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dated 19.11.2014 M/S ORCHID INFO SOLUTION PVT LTD ..... Plaintiff v. STATE BANK OF INDIA ..... Defendant

Delhi High Court · 19 Nov 2014 · 2014:DHC:6229
HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J (ORAL)
2014:DHC:6229
civil appeal_allowed Significant
AI Summary

The Delhi High Court held that an unregistered letter purportedly extending a lease beyond one year is inadmissible, and on admitted facts, granted the landlord a decree for possession under Order 12 Rule 6 CPC.

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CS(OS)No.1918-2014 HIGH COURT OF DELHI
CS(OS) 1918/2014
JUDGMENT
dated 19.11.2014 M/S ORCHID INFO SOLUTION PVT LTD ..... Plaintiff
Through: Mr. Vidit Gupta, Adv.
versus
STATE BANK OF INDIA ..... Defendant
Through: Mr.Ashish Rana and Mr. Shaveer Ahmed, Advs.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J (ORAL)
I.A.11850/2014

1. This is an application under Order 40 Rule 1 and Order 12 Rule 6 read with Section 151 of the Code of Civil Procedure filed by the plaintiff seeking a decree on admissions.

2. The plaintiff has filed the present suit for recovery of possession, use and occupation charges. As per the plaint, the suit property comprises of a basement, ground floor approximately measuring 6000 Sq. Ft. forming part of property bearing No.2/15, East Patel Nagar, New Delhi-110008 as shown in red colour in the site plan (hereinafter referred to as the suit property). The suit property was given on rent to the defendant in terms of a lease deed dated 24.02.2009, registered on 25.02.2009 having registration No.2860 in Additional Book No.I, Vol. No.16678 at pages 155 to 161 with the Office of Sub-Registrar-II, New Delhi by the 2014:DHC:6229 predecessor-in-interest of the plaintiff for a limited period of five years commencing from 23.11.2008 and to 22.11.2013 at a monthly rent of Rs.2,75,000/- excluding service tax, electricity and water charges etc. The erstwhile owner had brought to the notice of the bank of their intention to sell the property. NOC vide letter dated 03.09.2010 and 18.09.2010 was granted by the bank to the erstwhile owner, subject to the condition of the existing tenancy. It may also be noticed that the defendant bank has also instituted a suit against the plaintiff herein being CS(OS) 603/2014 for permanent and mandatory injunction restraining the eviction of the plaintiff from the suit property and for specific performance of the lease deed and for renewal of the lease period.

3. Counsel for the plaintiff submits that the relationship between the parties i.e. owner and tenant is admitted. The creation of a tenancy by a registered lease deed is also admitted and the rate of rent i.e. Rs.2,75,0000/-, which is over Rs.3500/-. The legal notice dated 23.11.2013 issued by the plaintiff to the defendant is also admitted which is evident from the reply received from the defendant dated 15.10.2013. The subsequent notice dated 18.5.2013 was also issued to the defendant which was duly served. It is contended that the defence in the written statement is sham as the defendant only relies on an alleged communication dated 08.07.2009 purported to be issued by the erstwhile owner to the bank by which the existing owner admitted to the bank that the lease deed was executed for a period of 10 years from 22.11.2008. Counsel submits that the alleged letter cannot be looked into for two reasons. Firstly, the letter would amount to renewal of lease deed for a period of more than one year and such a document is compulsorily registrable under Section 17 (1) (D) of the Registration Act. In support of his submissions the counsel has relied upon Modern Food Industries (India) Limited v. I.K. Malik and Others, reported at 2002 Volume 63 DRJ 451 (DB).

4. Secondly the said letter cannot be relied upon as it is not above suspicion, as the subsequent letters addressed by the bank to the plaintiff dated 3.10.2010 and 18.09.2010 no mention has been made of the letter dated 8.7.2009 that the tenancy stood extended for a total period of ten years. Counsel further submits that no reliance was placed by the bank on the letter dated 8.7.2009 even in the reply to the legal notice issued by the plaintiff to the defendant.

5. Learned counsel for defendant has opposed this application on the ground that the admission sought to be relied upon is neither unequivocal nor clear. He further submits that the initial sanction was granted by the bank for taking on the premises on lease for a period of 10 years and this was the clear understanding between the parties. He further submits that till the suit filed by the bank for specific performance is decided, in case the order of ejectment is passed the suit filed by the bank would be rendered infructuous. It is submitted that the application is an abuse of process of law as the erstwhile landlord agreed to extend the lease till the year 2018. It is also submitted that the defendant even after issuance of legal notice had offered rent of Rs.2,75,000/- per month which was not accepted by the plaintiff.

6. I have heard the learned counsel for the parties. The following documents are admitted between the parties i. Lease deed dated 24.02.2009 (Ex.P[1]) ii. Letter dated 03.09.2010 (Ex.P[2]) iii. Letter dated 18.09.2010 (Ex.P[3]) iv. Legal notice dated 03.10.2013 (Ex. P[4]) v. Reply dated 15.10.2013 to the legal notice (Ex.P[5]) vi. Legal notice dated 18.1.2014 (Ex.P[6])

5. On the basis of the admitted documents, there is no room for doubt that the relationship of landlord and tenant stands admitted. The rate of rent and the period of tenancy also stand admitted.

6. As per the letter dated 03.09.2010 the landlord had informed the bank of its desire to sell the property and as per the office communication the bank gave no objection to the erstwhile landlord to sell the property provided the conditions of tenancy of the bank would continue with the same terms and conditions of the existing lease agreement. On the same lines is the no objection dated 18.09.2010. The bank at this stage for reasons best known to them did not refer to the letter of 8.7.2009 whereby, as alleged, the erstwhile owner had agreed to extend the lease for another period of five years upto 2018. Neither there is a reference to the letter dated 08.07.2009 in response to the legal notice issued.

7. Although the letter dated 08.07.2009 is disputed by the plaintiff, however, the short point which would arise for consideration is as to whether this letter can be termed as an extension of the lease and, if yes,, whether the letter can be relied upon. In a somewhat similar situation before a Division Bench in the case of Modern Industries India Ltd. (supra), the Division Bench held that the letters relied upon in the aforesaid matter cannot be looked into as the said letters were unregistered and a lease for more than one year and the terms of such a letter by which the lease is extended for a period of more than one year cannot be looked into.

8. Paras 10 to 15 of Modern Food Industries (India) Limited read as under:

“10. On the other hand Mr. Sudhanshu Batra contended that after the expiry of the initial lease in 1992, no fresh lease deed was executed. Neither the initial lease deed executed in
1972 nor the two letters on which reliance has been placed by the appellant dated 1st June, 1992 and 3rd July, 1992 are registered documents. He further contended that the original lease deed dated 12th April, 1972 was never placed on record by the appellant, therefore, the terms and conditions contained in the original agreement are not known. Therefore, reliance by the appellant on the letter dated 3rd July, 1992 purporting to be a renewal lease agreement cannot be looked into being unregistered. To support his contention, he placed reliance on the decision of Supreme Court in the case of D.D.A. v. Durga Chand Kaushik, to say that even the renewal lease require registration. In the absence of registration as envisaged under Section 107 of the Transfer of Property Act, a lease of immovable property which is more than one year and not registered, its terms cannot be looked into. He also placed reliance on the division bench judgment of this court in the case Uptron Powertronics Ltd. v. Shri G.L. Rawal, 1999 IV AD (Delhi) 861: 1999 (50) DRJ 719 (DB), and another decision of this court in the case of Kidarsons Industries Pvt. Ltd. v. Allahabad Bank, 1999 IV AD (DELHI) 822:1999 (50) DRJ 490.
11. After hearing counsel for the parties and perusing the record, we are of the considered view that the Clauses of the lease deed or renewal of deed dated 3.7.1992 cannot be looked into for want of registration. If a document is inadmissible for non-registration, all its terms are inadmissible including the one dealing with the landlord's permission for the renewal of the lease and the increase of the rent. The letter dated 3rd July, 1992 cannot be disassociated from the initial lease of 1972 purported to have been executed between the erstwhile landlord and the appellant containing the terms and conditions of the tenancy. We are told at the Bar that even the initial lease was not registered, therefore, the contention of Mr. Sudhanshu Batra, counsel for the respondents that the terms as stipulated in letter dated 3rd July, 1992 cannot be looked into for want of registration appears to be correct. Fazal Ali, J. in Sachindra Mohan Ghose v. Ramjash Agarwalla, AIR 1932 Patna 97 observed that if a decree purporting to create a lese is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose.
12. Admittedly the letters dated 1st June, 1992 and 3rd July, 1992 constitute a lease or at least an agreement to renew the lease falling within the provisions of Section 2(7) of the Indian Registration Act, since the agreement to renew the lease by virtue of these two letters in writing and these having not been registered, no right can be enforced by the appellant on the basis of these two letters. Since the lease in question as per appellant's own showing was for a period of more than one year consequently the provision of Section 107 of the Transfer of Property Act becomes applicable. The terms of unregistered lease cannot be looked into for the purpose of enforcing a right flowing there from.
13. The argument of Mr. Amitabh Narayan is that proviso to Section 49 of the Registration Act protects the appellant to the extent that these unregistered letters can be received in evidence for the purpose of enforcing the right under Section 53A of the Transfer of Property Act. We find no force in this submission. At best the appellant can use this unregistered document for the purpose of proving the nature of possession but it does not create any right in favor of the appellant to continue as tenant for a year or more. The Supreme Court in the case of Rana Vidya Bhushan Singh v. Ratiram, Civil Appeal No.460 of 1966, decided on 28th January, 1969, reported in U.J. (S.C.) 21 (69), page 86 observed that:- "A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property.
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14. Therefore, a document which requires compulsory registration is not admissible for want of registration to prove the terms of the lease. It is admissible only to prove the character of the possession of the person who holds the property. Therefore, even the proviso to Section 49 of the Registration Act is of no help to the appellant. At best the appellant can prove the nature of his possession but not the terms of the lease. Admittedly creation of lease is not a collateral purpose nor the terms of the lease are collateral within the meaning of Section 49 of the Registration Act as held by Supreme Court in the case of Satish Chand v. Goverdhan Das AIR 1984 SC 413.
15. As already pointed out above, a lease or a renewed lease even though a letter if not registered, its terms cannot be looked into. It has been so held by the Supreme Court in the case of Durga Chand Kaushik (Supra) which observations are reproduced as under: "A renewal of lease is really the grant of a fresh lease. It is called a 'renewal' simply because it postulates the existence of a prior lease which generally provides for renewals as of right. In all other aspects, it is really a fresh lease."”

9. Another aspect which is to be considered is the manner in which the lease was to be extended. Clause (x) of the lease deed reads as under: “x) That the bank shall the option or renewing the lease of the demised premises at the expiry of the present term hereby granted with mutual consent and agreed rate of rent for future.”

10. As per clause (x), the lease between the parties was liable to be extended at the expiry with mutual consent and agreed rate of rent. Admittedly, there is not a single document on record by which the bank made an offer to the plaintiff or requested the plaintiff for extension of the lease nor fresh terms were offered. If letter of 08.07.2009 filed by the defendant is to be relied upon then the next question which would arise for consideration is whether the defendant decided to take recourse to the fresh terms of this letter or not. The letter of 8.7.2009 reads as under: “State Bank of India East Patel Nagar This is with reference to Sanction Letter No.DAO/RHI/FK SK/5682 dt.16/2/2009. Rent Agreement No. IN- DL0097607707828H was executed on the basis of the said letter between State Bank Of India and Mr. N.N. Bhardwaj & Others for renting of their premises 2/15 East Patel Nagar to you. Further to the said rent agreement we confirm that we shall extend the lease by 5 yrs. on expiry of the same in 2013 with increase of 25% rent as agreed as per your above said letter. We confirm the lease period to be 10 yrs. w.e.f. from 24/11/2008 and to which we have no objection.”

11. A careful reading of this letter would show that according to the bank, the erstwhile owner informed the bank that it is confirmed that they would extend the lease by five years on expiry of the same in 2013 with increase of 25% rent as agreed as per the letter of the bank. In case the bank had decided to rely on this communication after the expiry of five years, the bank would have offered enhanced rent or paid rent to the plaintiff subject to an increase of 25% which admittedly bank did not. Counsel for the defendant bank submits that the bank has always been ready and willing to pay the additional 25%, although the bank did not offer the same to the plaintiff.

12. The law with regard to Order 12 Rule 6 CPC more particularly pertaining to tenants has been well-settled by a catena of judgments.

13. The law with regard to Order 12 Rule 6 CPC has been laid down by the Apex Court in the case of Uttam Singh Duggal and Company Ltd. Vs. United Bank of India & Ors, reported at (2000) 7 SCC 120, relevant portion of which reads as under: “12. As to the object of Order 12 Rule 6, we need not say anything more than what the legislature itself has said when the said provision came to be amended. In the Objects and Reasons set out while amending the said Rule, it is stated that “where a claim is admitted, the court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant, the plaintiff is entitled”. We should not unduly narrow down the meaning of this Rule as the object is to enable a party to obtain speedy judgment. Where the other party has made a plain admission entitling the former to succeed, it should apply and also wherever there is a clear admission of facts in the face of which it is impossible for the party making such admission to succeed.”

14. It was observed in the case of Rajiv Sharma and Another Vs. Rajiv Gupta, reported at (2004) 72 DRJ 540, that the purpose of Order XII Rule 6 of the CPC is to enable the party to obtain speedy justice to the extent of relevant admission, which according to the admission, if the other party is entitled for. Admission on which judgment can be claimed must be clear and unequivocal.

15. In the case of Ms. Rohini V R.B.Singh, reported at 155 (2008) DLT 440, it has been held as under: “It is trite to say that in order to obtain judgment on admission, the admissions must be clear and unequivocal. In the matter of landlord and tenant there are only three aspects which are required to be examined – (i) Relationship of landlord and tenant; (ii) expiry of tenancy by efflux of time or determination of valid notice to quit; and (iii) the rent of the premises being more than Rs.3500/-, per month, in view of the Act”.

16. Upon considering judgments rendered by the High Court, it can be held that while dealing with an application under Order XII Rule 6 CPC relating to a suit for possession three factors must be satisfied by the landlord: (i) the landlord tenant relationship should not be disputed; (ii) the rate of rent should be over Rs.3,500/-; and (iii) the tenancy should have been validly terminated.

17. A bare reading of Order XII Rule 6 CPC would show that the intention and purpose of the legislature was not to prolong the trial, however, in case of any admission a decree was to be passed under Order 12 Rule 6 CPC. Reading of the provision and the law laid down show that the admission need not be only in the pleadings, but it can be either in any document or otherwise and at any stage.

18. Another argument, which has been raised by counsel for the Bank, is that the plaintiff has filed a suit for specific enforcement of the lease deed and in case a decree is passed in favour of the landlord the suit of the Bank would be rendered infructuous. This submission of counsel for the Bank is without any force.

19. It will be useful to reproduce the observations made by another Single Judge of this Court in the case of Sunil Kapoor v. Himmat Singh & Ors., reported at 2010 Volume 115 DRJ page 229, in para 11, which is reproduced below:

“11. A mere agreement to sell of immovable property does not create any right in the property save the right to enforce the said agreement. Thus, even if the respondents/plaintiffs are found to have agreed to sell the property, the petitioner/defendant would not get any right to occupy that property as an agreement purchaser. This Court in Jiwan Das Vs. Narain Das AIR 1981 Delhi 291 has held that in fact no rights enure to the agreement purchaser, not even after the passing of a decree for specific performance and till conveyance in accordance with law and in pursuance thereto is executed. Thus in law, the petitioner has no right to remain in occupation of the premises or retain possession of the premises merely because of the agreement to sell in his favour.”

20. Although the aforesaid matter related to an Agreement to Sell but in my view the basic principal would not change.

21. In view of the categorical admissions, the plaintiff is entitled to a decree of possession. As far as the letter of 08.07.2009 is concerned, the letter cannot be relied upon for the purpose of extension of lease as it is an unregistered document even otherwise there is no reference by the bank in any of his prior communications dated 03.09.2010 and 18.09.2010 in reply to legal notices. In case the bank wanted to rely on the letter of 8.7.2009, it was mandatory for the bank to have issued a demand draft or cheque with a 25% increase if they wanted to take advantage of this letter but the bank did not do so. Thus it cannot be said that the bank had made an offer for extension of the lease. Suit is partially decreed.

22. Application stands disposed of. CS(OS) 1918/2014

23. At this stage, counsel for the Bank prays for an adjournment to make an offer to the landlord.

24. At joint request, list on 25.11.2014. G.S.SISTANI, J NOVEMBER 19, 2014 ns

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