Riveria Commercial Developers Ltd v. Brompton Lifestyle Brands Pvt Ltd

(ii) The tenancy is not a ‘protected tenancy’ under the

(iii) There is no registered subsisting lease agreement;

(iv) The tenancy has been terminated and the respondent-tenant has failed to hand over possession.

15. He submits that in the present case, there is no dispute about the existence of the relationship of a landlord-tenant between the plaintiff and the defendant. He submits that the same stands admitted not only in the Written Statement of the defendant to the present suit, but also in the Affidavit of admission/denial of documents wherein, the Lease Deed dated 11.05.2019 (hereinafter referred to as the ‘Lease Deed’) has been admitted by the defendant. He submits that the same admission has also been made in the suit filed by the defendant before the learned District Judge referred to hereinabove.

16. As far as the tenancy not being a ‘protected tenancy' under the Delhi Rent Control Act, 1958 (in short, ‘DRC Act’), he submits that in terms of the Lease Deed, the defendant was to pay a monthly rent of Rs.11,85,800/- (Rupees Eleven Lakh Eighty-Five Thousand Eight Hundred only). In view of the Escalation Clauses in the Lease Deed, the last paid rent by the defendant was more than Rs.15,00,000/- (Rupees Fifteen Lakh only) per month. He submits that this fact has also been admitted by the defendant in the Written Statement filed before this Court as also in the plaint filed before the learned District Judge.

17. On the question of there being no registered subsisting Lease Agreement, again, there is no dispute that the Lease Deed is an unregistered document and, therefore, at best, would create a month-to-month tenancy in terms of Section 107 of the Transfer of Property Act, 1882.

18. He submits that the tenancy has also been validly terminated by way of the termination notice dated 08.03.2021. He submits that even if the defendant is to contest the period of notice, the same is liable to be rejected by this Court inasmuch as the suit itself is a notice to the defendant of such termination. In support, he places reliance on the judgments in Nopany Investments (P) Ltd. v. Santokh Singh (HUF), (2008) 2 SCC 728, and M/s Jeevan Diesels & Electricals Ltd. v. M/s. Jasbir Singh Chadha (HUF) & Anr., 2011 SCC OnLine Del 1515.

19. He submits that in view of the above, all the requirements of passing of a decree of eviction against the defendant under Order XII Rule 6 of the CPC stand satisfied. Submissions on behalf of the learned counsel for the defendant

20. On the other hand, the learned counsel for the defendant submits that the present suit was filed as an ‘Ordinary Suit’ and not as a ‘Commercial Suit’ under the provisions of the Commercial Courts Act, 2015 (in short, the ‘CC Act’). The suit, on the objection of the defendant, was converted to a ‘Commercial Suit’ vide order of this Court dated 21.07.2022. However, the plaintiff was not granted any exemption from initiating pre-institution mediation as is a mandatory requirement under Section 12A of the CC Act.

21. He further submits that the present application is also not supported with an affidavit of ‘Statement of Truth‘, as is required in Appendix-I to the Schedule to the CC Act. He submits that the present application is, therefore, not maintainable before this Court and is liable to be dismissed.

22. On merits, he submits that purported admission made by the defendant in the plaint filed before the learned District Judge cannot be relied upon as an admission for passing of a decree in the present suit.

23. He further submits that the Lease Deed provides that the possession of the suit premises shall be handed over to the defendant only upon the registration of the Lease Deed. However, admittedly the plaintiff proceeded to hand over the possession of the suit premises to the defendant without insisting upon the registration of the Lease Deed, therefore, the plaintiff is estopped from contending that the defendant is not entitled to a protection for the entire lease period as stipulated in the Lease Deed. He further submits that it is, in fact, the plaintiff which has failed to get the Lease Deed registered due to its own disputes with the New Delhi Municipal Council (in short, ‘NDMC’).

24. He submits that the defendant has over-paid the rent to the plaintiff and is entitled to a refund/adjustment to such over payment made to the plaintiff.

25. He further submits that the notice terminating the Lease Deed was waived by the plaintiff by accepting rent for Suit premises after the termination notice. He submits that the parties have also explored the possibility of arriving at an amicable settlement thereafter. He submits that, therefore, the plaintiff cannot rely upon the termination notice for basing the present suit.

26. He further submits that the Lease Deed relied upon by the plaintiff and filed with the suit has not been properly stamped and is, therefore, liable to be impounded by this Court. He submits that till such time that the deficient Stamp Duty and penalty thereon is paid by the plaintiff, the said document cannot be relied upon. Analysis and Findings

27. I have considered the submissions made by the learned counsels for the parties.

28. A copy of the Written Statement as also the Affidavit of admission/denial of documents filed by the defendant has been handed over to me during the course of hearing and the same has been taken into consideration by me for passing the present order.

29. In Uttam Singh Dugal & Co. Ltd. v. Union Bank of India & Ors., (2000) 7 SCC 120, the Supreme Court explained the object of Order XII Rule 6 of the CPC in the following words:-

31. Keeping the above object of the provision and its ambit and scope in mind, I proceed to consider the present application.

32. As held by this Court in Geeta v. Mohd. Raza and Anr. (supra), in suit for ejectment, the plaintiff has to establish the following:- “13. In a suit for ejectment, a plaintiff has to establish the following:—

(i) Relationship of landlord and tenant

(ii) Tenancy is not a protected tenancy under the

(iii) There is no registered subsisting lease agreement.

(iv) Tenancy has been terminated and the respondent tenant has failed to hand over possession.‖

33. The relationship between the plaintiff and the defendant as a landlord-tenant stands admitted by the defendant in the Written Statement filed in the present Suit.

34. It is also not denied in the Written Statement that the rent of the tenanted premises is more than Rs.3,500/- and, therefore, it is not a ‘protected tenancy’ under the DRC Act.

35. It is also not disputed that the Lease Deed is an unregistered document. Though, the learned counsel for the defendant has urged that the Lease Deed could not be registered for the fault of the plaintiff, and that in terms of the Lease Deed, the possession of the Suit Premises was to be handed over to the defendant only on the registration of the Lease Deed, however, as the possession was handed over without the registration of the Lease Deed, the plaintiff cannot seek eviction of the defendant prior to the expiry of the terms of lease provided in the Lease Document, in my opinion, the said submissions are only to be stated to be rejected. The said submissions would not make any difference inasmuch as the fact remains that the Lease Deed has not been registered by the parties. Being an unregistered document, the Lease Deed can at best be read as collateral evidence under Section 49 of the Registration Act,

1908. The effect of non-registration of the Lease Deed is one in law and the parties cannot waive the effect of such nonregistration or be estopped from taking benefit thereof. The lease between the parties is, therefore, month to month under Section 106 of the Transfer of Property Act, 1882.

36. In Assocham (supra), a learned Single Judge of this Court rejected similar arguments made by counsels, observing as under: ―13……Once lease is un-registered, no clause of the same can be considered by virtue of Section 49 of the Indian Registration Act,

1908. No arguments therefore can be predicated on the basis of terms of the lease. There may be reasons for not registering the lease, whether due to provisions of the Income Tax Act, 1961 or Urban Land (ceiling and Regulation) Act, 1976 or otherwise for the convenience of the parties, but, the fact remains that the lease deed was un-registered. The lease deed being un-registered all other consequences flow of the tenancy being a monthly tenancy and the fact that it can therefore be terminated by the notice under Section 106 of the Transfer of the Property Act.‖ (Emphasis Supplied)

37. In Nexgen Edusolutions Pvt. Ltd. v. Aspire Investments Pvt. Ltd., 2015 SCC OnLine Del 12431, a Division Bench of this Court reiterated as under:- ―3. Since the lease deed was neither sufficiently stamped nor registered, the leasedeed is inadmissible in evidence and cannot be looked into for any purpose and no term of the lease can be enforced. Since the terms of the lease cannot be relied upon or enforced, the term that provided the appellant a period of 10 years also cannot be enforced. The result of which is that the tenancy becomes a month to month tenancy‖

38. In Delux Dentellers (supra), a Division Bench of this Court has reiterated the position in law on the effect of an unregistered Lease Deed, as under:- ―30. In view of afore-noted authoritative pronouncement of law laid down by Supreme Court in Ram Kumar Das vs. Jagdish Chandra Deo & Anr., AIR 1952 SC 23, the answer to the question posed above is: tenancy of immovable property for any purpose other than agricultural or manufacturing created by an unregistered instrument would be deemed to be 'month to month' tenancy even where the tenant has paid annual/yearly rent to the landlord.

34. Where a lease-deed is for a term exceeding one year and is unregistered, the terms of such a deed cannot be relied upon to claim or enforce any right under or in respect of such lease in view of Section 49 of Registration Act,

1908. It can only be relied upon for the limited purposes of showing that the possession of the lessee is lawful or as evidence of some collateral transaction. (See the decision of Supreme Court reported as (2011) 4 SCC 66 SMS Tea Estates Pvt. Ltd. vs Chandmari Tea Company Pvt. Ltd.)‖ (Emphasis Supplied)

39. As far as the submission of the learned counsel for the defendant that the Lease Deed is deficiently stamped, the same is accepted by the learned senior counsel for the plaintiff. However, the learned senior counsel for the plaintiff submits that the Stamp Duty on the said document, though payable by the defendant, shall be paid by the plaintiff. He further submits that, in fact, the plaintiff is not relying on the said document as the oral lease is evident from the conduct of the parties and their admission.

40. The effect of the Lease Deed being deficiently stamped is in Section 35 of the Stamp Act, that is, it shall not be admissible in evidence. In any case, due to the non-registration of the Lease Deed also it cannot be read in evidence. The terms of the Lease Deed therefore, cannot be read. The said effect has been explained by the Division Bench of this Court in Delux Dentellers (supra), as under: ―35. Section 35 of Stamp Act provides that instruments not duly stamped is inadmissible in evidence and cannot be acted upon. The relevant portion of said Section is extracted below:-

Provided that – (a) any such instrument shall be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion."

36. Having regard to Section 35 of Stamp Act, unless the stamp duty and penalty due in respect of the instrument is paid, the instrument cannot be admitted in evidence and court cannot act upon the instrument. Section 35 of Stamp Act is distinct and different from Section 49 of Registration Act in regard to an unregistered document. Section 35 of Stamp Act does not contain a proviso as appended to Section 49 of Registration Act enabling the instrument to be used to establish a collateral transaction.

37. In the instant case, the lease-deed dated November 21, 1999 is an unstamped and unregistered instrument. In view of prescriptions contained in Section 35 of Stamp Act and Section 49 of Registration Act, the lease-deed dated November 21, 1999 is inadmissible in evidence and the defendant No.1 cannot rely upon the terms of said lease to claim or enforce right of renewal contained in the said lease.

38. Neither can the plaintiff rely upon the lease-deed in question for purposes of rent being enhanced by 10% each year.

39. With respect to reliance upon the leasedeed in question, we find that the plaintiff as well as the defendants are taking mutually destructive pleas to their own case. The plaintiff asserts that the defendant cannot rely upon the lease-deed for enforcement of the clause contained therein which gives the defendant an option to have the lease renewed for a further term of 11 years on the ground that the document is not registered, but would rely upon the lease-deed for the term contained therein that rent would be increased by 10% every three years. Per contra, the defendants would rely upon the lease-deed pertaining to the clause of renewal of the term of the lease for a period of 11 years but would deny the right to the plaintiff to rely upon its term of the rent to be increased by 10% every three years.

40. The document in question cannot be relied upon by either party to enforce the term favourable to it.‖

41. Be that as it may, the plaintiff shall produce the original Lease Deed before this Court. On such production, the same shall be impounded and sent to the Collector of Stamp for adjudication of the appropriate Stamp Duty as also the penalty, if any, to be paid by the plaintiff on such document. It is clarified that any Stamp Duty/penalty paid by the plaintiff shall also be the subject-matter of the costs to be determined in the suit.

42. However, the above exercise shall have no effect on the outcome of the present application, inasmuch as I agree with the submission of the learned senior counsel for the plaintiff that the present application can be and has to be disposed of without placing reliance on the Lease Deed. As noted hereinabove, the admission of the relationship between the parties and the monthly rent payable being more than Rs.3,500/- is evident from the pleadings of the defendant itself, for which no reference need be made to the Lease Deed.

43. On the issue of termination of the Lease Deed, the defendant again admits the receipt of notice dated 08.03.2021. In terms of the judgments Nopany Investements (P) Ltd. (supra) and M/s Jeevan Diesels & Electricals Ltd. (supra), even if the notice period is held to be deficient, the filing of the present suit itself would be a notice to the defendant for termination of the lease by the plaintiff.

44. The submission of the defendant that the plaintiff, by accepting the rent and/or by entering into negotiation for a settlement has waived the termination notice, also cannot be accepted. The defendant filed a suit before the learned District Judge seeking an order of injunction against the plaintiff from evicting the defendant without following ‘due process of law‘. The suit was filed sometime in August 2021, that is, almost immediately after the notice of termination. The plaintiff, in turn, filed the present suit, inter alia, seeking eviction of the defendant from the suit premises on or about September 2021. The landlord/plaintiff cannot be expected to not accept the rent that is offered by the tenant/defendant or not explore possibility of an amicable settlement after serving the tenant/defendant with a notice of termination of the lease. The plaintiff, by its very conduct, has shown that there was no waiver of the notice of termination by it.

45. Even otherwise and as noted hereinabove, in fact, the very filing of the present suit can be treated as a notice of termination of the lease and be acted upon as far as the present application is concerned.

46. This now brings me to the submission of the learned counsel for the defendant that the present suit having been converted into a ‘Commercial Suit’ under the CC Act, does not comply with the mandatory requirement of a pre-suit mediation under Section 12A of the CC Act.

47. In this regard, it is to be noted that the present suit was filed as an Ordinary Suit in September 2021. It was only by an order dated 21.07.2022, that the present suit was converted into a Commercial Suit and numbered as such.

48. Along with the present suit, the plaintiff had filed an application seeking an ad interim ex-parte injunction, being I.A. 12809/2021, as also an application under Order XV-A Rule 1 of the CPC, being I.A. 12810/2021, praying for a direction to the defendant to pay the arrears of rent. Finding prima facie merit in both these applications, ex-parte interim order/directions were passed by this Court vide order dated 30.09.2021.

49. Section 12A of the CC Act states that a suit ‘which does contemplate any urgent interim relief’ under the CC Act shall not be instituted unless the plaintiff exhausts the remedy of preinstitution mediation. In the present case, not only did the plaintiff pray for but was granted ‘urgent interim relief‘. Clearly, therefore, the plaintiff was entitled to institute the present suit without initiating pre-institution mediation on a plain reading of Section 12A of the CC Act.

50. A Division Bench of this Court, in its judgment titled Chandra Kishore Chaurasia v. R A Perfumery Works Private Ltd, 2022 SCC OnLine Del 3529, has also rejected the similar submission by observing as under:- ―29. A plain reading of Sub-section (1) of Section 12A of the Commercial Courts Act, 2015 indicates that the institution of a suit, which does not contemplate any urgent interim relief, is proscribed unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with the procedure as may be prescribed. There is no ambiguity that a suit, which contemplates urgent interim relief, is excluded from the rigor of Section 12A(1) of the Commercial Courts Act, 2015. Thus, a plaintiff seeking to institute a suit involving urgent interim relief(s) is not required to exhaust the remedy of preinstitution mediation.

30. The contention that it would be necessary for the plaintiff to file an application seeking exemption from the provisions of Section 12A of the Commercial Courts Act, 2015, is unmerited. This Court cannot accept the said contention for several reasons.

31. First of all, there is no provision under Section 12A of the Commercial Courts Act, 2015 that requires the plaintiff to make any such application in a suit which involves urgent interim reliefs. As stated above, if the suit involves urgent interim relief, Section 12A of the Commercial Courts Act, 2015 is inapplicable and it is not necessary for the plaintiff to enter into a pre-institution mediation. xxxx

33. This Court also finds it difficult to accept that a commercial court is required to determine whether the urgent interim reliefs ought to have been claimed in a suit for determining whether the same is hit by the bar of Section 12A(1) of the Commercial Courts Act, 2015. The question whether a plaintiff desires any urgent relief is to be decided solely by the plaintiff while instituting a suit. The court may or may not accede to such a request for an urgent interim relief. But that it not relevant to determine whether the plaintiff was required to exhaust the remedy of preinstitution mediation. The question whether a suit involves any urgent interim relief is not contingent on whether the court accedes to the plaintiff‘s request for interim relief.

34. The use of the words ―contemplate any urgent interim relief‖ as used in Section 12(1) of the Commercial Courts Act, 2015 are used to qualify the category of a suit. This is determined solely on the frame of the plaint and the relief sought. The plaintiff is the sole determinant of the pleadings in the suit and the relief sought.

35. This Court is of the view that the question whether a suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the relief(s) sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre-institution remedy of mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015. xxxx

37. This Court is unable to accept that it is necessary for a court to read in any procedure in Section 12A of the Commercial Courts Act, 2015, which makes it mandatory for a plaintiff to file an application to seek leave of the court for filing a suit without exhausting the remedy of pre-institution mediation, irrespective of whether the plaintiff seeks urgent interim relief or not.‖

51. That apart, the defendant itself pleads that the plaintiff did, in fact, initiate talks of arriving at an amicable settlement with the defendant prior to instituting the present Suit, however, the same failed. Therefore, it does not lie in the mouth of the defendant today to plead that plaintiff must also have been initially burdened to institute pre-institution mediation under the provisions of Section 12A of the CC Act in the present case.

52. As far as the submission of the learned counsel for the defendant that the affidavit with the present application is not in a proper form as required in Appendix-I to the Schedule to the CC Act, again is liable to be rejected. It is well-settled that even if there is any defect in the affidavit filed with the present application, the same is a curable defect; the same cannot defeat the right of a plaintiff to the relief claimed. In any case, I do not find any such defect in the affidavit filed by the plaintiff to the present application.

53. In view of the above, as all ingredients for the grant of a decree of eviction have been satisfied by the plaintiff based on the admissions of the defendant itself, and even exercising powers under Order XIII-A Rule 3 of the CPC as applicable to commercial disputes of a specified value wherein, I find that there is no possibility of the defendant having any defence to the present suit so far as it claims the relief of possession of the Suit premises from the defendant, an order of eviction directing the defendant to hand over the actual and vacant physical possession of the suit premises being shop bearing number G- 5A, situated at ground floor of the building namely, ‘The Chanakya’, situated at Yashwant Place Commercial Complex, opposite Chanakyapuri Post Office, Chanakyapuri, New Delhi- 110021 to the plaintiff is passed in favour of the plaintiff and against the defendant.

54. The application is allowed in the above terms. Let a decree-sheet be drawn up accordingly. I.A. 20190/2022

55. This application has been filed by the defendant seeking rejection of the plaint under Order VII Rule 11(d) of the CPC.

56. The learned counsel for the defendant has urged that the present suit is liable to be dismissed for the plaintiff not having satisfied the mandatory conditions of Order VI Rule 15A of the CPC, as applicable to commercial disputes of specified value.

57. The learned senior counsel for the plaintiff, on the other hand, submits that the present Suit was filed as an Ordinary Suit and was thereafter converted as a Commercial Suit vide order of this Court dated 21.07.2022. Thereafter, the plaintiff complied with the condition of Order VI Rule 15A and a ‘Statement of Truth’ dated 03.11.2022 was filed on 05.11.2022.

58. The High Court of Calcutta in Harji Engineering Works Pvt. Ltd. v. Hindustan Steel Works Construction Ltd., 2021 SCC OnLine Cal 2457, has held that the consequence of not filing a ‘Statement of Truth’ in the prescribed form would not debar a party from proceeding with the Suit if such defect is cured.

59. In view of the above and for the reasons which have been recorded hereinabove, I find no merit in the present application. The same is dismissed. CS(COMM) 640/2022 & CCP(O) 76/2022, I.A. 12809/2021, I.A. 12810/2021 & I.A. 18417/2022

60. List before the learned Joint Registrar (Judicial) for completion of pleadings and further proceedings on 12th January, 2023, the date already fixed.

61. On the said date, the plaintiff shall produce the original Lease Deed. On such production, the learned Joint Registrar (Judicial) shall impound the said document and forward it to the Collector of Stamp for adjudication of the proper Stamp Duty and penalty, if any, payable on the same.

62. On such adjudication, the plaintiff shall deposit the requisite amount of Stamp Duty and penalty as adjudicated, with the right of recovery of the same against the defendant being preserved.

NAVIN CHAWLA, J DECEMBER 20, 2022/rv/AB