Delhi High Court
Vansons Footwear (P) Ltd vs Usp Fashion Weaves (P) Ltd & Ors on 19 January, 2018
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 19th January, 2018
+ CS(OS) No.36/2017
VANSONS FOOTWEAR (P) LTD ..... Plaintiff
Through: Mr. Giriraj Subramanium and
Mr. Simarpal Singh Sawhney,
Advs.
Versus
USP FASHION WEAVES (P) LTD & ORS ..... Defendants
Through: Mr. V. Elanchezhiyan & Mr.
Jawaid Hussain Khan, Advs. for
D-1,2&4.
Mr. Govind Rishi, Adv. for D-3.
Mr. Jai Kant Prashant, Adv. for
applicants.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
IA No.15364/2017 (of plaintiff u/S 151 CPC)
1. The order dated 20th December, 2017 is made absolute and the
application is disposed of.
IA No.15365/2017 (of plaintiff u/O XII R-6 CPC)
2. The plaintiff has instituted this suit, (a) for ejectment of the
defendants from property No.A-II/79 A&B, Lajpat Nagar-II, New
Delhi, after determination of tenancy of the defendant No.1 with
respect thereto; (b) for recovery of arrears of rent in the sum of Rs.50
lakhs with interest; and, (c) for recovery of mesne profits @
Rs.70,000/- per day with effect from the date of institution of the suit
till delivery of possession.
CS(OS) No.36/2017 Page 1 of 11
3. The suit was entertained and summons thereof ordered to be
issued and the defendants restrained from creating any third party
interest in the property.
4. Written statement has been filed by the defendant No.1 USP
Fashion Weaves (P) Ltd. No written statement has been filed by the
defendants No.2 to 4 namely Mrs. Summy Lobsang Bhutia, Ms.
Purnima Mittal and Ms. Usha Jain. Though the counsel for the
defendants No.1,2&4 on 26th October, 2017 stated that an application
had been filed for deletion of the defendants No.2&4 from the array of
defendants but the said application has not come up before this Court
till now.
5. The counsel for the defendant No.3 states that written statement
has been filed but is not on record.
6. The plaintiff has filed this application for decree on admissions
and the counsel for the plaintiff contends that the written statement of
the defendant No.1 does not disclose any defence and the plaintiff is
entitled to judgment on admissions forthwith.
7. The counsel for plaintiff, counsel for the defendants No.1,2&4
and the counsel for the defendant No.3 have been heard.
8. I may at the outset state that the counsel for the plaintiff, on
enquiry, states that the relationship of landlord and tenant was
between the plaintiff and the defendant No.1 only and the defendants
No.2 to 4 have been impleaded in this suit in their capacity as
Directors of the defendant No.1 and no relief has been claimed against
them personally.
CS(OS) No.36/2017 Page 2 of 11
9. It is the case of the plaintiff (i) that a registered Lease Deed
dated 8th September, 2015 was executed between the plaintiff and the
defendant No.1, whereunder the plaintiff let out the property aforesaid
to the defendant No.1 for an initial period of three years, from 27 th
November, 2015 to 26th November, 2018, extendable as provided
therein; (ii) that the agreed monthly rent was Rs.10 lakhs, besides
utility charges; (iii) that the defendants deposited a sum of Rs.40 lakhs
with the plaintiff as refundable security deposit; (iv) that the rent was
agreed to be paid on the 7th day of every english calendar month and
25 post dated cheques were handed over; (v) that the defendants failed
to pay the rent for five months, of July to November, 2016 and were in
breach of the Lease Deed; (vi) that the post dated cheques handed over
by the defendants to the plaintiff were returned dishonoured; (vii) that
the defendants have thus become liable to be evicted under Clauses
8.2 and 8.4 of the registered Lease Deed dated 8th September, 2015 as
under:
"8.2 That if the lessee defaults in payment of rent for
two consecutive months, notwithstanding the terms of
clause 8.1, the lessor will have a right to terminate the
lease forthwith. Further, in the event the lessee is in
breach of performance of terms and conditions of this
lease deed and if such breach is not remedied within
fifteen days of written notice, or the business is wound up
or taken over by the government or any authority or
company so as to imply or cause a change in the
ownership or management of the lessee, without previous
written consent of the lessor, the lessors shall be entitled
to terminate this lease deed by given thirty days notice of
the same to the lessee, after which period the lessee shall
CS(OS) No.36/2017 Page 3 of 11
be liable to pay damages/mesne profits as enumerated in
clause 8.4.
If any cheque towards the payment of rent is dishonoured,
the lessors will have a right to terminate the lease
forthwith.
.....
8.4 In the event the lessee fails to handover the vacant
possession of the demised premises at the expiry of lease
period or on expiry of extended period as per clause 1.1,
the lessee shall liable to pay damages/Mesne Profits to
the lessors at the rate of Rs.70,000/- (Rupees Seventy
Thousand Only) per day, which amount shall
proportionately be increased on the renewal, per day of
default from the date of expiry of this Lease Deed or its
earlier termination as enumerated above, till handing
over of the vacant and peaceful possession of the demised
premises to the lessors, besides all the other amounts
payable to the lessors as set out hereinabove. The lessee
expressly agrees that this clause is reasonable and is fully
consented to by the lessee freely and voluntarily and may
be given full effect to by the lessor.";
(viii) that the plaintiff served a notice dated 16 th November,
2016 on the defendants of demand of arrears of rent and of termination
of tenancy.
10. The defendant No.1, in its written statement, has pleaded (a)
that the plaintiff, at the time of letting of the premises to the defendant
No.1, had represented itself to be the owner of the property but had
not provided to the defendant No.1 any documents of title of the
property in favour of the plaintiff; (b) that the plaintiff, by making
false representations to the defendant No.1, made the defendant No.1
CS(OS) No.36/2017 Page 4 of 11
agree to exorbitant rent of Rs.10 lakhs per month which is double the
prevalent market rent; (c) that the plaintiff had represented to the
defendant No.1 that the property was legally constructed and having
all the requisite approvals for commercial use; (d) that the defendant
No.1, acting on the said representations of the plaintiff, made
investments of Rs.2 crores in developing a market in the property and
started allotting small units/shops to small shopkeepers; (e) that the
defendant No.1 received a notice dated 19th April, 2016 from South
Delhi Municipal Corporation, with respect to illegal construction in
the property and subsequently a demolition order dated 13th May,
2016 was also passed with respect to the property and against which
the defendant No.1 preferred an appeal to the Appellate Tribunal,
Municipal Corporation of Delhi; (f) that the defendant No.1 later
learnt that the basement and second floor of the property is
unauthorised; (g) that the plaintiff is aware that small units/shops
made by the defendant No.1 in the property have been allotted by the
defendant No.1 to various shopkeepers and the said shopkeepers are in
physical possession of the property and are necessary parties to the
present suit and which fact has been suppressed by the plaintiff; (h)
that the registered Lease Deed is void, being based on
misrepresentations of the plaintiff qua its ownership and legality of the
property; (i) that owing to the acts aforesaid of the plaintiff, the
defendant No.1 is on the verge of insolvency; (j) that the defendants
No.2&4 have resigned from the Board of Directors of the defendant
No.1; (k) that the plaintiff is not entitled to mesne profits @
Rs.70,000/- per day.
CS(OS) No.36/2017 Page 5 of 11
11. As would be obvious from the above, the defendant No.1, in its
written statement, has not controverted non-payment of rent for the
period alleged.
12. The counsel for the defendant No.1 has today also drawn
attention to Clause 7.3 of the registered Lease Deed as under:
"7.3 Sub-letting of the demised premises.
That the Lessee shall not transfer, assign, license,
sublet or otherwise part with the possession of the
whole or/and part of the demised premises to any
third party, including its subsidiaries, nor shall the
Lessee create any third party interest, in the
demised premises in any way whatsoever. Any
breach of this condition shall invite immediate
termination of the lease.
However, the following Subsidiaries of the Lessee
may operate out of the same premises, subject to
Clause 7.3.1 detailed below:
1. Red Realty Infratech (P) Ltd.
2. USP Fashion Weaves (P) Ltd.
3. USP Supreme Agro Foods (P) ltd.
7.3.1 The Lessee understands and undertakes that
the term "third party" includes the subsidiaries
listed no.1-3 in this clause. The Lessee further
undertakes that the Lessor shall not be liable for
any claims or disputes arising out of such
operations of the said Subsidiary complanies of the
Lessee. Further, the Lessee shall be liable for
ensuring peaceful possession of the premises and
adherence of the present agreement by the
subsidiaries of the Lessee."
CS(OS) No.36/2017 Page 6 of 11
13. I am however unable to understand the relevance thereof to the
matter in controversy.
14. The counsel for the defendant No.1 has also argued that this suit
has been filed by the plaintiff in collusion with the defendant No.3 and
has drawn attention to Sections 18&19 of the Indian Evidence Act,
1872 but the relevance whereto also to the controversy at hand is not
understood.
15. Mr. Jai Kant Prashant, Advocate present in Court states that he
has filed three separate applications for impleadment in this suit, on
behalf of three persons who have been permitted by the defendant
No.1 to run their businesses from the premises but the said
applications have not been listed as yet.
16. The aforesaid also does not come in the way of decision on this
application. The persons, if any inducted by the defendant No.1 in the
premises have no privity with the plaintiff and would neither be
necessary nor proper party and in any case cannot object to a decree
for ejectment and recovery against defendant No.1, if the plaintiff is
found entitled thereto, being passed on admissions.
17. The counsel for the defendants No.1,2&4 interjects at this stage
and states that the persons on whose behalf applications for
impleadment have been filed have been inducted into the premises by
Red Realty Infratech (P) Ltd. referred to in Clause 7.3 of the registered
Lease Deed supra.
18. Clause 7.3 supra of the Lease Deed contains an agreement
between the plaintiff and the defendant No.1 that the defendant No.1
will not transfer, assign, license, sublet or otherwise part with the
CS(OS) No.36/2017 Page 7 of 11
possession of the whole or/and part of the demised premises to any
third party, including its subsidiaries and only permits Red Realty
Infratech (P) Ltd. to operate out of the property. However, the same
does not create any right in favour of Red Realty Infratech (P) Ltd.
and Red Realty Infratech (P) Ltd. or its assignees shall also be liable to
be ejected under the order of ejectment, if any passed in favour of the
plaintiff and against the defendant No.1. Neither Red Realty Infratech
(P) Ltd. nor any other person inducted has any independent right to the
premises.
19. On the aforesaid pleadings, there is no challenge by the
defendant No.1 to default having been committed in payment of rent
within the meaning of Clause 8.2 supra of the registered Lease Deed
and which entitles the plaintiff to determine Lease Deed even prior to
the period for which the premises were let out. As per the dicta of the
Supreme Court in Nopany Investments (P) Ltd. Vs. Santokh Singh
(2008) 2 SCC 278, even if notice of termination is not given, the same
would not effect the suit inasmuch as the suit has now admittedly been
pending for over 30 days, of which notice was agreed to be given.
20. As far as the other pleas taken by the defendant No.1 in its
written statement, of ownership and of misrepresentations on the part
of the plaintiff are concerned, I may only state that in a suit by a
landlord for ejectment of a tenant, ownership is not relevant (see Sri
Ram Pasricha Vs. Jagannnath (1976) 4 SCC 184, State of Andhra
Pradesh Vs. D. Raghukul Pershad (Dead) by LRs (2012) 8 SCC 584,
Jai Sujanti Vs. Sudarshan Chadha 2013 SCC OnLine Del 2860,
Sanjay Singh Vs. Corporate Warranties Pvt. Ltd. (2013) 204 DLT 12
CS(OS) No.36/2017 Page 8 of 11
and Ram Kumar Vs. S.K. Gulati (2013) 203 DLT 588) and the
misrepresentations, if any only entitled the defendant No.1 to sue the
plaintiff for compensation and no more. Thus, insofar as the relief
claimed of ejectment and recovery of arrears of rent is concerned, the
written statement of the defendant No.1 does not disclose any defence.
21. The counsel for the defendant No.3, on enquiry, states that the
defendant No.3 is not claiming any rights in the property.
22. Since the counsel for the plaintiff has made a statement that the
plaintiff is not claiming any relief personally against the defendants
No.2 to 4, in any case, there is no need to await their written
statement.
23. The counsel for the defendant No.1 has also contended that
there is no admission for Order XII Rule 6 of the Code of Civil
Procedure, 1908 (CPC) to be availed of.
24. There is no need to elaborate the law in this respect which is
sufficiently clear and reference may be made to (Ashoka Estate Pvt.
Ltd. Vs. Dewan Chand Builders Pvt. Ltd. 2009 (113) DRJ 193, P.S.
Jain Co. Ltd. Vs. Atma Ram Properties (P) Ltd. (2013) 205 DLT 302,
Precision Steels Vs. Reeta Salwan (2013) 205 DLT 695, Sikka
Promoters Pvt. Ltd. Vs. National Agricultural Cooperative
Marketing Federation of India (2013) 202 DLT 49 [RFA(OS)
No.110/2013 preferred whereagainst was dismissed on 2nd August,
2016], Sandeep Kohli Vs. Vinod Kohli 2016 SCC OnLine Del 6533,
Uttam Singh Duggal Vs. United Bank of India (2000) 7 SCC 120
and Vijay Myne Vs. Satya Bhushan Kaura (2007) 142 DLT 483) and
in some of which reliance is also placed on Order XV of the CPC
CS(OS) No.36/2017 Page 9 of 11
which entitles the Court to, if finds no material plea of law or fact
arising for adjudication for grant of relief claimed, grant the relief
forthwith. In the present case, the written statement of the defendant
No.1 does not disclose any defence in law to the relief claimed of
ejectment and recovery of arrears of rent and as aforesaid, the
questions of ownership and misrepresentations are not relevant for
adjudication of the matter in controversy. S.M. Asif Vs. Virender
Kumar Bajaj (2015) 9 SCC 287 cited by counsel for defendants
no.1,2 and 4 merely holds that a judgment on admissions is not a
matter of right. Judgment in that case was denied even though there
were admissions of relationship of landlord - tenant because the plea
of advance amount paid required adjudication.
25. That leaves the question of mesne profits. Though the plaintiff
has claimed mesne profits @ Rs.70,000/- per day as provided in
Clause 8.4 of the registered Lease Deed but the counsel for the
plaintiff, for the sake of expediency, confines the relief of mesne
profits to the rate of the last paid rent i.e. Rs.10 lakhs per month only.
26. Accordingly, the application is allowed and disposed of.
CS(OS) No.36/2017 & IAs No.1069/2017 (u/O XXXIX R-1&2
CPC), 2162/2017 (u/O XXXIX R-2A CPC) & 12609/2017 (of D-1
for condonation of 38 days delay in filing WS)
27. In terms of above, a decree is passed in favour of the plaintiff
and against the defendant no.1
a) of ejectment of the defendants from property No.A-II/79
A&B, Lajpat Nagar-II, New Delhi;
CS(OS) No.36/2017 Page 10 of 11
b) of recovery of arrears of rent/mesne profits @ Rs.10
lakhs per month with effect from the month of July, 2016
till the month of delivery of possession;
c) the plaintiff shall also be entitled to interest @ 8% per
annum on the arrears of rent from the date of institution
of the suit till realisation and on the mesne profits with
effect from the end of the month for which the mesne
profits are due and till the date of realisation; and,
d) the plaintiff shall also be entitled to costs of the suit.
28. Decree sheet be drawn up.
29. The counsel for the defendant No.1,2&4 at this stage states that
his submission of collusion between the plaintiff and the defendant
No.3 may be recorded.
30. It is so recorded. The same has no bearing on the outcome of
the suit.
RAJIV SAHAI ENDLAW, J.
JANUARY 19, 2018 'gsr/bs'..
[Corrected & released on 6th February, 2018] CS(OS) No.36/2017 Page 11 of 11