Hansalaya Properties
v.
Reservation Data Maintenance India Private Limited
(High Court Of Delhi)
Interlocutory Application No. 2340 of 1999 in Suit No. 189 of 1999 | 23-03-2000
1. The claim in this suit under Order XXXVII of the Code of Civil Procedure, 1908 is for the recovery of arrears of rent at the rate of Rs. 4,50,000 per month for the period from January 1, 1999 to August 16, 1999. In paragraph 15 of the plaint it has been stated that the plaintiff seeks to recover by way of the present suit a debt or liquidated demand in money payable by the defendant on a written contract. It is not in dispute that a Lease Deed in respect of Flat Nos. 3-C and 3-G, Third floor, Hansalaya, New Delhi was entered into on 16th December, 1993 for a period of five years commencing from 17th August, 1993. It is also not in dispute that on the expiry of this period, that is on 16th August, 1998, a fresh agreement of lease was executed between the parties. It is, however, seriously in contest whether this was for a period of four months or for a period of one year. The defendant has contended that the Lease Deed was executed without its free consent. In August, 1998, that is prior to registration of second Lease Deed, the defendant had addressed a letter to the plaintiff enclosing a cheque for Rs. 10,76,129 towards advance rent of the premises for the period 17th August, 1998 to 31st December, 1998. It is also not in dispute that for the period commencing 1st January, 1999 to 16th August, 1999 the rent payable, as recorded in the Lease Deed, was Rs. 4,50,000 per month. The receipt of a letter dated 16th December, 1998 from the plaintiff to the defendant is also admitted. In this letter the plaintiff had called upon the defendant to remit the advance rent for the period January 1, 1999 to August 16, 1999. This demand apparently was in conformity with the terms of the second registered Lease Deed, a copy of which was sent with this letter. This is followed by another letter dated 1st January, 1999 giving notice to the defendant that if the advance rent is not paid within one week the lease would stand determined. By its letter dated 23rd January, 1999 the defendant informed the plaintiff that it intended to vacate the premises on or before 28th February, 1999. The rent for the month of January, 1999 had also been sent along with this letter. The defendants Lawyers letter dated 25th January, 1999 requested the plaintiff not to obstruct in the removal of the defendants belongings from the premises. The present suit has been filed on 28th January, 1999 under Order XXXVII of the Code of Civil Procedure, 1908. On 3rd March, 1999, I.A. 2101/99 was filed by the defendant to direct the plaintiff to take possession of the keys of the premises. This was carried out on 12th March, 1999. In the interregnum, on 8th March, 1999, the present application seeking leave to defend the suit under Order XXXVII, Rule 3(5) was filed by the defendant.
2. In its application seeking leave to defend the suit it has been submitted, inter alia, that the plaint does not disclose any cause of action as no arrears of rent are due. It is asserted that the defendant has paid rent for the period ending February, 1999. It is thereafter narrated that the defendant was paying rent at the rate of Rs. 72,000 per month from 17th August, 1993 ( 1983) to 16th August, 1986 and thereafter at the rate of Rs. 86,400 per month from 17th August, 1986 to 16th August, 1998. The premises were in very bad condition and, therefore, the defendants had to incur expenses of Rs. 13,90,000 for making it habitable. It is pleaded that the defendant had taken on rent premises at Vasant Vihar, New Delhi but these could not be completed by 16th August, 1998. The defendant thereupon requested the plaintiff to allow them to continue with the tenancy for another period of five months, that is upto 31st December, 1998. Taking advantage of the defendants position and realising that it would not be feasible for the defendant to shift to its alternate site the plaintiff exerted undue pressure and forced the defendant to agree to the payment of Rs. 3 lakhs per month as rental for the same space. Defendants had no alternative but to agree. Thereafter the plaintiff insisted on the execution of a fresh lease and represented that the minimum period of the lease would be one year, since a lease for five months could not registered. The plaintiff got the Lease Deed typed and got a clause inserted to the effect that after the expiry of four months of the lease, on 31st December, 1998, the defendant would be liable to pay Rs. 4,50,000 per month as rent for the subsequent period. The defendants had started removing the furniture in the middle of December, 1998 but this was not permitted by the plaintiff who insisted that they should first make the payment of the rent for the month to January, 1999. This caused a slowing down in the process of removing the goods. The plaintiff had terminated the Lease Deed vide notice dated 1st January, 1999, which was gracefully accepted by the defendant. The lease came to an end by termination as well as by surrender and the defendant vacated the premises on 27th February, 1999. Since the plaintiff refused to take possession, the keys were deposited in the Court. It has been contended that there is no clause in the Lease Deed which prohibited the surrender of the premises before the expiry of the period contemplated in the lease. It has been further averred that the plaintiff has not suffered any loss on account of the defendants vacating the premises prior to the expiry of the lease. In the November, 1998 the defendants had to incur an expense of Rs. 75,000 for installing the sprinkler systems. It has also been submitted that at the time of the filing of the suit the signatory of the plaint was not a registered partner. This averment has not been specifically traversed by the plaintiff. In its reply the plaintiff has substantially denied the statements made in the application. A rejoinder has also been filed.
3. The first question that falls to be answered is whether the present suit has been correctly brought and can be sustained under the provisions of Order XXXVII of the Code of Civil Procedure. There can be little controversy on the question that a Lease Deed constitutes a written contract. However, it is certainly debatable whether the claim for payment of future rent for a period in which the tenant is admittedly not in possession of the demised premises, would constitute a debt or a liquidated demand in money payable on the basis of this written contract.
4. The relevant clause of the Lease Deed are reproduced below:
12. Simultaneously with the execution of this deed, the lessee agree to pay rent in advance for the period 17.8.1998 to 31.12.1998 at the agreed rate which shall be adjusted against the said period and thereafter pay in advance for the balance period from January 1st, 1999 to August 16, 1999.
14. In the event of the lessee committing breach of the terms and conditions and/or the obligations undertaken herein, the lessor shall give to the lessee notice in that behalf to rectify/remedy the breach within one week of receipt of the notice this lease shall in that case stand determined, without prejudice to the lessors right to enforce the terms hereunder agreed.
5. On a reading of Clause 12, I am unable to arrive at the unequivocal conclusion that a fixed term lease for one year had been executed. Unhappily for the plaintiff, the advance mentioned could well be for each month, and not the entire remaining tenure as one composite period. On the contrary, this clause substantially supports the defendants case that it was only interested in an extension upto 31st December, 1998. It must also be keep in perspective that the rent for the period ending 31st December, 1998 had already been tendered by the defendant in terms of its letter dated 17th August, 1998. From the defendants perspective the Lease Deed was superfluous. The version that the Lease Deed was executed and registered on the plaintiffs insistence is very credible. Reliance was placed on the decisions of the Apex Court delivered in Tamil Nadu Electricity Board and Anotherv.N. Raju Reddiar and Another, AIR 1996 SC 2025 [LQ/SC/1996/880] =III (1996) CLT 5 (SC); and in Pawan Kumar Gupta v. Rochiram Nagdeo, 1999 IV AD (SC) 218=IV (1999) SLT173. Neither of these decisions prohibit the consideration of the defence put forward in this case. Firstly, the clause is overwhelmingly ambiguous as to fixed term nature of the Lease. Secondly it is supportive of the defendants case itself and the foundation of the defence can be traced to and rested upon the Lease Deed itself. As observed by the Supreme Court, Section 92 forbids admission of any evidence for the purpose of contradicting, varying, adding to or substracting from the terms of such document. Therefore, Sections 91 and 92 would not be an obstacle in the consideration of this defence since it tantamounts to none of these four contingencies.
6. Since Counsel has heavily relied on these judgments, it would be appropriate to reproduce the relevant portions of these decisions. In the Tamil Nadu Electricity Boards case it was held, on the issue being canvassed before me, as follows:
At the outset it must be borne in mind that the agreement between the parties was a written agreement and, therefore, the parties are bound by the terms and conditions of the agreement. Once a contract is reduced in writing, by operation of Section 91 of the Evidence Act it is not open to any of the parties to seek to prove the terms of the contract with reference to some oral or other documentary evidence to find out the intention of the parties. Under Section 92 of the Evidence Act where the written instrument appears to contain the whole terms of the contract then parties to the contract are not entitled to lead by oral evidence to ascertain the terms of the contract. It is only when the written contract does not contain the whole of the agreement between the parties and there is any ambiguity then oral evidence is permissible to prove the other conditions which also must not be inconsistent with the written contract.
(Emphasis supplied)
7. In Pawan Kumar Guptas case the Court was primarily concerned on which of the parties should shoulder the burden of proof. This decision, in fact, highlights the arguments put forward by the learned Counsel for the plaintiff inasmuch as it states that the party who wants to prove that the recitals are untrue, must bear the burden to prove it. The relevant paragraphs are reproduced below:
All the above three premise adverted to by the High Court are unsupport-able. The clear pleading of the plaintiff is that he purchased the suit property as per Ext. P 11-sale deed. Burden of proof cannot be cast on the plaintiff to prove that the transaction was consistent with the apparent tenor of the document. Ext. P 11-sale deed contains the recital that sale consideration was . paid by the plaintiff to Narain Prasad, the transferor. Why should there be a further burden of proof to substantiate that recitals in the document are true The party who wants to prove that the recitals are untrue must bear the burden to prove it.
In this context reference to Sections 91 and 92 of the Evidence Act will be useful. As per the former, in all cases in which any matter is required by law to be reduced to the form of a document no evidence shall be given in proof of the terms of such matter except the document itself. Section 92 forbids admission of any evidence for the purpose of contradicting, varying, adding to, or substracting from the terms of such document. One of the exceptions to the said rule is that any fact which would invalidate the instrument can be proved by adducing other evidence.
In this case, Ext. P.11 is the document by which transfer of ownership from Narain Prasad was effected. When any party proposes to show something which is at variance with the terms of Ext. P.11 the burden of proof is on him. When respondent asserted that the real transaction is not what is apparently mentioned in Ext. P.11 the burden is on the respondent to establish the transaction which he asserts to be the real one.
8. Essentially, liability for payment of rent can only arise if the tenant has retained possession of the demised premises. This is the consideration or the quid pro quo. If possession has been returned during the currency of the lease that would, at best, tantamount to a breach of contract. In this contingency it is necessary for the party complaining of the breach to prove that it has sustained damages. In the context of a summary suit filed where the agreement to sell itself contains a clause stipulating that double the amount given as Bayana/Earnest Money would be payable if the seller resiled from the contract, I have held that the suit does not lie under Order XXXVII. It would still be necessary to prove actual damages, and if the amount liquidated is not in the nature of a penalty, and is realistically close to actual damage sustained, the liquidated sum may be awarded as damages. Reference is invited to Roshan Lalv.Manohar Lal, 1999 VI AD (Delhi) 994=82 (1999) DLT 418=AIR 2000 Delhi 31, to avoid prolixity. I am in no doubt that it would be stretching the fabric of the Lease Deed to its tearing point if it is to be read as providing a demand of money and not merely liquidating damages, to the extent monthly rent reserved. I cannot appreciate how any of the terms of the Lease predicate and prompt this argument. The fact that the plaintiff had itself terminated the tenancy in terms of its letter dated 1st January, 1999 cannot be glossed over. If it had terminated the lease, damages could not be premised on the lease/written contract. At best damages would be founded in the realm of tort; and that would necessarily require proof through evidence. No doubt the plaintiff has reserved its right to use for damages but this is only possible by filing an ordinary suit. The filing of a summary suit is wholly misconceived.
9. Let me now travel into the factual matrix of the case. I.A. No. 864 of 1999, under Order XXXIX, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure had been filed along with the plaint. Interestingly, the prayers in this application is for the passing of an interim injunction restraining the defendant from removing the valuable office equipments, computers, air-conditioners etc. has also the fixtures and fittings in the lease premises. This prayer, along with the defendants assertion that it was not allowed to remove its furniture etc. leads to the inescapable conclusion that the plaintiff/landlord was solely interested that the defendant should continue in possession of the demised premises. I cannot also lose sight of the exemplary behaviour of the defendant. Prior to the expiry of the lease the plaintiff had already been informed that the defendant would require the premises for a further period of four months. It is common place that in these circumstances other persons would have continued/held over in the premises, most often even without payment of rent. The plaintiff had extracted a manifold increase in the rent in August, 1998. On the pleadings as they presently exist, the preponderance of likelihood is that the landlord had unilaterally inserted the clause whereby the rent for the period subsequent to January, 1999 would again attract a further monumental escalation to the manifold increase already taken from September, 1998 to December, 1998. The rentals have galloped over five times (500%) in the space of a few months. There is no legal bar to avarice, but I am loath to encourage it in Court. Having inserted this clause in the second Lease Deed the landlord was obviously not interested in letting go of the tenant/goose that had laid the gold egg. Judicial note must also be taken of the fact that rents have depreciated sharply since the middle of the 1998. In this analysis, the defence disclosed in this application is certainly not moonshine. As already observed above it is more than just plausible. Leave to defend therefore, must be granted even if it is assumed that the provisions of Order XXXVII were not available to the facts of the present case.
10. I cannot help but observe that the case manifests a gross abuse of the judicial process. There is no warrant or justification for cases such as the present to be filed in Court, even less under Order XXXVII of the Code of Civil Procedure. In the circumstances, I grant unconditionally leave to defend the suit to the defendant. The application is allowed with costs of Rs. 20,000 against the plaintiff, half to be paid to the defendant and the remaining half to the Delhi Legal Services Authority.
Advocates List
For the Plaintiff H.L. Tikku, R.C. Panigrahi, Advocates. For the Defendant J.K. Seth, Virender Mehta, Advocates.
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE MR. JUSTICE VIKRAMAJIT SEN
Eq Citation
2000 5 AD (DELHI) 573
2000 (53) DRJ 595
(2000) ILR 2 DELHI 183
2000 (3) RCR (CIVIL) 730
86 (2000) DLT 734
LQ/DelHC/2000/377
HeadNote
**Headnote** **Civil Procedure Code, 1908, Order XXXVII** — Summary suit — Leave to defend — Suit for recovery of rent — Lease deed — Interpretation — Whether suit maintainable under Order XXXVII — Whether defense disclosed in application is plausible. **Facts:** - Plaintiff filed a suit under Order XXXVII of the Code of Civil Procedure (CPC) for recovery of arrears of rent for the period from January 1, 1999 to August 16, 1999. - Lease deed executed on December 16, 1993 for a period of five years from August 17, 1993. - Fresh agreement of lease executed on August 16, 1998 for a period of four months or one year (disputed). - Defendant contended that the second lease deed was executed without its free consent and under pressure. - Defendant vacated the premises on February 27, 1999. - Plaintiff refused to take possession of the keys, which were deposited in court. - Defendant filed an application for leave to defend the suit under Order XXXVII, Rule 3(5). **Issue:** - Whether the suit is maintainable under Order XXXVII of the CPC and whether the defense disclosed in the application is plausible. **Held:** - A suit for payment of future rent for a period in which the tenant is not in possession of the demised premises does not constitute a debt or a liquidated demand in money payable on the basis of a written contract. - The clause in the lease deed regarding the payment of rent for the period from January 1, 1999 to August 16, 1999 is ambiguous. - The defense disclosed in the application is plausible and requires further evidence. - Leave to defend the suit is granted unconditionally. **Costs:** - Costs of Rs. 20,000 awarded against the plaintiff, half to be paid to the defendant and the remaining half to the Delhi Legal Services Authority.