do not fall within the protective umbrella of the DRC Act as the so-called remuneration of Rs. 4000/- per month stipulated under the sham partnership deed has been found to be nothing but a disguised consideration or rent for use and occupation of the tenanted premises by defendant no.5. Consequently, the tenanted premises are, in effect, fetching a monthly rent or consideration exceeding the statutory ceiling of Rs.3500/- per month prescribed under Section 3(c) of the DRC Act and resultantly the bar under Section 50 of the DRC Act does not apply to the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:36 +05'30' Civil Suit no. 94413/2016 Page no. 29 of 43 present suit. Accordingly, it is held that the present suit is maintainable before this court and the objection raised by the defendants regarding the bar under Section 50 of the DRC Act is devoid of any merits and is hereby rejected. Consequently, the present issue is decided in favour of the plaintiffs and against the defendants.
Issue no. 4: Whether the suit is barred under Order 2 Rule 2 CPC? OPD
46.The onus to prove the said issue was upon the defendants. It is pertinent to mention that defendant no.1, 2 and 5 in their written statement have taken a preliminary objection that the present suit is barred under Order 2 Rule 2 CPC contending that the plaintiffs have already filed a suit in respect of the tenanted premises between the same parties and that the said suit is still pending adjudication. However, the defendants have neither disclosed the particulars of the said alleged suit nor have the defendants lead any evidence whatsoever to establish the requisite preconditions necessary to attract the bar under Order 2 Rule 2 CPC. In this context, it apposite to refer to the decision of the apex court in Gurbux Singh vs. Bhooralal AIR 1964 SC 1810 wherein it has been held that in order to sustain a plea under Order 2 Rule 2 CPC, the defendant must prove (i) that the earlier and the subsequent suits arose out of the same cause of action (ii) that in respect of that cause of action, the plaintiff was entitled to more than one relief and (iii) that the plaintiff had omitted to sue for the relief which he was entitled to claim in the earlier suit. It is pertinent to mention that the plaintiffs in their replication have clarified that the earlier suit filed by the plaintiffs pertains only to recovery of damages/mesne profits for a limited period of three years UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:45 +05'30' Civil Suit no. 94413/2016 Page no. 30 of 43 whereas the present suit has been filed for recovery of possession and for mesne profits consequent upon termination of the tenancy vide notice dated 04.03.2014 and that the reliefs claimed in both the suits are distinct and arise from separate causes of action. In this context, it is pertinent to mention that a suit for possession and a suit for claiming damages for use and occupation of the property are two different and distinct causes of action and therefore the bar of Order 2 Rule 2 CPC does not apply in the present case. Reliance in this regard is placed on the decision of the apex court in Bharat Petroleum Corporation Ltd. vs. ATM Constructions Pvt. Ltd. 2023 INSC 1042. Furthermore, in Cuddalore Powergen Corporation Ltd vs. Chemplast Cuddalore Vinyls Ltd 2025 INSC 73, it has been held that the plea regarding the applicability of Order 2 Rule 2 CPC is a technical bar and has to be established satisfactorily and cannot be presumed merely on the basis of inferential reasoning. It was further held in the said case that in order to prove the plea of bar under Order 2 Rule 2 CPC, the defendant must also produce the earlier plaint in evidence in order to establish that there is an identity in the causes of action between both the suits and that there was a deliberate relinquishment of a larger relief on the part of the plaintiff.
47.As already discussed, the defendants have neither disclosed the particulars of the alleged earlier suit nor have they placed on record the plaint of the said suit and therefore the defendants have miserably failed to prove the bar of Order 2 Rule 2 CPC. Furthermore, the defendants have not led any evidence whatsoever to show that the earlier suit and the present suit arise out of the same cause of action and rather the defendants have merely made bald averments without any foundational pleadings and no evidence whatsoever has been led by the defendants to UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:45:56 +05'30' Civil Suit no. 94413/2016 Page no. 31 of 43 substantiate the said plea of bar of Order 2 Rule 2 CPC. Therefore, the defendants have miserably failed to prove the present issue and accordingly the objection as to the bar of Order 2 Rule 2 CPC is rejected as being wholly misconceived and devoid of any merits. Accordingly, the said issue is decided in favour of the plaintiffs and against the defendants.
Issue no. 1: Whether the plaintiffs are entitled for decree of possession, as prayed for? OPP
48.The onus to prove the said issue was upon the plaintiffs. It is a well settled law that in a suit for recovery of possession from a tenant whose tenancy is not protected under the provisions of the DRC Act, the plaintiff has to establish the existence of the jural relationship of landlord and tenant between the parties and the termination of the tenancy either by lapse of time or by notice served by the landlord under Section 106 of the Transfer of Property Act. Reliance in this regard is paced on the decision of the apex court in Payal Vision Ltd. vs. Radhika Choudhary (2012) 11 SCC
405. It is pertinent to mention that defendant no.1, 2 and 5 in their written statement have themselves admitted that there exists a relationship of landlord and tenant between the parties. Therefore, the existence of the jural relationship of landlord and tenant between the parties stands established in the present case and the same is not in dispute. Furthermore, in view of the detailed findings on issue no.1 as discussed above, it is amply clear that the tenanted premises are effectively fetching a monthly rent exceeding the statutory ceiling of Rs. 3500/- per month, the so-called monthly remuneration being nothing but a disguised consideration or rent for use and occupation of the tenanted premises and consequently, the protection of the DRC Act is not available to the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:46:05 +05'30' Civil Suit no. 94413/2016 Page no. 32 of 43 defendants. In view of the aforesaid findings, the only question that remains to be adjudicated is whether the tenancy of the defendants was duly terminated by service of a valid notice under Section 106 of the Transfer of Property Act, 1882, thereby entitling the plaintiffs to a decree for recovery of possession of the tenanted premises.
49.It is pertinent to mention that the plaintiffs have averred in the plaint that the tenancy of the defendants was terminated vide notices dated 31.12.2001 and 30.06.2003 i.e. documents Mark A and Mark B respectively but despite service of the said notices, the defendants failed to deliver the vacant possession of the tenanted premises. The plaintiffs have further averred that by way of abundant caution, they served another legal notice dated 04.03.2014 i.e. Ex. PW-1/7, thereby terminating the tenancy of the defendants in respect of the tenanted premises with effect from 30.04.2014 and by way of the said notice, the defendants were called upon to deliver the actual, peaceful, physical and vacant possession of the tenanted premises to the plaintiffs in its original condition on 01.05.2014. The plaintiffs have further contended that defendant no. 1 and Late Gurpreet Singh being the original tenants had sublet, assigned and parted with the possession of the tenanted premises in favour of defendant no. 5 and that even though the plaintiffs do not admit defendant no. 5 to be their tenant, the plaintiffs, as a matter of abundant caution and to obviate any possible objection or claim by defendant no. 5 had also terminated the alleged tenancy of defendant no. 5 in April 2014. In this context, it is imperative to mention that defendant no.1, 2 and 5 in their written statement have categorically denied the receipt of the notices dated 31.12.2001 Mark A and 30.06.2003 Mark B and have contended that no such notices of termination were ever served upon the defendants.
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50.However, the defendants in their written statement have admitted the receipt of the notice of termination of tenancy dated 04.03.2014 Ex. PW-1/7 and have stated that the said notice of termination dated 04.03.2014 was duly replied by the defendants and have further asserted that defendant no. 5 is not a tenant and has nothing to do with the tenanted premises.
51.During the course of final arguments, Ld. counsel for defendant no.1 and 5 argued that the present suit instituted in 2014 is barred by limitation as the plaintiffs had allegedly terminated the tenancy of the defendants earlier by notices dated 31.12.2001 and 30.06.2003 and therefore, the present suit ought to have been filed within 12 years therefrom in terms of Article 67 of the Limitation Act, 1963. However, the said contention is wholly misconceived and is devoid of any merits as explained hereunder. At the outset, it is reiterated that defendant no. 1, 2 and 5 in their written statement have categorically denied the service of the notices of termination dated 31.12.2001 Mark A and 30.06.2003 Mark B. Therefore, once the defendants have themselves disputed and denied the service of the said notices, they cannot be permitted to approbate and reprobate by simultaneously relying upon those very notices to contend that the tenancy stood terminated on those dates and that the suit is barred by limitation. The mere assertion by the plaintiffs that such notices were served upon the defendants is of no consequence for the purpose of limitation particularly when the defendants have themselves denied their service and therefore have not accepted the termination of tenancy on the basis of the said notices. On the contrary, the defendants have unequivocally admitted the receipt of the notice of termination of tenancy dated 04.03.2014 Ex. PW-1/7 which was also duly replied by the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:46:25 +05'30' Civil Suit no. 94413/2016 Page no. 34 of 43 defendants and the said notice clearly terminated the tenancy of the defendants with effect from 30.04.2014 and by way of the said notice, the defendants were called upon to deliver the vacant and peaceful possession of the tenanted premises to the plaintiffs on 01.05.2014. Therefore, the cause of action for filing the present suit for recovery of possession of the tenanted premises can be said to have accrued only upon termination of the tenancy vide notice dated 04.03.2014 Ex. PW-1/7. Accordingly, the present suit having been instituted on 06.06.2014 is well within the period of limitation. Consequently, the contention of Ld. counsel for defendant no.1 and 5 that the period of limitation ought to be computed from the date of the alleged first notice of termination dated 31.12.2001 is wholly misconceived, self-contradictory and untenable. On the one hand, the defendants have categorically denied the service of the alleged notices dated 31.12.2001 and 30.06.2003 and on the other hand, they seek to rely upon the very same notices to non-suit the plaintiffs on the ground of limitation. In other words, once the defendants have themselves disputed and denied the service of the said notices, they cannot be permitted to rely upon those very notices to contend that the tenancy stood terminated from the date of such alleged notices and that the suit is barred by limitation. Such a plea being self-contradictory, inconsistent and mutually destructive is therefore wholly unsustainable and a party cannot be permitted to approbate and reprobate at the same time. Furthermore, the plaintiffs have also not placed on record any proof of service of the alleged notices dated 31.12.2001 and 30.06.2003 and therefore, in the absence of any proof of service, the said notices cannot be treated as a valid termination of tenancy so as to trigger the commencement of the period of limitation. Therefore, it is concluded that the tenancy of the defendants stood validly terminated only vide notice dated 04.03.2014 UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:46:35 +05'30' Civil Suit no. 94413/2016 Page no. 35 of 43 Ex. PW-1/7, the receipt of which has been duly admitted by the defendants and the present suit having been filed on 06.06.2014 is well within the period of limitation. Furthermore, upon termination of the tenancy vide notice dated 04.03.2014 Ex. PW-1/7, the defendants ceased to have any lawful right to continue in possession of the tenanted premises. In view of the existence of the jural relationship of landlord and tenant between the parties, the determination of the tenancy coupled with the inapplicability of the DRC Act, all the requisite legal conditions for the grant of relief of possession of the tenanted premises stand satisfied in the present case and accordingly the plaintiffs are entitled to recover the possession of the tenanted premises from the defendants. Accordingly, the present issue is decided in favour of the plaintiffs and against the defendants.
Issue no.2: Whether the plaintiff is entitled for a decree for mesne profits, if yes then at what rate? OPP Issue no. 3: Whether the plaintiffs are entitled for any interest, if yes, then at what rate, upon what amount? OPP
52.Both the issues are taken up together as they are inextricably interconnected with each other. The onus to prove both the issues was upon the plaintiffs. The plaintiffs have averred in the plaint that the total area of the tenanted premises is 806.13 sq. ft. and that the tenanted premises can easily fetch a rent of Rs. 70/- per sq. ft. per month and have accordingly contended that the defendants are liable to pay damages/mesne profits amounting to Rs. 63,953/- computed at the rate of Rs. 70 X 806.13 sq. ft. for the period from 01.05.2014 to 04.06.2014 for the unauthorised use and occupation of the tenanted premises by the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:46:45 +05'30' Civil Suit no. 94413/2016 Page no. 36 of 43 defendants. Furthermore, the plaintiffs have contended that they are also entitled to future damages/mesne profits from the date of filing of the suit till the date of handing over the vacant possession of the tenanted premises. However, PW-1 in his evidence affidavit has stated that the tenanted premises can easily fetch a rent of Rs. 35/- per sq. ft. per month and has further stated therein that defendants are liable to pay damages/mesne profits amounting to Rs. 31,971/- computed at the rate of Rs. 35 X 806.13 sq. ft. for the period from 01.05.2014 to 04.06.2014 for the unauthorised use and occupation of the tenanted premises. Evidently, there is a variance in the prevailing market rent of the tenanted premises as averred in the plaint and as stated in the evidence affidavit filed by PW-1. Be that as it may, the said variance does not go to the root of the matter nor does it disentitle the plaintiffs in in any manner from claiming damages/mesne profits from the defendants much so since the defendants have even failed to cross examine PW-1 and have miserably failed to lead any evidence regarding the prevailing market rent of the tenanted premises.
53.It is pertinent to mention that mesne profits are defined under Section 2(12) of the Code of Civil Procedure, 1908 as those profits which a person in wrongful possession of property actually received or might with ordinary diligence have received, together with interest thereon. Therefore, mesne profits or damages are awarded to the landlord for the unauthorised use and occupation of the property by the tenant and the court is required to determine a reasonable amount thereof on the basis of the material on record and surrounding circumstances. Consequently, once the tenancy stands validly terminated and the tenant continues in possession of the tenanted premises even after the termination of the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:46:55 +05'30' Civil Suit no. 94413/2016 Page no. 37 of 43 tenancy, such possession and occupation becomes unauthorised and the tenant becomes liable to pay mesne profits to the landlord. In other words, a tenant continuing to occupy the tenanted premises after expiry of the lease is a tenant at sufferance and is liable to pay mesne profits at market rent for unauthorised use and occupation of the premises. Reliance in this regard is placed on the decision of the apex court in Indian Oil Corporation Ltd. vs. Sudera Realty Private Limited 2022 SCC OnLine 1161. In the present case, it stands duly established that the tenancy of defendant no. 1 being the original tenant and also of defendant no. 2 to 4 being the legal heirs of Late Gurpreet Singh who was the other original tenant stood validly terminated by the plaintiffs by service of the notice dated 04.03.2014 Ex. PW-1/7. Consequently, upon such termination of the tenancy, the said defendants ceased to have any lawful right to use and occupy the tenanted premises and their continued occupation thereafter was unauthorised and wrongful rendering them liable to pay mesne profits. The entitlement of the plaintiffs to claim mesne profits therefore flows automatically from the termination of tenancy vide notice dated 04.03.2014 Ex. PW-1/7 and the unauthorised use and occupation of the tenanted premises thereafter by the defendants. Furthermore, in so far as defendant no. 5 is concerned, the evidence on record clearly establishes that the tenanted premises were unauthorisedly sublet in his favour and that defendant no.5 is the person in actual, physical and exclusive possession of the tenanted premises. Therefore, defendant no. 5, being the sub-tenant in actual possession of the tenanted premises is also liable to pay mesne profits to the plaintiffs for the unauthorised use and occupation of the tenanted premises by him.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
17:47:07 +05'30'
Civil Suit no. 94413/2016 Page no. 38 of 43
54.In view of the aforesaid discussion, it is concluded that the defendants are jointly and severally liable to pay damages/mesne profits to the plaintiffs for the unauthorised use and occupation of the tenanted premises from the date of termination of tenancy till the date of handing over the vacant and peaceful possession of the tenanted premises to the plaintiffs.
55.It now becomes imperative to determine the quantum of mesne profits to be payable by the defendants to the plaintiffs. It is pertinent to mention that PW-1 in his evidence affidavit has stated that plaintiff no.1 trust has let out various properties situated in the vicinity of and adjoining the tenanted premises to different tenants at a much higher rent and has placed on record various rent receipts qua the said properties i.e. Ex. PW-1/20 (colly) and Ex. PW-1/21 (colly) and has further stated that the tenanted premises can easily fetch a rent of Rs. 35/- per sq. ft. per month. PW-1 in his evidence affidavit has further stated that plaintiffs are entitled to recover damages/mesne profits amounting to Rs. 31,971/- from the defendants computed at the rate of Rs. 35 X 806.13 sq. ft. for the period from 01.05.2014 to 04.06.2014 for the unauthorised use and occupation of the tenanted premises and has further stated that plaintiffs are also entitled to future damages/mesne profits from the date of filing of the suit till the date of handing over the vacant possession of the tenanted premises.
56.As already discussed, the defendants have failed to cross examine PW-1 and have failed to lead any evidence to rebut the said assertions stated in the evidence affidavit filed by PW-1. Be that as it may, even though PW-1 has placed on record certain rent receipts of the adjoining properties, the plaintiffs have not led any cogent evidence to establish that UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:47:17 +05'30' Civil Suit no. 94413/2016 Page no. 39 of 43 the tenanted premises is similar in size, nature, frontage, user or amenities to the said adjoining properties whose rent receipts have been placed on record by PW-1. Furthermore, the plaintiffs have not examined any independent witness to establish that the tenanted premises was comparable in all material respects to the adjoining properties. In the absence of such evidence, the claim that the tenanted premises can easily fetch a rent of Rs. 35/- per sq. ft. per month remains merely an estimate as the same is not sufficiently substantiated. On the other hand, it has already been held that the partnership deed relied upon by the defendants is a mere sham and that the so-called remuneration of Rs. 4000/- per month stipulated under the said partnership deed is in substance, the true consideration for use and occupation of the tenanted premises by defendant no. 5. The said amount of Rs. 4000/- camouflaged as partners' remuneration therefore represents the true and real consideration or rent which the tenanted premises were fetching per month from the person in actual possession. The said amount therefore constitutes a just, fair and reasonable measure of mesne profits in the present case particularly in the absence of any rebuttal evidence by the defendants to show that the prevailing market rent of the tenanted premises or the damages for use and occupation thereof was less than the said amount.
57.It is pertinent to mention the plaintiffs have claimed damages/mesne profits with effect from 01.05.2014 and there is no dispute that the defendants continued in unauthorised occupation of the tenanted premises from the said date pursuant to the termination of tenancy. Accordingly, the plaintiffs are held entitled to recover damages/mesne profits from the defendants @ Rs. 4000/- per month from 01.05.2014 till the date of handing over the vacant and peaceful possession of the UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:47:28 +05'30' Civil Suit no. 94413/2016 Page no. 40 of 43 tenanted premises to the plaintiffs.
58.As regards interest payable on mesne profits, it is a settled law that interest forms an integral part of the mesne profits and therefore once the court awards mesne profits, the interest accruing thereon has to be allowed as a necessary corollary in the computation of the mesne profits. Reliance in this regard is placed on the decision of the Hon'ble High Court of Delhi in JK Laksmi Cement vs. Master Avishkar Prakash 2024: DHC: 9239. In the present case, the plaintiffs have prayed for interest @ 12% per annum on the amount of damages/mesne profits and also on the future mesne profits. In the considered opinion of this court, the same appears to be exorbitant and without any basis. Considering the prevailing market conditions, this court does not deem it equitable to grant such high rate of interest. This court is of the considered view that grant of simple interest @ 9% per annum on the amount of damages/mesne profits and also on the future mesne profits is reasonable, just and equitable in the facts and circumstances of the present case. Accordingly, the defendants are held jointly and severally liable to pay damages/mesne profits @ Rs. 4000/- per month from 01.05.2014 till the date of handing over the vacant and peaceful possession of the tenanted premises to the plaintiffs along with simple interest @ 9% per annum for the said period.
59.In view of the aforesaid discussion, issue no. 2 and 3 are decided in favour of the plaintiffs and against the defendants.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15
17:47:42 +05'30'
Civil Suit no. 94413/2016 Page no. 41 of 43
Issue no. 6: Whether the present suit has been properly valued? OPD
60.The onus to prove the present issue was upon the defendants. It is pertinent to mention that defendant no.1, 2 and 5 in their written statement have taken a preliminary objection that the present suit has been not properly valued for the purpose of court fees and jurisdiction. However, except for making bald and vague averments, the defendants have failed to lead any evidence whatsoever to substantiate the said plea. Furthermore, even at the stage of final arguments, no arguments were addressed on behalf of the defendants on the said aspect. Therefore, the defendants have miserably failed to prove that the present suit is not properly valued for the purpose of court fees and jurisdiction. Accordingly, the present issue is decided in favour of the plaintiffs and against the defendants.
61.In view of the aforesaid discussion and findings on the above issues, this court is of the considered view that the plaintiffs have duly discharged their burden of proof and have successfully proved their case on the scale of preponderance of probabilities and consequently the plaintiffs are entitled to recover possession of the tenanted premises from the defendants along with damages/mesne profits.
Relief:
62.Accordingly, the present suit is decreed in favour of the plaintiffs and against the defendants as follows:
a) A decree of recovery of possession is passed in favour of the plaintiffs and against the defendants and the defendants are hereby directed to UMANG Digitally signed by UMANG JOSHI JOSHI Date: 2026.01.15 17:47:58 +05'30' Civil Suit no. 94413/2016 Page no. 42 of 43 hand over the vacant and peaceful possession of the tenanted premises i.e. property bearing shop no. 1330, Sultan Singh Building, Kashmiri Gate, Delhi-110006 to the plaintiffs.
b) The defendants shall jointly and severally pay damages/mesne profits @ Rs. 4000/- per month from 01.05.2014 till the date of handing over the vacant and peaceful possession of the tenanted premises to the plaintiffs along with simple interest @ 9% per annum for the said period.
c) Cost of the suit shall be paid by defendants to the plaintiffs as per rules.
63.The plaintiffs shall file deficient court fee, if any. Decree sheet be prepared accordingly.
64.File be consigned to record room after due compliance.
Announced in Open Court on this 15th day of January 2026 This Judgment consists of 43 signed pages.
UMANG Digitally signed by
UMANG JOSHI
JOSHI Date: 2026.01.15 17:48:18
+05'30'
(UMANG JOSHI)
Principal Magistrate, JJB-V,
Family Court Complex, East District
The then Civil Judge-04, Central,
Tis Hazari Courts, Delhi
15.01.2026
Civil Suit no. 94413/2016 Page no. 43 of 43