Delhi District Court
State Bank Of India vs Sh. Sanjay Bharti on 28 February, 2011
IN THE COURT OF SH. PITAMBER DUTT; ADJ (CENTRA)17,DELHI Suit No. 735/08 Unique Case ID No. 02401C0839422008 STATE BANK OF INDIA, a body Corporate constituted under The State Bank of India Act, 1955 having its Central Office at Madam Cama Road, Nariman Point, Mumbai and one of its Local Head Office at 11, Parliament Street, New Delhi and amongst others a Branch Office at B/3738, 2nd floor, Inner Circle, Cannaught Place, New Delhi Through its Chief Manager, Anil Kanotra ........Plaintiff Versus Sh. Sanjay Bharti S/o Sh. S. D. Bharti, R/o 4/11, Kalkaji, Extn. New Delhi .........Defendant Date of Institution of Suit : 04.06.2008 Date when reserved for orders : 21.02.2011 Date of Decision : 28.02.2011 JUDGMENT
1. Vide this judgment I shall decide the suit for specific performance and permanent injunction filed by the plaintiff against the defendant. The brief facts necessitating in filing the present suit are Suit no. 735/08 Page 1/21 given as under:
2. That plaintiff is a body Corporate constituted under the State Bank of India Act, 1955. The defendant is the owner / landlord of the premises no. 142, (Front Portion), Bhagat Singh Market, Gole Market, New Delhi110001. The plaintiff is the tenant in the suit property vide registered lease deed dated 01.05.02 for 5 years with an option to seek renewal of the lease deed for further two terms of 5 years each with an increase of rent by 15% after the expiry of every 5 years. Plaintiff had been asking the defendant to exercise option of renewal since November 2006 through various telephonic / verbal conversation for further period of 5 years. The plaintiff was ready and willing to continue the possession and wanted renewal of the lease deed but defendant inspite of his promise, did not execute new lease deed in favour of the plaintiff and filed a false suit. The plaintiff bank could not pay the enhanced rent due to the nonexecution of new lease deed by the defendant, however, agreed rent was remitted to the defendant vide letter dated 01.05.07, 01.06.07 and 01.04.07. On the receipt of the notice of the civil suit, the plaintiff was in complete shock as it was a deliberate attempt of the defendant in contravention of the contractual obligation. The plaintiff approached the defendant and requested him to perform his part of the contract as per the lease deed dated 01.05.02 and execute a fresh lease deed for 5 years, but he did not pay any heed to such request. On the basis of the above Suit no. 735/08 Page 2/21 averments, the present suit has been filed by the plaintiff against the defendant for adjudication.
3. Pursuant to the summons defendant appeared and filed written statement taking various preliminary objection that the suit does not disclose cause of action that same is barred by Section 14 of Specific Relief Act and this Court has no pecuniary jurisdiction to entertain and try the present suit, that the present suit is a counter to the suit filed by the defendant for possession of the suit property.
On merit it is stated that plaintiff bank was the tenant of the property in question in terms of the lease deed dated 01.05.02 till the expiry of the said lease deed i.e 30.04.07 and thereafter the plaintiff is in unauthorized occupation of the suit property as it did not exercised its option of renewal of the lease, accordingly the lease deed expired on 30.04.07. He further stated that the plaintiff was required to exercise its option by giving prior notice of two months before the expiry of the initial lease period and notice was to be given at the last known address of lessor but no such notice was given by the plaintiff to the defendant. It is further stated that as per the condition, the plaintiff was to increase rent by 15%. The plaintiff had no intention to renew the lease deed that is why the plaintiff failed to sent the written notice to the defendant but also did not sent the enhanced rent by 15%. It is denied that since November 2006, plaintiff asked the defendant by any telephonic or verbal conversation to renew the lease. It is also Suit no. 735/08 Page 3/21 denied that plaintiff ever made any telephonic or verbal communication on the subject of the renewal of the lease with the defendant. All other averments have also been denied. It is prayed that suit of the plaintiff be dismissed.
4. Plaintiff filed replication thereby denied the averments made in the written statement and reiterated the averments made in the plaint.
5 On the basis of the pleadings of the parties vide order dated 24.03.09 following issues have been framed for adjudication:
1. Whether the suit is without any cause of action? OPD
2. Whether the suit is barred by Section 14 of the Specific Relief Act? OPD
3. Whether this Court has no pecuniary jurisdiction to try and entertain the suit? OPD
4. Whether the plaintiff is entitled to a decree for specific performance of lease deed dated 01.05.02? OPP
5. Whether the plaintiff is entitled to permanent injunction as prayed? OPP
6. Relief 6 Defendant has already filed a suit against the plaintiff for possession and mesne profit being Suit No. 726/08. Vide order dated 01.02.10 both these suits have been consolidated by the Predecessor of Suit no. 735/08 Page 4/21 this Court and the Suit No. 726/08/07 is treated as main suit in which evidence has been recorded.
7 In order to prove his case plaintiff examined Sh. Anil Kanotra who reiterated the averment made in the plaint in his examination in chief.
During crossexamination, he admitted that terms and condition of the tenancy of the suit premises between plaintiff and the defendant bank were governed by the lease agreement dated 01.05.02 . He is aware about the content of Ex. DW1/1. He admitted that there is no other document which mention the terms and conditions of the landlord and tenant except Ex. DW1/1. He admitted that no notice in writing was given to the plaintiff for seeking renewal of the lease deed after the expiry of initial period. He volunteered that they made telephonically request to the plaintiff. He himself made request on telephone to the plaintiff being the Chief Manager of the bank. He denied that no request for renewal of the lease deed was made by him or any of the official of the bank to the plaintiff two months prior to the expiry of lease deed. He admitted that on the renewal of the lease deed the rent was required to be paid by enhancing 15% of the original rent. He admitted that after the expiry of initial lease deed on 30.04.07, rent was not enhanced. He volunteered that subsequently it was paid at the enhanced rate alongwith arrears. He admitted that up till 30.09.07 the bank paid the rent at the earlier rent by post every Suit no. 735/08 Page 5/21 month. He admitted that enhanced rent was paid by the bank after the receipt of the summons of the suit. He admitted that plaintiff demanded enhanced rent after 30.04.07. He submitted that he can not say if the suit premises as on today can fetch rent @ Rs. 50,000/ per month.
8 In order to answer the claim of the plaintiff, defendant also examined himself. He reiterated the averments made in the written statement in his examination in chief.
During crossexamination, PW1 admitted that bank is in possession of the suit property. The first term of lease expired on 30.04.07. He admitted that before or after 30.04.07 he has not served any notice upon the bank. He admitted that even after 30.04.07 the rent was remitted by the bank through cheques. After receipt of the cheques he did not serve any legal notice upon the bank regarding the rent paid and expiry of lease. He does not know whether at the relevant time Mr. Anil Kanotra was the Chief Manager of the branch. He denied that Mr. Anil Kanotra continuously since November 2006 verbally asked him to renew the lease and to execute a fresh lease deed in favour of the bank in exercise of its option. He denied that he deliberately delayed the execution of fresh lease deed. He has gone through the lease deed. He denied that there is no condition of written notice for exercising the option by the bank before the expiry of lease. He denied that he has refused to execute the fresh lease deed in favour Suit no. 735/08 Page 6/21 of the bank deliberately. He denied that bank is still the tenant in the property in question, use and occupation charges have been claimed by him @ Rs. 50,000/ p.m on the basis of the market rate and other ATMs in the same vicinity. He admitted that he has not filed any proof on record in support of the same. He denied that rent @ Rs. 50,000/ or Rs. 65,000/ is not payable in the area and the rent paid by the bank is correct and contractual rate.
9 I have heard both the Ld. Counsels for the parties and perused the pleadings, evidence and other material placed on record. My issue wise findings is as under: Issue No. 1 Whether the suit is without any cause of action?
OPD 10 The onus to prove issue no. 1 is upon the defendant. In the written statement, defendant has simply stated that the suit is not maintainable as it does not disclose any cause of action besides the above nothing has been specified in the entire written statement as to how the suit is without cause of action. Admittedly the suit property was let out to the plaintiff by the defendant by virtue of registered lease deed Ex. PW1/1. It is also admitted case that in the said lease deed the plaintiff has been given two option of renewal of the lease for similar period on the same terms and conditions. The said option was to be exercised by the lessee by giving 2 months notice before the expiry of the lease deed to the lessor. As per the plaintiff, it had Suit no. 735/08 Page 7/21 exercised the said option verbally / telephonically whereas as per the defendant the said option was not at all exercised therefore the tenancy of the plaintiff came to an end by the midnight of 30.04.07. Both the plaintiff and defendant has put forth a divergent view with regard to the exercise of option of renewal of the lease deed. The said controversy can only be resolved through adjudication. Therefore, the plaintiff has cause of action for filing the present suit. Defendant has failed to discharge the onus of issue no. 1,same is accordingly decided against the defendant.
Issue No.2 Whether the suit is barred by Section 14 of the Specific Relief Act? OPD 11 The onus to prove this issue is upon the defendant. In the written statement, defendant has simply stated that suit is barred under Section 14 of Specific Relief Act. He has not mentioned as to how it is barred by Section 14 of Specific Relief Act. Section 14 of Specific Relief Act speaks about the contract which are not specifically enforceable.
Ld. Counsel for the defendant contended that the lease deed was for a fix period which expired by efflux of time therefore the suit is not maintainable and is hit by Section 14 of Specific Relief Act. On the other hand, Ld. Counsel for the plaintiff contended that Sectin 14 has no application in the present suit.
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Admittedly, the plaintiff was inducted as a tenant by virtue of the lease deed for initial period of 5 years with an option of renewal for two terms of similar period. The renewal can be exercised as per the condition prescribed in the lease deed. If the condition prescribed in the lease deed had been performed the contract between the parties could have been enforced specifically. The question whether the option of renewal was exercised as per the lease deed or not is the question of fact which requires adjudication.
In view of the above, I am of the considered view that present suit is not barred under Section 14 of Specific Relief Act. The defendant has failed to discharge the onus of issue no. 2, same is accordingly decided against the defendant.
Issue No. 3 Whether this Court has no pecuniary jurisdiction to try and entertain the suit? OPD 12 The onus to prove issue no. 3 is upon the defendant. In the written statement, defendant has stated that this Court has no pecuniary jurisdiction to try the present suit as the value of the suit for the purpose of Court fees and jurisdiction is less than Rs. 3,00,000/. It is further stated that as per paragraph 16 of the plaint, the suit is valued for the purpose of court fees and jurisdiction at Rs. 2,69,000/ and for the purpose of relief and injunction is valued for Rs. 3,000/ Suit no. 735/08 Page 9/21 total value of the suit is thus less than Rs. 3,00,000/ which falls within the pecuniary jurisdiction of Ld. Civil Judge.
I have carefully examined the plea taken by the defendant. Undoubtedly the plaintiff has valued the suit for the purpose of court fees and jurisdiction at Rs. 2,69,000/ only which is below the amount of Rs. 3,00,000/. Therefore same, falls within the pecuniary jurisdiction of the Ld. Civil Judge. Undoubtedly the plaintiff valued the suit for the purpose of court fees and jurisdiction at Rs. 2,69,000/ and filed the same before the District Judge. Filing of present suit before the Court of Additional District Judge can be a procedural irregularities but it is not an illegalities which goes to the root of the matter. It is made clear that the Court of Additional District Judge is vested with pecuniary jurisdiction upto to the tune of Rs. 20,000,00/ being the higher court, it can decide the suit which falls within the pecuniary jurisdiction of Ld. Civil Judge.
It is also relevant that two suits were pending between the parties i.e one suit being Suit No. 726/08 filed by the defendant against the plaintiff and another suit being Suit No. 735/08 filed by the plaintiff against the defendant. Both these suits were pending before the different Court. Ld. District Judge, vide order dated 15.10.08 assigned both the suits to the Court of Sh. Sunil Rana, Additional District Judge, Delhi and thereafter, the matter was assigned to this Court. In veiw of the above, I am of the considered view that although Suit no. 735/08 Page 10/21 present suit should have been filed before the court of Ld. Civil Judge, however filing of the suit before this court is not illegal, however, it may be irregularities. The said fact does not go to the root of the matter. Moreover, both these suit were subsequently assigned to one court under the order of the District Judge, therefore I am of the view that this Court has pecuniary jurisdiction to try the present suit. Issue no. 3 is accordingly decided.
Issue No. 4 Whether the plaintiff is entitled to a decree for specific performance of lease deed dated 01.05.02? OPP 13 Plaintiff has set up a case that it was inducted as a tenant by virtue of the registered lease deed dated 01.05.02 for initial period of 5 years with an option of renewal of two terms of 5 years each with an increase in rent by 15% after expiry of every 5 years. As per the plaintiff they communicated the defendant, their intention to exercise option of renewal verbally / telephonically in November 2006 itself. Defendant promised to execute the lease deed but he failed to do so. As per the plaintiff they were always ready and willing to perform their part however, it was the defendant who failed to perform his part of obligation.
On the other hand as per the defendant, plaintiff had not exercised their option of renewal as prescribed under the lease deed. As per the lease deed the plaintiff was under obligation to serve a Suit no. 735/08 Page 11/21 notice 2 months prior to the expiry of lease deed conveying its intention to exercise the option of renewal at the last known address of the lessor but the defendant had failed to exercise that option and lease deed expired by efflux of time by the midnight of 30.04.07. 14 A careful examination of the pleading and the evidences led on record shows that it is the admitted case of the parties that the tenancy of the plaintiff was created by virtue of a registered lease deed Ex. PW1/1. It is also the admitted case of the parties that vide said lease deed two options has been given to the lessor after the expiry of initial period of 5 years each with an increase of 15% rent.
Besides the above the Court has to independently examine whether the material on record entitles the plaintiff to the decree sought for. Two important consideration always weigh with the court while adjudicating the claim for specific performance of the contract of sale of immovable property. One whether the plaintiff had pleaded and proved readiness and willingness to perform their part of the contract and two whether the equities of the case demands that such decree be made.
15 Ld. Counsel for the plaintiff contended that necessary averments has been made in the plaint. He also referred to affidavit of evidence in support of his contention that plaintiff was ready and willing to perform its part of obligation. On the other hand, Ld. Counsel for the defendant contended that plaintiff has failed to prove Suit no. 735/08 Page 12/21 that they were ready and willing to perform their part. He further contended that the plaintiff has not exercised the option as per the terms of the lease deed ex. PW1/1,l therefore, same was expired by efflux of time.
16 Section 16(c) of the Specific Relief Act which is relevant for the purpose of this case to the extent is reproduced below: Sec16 (a) *
(b) * (C) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation for the purpose of Clause C
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and willingness, to perform, the contract according to its true construction.
The idea behind Section 16 (C) reads with explanation 2 Suit no. 735/08 Page 13/21 is that any person seeking benefit of the specific performance of contract must manifest with his conduct has been blemishless throughout entitling him to the specific relief. Since the relief sought is equitable and discretionary, the Court can not grant the relief on the basis of the person who seeks it.
17 It is settled law that relief of specific performance is an equitable relief and is in the discretion of the court, which discretion requires to be exercised on the basis of settled principle of law, as adumbrated under Section 20 of Specific Relief Act 1963. Under Section 20, the court is not bound to grant relief just because there was a valid agreement. Section 16 C of the Act envisages "that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant relief of specific performance.
18 The Hon'ble Supreme Court in Man Kaur (Dead) by LRs Vs. Hartar Singh Sangha reported as 2010 AIOL 672 has held that "Section 16 (C) of Specific Relief Act 1963 bars the specific performance of a contract in favour of plaintiff who fails to aver and prove that he has performed or his always been ready and willing to perform the essential terms of the contract which are to be Suit no. 735/08 Page 14/21 performed by him. The explanation to Section 16 provides that for the purpose of clause C of Section 16, the plaintiff must aver performance of, or readiness and willingness to perform the contract according to its true consideration. Thus in a suit for specific performance the plaintiff should not only plead and prove the terms of the agreement but should also plead and prove his readiness and willingness to perform his obligation under the contract interms of the contract". 19 The above view has been reiterated by the Hon'ble Supreme Court in J. P. Builders & Ots. Vs. A. Ramadass Rao & Ors. reportes as 2011 (1) RCR (Civil) page 604.
20 Ld. Counsel for the defendant contended that the lease deed has not been happily worded and is not mention in the clause (i) that notice was required to be given in writing. He further contended that there is ambiguity in the stipulation of the lease deed which is required to be harmoniously construed after taking into consideration the other clause of the lease deed. On the other hand, Ld. Counsel for the plaintiff contended that there is no ambiguity in the lease deed and the intention of the parties is absolutely clear that two months notice was the condition precedent for exercising the option of renewal. 21 How the option of renewal could have been exercised can only be ascertained from the terms of the lease deed itself. The relevant clause of the lease deed are thus reproduced below Clause 2 of the lease deed stipulates as under:
Suit no. 735/08 Page 15/21
"to have and to hold the demised premises unto the Bank for its usage and public dealing Branch for its ATM and not for storage or other purpose which is in violation of the local laws for the terms of five (5) year (s) to be computed from the day of execution of this agreement with the further two option (s) of renewing the lease for further periods of five year (s) each on the same terms and conditions but with an increase in rent by 15% of the original rent now payable under this deed"
Clause (i) at page 6 further stipulates as under that : "That the Bank and the lessor / lessors shall gave the option of renewing the lease of the demises premises mutually at the expiry of the present term hereby granted for further periods of 5 years each with an increase in rent by 15% of the original rent now payable and on the same terms and conditions as contained in this lease provided due proper notice of 2 months, before the expiry of the initial lease period or first extended lease period thereof is given to the lessor at the last know address and the lessor will at the request of the Bank, forthwith execute and deliver to the Bank a new lease of the demised premises."
22 It is well settled law that 'in the case of any ambiguity the Court should look at all parts of the documents to ascertain the intentions of the parties. If ambiguity still persists, Court should interperate the documents strictly against the guarantor and in favour Suit no. 735/08 Page 16/21 of the grantee.' However, for doing so the explicit terms of the lease deed are required to be minutely examined. A perusal of clause 2 of the lease deed shows that the suit premises has been let out to the defendant for a period of 5 years which have to be computed for the day of execution of the agreement. The said lease deed provides two renewal option to the plaintiff on the same terms and conditions with an increase in rent by 15% of the original rent. Perusal of this clause clearly shows that there is not ambiguity in the same and the intension of the parties absolutely clear that the lease deed could have been renewed for two similar terms at the same time terms and conditions by increasing rent of 15%.
23 I have also perused the clause (i) at page 6. The said clause relates to the fact as to how the said option to be exercised. Perusal of clause (i) clearly shows that the said option was to be exercised mutually by both the parties and at the increase of 15% of the original rent provided proper notice of two months before the expiry of the initial lease periods or first extending period. The above words clearly shows that the option of the renewal of the lease deed could have been exercised with the condition of two months prior notice before the expiry of the lease. The said clause clearly shows that if the lessee wanted to exercise the option of renewal he was under
the obligation of giving notice of two months prior to expiry of the lease deed. The plaintiff has pleaded that they verbally / telephonically Suit no. 735/08 Page 17/21 communicated the plaintiff in November 2006 itself regarding the execution of the fresh lease deed thus, they have exercised the option as per the lease deed. On the other hand plaintiff contended that no such communication was made moreover notice in writing was required. As per the defendant it has not been stipulated that the notice would be in writing only.
24 A perusal of the clause (i) shows that notice was to be given to the lessor at the last known address and the lessor will at the request of the bank forthwith execute and deliver to the bank the new lease deed of the demised premises. The word 'at the last address' itself suggest that the notice should have been given in writing and not verbally if the intention of the parties was that the notice could be verbal through telephonic conversation then what was the occasion to mention in the lease deed that "prior notice of 2 months before the period thereof is given to the lessor at the last known address". The incorporation of the word "at the last address" exhibits the intention of the parties that the notice of renewal was to be in writing and not verbal or through telephonic conversation.
DW1 during crossexamination admitted that no notice in writing was given before two months of the expiry of the leased period to the plaintiff for exercising the option of renewal. He has simply stated that verbal / telephonic communication was made in November 2006 itself. However, he has not given any specific day on which Suit no. 735/08 Page 18/21 verbal / telephonic conversation was made. Moreover as per the lease deed the notice was required to be given before two months of the expiry of the leased period whereas the said communication was stated to be made by the defendant before more than 6 months which was not the requirement of the lease deed.
25 No evidence has been placed on record by the plaintiff which can show or suggest that it exercised the option of renewal as per the lease deed Ex. PW1/1. After the expiry of the lease period the plaintiff did not enhance the rent and continued to remit the original rent which was not accepted by the defendant.
The plaintiff had not taken any step for seeking enforcement of the renewal clause. The contention of the plaintiff is that they verbally conveyed to the plaintiff that they would exercise the option of renewal, but the defendant did not comply the same. If that is true then what action plaintiff had taken when their oral request was not conceded by the defendant. The plaintiff could have filed a suit for specific performance soon after the expiry of the initial lease period but they did not take any step till the receipt of the summons of the suit filed by the defendant. On the receipt of the summons of the suit the plaintiff remitted the enhanced rent which was rightly not accepted. Even thereafter, plaintiff did not approach the court for seeking specific performance of the renewal clause and kept on waiting and filed the present suit on 20.10.08 i.e after more than one Suit no. 735/08 Page 19/21 and half years of the expiry of the lease deed. The aforesaid conduct of the plaintiff shows that it was not ready and willing to perform its part of the obligation.
26 The requirement is that the plaintiff must show their willingness and readiness to perform its part of the contract is not ritualistic incantation of what is prescribed under the Act, but determines the claim to perform the contract. In the instant case, the plaintiff has not placed any proof to that effect. Therefore, the plaintiff could not substantiate its plea that they were ready and willing to perform their part of the contract which is mandatory requirement as per Section 16 (c) of Specific Relief Act.
27 In view of my above discussion, I am of the considered view that the plaintiff has failed to prove that it was ready and willing to perform it part of the obligation, the plaintiff has also failed to prove that it exercised the option of renewal as per the terms of the lease deed Ex. PW1/1, thus it is not equitable to grant relief of specific performance in favour of the plaintiff on the basis of the fact of the present case. The plaintiff has thus failed to discharge the onus of issue no. 4, same is accordingly decided against the plaintiff.
Issue No. 5 Whether the plaintiff is entitled to permanent injunction as prayed? OPP Suit no. 735/08 Page 20/21 28 The onus to prove issue no. 5 is upon the plaintiff. In the entire plaint, plaintiff has not mentioned a word regarding the fact whether the defendant or his employee ever interfered in the peaceful possession of the plaintiff. The apprehension of the plaintiff is unfounded and no material has been placed on record on the basis of which it can be assumed that the defendant ever tried to interfere in the possession of the plaintiff. Plaintiff has no cause of action for filing the present suit for permanent injunction against the defendant. The plaintiff has thus failed to discharge the onus of issue no. 5, same is accordingly decided against the plaintiff.
Relief 29 In view of the facts and circumstances, the suit filed by the plaintiff against the defendant is dismissed. However, there is no order to cost. Decree Sheet be accordingly prepared. File be consigned to record room.
Announced in the open court ( PITAMBER DUTT)
th
28 February, 2011 Additional District Judge
Delhi
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