WEALTH ESTATE PVT LTD v. K CHANDRA & ANR

Delhi High Court · 15 May 2014 · 2014:DHC:2582

G. S. Sistani

CS(OS) 1994/2012

2014:DHC:2582

civil appeal_dismissed Significant

AI Summary

The court upheld the validity of a registered sale deed against sham transaction claims and awarded mesne profits to the lawful owner for unauthorized occupation after licence termination.

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CS(OS)No.1994-2012 HIGH COURT OF DELHI
CS(OS) 1994/2012 & I.A. 22285/2012 & I.A. 16607/2013

JUDGMENT

dated 15.05.2014 WEALTH ESTATE PVT LTD(WEPL) ..... Plaintiff
Through: Mr.Jayant K. Mehta, Ms.Roopa Dayal and Mr.S. Hussain, Advocates

versus

K CHANDRA & ANR ..... Defendant
Through: None

CORAM:

HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J (ORAL)

I.A. 1291/2014 (u/O.XII R.6 CPC)

1. None is present on behalf of the defendant. None was present on 1.4.2013. Reply to the present application of the plaintiff under Order 12 Rule 6 CPC has not been filed by the defendants.

2. Plaintiff has filed the present suit for recovery of vacant possession, rent, use and occupation charges against the defendants.

3. As per the plaint, defendant no.1 is a licencee of defendant no. 2 and in possession of the property bearing No.32, Diplomatic Enclave Extension, Cooperative Housing Building Society Limited, Western Colony, New Delhi (herein after referred to as „suit property‟).

4. Further as per the plaint, the defendant no.2 had executed a „Leave and Licence Agreement‟ (L&L Agreement) dated 18.09.2009 in favour of defendant no.1 for a period of 11 months ending on 17.08.2010. The monthly licence fee was fixed at Rs.50,000/-. After expiry of said 11 2014:DHC:2582 months, pursuant to defendant no.1‟s various requests for extension from time to time, defendant no. 2 permitted defendant no.1, on month to month tenancy basis to stay in the said property till 31.03.2012 and defendant no. 1 promised in writing to vacate the said premises on or before 31.03.2012.

5. It has further been averred in the plaint, that SICPA India Private Limited (SIPL) was also a Confirming Party in the L&L Agreement dated 18.09.2009 as defendant no. 2 had entered into agreement to sell dated 10.09.2009 with SICPA, whereby defendant no. 2 had agreed to transfer, convey and sell it‟s right, interest and title in the suit property in favour of SICPA. As per clause 2(a) of the L&L Agreement dated 18.09.2009, defendant no.1 was required to pay license fee of Rs. 50,000 per month to defendant no. 2 till the execution and registration of the sale deed and thereafter the said amount was to be paid to SICPA.

6. It has also been averred in the plaint that as per clause 8 and 17 of the agreement to sell dated 10.09.2009, SICPA was entitled to get the said property transferred in the name of its assignee(s), nominee(s) or any third party/legal entity. Therefore, SICPA‟s board incorporated the plaintiff i.e. WEPL as a Special Purpose Vehicle (SPV) to acquire the suit property from the defendant no. 2 and accordingly, the plaintiff got the sale deed registered in its name vide registered sale deed dated 01.02.2012. Thus, by virtue of the said sale deed dated 01.02.2012, the plaintiff became the lawful owner of the suit property and thereafter, the suit property was mutated in its name vide a letter dated 10.04.2012 issued by the competent authority. Further, as per the sale deed dated 01.02.2012, actual physical and vacant possession of the suit property was to be delivered by the defendant no. 1 to the plaintiff on 31.03.2012 failing which the plaintiff was at liberty to initiate appropriate legal remedy against the defendant no. 1 or any other occupant as per law.

7. It is submitted that since the sale deed was executed on 01.02.2012, therefore, as per clause 2(a) of the L&L Agreement dated 18.09.2009, which stipulated monthly license fee, the plaintiff is entitled to receive monthly license fee @ Rs. 50,000/- for the period from 01.02.2012 to 31.03.2012 and from 01.04.2012 onwards the said L&L Agreement dated 18.09.2009 stands terminated and since then the defendant no. 1 is an unauthorized occupant and in wrongful possession of the suit property. Further, the plaintiff vide it‟s letter dated 16.05.2012 through its counsel, called upon defendant no. 1 to handover peaceful and vacant possession of the said property to plaintiff on or before 31.05.2012 and also to make good the arrears to the tune of Rs. 20 Lacs (i.e. market rent @ Rs. 10 Lacs per month for the period of 01.04.2012 to 31.05.2012) failing which, the plaintiff had reserved its right to claim the rent amount at the market rate for the entire period till the defendant no. 1 retains the possession of the property as an unauthorized occupant. Despite having received the said notice, the defendant no. 1 chose not to reply to the said notice and did not pay any amount to the plaintiff. The defendant no. 1 was still in possession of the same after expiry of the notice period i.e. 31.05.2012.

8. Vide order dated 25.10.2013 passed by this Hon‟ble Court, defendant NO. 1 and 2 were directed to handover peaceful and vacant possession of the suit property to the plaintiff on or before 01.11.2013 and if the same is not handed over, it was open for the plaintiff to seek the assistance of the Bailiff of this court and if necessary, seek police assistance for that purpose. Counsel for the plaintiff further submits that against the order dated 25.10.2013, defendant had filed an appeal before the Division Bench, which was dismissed as withdrawn. Vide order dated 01.11.2013, a Division Bench of this Court directed appellant/defendants to handover vacant physical possession of the suit property on or before 31.12.2013 to the respondent/plaintiff and to deposit Rs. 16 Lacs as damages towards use and occupation of the premises for the months of November and December, 2013 on or before 07.11.2013. Vide order dated 30.12.2013 the Division Bench further directed the appellant/defendants to vacate the suit property latest by the mid-night of January 31, 2014 and also to tender damages for the month of January, 2014 @ Rs. 8 Lacs. It is submitted that the license fee has been paid by the defendant no. 1 to the plaintiff for the months of November and December, 2013 and January to April, 2014.

9. Counsel prays for a decree on admission. In support of his submission counsel relies on clauses 8 and 9 of Sale Deed dated 08.02.2012 between plaintiff and defendant no. 2, which are at pages 46 of the documents file:

“8. That the actual physical and vacant possession of the said property hereby conveyed shall be delivered to the Vendee by the Vendor on 31.03.2012. However, the Vendee shall become the absolute owner of the same on the date of execution of this Sale Deed and shall enjoy all the rights, privileges, passages, etc. with respect to the said property. Further the vendor has been left with no right, title, interest, claim or concern of any nature in the said property. 9. The Vendor intimated the Vendee that Mr.K. Chandra S/o.Dr.K.V. Krishnamurthy, who is one of the largest shareholder of the Vendor is in actual and physical possession of the said property vide leave and licence agreement dated 18.09.2009 („Licence Agreement”) for a monthly licence fee of Rs.50,000/- (Rupees Fifth Thousand Only) per month and the said Licence Agreement was valid only for the period of 11 (eleven) months from the date thereof. The duration of the License Agreement already stands expired on 17.8.2010. The Vendor further confirms that there is no other license agreement executed with Mr.K.

Chandra apart from the License Agreement dated 18.9.2009. However, Mr.K. Chandra vide his letter dated 10.11.2011 sought an extension of the License Agreement and requested the Vendor to permit him to stay in the said Property till 31.03.2012. The vendor has permitted Mr.K. Chandra to stay in the said property till 31.3.2012. Mr.K. Chandra shall be treated as a licensee of the Vendee with effect from the date of execution of this Sale Deed. However, the Vendor hereby assures and confirms the Vendee that the Vendor shall get the said Property vacated from Mr.K. Chandra and shall facilitate handing over of actual and vacant physical possession from Mr.K. Chandra to the Vendee on 31.3.2012. In case, the Vendor fails to get the said property vacated and hand over actual and physical possession to the Vendee on 31.3.2012 then the Vendee shall be at liberty to initiate appropriate legal remedy against the Vendor, Mr.K. Chandra or any other occupants of the said Property as per law.”

10. Counsel also relies on clause (j) and (k) of the sale deed, which is at page 49 of the document file, which is reproduced below: “(j) That there is no legal impediment, bar, hindrance or implication on the part of the Vendor or within the knowledge of the Vendor which may cause an obstruction, hindrance, etc. of any nature whatsoever in the sale of the said property in favour of the Vendee. (k) That the Vendor hereby assures and confirms that they are selling the said property to the Vendee without any threat, fear, coercion, allurement, fraud, pressure, influence, etc., from any side / corner and is selling the said property out of its own will, desire and bonafide requirements and received full and final sale proceeds from the Vendee.”

11. Counsel for the plaintiff has also placed reliance on paragraph 16 of the written statement filed by the defendants which is reproduced below:

“16. That believing such assurances to be true and bona-fide, and in as much as the Defendants were not in an immediate position to pay off the loan, and also since Defendants were confident that the

loan would be paid off on or before 30 June, 2014, the Defendant no.2 agreed to execute and register the Sale Deed on the premise that this was a sham and bogus transaction, and not meant to be acted upon till after 30 June, 2014. For the purposes of the sale, SICPA therefore, created a bogus company, the Plaintiff herein, as a “Special Purpose Vehicle”, and the Sale Deed was executed between the Defendant no.2 and the plaintiff herein.”

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12. In view of the written statement, execution of the sale deed has not been disputed by the defendants, however, defendants rely upon an oral understanding between the defendant and the plaintiff and it is averred in the written statement that the entire transaction was sham and bogus transaction.

13. It is pointed out that the defendants also filed an SLP before the Supreme Court against the order dated 01.11.2013 passed by the Division Bench of this Court and the same was also dismissed.

14. It is submitted that the stand taken by the defendant in the written statement was rejected by the learned Single Judge in paragraphs 29 and 30 and 36 & 39 of the order 25.10.2013, which read as under:

“29. Mr. Jayant Mehta, learned counsel for the Plaintiff urged that Defendant No. 1 should be asked to hand over possession of the suit property to the Plaintiff since there was no justification for Defendant No. 1 to continue to remain in possession thereof. He submitted that clearly, the period granted by the L&L Agreement, had come to an end. The extended period as envisaged under the sale deed, i.e., 31st March 2012 had also expired. He submitted that with the Plaintiff becoming the lawful owner of the suit property under the registered sale deed neither of the Defendants could deny to the Plaintiff the vacant and peaceful possession of the suit property. Mr.Mehta referred to various clauses of the Agreement, the L&L Agreement and the sale deed and to the decisions in Bishwanath Prasad Singh v.Rajendra Prasad (2006) 4 SCC 432;

A. Abdul Rashid Khan v. P.A.K.A. Shahul Hamid (2000) 10 SCC

636 and S. Saktivel v. M. Venugopal Pillai (2000) 7 SCC 104; Chandrakant Shankarrao Machale v. Parubai Bhairu Mohite (2008) 6 SCC 745 and Bhandari Construction Co. v. Narayan Gopal Upadhye (2007) 3 SCC 163.

30. Mr. Jayant Tripathi, learned counsel appearing for the Defendants, did not deny that a sale deed had been executed and registered in favour of the Plaintiff. He, however, referred to the documents filed by the Defendants to urge that the Plaintiff could not, in the absence of any assignment in its favour by SICPA, get the suit property transferred to itself through such transactions. He contended that the sale deed was a sham document. According to him, it essentially reflected a loan transaction between SICPA and Defendant No. 2. According to Defendant No. 2 it was agreed that a loan of Rs. 47 crores would be granted by SICPA and Rs. 1 crore would be paid as earnest money and would not be counted towards the loan. Interest on the loan would be 18.[4] per cent per annum payable in quarterly rests and if not paid, interest would be payable at 24 per cent per annum. It was submitted that even though the said rate of interest was usurious, and worked out to over Rs. 11 crores per year, the Defendants being in dire need of finances had no option but to agree. The loan was due and payable after 30th June 2014. It was only as a security for the loan that it was agreed between the parties that an Agreement to Sell for the suit property would be executed. Further as a security for loan, the total sale consideration of the suit property would be stated to be Rs. 55 crores instead of 48 crores and the balance to be utilised towards interest due and not paid.

“36. The plea of the Defendants that the Agreement to Sell, the L&L Agreement, the GPA and the registered sale deed are all sham and bogus documents is based on a purported oral understanding between the parties that the sale deed was not meant to be acted upon as such and that the suit property was agreed to be reconveyed to Defendant no.2 upon the loan being repaid to SICPA. It is settled law that the terms of a registered document cannot be allowed to be contradicted by oral evidence. Further, under Section 92 of the

Indian Evidence Act 1872, no evidence of any oral agreement or statement shall be admitted for the purposes of contradicting, varying, adding to, or subtracting from the terms of a written contract or other transactions of property that have been reduced in the form of a document.

39. In view of the above settled legal position, it is not possible for the Court to accept the contention of the Defendants that the registered sale deed in favour of the Plaintiff is a sham and bogus document. The settled law appears to be that no oral evidence can be led to vary the terms of the document. Although the stage for leading evidence has not yet reached, even for the purposes of deciding whether the Defendant No. 1 is required to hand over the possession of the premises, it is sufficiently clear that the Defendants cannot avoid their obligations under the registered sale deed.”

15. I have heard counsel for plaintiff and perused the application under Order

12 Rule 6 CPC alongwith the documents relied upon by the plaintiff. In the Written Statement filed by the defendants wherein the execution of the sale deed has not been disputed by the defendants. As noticed in the paragraphs aforegoing, the possession of the suit property has already been handed over by the defendant no. 1 to the plaintiff. The only prayer which survives is with respect to mesne profits for the period after the license was terminated upto the date of handing over of possession less the period for which the defendant made the payment under the order of Division Bench i.e. November and December, 2013 and January to April,

2014. Mr. Mehta, counsel for the plaintiff, has submitted that in the plaint which was filed on 09.07.2012, plaintiff prayed for mesne profit @ Rs. 10 Lacs per month, however the plaintiff would be satisfied if the mesne profit is quantified at the rate of Rs. 8 Lacs per month as agreed before the Division Bench. On 01.11.2013 the following order was passed by the Division Bench in FAO(OS) 494/2013: “CAV 965/2013 Caveat discharged. FAO (OS) 494/2013, CM APPL.17431-17433/2013 After some hearing, Mr. Shivram, Advocate submitted that he has instructions to withdraw the appeal. He requested that the appellant be permitted to retain the said premises, i.e., A-32, West End, New Delhi till 31.12.2013 subject to payment of Rs.[8] lakhs per month towards mesne profits/damages. This proposal was agreeable to the respondent as indicated by its counsel Mr. Jayant K. Mehta who stated that the entire amount of Rs.16 lakhs should be paid. Counsel for the appellant upon instructions stated that this proposal too is agreeable. It is accordingly directed that the appellant shall hand over vacant physical possession of the said premises A-32, West End, New Delhi on or before 31.12.2013 to the respondent/plaintiff and shall also comply with the following directions: - (1) Deposit Rs.16 lakhs as damages towards use and occupation of the premises for the months November and December, 2013 on or before 07.11.2013. The said amount shall be paid directly to the respondent/plaintiff; (2) Within two weeks from today, the appellant shall file an affidavit undertaking to comply with the above directions. The said affidavit shall be filed in this Court and a copy shall be furnished to the respondent or its counsel. Peaceful possession of the said premises shall be handed over unconditionally to the respondent/plaintiff on or before 31st December, 2013. The above terms recorded by the Court shall not be construed as creating any equity in favour of either parties; all rights and contentions of the parties are expressly reserved in the suit. The appeal is dismissed as withdrawn but in the above terms. Order dasti under the signatures of Court Master.”

16. No doubt for the period November and December, 2013 and January, 2014, the defendant agreed to pay Rs. 8 Lacs per month, but in the absence of any evidence placed on record the prayer of the plaintiff of awarding mesne profit at Rs. 8 Lacs per month is denied. However, this court can take judicial notice of the increase of rent in Delhi and more particularly in West End Colony which is one of the posh colonies of the Capital. Defendant no. 1 shall pay mesne profits/damages @ Rs. 4,50,000 per month to the plaintiff for the period, 01.04.2012 to 31.04.2014 which comes upto Rs. 1,12,50,000/- (One Crore Twelve Lacs and Fifty Thousand) less the amount of license fee paid by defendant no.1 to plaintiff for November and December, 2013 and January to April, 2014 @ Rs. 50,000/- per month, i.e. Rs. 3,00,000/-. The total amount payable by defendant no.1 is Rs, 1,09,50,000/-. Decree-sheet be drawn up accordingly. G.S.SISTANI, J MAY 15, 2014 ssn

WEALTH ESTATE PVT LTD v. K CHANDRA & ANR

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