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CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.278 OF 2022
Nitin Prabodhchandra Gadekar …Applicant
Through Sanja Kumar Mehrotra, Assistant General Manager
Jadhav & Priyanka Rammurthy i/b Bina R. Pai, for the Applicant.
Ms. Sonal a/w Mr. Pranay Patil i/b FF & Associates, for the Respondent.
JUDGMENT
1. Heard Mr. Pai, learned Senior Counsel for the Applicant and Ms. Sonal, learned Counsel for the Respondent.
2. By the present Civil Revision Application filed under Section 115 of the Code of Civil Procedure, 1908 (“CPC”), the Applicant i.e. Original Plaintiff is challenging the legality and validity of the Order dated 4th May 2022 passed by the learned Appellate Bench of the Small Causes Court at Mumbai in Appeal No.71 of 2021 (“impugned Order”).
3. By the impugned Order dated 4th May 2022, the Appellate Court set aside the Order dated 12th March 2020 passed below Exhibit – 19 in
2020, the learned Trial Court allowed the said Application filed under Order XII Rule 6 and Section 151 of the CPC seeking judgment on admission. The learned Appellate Court by the impugned Order has set aside the judgment on admission passed by the learned Trial Court.
4. It is the submission of Mr. Pai, learned Senior Counsel for the Applicant that the Indenture of Lease has been determined on and from 5th June 2013 as the Respondent has committed breach in payment of rent from November 2010 to May 2012. Learned Senior Counsel invited attention of this Court to Clause (1) of the Indenture of Lease dated 3rd March 1978. Learned Senior Counsel submitted that as there is default in payment of rent, from November 2010 to May 2012 i.e. more than 18 months, as contemplated under Clause (1) of the lease deed and as the default is admitted in the Reply dated 24th December 2013, the suit is required to be decreed in view of the admission. Learned Senior Counsel, submitted that the case of the Applicant is covered by Clause (b) of Section 111 of the Transfer of Property Act, 1882 (“TP Act”), which contemplates that if time is limited conditionally on the happening of such event, a lease of immoveable property determines. He relied on the decision of the Supreme Court in Karam Kapahi v. Lal Chand Public Charitable Trust 1. He therefore submitted that the learned Trial Court has rightly passed the decree on admission which has been erroneously set aside by the learned Appellate Court.
5. On the other hand, it is the submission of Ms. Sonal, learned Counsel for the Respondent that this case is covered by Sub-Clause (g) of Section 111 of the TP Act and the determination of lease is by forfeiture. She relied on the decision of the Calcutta High Court in In re Srinath Zamindary (In Liqdn.) 2 and also the decision of the Orissa High Court in Raja Sri Krishna Chandra Manasingh Harichandan Mardaraj v. M/s. National Chemical & Salt Works Ltd., (India), Calcutta 3. She submitted that decree on admission cannot be granted in the facts and circumstances and in view of the law laid down by Calcutta High Court and Orissa High Court.
6. Before considering the rival contentions, it is necessary to set out Order XII Rule 6 of CPC. The same reads as follows:- “ORDER XII ADMISSIONS...
6. Judgment on admissions. —(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions. (2) Whenever a judgment is pronounced under sub-rule (1) a decree shall be drawn upon in accordance with the judgment 2 1951 SCC OnLine Cal 67: AIR 1952 Cal 207 3 AIR 1957 ORISSA 35 and the decree shall bear the date on which the judgment was pronounced.” (Emphasis added) Thus, what is contemplated under Order XII Rule 6 of CPC is where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
7. Mr. Pai, learned Senior Counsel relied on the decision of Karam Kapahi (supra) and submitted that the Court should not unduly narrow down application of Order XII Rule 6 of CPC as the object is to enable a party to obtain speedy judgment. Mr. Pai, learned Senior Counsel, more particularly relied on Paragraph Nos.39 to 43 of the Karam Kapahi (supra), which read as under:- “39. In the 54th Law Commission Report, an amendment was suggested to enable the court to give a judgment not only on the application of a party but on its own motion. It is thus clear that the amendment was brought about to further the ends of justice and give these provisions a wider sweep by empowering the Judges to use it “ex debito justitiae”, a Latin term, meaning a debt of justice. In our opinion the thrust of the amendment is that in an appropriate case, a party, on the admission of the other party, can press for judgment, as a matter of legal right. However, the court always retains its discretion in the matter of pronouncing judgment.
40. If the provision of Order 12 Rule 1 is compared with Order 12 Rule 6, it becomes clear that the provision of Order
12 Rule 6 is wider inasmuch as the provision of Order 12 Rule 1 is limited to admission by “pleading or otherwise in writing” but in Order 12 Rule 6 the expression “or otherwise” is much wider in view of the words used therein, namely: “admission of fact … either in the pleading or otherwise, whether orally or in writing”.
41. Keeping the width of this provision (i.e. Order 12 Rule
6) in mind this Court held that under this Rule admissions can be inferred from the facts and circumstances of the case (see Charanjit Lal Mehra v. Kamal Saroj Mahajan [(2005) 11 SCC 279], SCC at p. 285, para 8). Admissions in answer to interrogatories are also covered under this Rule (see Mullas's Commentary on the Code, 16th Edn., Vol. II, p. 2177).
42. In Uttam Singh Duggal & Co. Ltd. v. United Bank of India [(2000) 7 SCC 120] this Court, while construing this provision, held that the Court should not unduly narrow down its application as the object is to enable a party to obtain speedy judgment.
43. In Uttam Singh Duggal case [(2000) 7 SCC 120] it was contended on behalf of the appellant, Uttam Singh Duggal, that: (a) Admissions under Order 12 Rule 6 should only be those which are made in the pleadings. (b) The admissions would in any case have to be read along with the first proviso to Order 8 Rule 5(1) of the Code and the court may call upon the party relying on such admission to prove its case independently.
(c) The expression “either in pleadings or otherwise” should be interpreted ejusdem generis. (See para 11, p. 126-27 of the Report.) Almost similar contentions have been raised on behalf of the Club. In Uttam Singh [(2000) 7 SCC 120] those contentions were rejected and this Court opined no effort should be made to narrow down the ambit of Order 12 Thus, what the Supreme Court has observed that, in an appropriate case, a party, on the admission of the other party, can press for judgment as a matter of legal right. However, the Court always retains its discretion in the matter of pronouncing judgment. In the context of Order XII Rule 6 of CPC, it has been held that the expression “or otherwise” is much wider in view of the words used therein, namely: “admission of fact either in the pleading or otherwise, whether orally or in writing”. Thus, admissions can be inferred from the facts and circumstances of the case. It has been held that while construing this provision, the Court should not unduly narrow down its application as the object is to enable a party to obtain speedy judgment.
8. The Supreme Court in the decision of Vikrant Kapila v. Pankaja reiterated what has been held by the Supreme Court in Himani Alloys Ltd. v. Tata Steel Ltd 5 in Paragraph No.40 as follows:-
9. Thus the Court dealing with applications for passing judgment on admission under Order XII Rule 6 has to keep in mind the following parameters:i. Order XII Rule 6 is an enabling provision. The said power is neither mandatory nor peremptory but discretionary. ii. The court, on examination of the facts and circumstances, has to exercise its judicial discretion, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. iii. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. iv. The discretion should be used only when there is a clear "admission" which can be acted upon. v. In an appropriate case, a party, on the admission of the other party, can press for judgment, as a matter of legal right. However, the court always retains its discretion in the matter of pronouncing judgment. vi. The Court should not unduly narrow down its application as the object is to enable a party to obtain speedy judgment.
10. It is necessary to consider the factual aspects involved in this case and the legality and validity of the impugned Order on the touchstone of the above principles laid down by the Supreme Court.
11. Clause (1) of the said lease deed dated 3rd March 1978 on which Mr. Pai, learned Senior Counsel has heavily relied, reads as under:- “1. If and whenever any part of the rent hereby served shall be in arrears for a period of 18 (eighteen) months whether the same shall have been legally or – formally demanded or not and also if and whenever there shall be a breach of any of the conditions or of the covenants on the part of the Lessees/Purchasers herein contained the Lessors may re-enter upon the said premises or any part of the said premises in the name of the whole and immediately thereupon this demise and all rights of the Lessees/Purchasers shall absolutely determine unless the breach is remedied within one months from the receipt of a notice in writing to do so from the Lessors.”
12. Admittedly, lease deed dated 3rd March 1978 is with effect from 1st February 1974 for a period of 70 years. Thus, the period of said lease deed is going to expire by efflux of time on 31st January 2044. The Clause (1) of the said lease deed dated 3rd March 1978 as set out herein above, contemplates that if lessees commits default in payment of rent for 18 months, whether the same shall have been legally or formally demanded or not and also if and whenever there shall be a breach of any of the conditions or of the covenants on the part of the lessees, the lessors may re-enter upon the said premises or any part of the said premises and immediately thereupon all rights of the lessees shall absolutely determine unless the breach is remedied within one month from the receipt of a notice in writing to do so from the lessors.
13. By relying on the said Clause (1), it is the submission of Mr. Pai, learned Senior Counsel that the Applicant has not issued notice calling upon the Respondent to remedy the breach. He submits that once default is committed in making payment of rent as contemplated under Clause (1), it gives automatic right to the lessors to re-enter upon the said premises or any part of the said premises and as the default is admitted, the decree has to be passed under the provisions of Order XII Rule 6 of the CPC. He relied on the decision of Karam Kapahi (supra).
14. In this case, as noted herein above, the lease deed is for a period of 70 years i.e. period of lease deed ends by efflux of time on 31st January 2044. As per the relevant Clause of the lease deed which has been quoted herein above i.e. Clause (1), the lessor may re-enter upon the said premises or any part of the said premises if there are arrears for a period of 18 months or more and what is further provided in Clause (1) is this all rights of the lessees/purchasers shall absolutely determine unless the breach is remedied within one month from the receipt of a notice in writing to do so from the lessors.
15. By relying on the above Clause (1), it is the submission of Mr. Pai, learned Senior Counsel that the Applicant i.e. Original Plaintiff has not sought by the suit notice dated 4th December 2013 that breach should be remedied and as default in payment of rent for more than 18 months is admitted therefore decree on admission is required to be passed. He relied on Paragraph Nos.3, 5(f), 5(g) and 5(i) of Written Statement read with Reply dated 24th December 2013 sent to the suit notice and submitted that as default is admitted the decree on admission should be passed.
16. The said Paragraphs Nos.3, 5(f), 5(g) and 5(i) of the Written Statement are reproduced herein below for ready reference:- “3) The plaintiff has issued a false notice dated 04/12/2013 (Exh. "F" of plaint) levelling false allegations and making illegal demands to the defendant. The plaintiff demanded possession of lease plot from the defendant within two months from the date of receipt of alleged notice which was received by the defendant on 04/12/2013 itself. The defendant suitably replied to the said notice vide their reply dated 24/12/2013 and enclosed Banker's Cheque No: 551124 dated 13/12/2013 for an amount of Rs. 37,000/- (Rupees Thirty Seven Thousand only) being the lease rent for the period December 2010 to December 2013 (37 months.) In view of this there was no cause of action for the plaintiff to file the present suit.
5) That without prejudice to the stand taken by the defendant hereinabove, the defendant gives below their reply to the contents of the plaint para wise: … … f) So far as the para 4(O) of the plaint is concerned it is denied that the defendant was regular defaulter in payment of ground rent as claimed by the plaintiff. The defendant say that the building known as "Saroj" having two wings i.e. one wing consisting Ground +5 Upper Floors & the Second wing consisting of Ground + 6 Upper Floors totally there being 11 Flats on the said plot of land was sold to the defendant for a sum of Rs. 12.25 Lacs and the defendant are the sole owners of the entire structure standing on the said plot of land. That even the plot of land was leased out to the defendants for a period of 70 years from 1/7/1977, the ground rent being Rs. 12,000 (Rupees Twelve Thousand only) per year. That there is a clause in the Lease Deed for extension of lease period for another term of 70 years on the expiry of first term of 70 years. This fact and other terms of the Lease Deed if read as a whole makes clear the intention of the parties i.e. the plot was leased out to the defendant permanently -The defendant to continue to pay the lease rent since the defendant is the owner of the structure. Thus, there was no intention even on the part of the Lessor to get back the possession of the plot. That even there is a clause in the Deed that the defendant can make the payment of arrears by paying the arrears of rent within one month on demand from the lessor. This is an enabling provision. The plaintiff has given about 5 to 6 instances claiming that the defendant has paid the rent few days late. The defendant says that the rent has been paid regularly month to month may be 5 to 10 days late. But then the plaintiff never objected to it and accepted the same. That in 396 months (33X12=396) 5 to 6 instances of delayed payment of rent and that too by 5 to 10 days are of hardly any significance. In any case the plaintiff cannot have that grievance now having accepted the rent and having not raised any objection to it all these years. Further, the plaintiff never brought to the notice of the defendant, that the ground rent remained to be paid from December 2010 till May 2012 and quietly closed his account with the Defendant's Bank, Bandra west Branch, Mumbai. The defendants is a Nationalised Bank having huge number of branches pan India and there are lakhs of Account Holders. The process of people opening and closing account for one or the other reason is very common keeping in mind its huge operations. Further there is a provision in the Deed that arrears can be cleared by the lessee within one month from the date of demand. In this background it can be seen that the intention of the plaintiff by quietly closing the bank account and without making a demand of rent, was not bonafide particularly in view of the nature and duration of Lease Deed. g)So far para 4(p) & (q) of the plaint are concerned, the defendant received the notice dated 04/12/2013 and was shocked to learn the contents of the said illegal notice. The contents of the notice are contrary to one and other. First of all there was no ground for the plaintiff to issue the said notice. In para (10) of the notice the plaintiff called upon the defendant, to handover the possession of the plot within two months from the date of notice i.e. from 04/12/2013 within two months. At the same time he informs the defendant that he shall visit the suit premises on 15/01/2014 at 10.00 Am for receiving the possession. This itself is contrary to his demand in the notice. All the demands and the claims made by the plaintiff in the said notice are illegal and not tenable and as such the defendant was not bound to comply with the same. That the defendant replied to the said notice by their reply dated 24/12/2013 by Regd. Post AD and enclosed thereto a Banker's cheque for an amount of Rs. 37,000/- (Rupees Thirty Seven Thousand only) The plaintiff has received the said reply and the said cheque within one month from the date of his notice and as such the entire arrears if any stood paid by the defendant to the plaintiff. The plaintiff has been regularly receiving the cheques towards the rent amount from the defendant. The plaintiff is to be put to strict proof of the claims and allegations made by him in the said paras of the plaint. i) So far para (5) of the plaint is concerned, the defendant denies that the Lease stood determined as claimed by the plaintiff. The defendant submits that they paid the entire arrears of rent within one month from the date of receipt of the said illegal notice from the plaintiff. That even the plaintiff admits this. No cause of action thus arose for the plaintiff to file the present suit. The plaintiff is to be put to strict proof of the allegations and the claims made by him.”
17. Mr. Pai, learned Senior Counsel also relied on the Reply dated 24th December 2013 issued to the suit notice, which reads as under:- “Date: 24 DEC 2013 Ref No.
REGISTERED AD Shri. Nitin Prabodhchandra Gadekar, 9, Sukh Niwas, 17th Road, Khar, Mumbai – 400 052. NO.PRM/DKS/1353 Dear Sir, PAYMENT OF LEASE RENT With reference to your letter dated 04.12.2013 we enclose the lease rent of land referred in Lease Deed dt. 03.03.1978 vide our Bankers Cheque No. 551124 dt. 13.12.2013 for Rs.37,000/- (Rupees Thirty seven thousand only).
2. It appears from your letter dt. 04.12.2013 received by us on 05.12.2013 that you have claimed the lease rent from November 2010 to May 2012. It may be noted that as per the said deed the lease rent is to be paid in advance at the beginning of the month. For November 2010 we have paid the rent on 22.10.2010 vide Bankers Cheque no 543568 for Rs.1,000/- and the same was credited in your account on 27.11.2010. Now, therefore we are paying the rent from December 2010 to December 2013 i.e. for 37 months. We assure you to pay the rent in future in time as per the said lease deed We have remedied the demand of arrears of rent within on month from receipt of your letter. Therefore it would be not legal and valid on your part to determine our rights under the lease. Yours faithfully, Dy. General Manager (Premises) ”
18. In above factual position, it is necessary to examine the contention of the Petitioner that the case is covered by Section 111(b), whereas it is the contention of the Respondent that Clause (g) of Section 111 of the TP Act is applicable. For appreciating the contentions of the parties, it is necessary to set out Section 111 of the TP Act, which reads as under:- “111. Determination of lease.—A lease of immoveable property determines— (a) by efflux of the time limited thereby; (b) where such time is limited conditionally on the happening of some event—by the happening of such event;
(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event—by the happening of such event;
(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right; (e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them; (f) by implied surrender; (g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease; (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. Thus, what is contemplated by Clause (b) is a lease of immovable property determines, where such time is limited conditionally on the happening of some event by the happening of such event. Clause (g) of Section 111 is regarding forfeiture. The said Clause contemplates that if the lessee breaks an express condition which provides that, the lessor may re-enter on the happening of such event and in any of such cases, the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease.
19. It is the submission of Ms. Sonal, learned Counsel that Paragraph No.9 of the suit notice dated 4th December 2013 specifically states that in the circumstances set out therein the lease has determined on and from 5th June 2012 and therefore the case will be covered by Clause (g) of Section 111 and not by Clause (b) of Section 111. The said Paragraph No.9 of the suit notice dated 4th December 2013 reads as under:- “9. This is to place on record that you have not bothered to deposit the amount of the rent reserved in the Indenture of Lease in the Bank Account since November, 2010 to May,
2012. Thereafter I have caused to close the said bank account in or around June, 2012. I have not received any rent or communication from you since November, 2010. In the circumstances the referred Indenture of Lease has determined on and from 5th June, 2012. I am interested in resuming possession of the said land forthwith. In fact I genuinely require the said land for the benefit of my family.”
20. To substantiate the said contention, Ms. Sonal, learned Counsel has relied on the decision of the Calcutta High Court in In re Srinath Zamindary (In Liqdn.) (supra). She submitted that the discussion in the said decision is squarely applicable to the present case. She relied on Paragraph Nos.13 to 16 and 20 of the same. The discussion of the Calcutta High Court in said Paragraph Nos.13 to 16 and 20 as well as para 1 (partly), para 3 and para 7 are also relevant for understanding the factual position and point of law considered in that case. The said Paragraphs are reproduced herein below for ready reference:- “1....The lease was granted on 17th July, 1928, to the company which is in liquidation, and contains, among others, the following clause: “In case the company goes to liquidation voluntarily or otherwise, this lease shall cease to be operative and the company shall forthwith make over possession of the abad to the proprietors.” ‘Abad’ is the property in question.” “3. It is contended on behalf of the lessors-other than Usha Bala that the lease has determined. The contention of Usha Bala and the liquidator is that the lease has not determined.” “7. The question is, which of the two subclauses applies to the case under consideration – sub-clause (b), or sub-clause (g). According to the Petitioner sub-clause (b) applies. On the other hand on behalf of Usha Bala and the liquidator it is contended that sub-cl. (g) applies.” “13. In forfeiture “the term created by the instrument” is defeated on the happening of a particular event or the doing of a particular act—that is our sub-clause (g). In sub-cl. (b) on the other hand, the term does not come to an end on the doing of an act or the happening of an event. It applies where the time is limited conditionally on the happening of some event and that event happens.
14. Sub-clause (a) Efflux of time—Leases for a definite period, such as a lease for a year or for a term of years, expire on the last day of the term, and the lessor or person entitled to the reversion may enter without notice or other formality.
15. If the term depends upon the happening of a future event, the lease determines when that event happens. Thus a lease for life determines on the death of the lessee. That is what is contemplated in sub-clause (b). The term is not “defeated” as in sub-clause (g), (b) has got to be read along with (a).
16. In (b) the term is fixed conditionally and depends upon the happening of a future event. In (g) the term is brought to an end by a defeasance clause.This is the difference between (b) and (g). “20. In my view counsel's contention that sub-clause (b) applies to the case under consideration is not correct. I do not think the term in this case was fixed conditionally on the happening of some event within the meaning of sub-clause (b). In this case the term was for 99 years. There is a condition in the lease that on the happening of particular event the term created by the instrument would be defeated. That is forfeiture.” Thus, what has been held by the Calcutta High Court is that the term of lease was for 99 years. There is a condition in the lease that, on the happening of particular event, the terms created by the instrument would be defeated. On the basis of the same, the Calcutta High Court has stated that the same is forfeiture.
21. Ms. Sonal, learned Counsel also relied on the decision of the Orissa High Court in Raja Sri Krishna Chandra (supra). In the said case also the Orissa High Court has held that the said case will not come within the language of Clause (b).
22. Thus, without going into the merits in detail about the claim of the Petitioner that the case is covered by Section 111(b) and the case of the Respondent, that the case is covered by Section 111(g), it is clear that this is not a case where the Judgment on admission can be passed. In this case, for passing the Judgment it is necessary to interpret the Clause (1) of the lease agreement and on the basis of that it will be required to determine whether the case will be covered by Clause (b) or Clause (g) of Section 111 of the T.P. Act. Thus, the decree cannot be passed on admission. As held by the Supreme Court Order XII Rule 6 is an enabling provision. The said provision is not mandatory, nor peremptory but discretionary. The court, on examination of the facts and circumstances, has to exercise its judicial discretion, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. In short the discretion should be used only when there is a clear "admission" which can be acted upon.
23. In any case as held by the Supreme Court in Karam Kapahi (supra) in an appropriate case, a party, on the admission of the other party, can press for judgment, as a matter of legal right. However, the court always retains its discretion in the matter of pronouncing judgment. Thus, the Court always retains discretion to pass Judgment under Order XII Rule 6 of C.P.C.
24. In this case for passing the Judgment on admission it is required to interpret Clause (1) of the lease deed. Apart from that it will be required to determine whether the case falls under Clause (b) or Clause (g) of Section 111 of the T.P. Act.
25. Thus, in the facts and circumstances and taking overall view, the discretion exercised by the learned Appellate Court not to pass the Judgment on admission and to set aside the Judgment passed by the learned Trial Court, need not be interfered.
26. Accordingly, no interference is warranted in the impugned Order under the revisional jurisdiction of this Court. The Civil Revision Application is dismissed, however, with no order as to costs. [MADHAV J. JAMDAR, J.]