Delhi High Court
S. Rajdev Singh And Ors. vs Punchip Associates Pvt. Ltd. And Ors. on 19 September, 2007
Equivalent citations: AIR2008DELHI56
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul
JUDGMENT Sanjay Kishan Kaul, J.
1. The plaintiffs had filed a suit for ejectment seeking recovery of possession from the defendants in respect of premises comprising of approximately 7063 sq.ft., with covered area of 5392 sq.ft. and an open area of 1671 sq.ft. (stated to be subsequently covered by defendant No. 1) on the first floor of premises bearing No. G-72, Connaught Circus, New Delhi (hereinafter referred to as the suit property).
2. The plaintiffs are the owners and landlords of the suit property and in terms of a lease deed dated 18.9.1986 duly registered on 20.9.1986, let out the same to defendant No. 1 on a monthly rent of Rs. 189.50. It is stated that on the expiry of the lease deed the tenancy of defendant No. 1 became monthly commencing from the first date of each month and ending with the last date of the same month. Defendant No. 1 is alleged to have sub-let, assigned or parted with possession of an area of 1280 sq.ft. to State Bank of Bikaner & Jaipur (defendant No. 2) without obtaining the consent of the plaintiffs in writing and has also sub-let, assigned and parted with the possession of the entire remaining area to defendants 3 to 5 similarly without the prior consent of the plaintiffs. Defendants 3 to 5 have also been alleged to have further sub-let the premises to defendant No. 2 and now the whole of the premises are stated to be in possession of defendant No. 2. It is alleged that the plaintiffs have come to know that the monthly rental for the same being paid by defendant No. 2 is Rs. 2,09,330.00 and thus, even though the initial letting to defendant No. 1 was for Rs. 189.50 per month, the tenancy is now not protected under the Delhi Rent Control Act, 1958 (hereinafter referred to as the Rent Act) and the defendants are liable to be evicted under the provisions of the Transfer of Property Act, 1882 (hereinafter referred to as the TP Act).
3. The plaintiffs did not want to continue the tenancy of defendant No. 1 and vide notice dated 9.4.1995 under Section 106 of the TP Act, duly served on defendant No. 1 on 17.4.1995, terminated the said tenancy and called upon defendant No. 1 to hand over vacant and peaceful possession of the suit property by the end of 31.5.1995.
4. The plaint also states that the plaintiffs had filed an eviction petition under Section 14(1)(b) of the Rent Act on the ground of sub-letting of the said premises by defendant No. 1 to defendants 2 to 5 but in terms of the order dated 4.10.1995 of Dr. R.K. Yadav, Additional Rent Controller, the said petition was rejected under Order 7 Rule 11 the Code of Civil Procedure, 1908 for want of jurisdiction on the ground that the premises was taken away from the ambit of jurisdiction of the Rent Act. The plaintiffs have reserved the right to claim damages and at this stage have filed the suit only for eviction.
5. The defendants have contested the suit and as per defendant No. 2 a plea is sought to be raised about the bar of jurisdiction of the civil court in view of the protection under the Rent Act on the basis that the relationship of landlord and tenant is between the plaintiffs and defendant No. 1. On the merits, reliance is placed on the terms of the perpetual lease dated 20.3.1937 read with clause 4 of the lease deed dated 18.9.1986 to the effect that if the provisions of the Rent Act are amended and any rights are acquired by the landlord, the same shall not be enforced to vacate the tenant except on the ground of breach of the terms of the perpetual lease deed dated 20.3.1937. It is stated that as per clause 1(g), the tenant is entitled to sub-let, assign or part with possession of the suit property at the discretion of the tenant subject to the landlord being kept informed about such sub-letting. It is, thus, alleged that the sub-letting was in pursuance to the written consent and if the tenancy of defendant No. 1 was terminated, defendant No. 2 was entitled to renewal of the lease directly in his favor.
6. Defendant No. 1 in its written statement has also raised the same plea relying upon the relevant clauses of the lease deed referred to aforesaid. It is further stated that as per clause 2 of the lease deed, the tenant or his successors-in-interest were entitled to renew the lease deed for a similar term of five years each subject to increase in rent as permitted by the Rent Act or increase of 25 per cent in case the Rent Act does not apply. Insofar as the intimation to the landlords was concerned, it is stated that the same was given but presuming that it was not so given, the plaintiffs were bound to be aware of the same.
7. The written statement of defendants 3 to 5 also seek to raise similar defenses.
8. On the pleadings of the parties, the following issues were framed on 27.2.2007:
1. What is the effect of the Lease Deed dated 18.9.1986 not being renewed or its specific performance not being sought by the defendants? OP Parties
2. Whether any notice of termination of tenancy was required to be served on the sub-tenants? If so, its effect? OPD-2 to 4
3. Whether the plaintiff is entitled to possession of the suit property? OPP
4. Relief.
9. The proceedings of the said date record that it is undisputed that the rights of the parties flow from the deed of lease dated 18.9.1986 and after a lapse of five years of the lease, no fresh lease deed has been executed. It is also recorded that in the petition filed by the plaintiffs under Section 14(1)(b) of the Rent Act, the defendants had raised a plea that the Rent Controller had no jurisdiction to try and determine the suit as the premises were originally let out to defendant No. 1 at a monthly rent of Rs. 189.50 and defendant No. 1 had sub-let the premises to defendants 2 to 5 in view of the rights conferred under the lease dated 18.9.1986 for Rs. 2,09,330.00. The controversy, thus revolved around the interpretation of the admitted documents.
10. The order sheet records that since the documents are admitted and there was no oral testimony to be recorded, learned Counsels for the parties agreed that they would file a short synopsis in view of the agreed position.
11. The defendants attempted to back out of the said order by filing RA No. 4721/2007, which was dismissed. The defendants thereafter filed an appeal before the Division Bench, being FAO (OS) No. 281/2007 against the said order but the appeal was dismissed vide order dated 30.7.2007. The Special Leave Petition has thereafter been dismissed as withdrawn vide order dated 20.8.2007.
12. Learned Counsels for the parties were heard and the findings on the issues are as under:
Issue No. 1:
What is the effect of the Lease Deed dated 18.9.1986 not being renewed or its specific performance not being sought by the defendants? OP Parties
13. The lease deed dated 18.9.1986 shows that the grant of lease was for a term of five years at a rental of Rs. 189.50 per month excluding electricity and water charges. Clause 1(g) does entitle defendant No. 1 to sub-let, assign or part with possession of the whole or part of the premises. Such power can be exercised as many times as the tenant may desire but the landlords (plaintiffs) had to be informed about the sub-letting or assignment by registered AD post within one month of the same. The defendants have placed nothing on record to show any such intimation to the plaintiffs but in fact in the written statement defendant No. 1 has pleaded that it must be presumed that the plaintiffs were aware of the same.
14. If defendant No. 1 seeks to exercise the rights as a tenant to create sub-tenancy under the said clause of the lease deed then all the requirements of the said clause must be met. It was the bounden duty of defendant No. 1 to inform the plaintiffs about the sub-letting by a registered AD post within one month of the same which they failed to do.
15. Clause 2 does entitle the tenant to renew the lease deed in respect of the tenanted premises for a similar term of five years each subject to increase in rent as permitted under the Rent Act or increase of 25 per cent at each renewal in case the Rent Act does not apply. Clause 4 also provides that the premises at present were covered under the Rent Act and any amendment thereof would not give benefit to the landlords.
16. The important issue, however, is that it being a lease in respect of an immovable property for more than a year, a registered document is necessary. The terms of the lease would continue to apply for a period of five years of the lease. In case defendant No. 1 wanted to exercise the right of renewal, then a fresh lease had to be executed and registered every time such renewal had to take place. If the plaintiffs failed to co-operate, defendant No. 1 could have enforced his rights through a suit for specific performance for execution of such a lease deed. Defendant No. 1 failed to do either. The lease expired by efflux of time. Any suit for specific performance of the renewal under the lease deed was to be filed within three years from the cause of action, which would be the date when the lease came to an end by the efflux of time. The failure to exercise the said right resulted in defendant No. 1 being only a tenant by holding over.
17. Learned Counsel for the plaintiffs has referred to the judgment of the Division Bench of this Court in Uptron Powertronics Ltd. v. G.L. Rawal . In the facts of the said case also the question had arisen that where a lease had come to an end and there was an option of renewing the lease whether a registered document was required for the same. It is in this context that in paragraph 27 of the judgment it has been observed that Section 107(1) of the TP Act makes it clear that a lease of immovable property exceeding one year can only be executed by a registered instrument. No registered instrument was drawn up by the parties after the expiry of the original lease and in the absence of such a registered instrument the necessary consequences would flow, which would imply that the tenancy was only on a month to month basis. The respondent could thus terminate the tenancy by a notice under Section 106 of the TP Act.
18. Learned Counsel also referred to the judgment of the Supreme Court in State of UP and Ors. v. Lalji Tandon (Dead) Through LRs . Paragraph 13 of the said judgment contains discussion on the question of the principal lease executed between the parties containing the covenant for renewal and if it is so renewed in accordance with the covenant whether the renewed lease shall also contain a similar clause for renewal. It is stated that the same would depend on the facts and circumstance of each case, regard being had to the intention of the parties as displayed in the original covenant for renewal and the surrounding circumstances. A distinction was made between an 'extension' of lease in accordance with the covenant in that regard contained in the principal lease and the 'renewal' of lease, again in accordance with the covenant for renewal contained in the original lease. In case of extension no fresh lease deed was required to be executed but where an option for renewal consistent with the covenant for renewal has to be exercised, on such convenant being invoked, a fresh lease deed would have to be executed between the parties. If no such fresh lease deed was executed, another lease for a fixed term would not come into existence though the principal lease in spite of expiry of the term thereof may continue by holding over by year by year or month by month, as the case may be.
19. Learned Counsel for the plaintiff further referred to the judgment of the Supreme Court in Burmah Shell Oil Distributing Now known as Bharat Petroleum Corporation Ltd. v. Khaja Midhat Noor and Ors. . In the factual matrix a lease for a period of ten years with a right of renewal for a further period of five years had been executed. After the expiry of ten years, no instrument was executed by the parties and the lessee continued to remain in possession of the suit property. The Lesser also accepted the rent and allowed the lessee to continue. After discussing the provisions of Section 106 & 107 of the TP Act, it was observed that since the lease was for a period exceeding one year it could only have been extended by a registered document executed by both the Lesser and the lessee in terms of Section 107(1) of the TP Act. In the absence of any registered instrument, the lease shall be deemed to be "lease from month to month". Thus, in the absence of a registered document, the lease would be monthly. It was held to be a case of holding over and not of continuation of old tenancy for a further period of five years and that was said to be the harmonious construction of Section 107 & 116 of the TP Act.
20. In view of the legal position succinctly set out in the aforesaid judgments there can be little doubt that on the failure of defendant No. 1 in exercising its rights on the expiry of the five year period of the lease in September 1991, the tenancy became one of month to month. Defendant No. 1 failed to file any suit for specific performance and merely continued to pay the rent. Such payment would be deemed to be on the basis of month to month tenancy as noticed in the aforesaid judgments.
21. The result of the aforesaid is that the effect of the lease deed dated 18.9.1986 not being renewed or specific performance not being sought by defendant No. 1 would be that the lease became a month to month tenancy which stood terminated in pursuance to the legal notice sent by the plaintiffs on 9.4.1995 and duly served on the defendants.
22. The issue is answered accordingly.
Issue No. 2:
Whether any notice of termination of tenancy was required to be served on the sub-tenants? If so, its effect? OPD-2 to 4
23. The aforesaid issue arises from the plea that the sub-tenants had an independent right to be served with a notice of termination prior to the eviction proceedings being initiated. Admittedly, no such notice was issued to the sub-tenants, defendants 2 to 5.
24. It is the case of the plaintiffs that such sub-tenants had no independent right and their rights would not arise as claimed by defendant No. 1, as a tenant. The termination of the tenancy of the tenant (defendant No. 1) would result in the termination of the sub-tenancy. It has been urged that the sub-tenants are not even necessary parties to the present proceedings and have been so imp leaded in order to ensure that in case of decree for possession being passed no difficulty is created in the way of the plaintiffs.
25. Learned Counsel for the plaintiffs has referred to the judgment of the Apex Court in Importers & Manufacturers Ltd. v. Pheroze Framroze Taraporewala where in paragraph 4, it has been observed that under the ordinary law a decree for possession passed against a tenant in a suit for ejectment is binding on a person under or through that tenant and is executable against such person whether or not he was or was not a party to the suit. Thus, non-joinder of such a person does not render the decree any the less binding on him and such a person was held not to be a necessary party to the ejectment suit against the tenant. Simultaneously it was recognised that such a person would nevertheless be a proper party to the suit in order that the question where the lease has been properly determined and the landlord/plaintiff is entitled to recover possession of the premises may be decided in his presence so that he may have the opportunity to see that there is no collusion between the landlord and the tenant under or through whom he claims and to seek protection under the TP Act, if he is entitled to any.
26. A reference has also been made to the judgment in Rupchand Gupta v. Raghuvanshi (P) Ltd. to the effect that the law does not require the sub-lessee to be made a party where the landlord institutes a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee. The decree in the suit would bind the sub-lessee and even though it may sound harsh on the sub-lessee, this is the position well understood by him when he took the sub-lease.
27. On consideration of the aforesaid judgments and the submissions of the parties to show that the notice of termination is required only to be given to the tenant, the sub-tenants are at best, proper parties to the proceedings. In the present case, the sub-tenants have been imp leaded as defendants. Even in the eviction proceedings filed before the Rent Controller, the sub-tenants were imp leaded as parties.
28. Learned Counsel for the defendants did not even contend that they were statutory tenants, especially in view of their objections raised in the proceedings before the Rent Controller, which had resulted in the order dated 4.10.1995. It was on consideration of the said objection that the Rent Controller found that the provisions of the Rent Act would not apply in view of the legal position enunciated therein as once the sub-tenant was paying a rent of over Rs. 3,500.00 per month, the Rent Controller would have no jurisdiction. The said judgment would, thus, be binding on the defendants insofar as the plea of lack of jurisdiction of the Rent Controller and the confirmant of the judgment in the civil court is concerned.
29. Learned Counsel for defendant No. 2 does not seek to contend that the notice is defective on account of the fact that the lease commenced on the 18th day of the month and thus the monthly tenancy would expired on the end of the 18th day and not at the end of the month. However, it would be seen that the lease had already expired and the defendants were holding over as tenants. Such holding over on a month to month basis would be by the end of the month. The termination notice dated 9.4.1995, in fact, directed the defendants to vacate the premises on or before 31.5.1995, thus giving a little less than two months to vacate the premises and thus either way, there was sufficient time given as per Section 106 of the TP Act to the defendants to hand over vacant and peaceful possession of the suit property. This is, of course, apart from the fact that there is not even an issue framed in this behalf.
30. In my considered view, the legal position set forth makes it abundantly clear that there was no requirement of any notice to be served personally on the said sub-tenants for the plaintiff to seek eviction of the defendants from the tenanted premises and, thus, the issue is answered in favor of the plaintiffs.
Issue No. 3:
Whether the plaintiff is entitled to possession of the suit property? OPP
31. The findings on the issues aforesaid leave really no doubt that the plaintiffs would be entitled to seek possession of the tenanted premises, the lease of which had been determined in accordance with Section 106 of the TP Act, the defendants holding over a month to month basis. It is not even the plea of the defendants that the provisions of the Rent Act would apply. It has neither been contended today nor such a thing could have been contended in view of the position set-out herein. In fact, this aspect is also clear from the proceedings recorded on 27.2.2007.
32. Learned Counsel for the plaintiffs referred to the judgment of the learned single Judge of this Court in K. Kishore & Construction v. Allahabad Bank . It was held that where the relationship of landlord and tenant is admitted, the lease/sub-lease has come to an end by efflux of time and if the last rate of rent agreed in the sub-lease is more than Rs. 3,500.00 per month, the landlord should be entitled to seek possession and the civil court is competent to grant a decree for possession in view of the judgment of the Supreme Court in D.C. Bhatia v. Union of India JT 1993 (7) SC 114.
33. Learned Counsel also submitted that though there is no dispute about the legal position about the jurisdiction of the civil court. In this behalf reference may be made to the judgment of the learned single judge of this Court (as he then was) in Atma Ram Properties (P) Ltd. v. P.S. Jain Company Ltd. and Ors. . It was held that the Rent Act was enacted to protect the tenants assuming them to be from the weaker section of society. In the wisdom of the legislature, provisions were enacted to take out the premises which carry a monthly rent exceeding Rs. 3,500.00 from the applicability of the Rent Act because such premises would not be enjoyed or occupied by persons belonging to the weaker section of society. Such protection can be foregone by the tenant himself agreeing to a rent so as to exceed Rs. 3,500.00 per month or if he sub-lets the premises exceeding Rs. 3,500.00 per month and in either eventuality the provisions of Section 3 of the Rent Act would come into play and a view contrary would create anamolous situation. This judgment was affirmed by the Division Bench of this Court in P.S. Jain Company Ltd. v. Atma Ram Properties (P) Ltd. and Ors. and the Special Leave petition was also stated to have been dismissed.
34. The legal position which, thus, emerges is clear and there can be no obstruction to a decree of possession or of the civil court exercising jurisdiction in such a case where there is month to month tenancy, the tenancy has been terminated and the sub-tenant is paying a rent of over Rs. 3,500.00 per month.
35. The issue is accordingly answered in favor of the plaintiffs.
Issue No. 4:
Relief.
36. In view of the findings arrived at aforesaid, a decree for possession is passed in favor of the plaintiffs and against the defendants in respect of suit property bearing No. G-72, Connaught Circus, New Delhi comprising of approximately 7063 sq.ft., with covered area of 5392 sq.ft. and an open area of 1671 sq.ft. (stated to be subsequently covered by defendant No. 1). The plaintiffs shall also be entitled to costs.
37. Decree sheet be drawn up accordingly.