Delhi District Court
District Judge Delhi vs M/S Ebony Fashions Pvt Ltd on 2 March, 2007
IN THE COURT OF SH. BABU LAL : ADDL.
DISTRICT JUDGE DELHI
S-428/04
1 Sh Avinash Singh
2 Sh Harinder Singh
3 Smt Maheep Manjit Singh
4 Miss Hardeepak Grewal Plaintiffs
Versus
1 M/s Ebony Fashions Pvt Ltd
2 M/s Textile Associates Defendants
JUDGMENT
1. Plaintiffs have filed the present suit against the defendants for recovery of possession, mesne profits and damages. Facts as alleged in the plaint are that father of the plaintiffs Sh S.Ranjit Singh Grewal who was owner of property No F-39, NDSE-I, New Delhi, had inducted defendant No 1 as a tenant on 15.7.1988 in respect of a portion initially comprising of drawing- dining room along with a glazed verandah measuring 1 726 sq feet on the ground floor which was marked as shop No 39/1 forming part of aforesaid property. The monthly rent as fixed by father of the plaintiffs allegedly was Rs 2000 exclusive of water and electricity charges. S.Ranjit Singh allegedly died on 24.11.93 leaving behind his widow Smt Pushpinder Kaur and plaintiffs. Smt Pushpinder Kaur allegedly also died on 28.9.2001 leaving behind the plaintiffs as her legal heirs, therefore, after death of their father and mother, they have become joint owner of aforesaid property and defendant No 1 has became tenant under them. Defendant No 1 is alleged to have unauthorizedly created two portions out of one portion viz. one being the larger portion and another being the smaller portion and also split up the rent of Rs 2000 and started paying Rs 1,500 for larger portion and Rs 500 for smaller portion. Subsequently, defendant No1 had allegedly started claiming that it had taken two portions on lease being No F-39/1A and F-39/1B from the father of the plaintiffs, therefore, two cheques for a sum of Rs 1500 and Rs 500 respective were being sent for two tenancies. Defendant no 1 is alleged to have sub let the larger portion which is subject matter of the present suit to defendant No 2 on a monthly rent of Rs 25,000. It is alleged that lease executed by their father 2 in favour of defendant No 1 was unregistered document, therefore, lease being month to month basis was determinable by a notice of 15 days. It is alleged that since rent realized by defendant No 1 from defendant No 2 was Rs 25,000, therefore, provisions of Delhi Rent Control Act are not applicable to the present suit. Plaintiffs are alleged to have served a notice dated 3.6.2002 U/s 106 of the Transfer of Property Act on defendant No 1 terminating its tenancy by the midnight of 30th June, 2002 and asking it to hand over possession. A copy of the notice was also dispatched to defendant No 2. Defendant No 1 is alleged to have sent reply to the legal notice and in pursuance thereof another notice dated 14.8.02 terminating the tenancy of defendant w.e.f. midnight of 14.9.02 was again served on defendants. However, despite receipt of the notice, defendant No 1 has not vacated the suit premises. Therefore, plaintiffs have claimed damages @ Rs 1 lac per month w.e.f. 15.8.02 inasmuch as suit premises is situated in a posh area and can easily fetch rent of Rs 1 lac per month.
2. It is also alleged that defendant No 1 has sub let suit premises to defendant No 2 is also clear from the fact that defendant No 2 had filed a suit for declaration and permanent injunction against defendant No 1 3 whereby it sought declaration to the effect that agreement dated 26.6.90 entered into between defendant No1 and 2 be declared as agreement of subletting. Defendant No 1 is also alleged to have filed a suit for possession, mesne profits and damages against defendant No 2 in respect of suit premises whereby tenancy of the defendant No 2 was terminated w.e.f. 20.11.1998 and damages were claimed @ Rs 1 lac per month. It is alleged that from the litigations going on between defendants, it is clear that defendant No 1 had sublet the suit premises to defendant No 2. On these facts, decree of possession, damages @ Rs 1 lac per month w.e.f. 15.8.02 and cost and interest @ 18% per annum has been prayed for.
3. In the written statement filed on behalf of defendant No 1, preliminary objection has been taken that this court does not have jurisdiction to entertain the present suit inasmuch as rent of suit premises is Rs 1500, therefore, same is liable to be dismissed. On merits, case of defendant No 1 is that it had taken on rent two separate portions for which two separate cheques of Rs 1,500 and Rs 500 respectively were being sent. It has been denied that defendant No 1 split up the tenanted portion into two portions. It is also case of the defendant that it had not sub let the suit premises 4 to defendant No 2 rather there was management and agency agreement between them and Rs 25,000 being paid by defendant No 2 to defendant No 1 was not on account of rent but on account of guaranteed profit of the business. It is also case of the defendant that cheques of rent were being sent in the name of Smt Pushpinder Kaur and plaintiffs somehow had manipulated them to their own names. It is also its case that it has no knowledge if plaintiffs are legal heirs of Smt Pushpinder Kaur as no intimation was ever given to defendant No 1 in this regard. It is alleged that plaintiffs have no locus standi to file the present suit nor did they have any authority to terminate the tenancies of the defendant No 1. It is alleged that defendant No1 is protected by the provisions of Delhi Rent Control Act and their tenancy can not be terminated by plaintiffs on flimsy ground. As regards litigation between defendants is concerned, it is the case of the defendant No 1 that it had terminated the agency agreement existing between the parties and in no proceedings of the court, defendant No 2 was held to be sub-tenant. It is alleged that plaintiffs are not entitled for the reliefs claimed. Dismissal of the suit has been prayed for.
4. Written statement filed on behalf of defendant 5 No2 is quite vague. In this written statement also preliminary objection has been taken that suit is barred under provisions of Delhi Rent Control Act. It is also alleged that there is no privity of contract between the parties. It is alleged that showroom of answering defendant is being run in the suit premises for the last 8-9 years and that plaintiffs had no contract with him and that they must have seen them operating from the suit premises but neither their father nor plaintiffs ever raised objection. It has been denied that plaintiffs are owners or landlords qua the suit premises. In corresponding para No 26 of the plaint, it is alleged that para No 26 of the plaint being matter of record is admitted. In para No 26 of the plaint, it was alleged that both the defendants have made admissions that the defendant No 1 has let out/ given on rent the suit premises to defendant No 2 at a monthly rent of Rs 25,000. Rent agreed between defendant No 1 as lessee and defendant No 2 as sub-lessee has been more than Rs 3,500 per month and under section 3 ( c) of the DRC Act, the said Act is not applicable over the suit premises. It is alleged that defendant No 2 is not bound by the notice allegedly served by plaintiffs and it is only binding on defendant No 1. It is alleged that present suit has been filed without any cause of action. 6
Dismissal of the suit has been prayed for.
5. In the replication, plaintiffs have reiterated and reaffirmed all the facts as alleged in the plaint and denied all the facts as embodied in the written statement.
6. On the basis of pleadings of the parties, following issues were framed :-
(1) Whether the plaintiffs are entitled to recover the possession of the suit premises from the defendants ? OPP (2) Whether the plaintiffs are entitled to recover Rs 1,75,000 on account of damages from the defendants ? OPP (3) Whether the plaintiffs are entitled to recover damages, pendente lite and future ? If so, at what rate ? OPP (4) Whether the plaintiffs are entitled to recover interest from the defendants ? If so, at what rate and for what period ? OPP (5) Whether the claim of the plaintiffs is barred by 7 section 50 of the Delhi Rent Control Act ? OPD-1. (6) Whether the defendant No 2 is sub-tenant of defendant No 1 at the rent of Rs 25,000 in respect of suit premises ? OPP (7) Relief.
7. In order to prove their case, plaintiffs have filed affidavit of Sh Avinash Singh who has been cross examined as PW-1. On the other hand, on behalf of defendant No 1, witnesses, namely, Anil Vig, Raj Kumar, Vinod Kochar, Suresh Pal and Vijay Kochar have been examined as DW-1, DW-2, DW-3, D1W-2 and D1W-3. On behalf of defendant No2 Sh Anil Gupta and P.C.Goel have been examined as D-2 W1 and D-2W2.
8. I have heard ld counsels for the parties and have carefully gone through record of the case. My issuewise findings are as under:-
Findings on issue No 1 & 6 Issue No 1 is whether the plaintiffs are entitled to recover the possession of the suit premises from the defendants ? Issue No 6 is whether the defendant No 2 is sub-tenant of defendant No 1 at the rent of Rs 25,000 8 in respect of suit premises ? Onus of both these issues was on the plaintiffs. Both these issues are inter connected, therefore, they will be decided together. Case of the plaintiffs is that defendant No1 has unauthorizedly sublet suit premises to defendant No 2 and despite termination of tenancy of the defendants, they have not vacated the suit premises, therefore, plaintiffs are entitled for a decree of possession. On the other hand, case of defendant No1 is that defendant No 2 is not its sub tenant and defendant No.2 is occupying the suit premises on the basis of business arrangement between the two defendants.
9. PW-1 Avinash Singh in his affidavit has deposed that his father Sh S.Ranjit Singh Grewal who was owner of property No F-39, NDSE-I, New Delhi, had inducted defendant No 1 as a tenant on 15.7.1988 in respect of a portion initially comprising of drawing- dining room along with a glazed verandah measuring 726 sq feet on the ground floor which was marked as shop No 39/1 forming part of aforesaid property. The monthly rent as fixed by father of the plaintiffs was Rs 2000 exclusive of water and electricity charges. S.Ranjit Singh had died on 24.11.93 leaving behind his widow Smt Pushpinder Kaur and plaintiffs. Smt Pushpinder Kaur had also died on 28.9.2001 leaving 9 behind the plaintiffs as her legal heirs, therefore, after death of their father and mother, they have become joint owner of aforesaid property and defendant No 1 became tenant under them. He has proved death certificate of Sh. S.Ranjit Singh Grewal and Smt Pushpinder Kaur as Ex PW1/1 and PW1/2. Defendant No 1 is deposed to have illegally and unauthorizedly created two portions out of one portion viz. one being the larger portion and another being the smaller portion and also split up the rent of Rs 2000 and started paying Rs 1,500 for larger portion and Rs 500 for smaller portion. Subsequently, defendant No1 is deposed to have started claiming that it had taken two portions on lease being No F-39/1A and F-39/1B from the father of the plaintiffs, therefore, two cheques for a sum of Rs 1500 and Rs 500 were being sent for two tenancies. Defendant no 1 is deposed to have illegally sub let the larger portion which is subject matter of the present suit to defendant No 2 on a monthly rent of Rs 25,000. Site plan of suit property has been proved as Ex PW1/3. It is deposed that lease executed by their father in favour of defendant No 1 was unregistered document, therefore, lease being month to month basis was determinable by a notice of 15 days. Plaintiffs are deposed to have served a notice dated 3.6.2002 U/s 106 10 of the Transfer of Property Act on defendant No 1 terminating its tenancy of defendant No 1 by the midnight of 30th June, 2002 and asking it to hand over possession. A copy of the notice was also dispatched to defendant No 2. Copy of the notice has been proved as Ex PW1/4, registered post receipts have been proved as Ex PW1/5 to PW1/8 and UPC receipt has been proved as Ex PW1/9. AD card showing receipt of notice by defendant No 1 has been proved as Ex PW1/10 and to defendant No 2 as Ex PW1/11. Defendant No 1 is deposed to have sent reply Ex PW1/12 to the legal notice and in pursuance thereof another notice Ex PW1/13 dated 14.8.02 terminating the tenancy of defendant w.e.f. midnight of 14.9.02 was again served on defendant. Postal receipts showing dispatch of the notice have been proved as Ex PW1/14 to PW1/17, UPC receipt has been proved as Ex PW1/18 and AD Cards showing receipt of notice by defendants have been proved as Ex PW1/19 and PW1/20. Reply to this notice sent by counsel of defendant Nos 1 & 2 have been proved as Ex PW1/21 and PW1/22. This witness has also proved certified copies of the complete ordersheets of the suit filed by defendant No 1 against defendant No 2 as Ex P-1, certified copy of plaint of that suit Ex P-2, report of the 11 Local Commissioner Ex P-3 and Ex _4. Certified copy of IA No 7251/94 along with affidavit Ex P-5 and IA 7627/1994 Ex P-6, IA No 8910/1994 with affidavit as Ex P-7. Certified copy of reply and another IA No 2144/1995 have been proved as Ex P-8 and P-9 respectively. Certified copy of replied to the said IA has been proved as Ex P-9 ,P-10 and P-11. Certified copy ofanother IA 7177/1996 with affidavit has been proved as Ex P-12, certified copy of amended plaint has been proved as Ex P-13. Certified copy of IA No 256/1997 with affidavit has been proved as Ex P-14 and certified copy of reply thereto has been proved as Ex P-15.
10. In his cross examination, this witness has stated that he had not moved any application in Hon'ble High Court for impleading him as a party in the suit being landlord of the suit premises. He has also stated that he did not know if Rs 25,000 was taken on account of minimum guaranteed profit from defendant No 2 to defendant No 1. In reply to question, he had stated that he has not seen any rent receipt executed between defendant Nos 1 & 2. He has also stated that he has not even seen any rent agreement executed between defendant No 1 & 2.
11. DW-1 Sh Anil Vig, Managing Director of M/s 12 Ebony Fashions Pvt Ltd in his affidavit he has deposed that there was specific management agency agreement with defendant No 2 for boosting sale of Bombay Dyeing Products and in return defendant No 1 was getting Rs 25,000 as minimum guarantee profit and status of defendant No 2 is certainly not of a sub- tenant, therefore, termination of the tenancy on the ground of sub-tenancy is illegal and not tenable in the eyes of law. In his cross examination, he has denied that landlord relationship existed between defendant No 1 and defendant No 2. He has also admitted that he has heard name of Avinash Singh who is son of Pushpinder Kaur but he has never seen him personally.
12. DW-2 Raj Kumar is the witness who was looking after accounts of defendant No 1. In his affidavit, he has deposed that a sum of Rs 25,000 per month was being received by Mr Anil Vig in the name of M/s Ebony Fashions Pvt Ltd towards mini guaranteed profit which was duly entered in books of accounts Ex DW2/A. DW-3 Sh Vinod Kochar is employed with defendant No 1. He has also deposed that Mr P.C.Goel is only organizing and boosting sales of Bombay Dying Products as he had some contract with M/s Ebony Fashions Pvt Ltd. D-1 W-2 is Suresh Pal from Indian Bank, South Ex who in his testimony 13 has only deposed that current account No 1128 is maintained with their bank by defendant No 1 and M/s Ebony Fashions Pvt Ltd, defendant No 1, had authorized Sh P.C.Goel to operate this account.
13. D1W-3 Sh Vijay Kochar in his affidavit has also deposed since defendant No 1 has no experience in the cloth selling line and since defendant No 1 is sole distributor of Bombay Dying in Delhi and had vast experience, therefore, defendant No 1 & 2 entered into an agreement on 26.6.1990 by virtue of which defendant No 2 had agreed to provide managerial services/ sales consultancy to defendant No 1 to run the showroom and nature of amount of Rs 25,000 paid by defendant No 2 to defendant No 1 was not rent but as guaranteed profit. He has also deposed that defendant No 1 had never sublet the suit premises to defendant No 2.
14. Defendant no.2 W-1 Sh Anil Gupta in his affidavit has deposed that plaintiff never came to the showroom to explain that he was owner of the house and that defendant No 1 was tenant. D-2 W-2 Sh P.C.Goel of defendant No 2 in his affidavit has deposed that he never knew at the time of entering into tie with defendant No 1 that they themselves were tenants in the premises and had it been so, he would not 14 have taken the said showroom and invested Rs 50 lacs. In his cross examination, he is specific that he has been paying Rs 25,000 per month as ''rent'' to defendant No 1 of the suit premises.
15. It has been argued on behalf of the plaintiff that defendant No 1 had sublet, assigned or otherwise parted with the possession of tenanted premises to defendant No 2 on the basis of an arrangement which in fact was a sub letting. It is also argued that a suit was filed by defendant No 1 against defendant No 2 herein for recovery of the possession of the tenanted premises from defendant No 2 and vide judgment passed by ld trial court, the same was decreed and it was held that defendant No2 was paying rent of Rs 25000 to the defendant No1 and since defendant No 1 had terminated tenancy of defendant No 2, a decree of possession was liable to be passed. Thereafter appeal was filed by defendant No 2 against the judgment, however,same was dismissed. It is further argued that defendant No 2 filed SLP before Hon'ble Supreme Court and where on the basis of statement made by the defendant No 1 and defendant No 2 (on their statement) it was held that defendant No 2 was licensee of defendant No 1 . It is argued that plaintiff moved Hon'ble Supreme Court for clarification and on 15 clarification Supreme Court passed the order that proceedings between defendant No 1 and defendant No 2 would not bind the plaintiff. It is argued that since the defendant No 1 had parted with the possession of the suit property to defendant No 2 who was in exclusive enjoyment thereof in lieu of an amount of Rs 25,000, the same was for all practical purposes' rent', hence, defendant No 1 was guilty of subletting, assigning or otherwise parting with the possession of suit premises. It is argued that plaintiff has by notice served on defendant No 1 terminated his tenancy calling upon defendant No 1 to vacate the premises. Therefore, when the tenancy of defendant No1 has been terminated, he has become unauthorized occupant and bound to deliver possession of suit premises to the plaintiff. It is further argued that handing over exclusive possession of the tenanted premises by defendant No 2 to defendant No 1 against consideration of Rs 25000 per month proves that defendant No 2 was sub tenant on the basis of sub tenancy created by defendant No 1 in favour of defendant No 2 and amount of Rs 25000 paid by defendant No 1 to defendant No 1 was rent, therefore, defendant No 1 is liable to hand over possession of the suit premises to the plaintiff. It is also argued that in various documents 16 proved on record by the plaintiff ( Ex P-1 and P-22, P5 to P-6, P-10 to P-11, P-23 to 24, PW2/1 to PW2/5,2/9, Ex PY) clearly show that relationship between defendant No1 and defendant No 2 was of sub tenant and same has been admitted by them in the pleadings of the earlier suits between them, copies of which have been placed on record. Plaintiff is, therefore, entitled to recover possession of suit premises from the defendant No 1.
16. Ld counsel for defendant No 1 has argued that relationship between defendant No 1 and defendant No 2 was based on a business arrangement and not of a sub tenant. It is argued that arrangement between the parties has been proved as Ex D1W-3/A under which defendant No 1 was sole distributor and defendant No 2 was appointed by it as a local distributor in Delhi to run the business. It is argued that function of defendant No 2 was of an expert employed by defendant no 1 to run the business profitably. It is also argued that under the arrangement defendant No 2 was to pay Rs 25,000 as share of the profits to defendant No 1 , therefore, actually it was a business arrangement and not a sub letting. It is argued that in order to prove subletting the plaintiff is bound to prove that there was a transfer of exclusive possession against consideration and since 17 the defendant No 1 retained the legal possession, there was no transfer of possession to defendant No 2, hence, no subletting by defendant No 1 to defendant No 2 has been proved. It is argued that account was in the name of defendant No 1, defendant No 2 was only authorized signatory of defendant no 1, purchase/ sale vouchers are in the name of defendant No 1 and defendant no 2 was only to sell goods on behalf of defendant No 1. It is argued that when since it does not stand proved on record that defendant No1 has sublet the premises in question to defendant No2 nor it has been proved that Rs 25,000 to be paid by defendant No 2 to defendant No 1 was rent, the plaintiff is not entitled to terminate the lease or recover any account.
17. He has also relied upon authorities reported as M.N.Clubwalia and another vs Fida Hussain Saheb and others, AIR 1965 SC 610; B.M Lall vs Dunlop Rubber Co ( India) Ltd,AIR 1968 SC 175; Puran Singh Sahni vs Sundari Bhagwandas Kripalani and others ( 1991) 2 SCC 180; Chandy Varghese and others vs K.Abdul Khader and others ( 2003) 11 SCC 328. In all these authorities, it was held that in order to determine relationship of landlord and tenant or in order to determine whether particular document is a lease or license agreement, contents of the documents are best 18 answer to these queries. He has also relied upon authorities reported as Gundalappalli Rangamannar Chetty vs Desu Rangiah and others, AIR 1954 Madras 182 wherein it was held that there can not be sub letting unless the lessee parted with legal possession. In Jagan Nath vs Chander Bhan and others, AIR 1988 SC 1362; Atul Gupta & Ors vs Delhi Cloth & General Mills Co Ltd & Ors 44 (1991) DLT 53; it was held that user by other person is not parting with possession so long as the tenant retains the legal possession himself. In United Bank of India vs Cooks and Kelvey Properties ( P) Ltd AIR 1995 SC 380, it was held that when the bank retained power to call upon the Union to vacate the premises at any time and maintaining the premises at its own expenses and also paying of charges for electricity consumed by Trade Union. In this context, it was held that bank can not be held liable for eviction under S.13(1) (a) for subletting the premises. He has also relied upon authorities reported as Mohd Usman vs Shahzada Begum 1988 RLR 534 and Rajiv Sharma & Anr vs Sh Rajiv, 2004 II AD ( Delhi) 197 wherein it was held that erroneous admissions are not binding on their maker.
18. Ld counsel for the defendant has also relied upon authorities reported as Baghel Singh and others vs 19 Mihan Singh and others, AIR 1953 Punjab 171; Ramabai Sriniwas Nadgir vs Government of Bombay, AIR 1941 Bombay 144; Abdul Qavi vs Mahboob Aliand others, AIR 1931 Oudh 133 ; Kalidas Dhanjibhai vs State of Bombay, AIR 1955 SC 62; Salah Bin Ahmed vs Abdullah Bin Ewaz Hamidan AIR 1956 Hyderabad 43; Ram Bharose Sharma vs Mahant Ram Swaroop and others ( 2001) 9 SCC 471; Shankar Lal vs Moti Lal and another AIR 1957 Rajasthan 267; M.Y.A.A. Nachiappa Chetiar vs M.Y.A.A.Muthy Karuppan Chettiar and others AIR ( 33) 1946 Madras 898; Sri Krishan vs Kurushetra University AIR 1976 SC 376; Sales Tax Officer Banaras and others vs Kanhaiya Lal Makund Lal Saraf, AIR 1959 SC 135; Stuert and Co Ltd vs C.Machertich AIR 1963 Calcutta, 198 and Sita Ram vs Pir Baksh and another AIR 1931 Lahore 6. In all these authorities it was held that admission on legal point or on the point of mixed question of law and fact and erroneous admissions are not binding of the parties who have made such admissions. Even it was also held that admission made by the party in the pleadings of one suit is not binding on him in the pleadings of second suit.
19. Coming to the present case, admittedly the rent payable by defendant No 1 to the plaintiffs in respect of 20 disputed portion of the suit premises is Rs 1500 p.m. The ouster of the jurisdiction of the Rent Controller and non applicability of the DRC Act has been claimed by the plaintiff only on the ground that since defendant No 1 has sublet, assigned, or otherwise parted with possession of the suit premises to defendant No 2 who has been paying Rs 25,000 per month as rent for enjoyment and occupation of the suit premises to defendant No 1, rent in respect of the suit premises is Rs 25,000 per month, therefore, the provisions of DRC Act has ceased to apply to present case. It is also the case of the plaintiff that after subletting, assignment or parting with possession by defendant No 1 against consideration ( rent of Rs 25,000 per month) by virtue of section 3 of the DRC Act, the case came to be governed by the ordinary law i.e. Transfer of Property Act and since the plaintiff has terminated the tenancy of defendant No 1, it has become unauthorized occupant, therefore, defendant No 1 liable to deliver possession of the suit premises to the plaintiffs.
20. On the other hand, the case of defendant No 1 is that arrangement between the parties was a business arrangement under which defendant No 2 was to manage the business of defendant No 1 and defendant No 2 was to pay Rs 25,000 per month as share out of 21 the profits of the business. According to defendant No 1, since this arrangement was not subletting, the amount of Rs 25,000 per month was not ''rent'', therefore, provision of DRC Act are still applicable.
21. The question naturally involved in this case is whether defendant No 1 has sublet, assigned or ''otherwise parted with possession'' to defendant No 2.
In order to prove these facts, the plaintiff has relied upon the pleadings of defendant No 1 and 2 filed by them against each other as Ex P-1 to P-14. Though plaintiffs and defendant have examined themselves in evidence yet fact remains that it is admitted case of the parties that arrangement between defendant No 1 and defendant no 2 was reduced in the form of a writing and was acted upon by them. So I am of the view that according to Section 91 & 92 of the Indian Evidence Act when terms of any contract, grant or disposition have been reduced into writing, the document would be evidence of its own contents, therefore, what was arrangement between the parties will depend upon interpretation of document Ex D-1W3/A entered into between defendant No 1 and defendant no 2. The plaintiff have heavily relied upon the admission of defendant Nos 1 & 2 in the pleadings filed by them in their cross cases claiming/ denying existence of 22 relationship of sub tenant between defendant no 1 and 2 and payment of rent by defendant No 2 to defendant no
1. However, those admissions were contained in pleadings Ex Ex P-1 and P-22, P5 to P-6, P-10 to P- 11, P-23 to 24, PW2/1 to PW2/5,2/9, Ex PY. Similarly the plaintiff and defendant in their evidence have given their own version about the relationship between defendant No 1 and defendant No 2 i.e. their own interpretation of relation which existed between defendant No1 & 2 on the basis of Ex D1W3/A. In my opinion the pleadings of the defendants in various suits between them are not the best evidence. In my considered opinion when the agreement had been entered into between defendant No 1 and 2 in writing, actual relationship between them is subject matter of interpretation of the agreement between them. The relevant terms and conditions of the revised agreement Ex D1W3/A entered into between defendant No 1 & 2 are given as follows :-
1***********
2 That the ''T.A'' shall conduct Managerial/ Sales Consultancy service as an agent of ''Ebony'', who is having its Bombay Dyeing approves Show-room at F- 39, N.D.S.E. Part I, New Delhi.
23 3 That the ''T.A.'' shall take over the ownership of stocks into himself from the ''Ebony'' along with current business assets and liabilities, and carry on sales/ purchase at the show-room in the name of Ebony entirely at its own risk, employing itw own staff and incurring all expenditure for running the shop, except the expenditure liability of Ebony.
4 That the amount of Rs 5 lacs worth of stocks level already guaranteed by Ebony to T.A. In the earlier agreement of understanding dated 26.6.90, shall stand taken over by '' T.A.'' for the purpose of this new agreement and this amount of Ebony shall remain in credit with '' T.A.'' until the expiry of this agreement and the same shall be made good by '' T.A.'' to the Ebony either by way of stocks or cash as mutually agreed upon the expiry of this agreement.
5 That in consideration of the above, the '' T.A.'' shall pay a fixed profit of the business @ Rs 25,000 ( Rupees twenty five thousand) per month to the Ebony payable by the end of each calender month. 24 6 That the Ebony expenditure liability to run the shop shall be that of only salary or remuneration to supervisory staff,if any, kept by Ebony to watch its interest and other incidental expenses, if any. 7 That the entire sales tax liability of Ebony shall also be borne/ reimbursed by '' T.A.'' with a stipulation that '' T.A.'' will maintain a full record/ accounts of Sales and Purchases and make the same available to Ebony for the purposes of Sales Tax Assessments.
8 That Mr Prakash Goyal the proprietor of '' T.A.'' shall be delegated the authority by the Board of Directors of Ebony to operate the bank A/c in South Extension branch of Indian Bank, as an authorized signatory, and the Board of Directors shall make necessary arrangement to complete the delegation of authority in this regard.
9 ******** 10 ******** 11 ******** 12 ********* 13 ********* 25 14 However, in case of any dispute or working is not satisfactory to either party, this Revised Agreement of Understanding may be terminated by three months written notice on either side.
22. From the terms and conditions of agreement Ex D1W3/A between defendant No 1 &2, defendant No 2 was to take ownership of the stocks from defendant No 1 along with the current business assets and liabilities and carry on sale /purchase at the show room. In lieu of that defendant No 2 was to pay an assured amount of Rs 25,000 per month as '' fixed profits'' to defendant No
1. This deed does not contemplate that in case defendant No 2 runs losses what will the be position of share of defendant No 1 in losses. In other words, an assured payment of Rs 25,000 under the agreement is the entitlement of defendant no 1 and liability of defendant No 2. The show room was exclusively to be managed by defendant No 2 which means that exclusive possession of the suit premises was delivered by defendant No1 to defendant No 2 and it was to run the showroom in the manner it liked. It is important to note that under clause 14, the arrangement could not have been terminated except by three months notice on either side. In other words, even if defendant No 1 26 wanted to terminate the arrangement, it had no right to recover immediate possession of premises in question from defendant No 2 immediately unless the period of three months had elapsed. In other words, the right to immediately recover possession was not retained by defendant No 1. From the arrangement between the parties it is very much clear that exclusive possession of the showroom in question was given by defendant No 1 to defendant No 2 and in lieu thereof defendant No 2 had promised to make assured payment of Rs 25,000 to defendant No 1.
23. Ld counsel for defendant No 1 has argued that first of all this arrangement was in the nature of ''lease of business'' and not the ''lease of property'' in nature, therefore, this arrangement does not offend the provisions of DRC Act. For this proposition, he has relied upon Spun Casting and Engg. Co ( P) Ltd vs Dwijendra Lal & Ors, ( 2005) 6 SCC 265. In this authority, it has been held that a distinction has to be drawn between lease of a business and lease of building and what is protected under the rent Act is the lease of the building and not lease of the business. It was also held that where business itself is let out, the same would not fall within the meaning of word'' accommodation'' enjoying the protection of rent Act. It 27 was also held that for determining the nature of lease created the nature of dominant intention has to been seen. However, this authority is on the premises as to whether the relationship between plaintiff and defendant was of lessor and the lessee. But existence of relationship of a sub leasee only is not sufficient to attract the disability of DRC Act. Even if a tenant has ''parted with the possession'' wholly or in part of the tenanted premises, the disability of the Act is attracted. In the present case, it is not the only question which requires decision as to whether defendant No 1 created a sub lease in favour of defendant No 2. The question is whether it had parted with the possession of whole or part of the premises against consideration ? The authority relied upon is not attracted to the facts of the present case.
24. Ld counsel for defendant No 1 has relied upon Gundalappalli Rangamannar Chetty vs Desu Rangiah and others, AIR 1954 Madras 182, H.S.Rikhy vs New Delhi Municipal Committee, AIR 1962 SC 554 and M/s Technicians Studio Pvt Ltd vs Smt Lila Ghosh and Anr 1978(1) R.C.R.41. In the aforesaid authorities the question which had arisen for decision was whether relationship between the parties was of lessor or not. The point for consideration was not that whether a 28 tenant had not parted with the possession and if it is so what was its interpretation. In Atul Gupta vs Delhi Cloth and General Mills ( Supra), United Bank of India ( Supra), the question for consideration which had arisen was whether the premises was ''sublet'' by the tenant or not. In those cases, the question had arisen as to what was the import of the word '' parting with the possession of the premises wholly or in part''. In this regard, the counsel for defendant No 1 has relied upon Jagannath vs Chanderbhan, AIR 1988 SC 1362 ( Supra). In this authority, it was held that user of the premises by other person is not parting with the possession so long as the tenant retains the legal possession himself and that there should be vesting of possession by the tenant in other person by divesting himself not only of physical possession but also of the right to recover possession It was also held that so long as tenant retains the right to recover possession, there is no parting with the possession.
25. On the other hand, ld counsel for plaintiff has relied upon Chandu Lal vs MCD, AIR 1978 Delhi 172, in this authority it has been held that a person who is let into exclusive possession prima facie is to be considered a tenant, nevertheless if circumstances negative such a conclusion and show that no tenancy 29 was created, the person in possession would not be held to be a tenant. It was also held that intention of the parties has to be ascertained from the documents of arrangement between the two. In my considered opinion till decision of the Supreme Court in Deepak Baneerje vs Leelawati Chakarborty AIR 1987 SC 2055 the view of the Hon'ble Supreme Court was that in order to attract disability of Rent Control Act for subletting, it is the duty of the landlord to prove that the defendant/ tenant has not only divested himself of actual physical possession of tenanted premises but has also divested himself of the right to recover possession and for a valuable consideration. It was held that if these two ingredients are not proved, the tenant will continue to enjoy protections of rent Control Act and would not be liable to be evicted on the ground of subletting the tenanted premises. However, Roop Chand vs Gopi Chand Thelia AIR 1989 SC 1416 was decided under the provisions of Rajasthan Premises ( Control and Eviction ) Act. In that case the tenant had allowed a social club to have its registered office in the part of the tenanted premises. Their lordships of the Supreme Court made the following observations :-
''That a tenant will render himself liable for eviction if he has'' assigned, sublet or 30 otherwise parted with the possession of whole or any part of the premises without the permission of the landlord''. Consequently even if a tenant parts with possession of the whole or any part of premises without assigning or subletting the premises, he wold still be liable to be evicted from the premises under the Act''.
26. The second case which came up before Hon'ble Supreme Court was Rajbir Kaur vs Chokosiri & Co AI R 1988 SC 1845. It was under the provisions of East Punjab Rent Control Act. In that case, the tenant had executed two documents in favour of alleged two sub tenants lebelled as deed of license and their contents were in conformity with a license deed and not a lease deed. The Rent Controller held that evidence on record indicated that tenant had given ''exclusive possession'' of the tenanted premises to a sub tenant. There was no evidence that the exclusive possession was given for any monetary consideration. Ld Rent Controller drew an inference of payment of monetary consideration by sub tenant on the basis of presumption and held that since exclusive possession was transferred against 31 consideration, it was ''subletting''. Their lordships upheld the decision of the Rent Controller and observed that the transaction of sub tenancy between tenant and sub tenant was of clandestine nature, therefore, once the exclusive possession of sub tenant was established, it might not be impermissible for the court to draw an inference that the transaction was entered into against monetary consideration and such transactions was sub letting in the eyes of law. From the observations of Hon'ble Supreme Court made in aforesaid two cases, now the law has emerged that landlord has to prove two ingredients to attract disability of Rent Control Acts on the tenants, namely, (1) A tenant has parted with exclusive possession of the tenanted premises to a third person and (2) parting with of exclusive possession must be in lieu of payment for enjoyment of exclusive possession. In the present case, the showroom in question was exclusively managed by defendant No 2 and it was in exclusive possession thereof. Defendant No 1 after alleged arrangement came to an end had to file a suit against defendant No 2 to recover possession. Secondly by terms of Ex D1W3/A, the arrangement could have been terminated only on three months notice in writing on either side. In other words, defendant No 1, if it 32 wanted to put itself again in possession of suit premises under the arrangement as referred to above, it was to give notice of three months. For three months, as a matter of right, defendant No 2 could have continue in possession of the suit premises. In my opinion, defendant No 1 has parted with exclusive possession of the suit premises to defendant No 2. By virtue of clause 14 of the arrangement, defendant No1 had not only divested himself of exclusive possession but the right to recover possession even though temporarily for a period of three months. Even otherwise, according to two decisions of Hon'ble Supreme Court as referred to above, what the landlord has to prove is that tenant had parted with ''exclusive possession'' of whole or part of the tenanted premises to another person and secondly against consideration. Hon'ble Supreme Court has gone to the extent of observing when parting with exclusive possession by tenant in favour of third person is proved, Court will presume passing of exclusive possession against consideration. Therefore, I am of the view that it stands proved on record that defendant No 1 had parted with exclusive possession of the suit premises to defendant No 2 against consideration.
27. Ld Ld counsel for the defendant has argued that consideration which is subject matter of D1W3/A 33 is not a consideration for possession but it is the share of defendant No 1 of profits to be earned, therefore, it can not termed as ''rent''. This argument is fallacious. Under the agreement D1W3/A, defendant No 2 had assured a payment of Rs 25,000 per month irrespective of the fact whether the business ran in losses or defendant No 2 suffered losses. Though in Ex D1W3/A the consideration is couched in the form of share in profits of the business but actually it is the consideration for passing of exclusive possession of suit premises to defendant No 2. In M/s Technician Studio vs Leela Ghosh & Ors ( Supra), their lordships of the Hon'ble Supreme Court have defined term rent to mean any payment made for use and occupation of any premises. Thus consideration emanating from defendant No 2 was certainly for use and occupation exclusively the tenanted premises passed on by defendant No 1 on defendant No 2. Certainly it was ''rent''. I, therefore, come to the conclusion that under the arrangement between the parties as referred to above, defendant No 1 had exclusively parted with possession to defendant No 2 against consideration and certainly it was rent paid to defendant No 1 by defendant No 2. When the rent paid by sub tenant was Rs 25,000 per month, certainly, the premises went out 34 of the protection of the DRC Act by virtue of Section 3 of the said Act. When DRC Act was not applicable, the relations between the parties was governed by ordinary law i.e. Transfer of property Act. It is admitted case that plaintiff had served two notices terminating the tenancy of defendant No 1 i.e. Dated 3.6.02 Ex PW1/4. Reply to this notice has been given by defendant No 1 vide Ex PW1/12 dated 6.6.02. Second notice was sent by plaintiff to defendant No 1 which is dated 14.8.02 Ex PW1/13. Reply to this notice was also given by defendant No 1 which has been proved as Ex PW1/21. Accordingly to notice Ex PW1/13 the tenancy of the defendant was terminated w.e.f midnight 14th day of September, 2002 or 15 days next after service of the notice. Therefore, tenancy of defendant No 1 stood terminated w.e.f. midnight of 14.9.02. Therefore, when tenancy of defendant No 1 which was governed by transfer of Property Act and it stood terminated, it is bound to deliver possession of the suit premises to the plaintiff. Present suit was filed on 16.11.02. Defendant No 1 had filed a suit No 37/99 on 3.5.1999 against defendant No 2 for recovery of possession. That suit was decreed by the Court on 3.4.03 (vide judgment Ex PW2/9 passed by Dr Naipal Singh, the then ld ADJ). Therefore, when the present 35 suit was fled defendant No 2 was in exclusive possession of the tenanted premises and arrangement between defendant No 1 and defendant No 2 was continuing. I am, therefore, of the view that plaintiff had a cause of action to file the suit on the basis that DRC Act ceased to apply on the suit premises as rent in respect of tenanted premises exceeded Rs 3500 p.m. In that situation, the relationship between the parties would be governed by provisions of Transfer of Property Act. Since the plaintiff has terminated the tenancy of defendant No 1, it is bound to deliver possession of the suit premises i.e. F-39/1B, NDSE-I, New Delhi ( more specifically shown in red in site plan Ex PW1/3) to the plaintiffs. Since defendant No 2 is a sub tenant under defendant No 1 and has no independent title, decree of possession shall be executable against defendant No 2 also.
28. Controversy has been raised by the plaintiff that only one shop has been let out by the plaintiff to defendant No 1 but thereafter it bifurcated the same into two shops and started paying rent @ Rs 1500 and Rs 500 per month. PW-1 in his testimony has admitted that tenancy between plaintiff and defendant No 1 was reduced into writing. No such rent deed has been produced on record from which it could have been 36 ascertained whether two tenancies were created or only one. In the absence of such evidence, I am of the view that when defendant no 1 has been sending rent separately @ Rs 1500 and Rs 500 per month in respect of two separate shop Nos F-39/1A and F-39/1B, NDSE-I, New Delhi. The same was paid in respect of two separate tenancies. These issues are accordingly decided in favour of the plaintiff and against the defendant.
29. Findings on issue No 2,3, & 4 Issue No 2 is whether the plaintiffs are entitled to recover Rs 1,75,000 on account of damages from the defendants ? Issue No 3 is whether the plaintiffs are entitled to recover damages, pendente lite and future ? If so, at what rate ? Issue No 4 is whether the plaintiffs are entitled to recover interest from the defendants ? If so, at what rate and for what period ? Onus of all these issues was on the plaintiffs. All these issues are inter- related, therefore, they shall be decided together. Case of the plaintiffs is that since defendants have not vacated the suit premises despite receipt of notice of termination, they are liable to pay Rs 1 lac per month as damages for use and occupation of the premises.
30. PW-1 in his affidavit has deposed that plaintiff had terminated tenancy of the defendant w.e.f. 14.9.02 37 by serving notice of termination dated 14.8.02 but despite receipt of notice , defendants did not vacate the suit premises,therefore, they are jointly and severally liable to pay damages/ mesne profits @ Rs.1 lac per month w.e.f 15.8.02 inasmuch as suit premises can easily fetch rent of Rs 1 lac per month and same rent if prevailing in the market. It is also deposed that defendant No 1 has also claimed from defendant No 2 in suit bearing No 224/02, a sum of Rs 1 lac per month towards mesne profits and damages, therefore, plaintiff is entitled to recover this amount as damages/ mesne profits. He has also deposed that plaintiff is also entitled to interest @ 18% per annum on the amount of mesne profits. On the other hand, DW-1 Sh Anil Vig in the affidavit has not deposed any facts on these issues except that termination of tenancy on the ground of sub-tenancy is illegal and not tenable in the eyes of law as no sub-letting ever existed or exists.
31. D1W3 Sh Vijay Kochar in his affidavit has deposed that claim of Rs 1 lac per month by way of damages by the plaintiff is totally bad and illegal as rent of the premises is only Rs 1500 per month. No other evidence on these issues has been adduced on behalf of defendants.
32. It has been argued on behalf of the plaintiff that 38 suit premises is situated in posh area of South Extension and is capable of being let out on monthly rent of Rs 1 lac. It is also argued that plaintiff has proved on record that suit premises could be let out on monthly rent of Rs 1 lac but no rebuttal evidence has been adduced by defendant No 1 regarding mesne profits, therefore, a decree of mesne profits from the date tenancy of defendant No1 came to end i.e. 15.9.02 till possession is delivered may be passed with interest @ 18% per annum.
33. On the other hand, ld counsel for defendant No 1 has argued that plaintiff has no led any evidence on record to show that market rent of the suit premises is more than Rs 1500 therefore, it is not entitled to recover any mesne profits as claimed or interest.
34. Ld counsel for the plaintiff has relied upon authorities reported as Mercury Travels ( India ) Ltd vs Mahabir Prasad and another 89 ( 2001) DLT 440 ( DB), Atma Ram Properties ( P) Ltd vs Pal Properties ( India) Pvt Ltd 91(2001) DLT 438, P.S. Jain Co Ltd vs Atmaram Ram Properties ( P) Ltd, 65 ( 1997) DLT 308 ( DB).
35. In his affidavit PW-1 has specifically stated that suit premises can easily fetch Rs 1 lac per month as rent. Secondly accordingly to PW-1 defendant No1 in 39 the suit filed by it against defendant No. 2 (224/02) it had also claimed Rs 1 lac per month towards mesne profits/ damages. According to him till filing of the suit mesne profits to the tune of Rs 1,75,000 have accrued which plaintiff are entitled to recover with interest @ 18% per annum. The only suggestion given on behalf of defendant No 1 was that rent of the disputed premises was Rs 1 lac if again let out and same was admitted by the witness. It is, therefore, clear that defendant No1 did not dispute that premises is capable of being let out for Rs 1 lac per month. On the other hand, on behalf defendant No 1 Sh Vijay Kochar D-1W3 has been examined. In his affidavit para No 31, he only says that claim of the plaintiff for Rs 1 lac per month as damages is totally illegal as rent of the premises is Rs 1500 per month. He does not say as to what is the rental value of the premises in question and for how much amount same can be let out. In his cross examination, he has admitted that NDSE market is a posh market having show room of big companies located in this area. However, he has denied the suggestion that in the year 2002 the suit premises could have fetched Rs 1 lac per month if let out. However, nothing has been stated by this witness as to what was the rental value of the suit premises 40 when suit premises was let out. It is important to note that present suit was filed on 16.11.02 and at that time defendant No 2 was in possession and defendant No 1 had filed the suit against defendant No 2 for recovery of possession on 3.5.1999 which was decreed on 3.4.03, therefore, when the tenancy of defendant No 1 was terminated by the plaintiff in the present suit vide notice dated 14.8.02 Ex PW1/13, defendant No 2 was in possession of the suit premises. In the notice served by the plaintiff it has been specifically claimed that rental value of suit premises was Rs 1 lac. In reply thereto Ex PW1/21 and PW1/12, there is only a bare denial on the part of defendant No 1 that rental value of damages/ mesne profits was Rs 1 lac. In these replies, defendant No1 has not stated as to what was the rental value of the suit premises. I come to the conclusion in view of the fact that PW-1 has specifically stated that rental value of the suit premises was Rs 1 lac and same has not been meaningfully denied either in reply to the notices or in the evidence, I come to the conclusion that plaintiffs have proved that rental value of the suit premises is Rs 1 lac per month. However, there is no privity of contract between plaintiff and defendant No
2. It is defendant No 1 which is tenant under the plaintiff. Therefore, decree of mesne profits can only 41 be passed against defendant No 1. I, therefore, held that plaintiff is entitled to recover damages from defendant No 1 @ Rs 1 lac per month w.e.f.15.9.02 till possession is delivered by defendant No 1 to the plaintiff.
36. So far as interest is concerned, I am of the view that interest @ 18% per annum claimed on the arrears of mesne profits is quite exorbitant and can not be allowed. I am of the view that ends of justice would be met if plaintiffs are held entitled to recover simple interest @ 6% per annum on the arrears of mesne profits w.e.f. 15.9.02 till possession is delivered by defendant No 1. These issues are accordingly decided in favour of the plaintiffs and against defendants.
37. Findings on issue No 5 Issue No 5 is whether the claim of the plaintiffs is barred by section 50 of the Delhi Rent Control Act ? Onus of this issue was on defendant No 1. Case of defendant No 1 in the preliminary objection of written statement was that since rent of suit premises is admittedly Rs 1500 per month, therefore, present suit is barred U/s 50 of the DRC Act. On the other hand, case of the plaintiffs was that since defendant No 1 was realizing rent of Rs 25,000 from defendant No 2, therefore,present suit is not hit by the provisions of 42 Delhi Rent Control Act.
38. DW-1 Sh Anil Wig in his affidavit has deposed that this court has no jurisdiction to try the present suit as amount of rent is Rs 1500 per month and provisions of Delhi Rent Control Act operate as specific bar. On the other hand, PW-1 Sh Avinash Singh in his affidavit has deposed that defendant No1 has sublet the suit premises to defendant No 2 on a monthly rent of Rs 25000, therefore, monthly rent of the suit premises is more than Rs 3500 and therefore, it takes it out of the purview of Delhi Rent Control Act.
39. It has been argued on behalf of the plaintiff though that defendant No 1 has been paying rent @ Rs 1500 per month nevertheless he has been realizing rent @ Rs 25,000 per month from defendant No 2. It is argued that U/s 3 of the Delhi Rent Control Act, provisions of Delhi Rent Control Act would not apply to those premises rent of which exceeds Rs 3500. It is argued by him that since rent received by defendant No 1 from defendant No 2 is Rs 25000 per month the rent in respect of suit premises is, therefore, Rs 25,000 per month, therefore, this court has jurisdiction to entertain the present suit. He has argued that subject matter of the present suit being a subject matter of Section 3 of the said Act, it has taken the suit premises out of the 43 scope of section 50 of the Delhi Rent Control Act, hence, this court is competent to entertain the present suit.
40. On the other hand, it has been argued on behalf of defendant No 1 that since rent payable by defendant No 1 is Rs 1500 per month, the subject matter of the present suit is governed by the provisions of Delhi Rent Control Act and therefore by virtue of Section 50 of the said Act, this Court does not have jurisdiction to entertain the present suit. The second linb of his argument is that jurisdiction to decide whether relationship between defendant Nos 1 & 2 was that of a tenant or subtenant or if at all there existed a sub tenancy in favour of defendant No 2 are the questions which by virtue of provisions of Delhi Rent Control Act vested in Rent Controller appointed under the Act, therefore, this court does not have jurisdiction to decide the controversy if at all there existed relationship of tenant and sub tenant between defendant No 1 and defendant No 2. Ld Ld counsel for the defendant No1 has relied upon authorities reported as Spun Casting and Engineering Co Pvt Ltd vs Dwijendra Lal Sinha and others ( 2005) 6 SCC 265 and Mohd Mahmood and others vs Tikam Dass and others AIR 1966 SC
210. The latter authority was on the provisions of 44 Madhya Pradesh Accommodation Control Act. In view of the provisions then existing in Madhya Pradesh Accommodation Act, since section 3 of that Act empowered the Rent Control Authority to decide whether a sub tenancy was lawful where the landlord disputed the same and when such application is made before the Rent Controller, it was the rent Controller to decide lawfulness of the sub tenancy and jurisdiction of the Civil Court was barred. The former authority was with reference to West Bengal Rent Control Act. In that authority the question had arisen where the landlord had given lease of the business along with machinery in a building settled on the appellant not including the premises or accommodation, the decisive factor was the dominant intentions of the parties while creating lease which was to be gathered by construing terms of lease deed. Their lordships came to the conclusion that since intentions of the parties was not to settle or grant lease of the structure or shed and basically the arrangement was regarding letting of the business, the provisions of West Bengal Tenancy Act were not attracted. Both these authorities are not attracted to the facts of the present case. In none of aforesaid authorities, question of jurisdiction similar to the provisions of Section 3 of the Delhi Rent Control 45 Act had arisen. Provisions of Section 3 of the Delhi Rent Control Act were added in the year 1988 for the first time by virtue of Delhi Rent Control ( Amendment Act ) 1988. According to this provision all the tenancies of which the rent was more than Rs 3500 were taken out of the protective umbrella of Delhi Rent Control Act. The protective umbrella of the said Act thus remains confined only to the premises in respect of which rent payable was upto Rs 3500 per month. Question arises whether the limitation of rent is in respect of ''premises'' or in respect of the ''liability of a particular tenant to pay it.'' In other words whether a premises in respect of which the rent payable by a tenant is less than Rs 3500 but if the tenant has created a sub tenancy and receiving more than Rs 3500 whether the protection of DRC Act would also be attracted to this situation? The decision of this question rests on the answer as to what is the interpretation of the words '' any premises'' '' whose monthly rent exceeds Rs 3500'' as mentioned in Section 3 of the DRC Act. In this respect there are number of decisions of our own Hon'ble High Court which have direct bearing on this issue. In the first case reported as Mercury Travels ( India) Ltd vs Mahabir Prasad & Anr 89 ( 2001) DLT 440(DB). In this authority two 46 separate rents agreements had been executed between the parties on the same day fixing Rs 4200 per month for the one unit and Rs 1800 per month for another unit. Both the lease deeds were executed and registered on the same. It was held that intentions of the parties was to create single tenancy and since the rent in respect of tenanted premises was Rs 6000, Civil Court was competent to entertain the suit. In that case the ground of sub letting by the tenant was relied upon as one of the ground of eviction. Initially suit was fled in the court of rent Controller from where it was withdrawn and subsequently was filed in Civil Court, therefore, it was held that Civil Court had jurisdiction to entertain the suit. There is another authority reported as Atma Ram Properties(P) Ltd Vs Pal Properties (India) Pvt Ltd & Ors, 91(2001) DLT 438. In this case the facts were that the tenant in respect of a suit premises had been paying rent less than Rs 3500 but he had inducted a sub tenant in portion of the property from which he had been charging more than Rs 3500 per month. It was specifically argued that suit was argued that suit was barred U/s 50 DRC Act but their lordships of our own High Court negatived the contention and held that U/s 3 of the DRC Act, the protection of DRC can be extended only to the 47 premises rent of which was Rs 3500 and not beyond that and since the sub tenant had been paying more than Rs 3500, therefore, rent in the respect of the premises being more than Rs 3500, Civil Court has jurisdiction to entertain the suit for recovery of possession by the landlord. The following observations made by their lordships of our own high court in P.S.Jain Co Ltd vs Atma Ram Properties and Ors 65 ( 1997) DLT 308 ( DB) was relied upon '' The point for consideration in the appeal is: whether a tenant who is paying a rent of Rs 900/- per month ( less than Rs 3,500/- as specified in Section 3 © of the Delhi Rent Control Act, 1958) through the Civil Court as he has lawfully sublet the premises to two tenants, one for Rs 40,000/- p.m. and another for Rs 4500/- p.m. ( in each case for more than Rs 3,500p.m.) ? It was, therefore, held by their lordships that relevant rent for the purpose of determining whether tenanted premises is covered by section 3 is the rent which is payable by the sub tenant and therefore, no protection can be claimed by the tenant U/s 50 of the DRC Act if rent payable by sub tenant was more than Rs 3500. In view of this authorities referred to above, I am of the view that for the purpose of determining whether this court has jurisdiction to entertain the suit or not the decisive 48 factor is that whether section 3 of DRC Act is applicable to the case. If court comes to the conclusion that rent payable either by the tenant or sub tenant was more than Rs 3500 per month, premises being one in respect of which is more than Rs 3500, protection of DRC will not be available to the tenant and civil Court would have jurisdiction to entertain the suit. Of course, it will have to be proved as per law by the landlord that amount above Rs 3500 being paid by tenant or sub tenant was ''rent''. While deciding the issues no.1 and 6 I have held that amount of Rs.25,000/- p.m paid by defendant no.2 to defendant no.1 was rent. Therefore, when the rent of suit premises exceeded Rs.3500/- Civil Court has jurisdiction to entertain the suit.
41. The second link of argument of ld counsel for defendant No 1 is question regarding sub tenancy can be decided by the Rent Controller and civil Court. There is a patent fallacy in the argument. Once it is proved on record tantamount of Rs more than 3500 is being paid by a tenant or sub tenant as rent'' the premises'' in respect of which such rent is payable ceases to be governed by the provisions of DRC Act. When DRC Act ceases to be applicable on a particular premises by virtue of the said reasons, the Rent Controller ceases to entertain the dispute of existence 49 of sub tenancy in respect of a premises over which he does not entertain any jurisdiction. By legal analogy after a particular premises ceases to have protection of DRC Act, the jurisdiction to decide issue of for existence of sub tenancy would vest in the Civil Court.
42. Ld counsel for defendant No1 has relied upon authority reported as Atma Ram Properties vs P.S.Jain ( Supra) and has argued that there was dispute in that case that relationship of tenant and tenancy existed, therefore, the jurisdiction of the Civil Court exceeded but in the present case there is a serious dispute regarding sub tenancy and tenancy, can be resolved by the civil court. This authority goes against the defendant. I, therefore, come to the conclusion that this court has jurisdiction to entertain the present suit and present suit is not barred by section 50 of the DRC Act.
43. Relief :- In view of my findings on various issues referred to above, I pass a decree in favour of plaintiffs and against defendants directing defendant No.1 and defendant no.2 to deliver to plaintiff physical possession of property No F-39/1B, NDSE-I, New Delhi ( more specifically shown in red in site plan Ex PW1/3) I further pass a decree directing defendant No 1 to pay damages to the plaintiffs for use and occupation of the aforesaid premises @ Rs 1 lac per 50 month with cost and simple interest @ 6% per annum w.e.f. 15.9.02 till possession is delivered by him to the plaintiffs. Decree of mesne profits shall be executable on payment of court fee by the plaintiffs on arrears of mesne profits falling due after filing of the present suit. Decree sheet be accordingly prepared.
Announced in the open Court on 2.3.2007 (BABU LAL) ADDL.DISTRICTJUDGE DELHI 51