Delhi Tourism & Transportation ... vs Leman International (P.) Ltd.
2000 Latest Caselaw 319 Del

ORDER

Vikramajit Sen, J.

1. I propose to dispose off the present application filed by the Plaintiff under Order XXXIX Rule 10 for payment of arrears of damages as well as future damages/mesne profits. This application has been filed in a suit for possession and recovery of sundry dues/damages. It is not in controversy that a Licence Deed dated 6.12.1998 has been executed by the parties. This Deed records. inter alia, that the Defendant was required to pay the Plaintiff Rs. 10,000/- per month by way of licence fee, alongwith a further sums representing 11 per cent of the gross revenue from the Defendant's sales.

The Licence Deed further stipulates that the Defendant was liable to pay proportional property tax, clause 7 of the Licence Deed requires the Defendant to deposit one year's licence fee in advance. This deposit was to be made every 11th month. Clause 10 of the Licence Deed mentions that in case of default of payment of the licence fee interest at the rate of 15 per cent on the outstanding amount would be chargeable. The plaint further discloses that the licence was granted initially for a period of five years. On a renewal, thereafter the licence fee would be enhanced to Rs.

20,000/- per month for the subsequent five years. It is averred that the Defendant failed to make payment as agreed to in this Licence Deed. On the date of filing the following sums were claimed to be due:

      S.   HEAD OF ACCOUNT                    AMOUNT DUE 
     No.
     1.   Licence Fee upto March 1995        Rs. 6,80,000.00
     2.   Royalty Commission                 Rs. 5,78,764.34 
     3.   Property Tax as per notice 
          dated 7.3.1999                     Rs. 6,66,709.00
     4.   Interest on the outstanding 
          Licence Fee @ 15% per annum        Rs. 3,03,018.78
     5.   Interest on the outstanding 
          Royalty Commission @ 15% 
          per annum                          Rs. 1,84,552.62
                        
                    Total                    Rs. 24,13.044.64
                        
 

2. It is thereafter averred in the plaint that despite oral and written reminders these outstandings were not cleared. The Defendant had instead raised evasive, untenable and irresponsible objections. The plaintiff has also claimed pendente lite and future interest at the rate of 21.75 per cent per annum with quarterly rests. It is pleaded that the Defendant's licence came to an end by efflux of time and also because of continued default in making requisite payments. Although the stand taken in the plaint is that only a licence was created, in para 17 of the plaint it is stated that a legal notice dated 1.6.1993 under Section 106 of the Transfer of Property Act was issued terminating the licence. This notice was replied to in terms of letter dated 4.8.1993. Mesne profits at the rate of Rs. 21,000/- per month with effect from 1.7.1993 has thereafter been claimed, aggregating a sum of Rs. 4,41,000/-.

3. The Defendant has filed a written Statement with Counter Claim. The objections raised therein, and repeated in the course of arguments, is that the suit property falls within the definition contained in Section 2(e) of the Public Premises (Eviction of unauthorised Occupants) Act, 1971 (herein after referred to as 'the Act), and therefore, the present suit was not maintainable. It is also submitted that a major part of the claim is time barred. It is then pleaded that no moneys are owed to the plaintiff and in fact they are liable to the Defendant for damages for the breach of the implied contract. The plaintiff's valuation of the suit for the purposes of court fee has also been challenged. It is next submitted that between Nov. 1989 to December, 1995 the Plaintiff had held parties on several occasions and hence there was a waiver subsequent to 1.7.1993. In para 3 of the Reply on Merits there is a categorical admission to the effect that the Plaintiff is the owner of the suit property. Thereafter there are detailed pleadings which have the effect of negating or varying the terms recorded in the Licence Deed dated 6.12.1988. The execution of this Deed is not, however, denied although there is a statement that it has been backdated. There are also detailed pleadings pertaining to the reasons why the restaurant started by the Defendant in the suit property was not successful and the reasons are largely attributable to the Plaintiff. A claim for a sum of Rs. 4,31,27,955/- has been laid claimable by the Defendant against the Plaintiff by way of damages. In para six of the Reply on Merits it is asserted by the Defendant that "apart from the security deposit of Rs. 1.25 lacs it had paid all the licence fee, royalties and house tax for the first two years". Therefore there is no controversy that the licence Deed was acted upon without demur. Further liability has been disputed for various reasons. There are also pleadings to the effect that "in view of the huge financial investments involved, it was decided by the Section Committee that initially the Licence would be for 10 years extendable at an enhanced licence fee of Rs. 20,000/- per month for subsequent five years. However, despite the understanding and assurances of the Chairman Shri Ram Prasad, the Plaintiff failed/neglected to issue the promised letter modifying clause 13 of the Licence Agreement". Thereafter there is a denial of liability for the aforementioned sums of Rs. 6,80,000/- Rs. 5,78,764.34, Rs. 6,66,709/- Rs. 3,03,018.78 and 1,84,552.52. Although a Counter Claim for a sum of Rs. 4,29,27,955/- by way of damages also accompanied the Written Statement, no Court fee was paid on this Claim. This was noticed by me on 11.8.1999 and on 2.9.1999 learned counsel for Defendant sought leave to withdraw the counter Claim. Leave was granted.

4. In the course of arguments learned counsel for the Defendant had pressed the Objections pertaining to the applicability of the Act; the inadequacy of the court fee paid on the plaint; the major claim being barred by limitation; and the revocation/waiver of the termination of the Deed for the reason that the Plaintiff had used the restaurant and facilities by the Defendant on the suit property.

5. It is not necessary to go into the legal objections raised by the Defendant in detail at this stage. None of these Objections are such as would disclose that the plaint necessarily needs to be rejected forthwith. The Court must keep in mind that the premises were handed over to the Defendant by the Plaintiff. This prima facie sets up the Defendant's liability to the Plaintiff to make payments, whether by way of rent, licence fee or damages for use and occupation. It would be wholly inequitable and unfair to permit the Defendant to resist payment of dues on technicalities. At this interim stage orders can and should be passed for payment of existing dues if there appears not to be a controversy on these issues. The execution of the Licence Deed is admitted. This being so, prima facie it is not open to the Defendant to set up a variation or cancellation of the Deed by way of alleged subsequent oral agreements/understandings. This is specifically disallowed by Section 92 of the Evidence Act, 1872. I would, therefore, at the present stage ignore all pleadings which attempt to set up a factual regime contrary to that recorded in the Licence Deed.

6. On the strength of the Licence Deed itself I am satisfied that a prima facie case has been successfully established by the Plaintiff. Since the Licence Deed is admitted, the terms contained therein are admittedly to be fulfillled by the parties. The defense put forward is that the Plaintiff did not fulfill some of its obligations as a consequence of which the Defendant has sustained damages. The claim for damages, contained in the Counter claim, has however been withdrawn, and hence these do not fall for adjudication. In any event it appears to me to be unassailable that even if the Plaintiff had neglected to comply with some of the obligations, the correct and legal recourse open to the Defendant was to put an end to the Licence, and hand back possession of the suit property to the plaintiff. By adopting this course it would have stopped the clock of liability for payment of licence fees and other dues. The Defendant could also have initiated proceedings for adjudication of the damages sustained by it as it has done and subsequently abandoned, the existence of a possible claim for damages cannot be considered as an answer to claims for payment of arrears of rent or licence fees.

7. Clause 1 of the Licence Deed uncontrovertibly mentions that the licence fee would be Rs. 10,000/- per month together with 11 per cent of the gross sales from all sources after deducting sales tax and payment of the proportionate share on property tax. Clause 13 records that the licence would after the first quin quennium be Rs. 20,000/- per month in addition to the 11 per cent share of gross sales for the second quin quennium. Other payments are also contemplated.

8. It is now well established that admissions are not restricted to pleadings. More often than not, contents of the plaint are denied in order to delay proceedings and procrastinate the incidence of liability. Admissions can, therefore, be justly and soundly drawn even from attending circumstances, such as pleadings in other suits or proceedings, or documents exchanged between the parties. Infact, in my opinion, documents constitute the best source of admissions of facts. In the present case, admittedly a Licence Deed was executed by the parties, and the Court need not travel any further. It is bound to treat the contents of such a document as admissions between the parties, and give effect to its contents at the very earliest. Failure to do so would tantamount to encouraging dishonest pleadings. All the averments put forward by the Plaintiff are predicated and are sustainable merely from a reading of this Deed itself.

9. The Defendant's objection pertaining to a major portion of the claims having become time barred requires consideration. The suit was filed on 12.5.1999. There is no doubt that the claims, being for money, should have been brought within three years of their falling due. The Licence Deed envisages the payment of all dues by the 7th day of each month. Accordingly, the claims pertaining to period prior to the month of May 1995 stood, prima facie, barred by time after 7.5.1992.

It is also mandatory that denials contained in pleadings should not be perfunctory, formal and all-encompassing. In the plaint as well as in the present application, the Plaintiff has annexed its calculation of the second part of the Licence fee at the rate of 11 per cent of the sales of the Defendant. Beyond a formal traverse of these pleadings, the Plaintiff has not even faintly indicated the reason for the denial of the paragraphs and of the Annexure thereto. It must be expected that the party denying averments, must also disclose the error and set out the true facts. I have no alternative but to hold that the denial of Annexure A1 to the application corresponding to Annexure 'C' of the Plaint is to be deemed to be correct.

10. The Licence Deed was executed in December 1988. On a conjoint reading of Clauses 1 and 13, the licence fee stood increased to Rs. 20,000/- to- gether with 11 per cent share of gross sales from all sources with effect from December, 1993 after deducting sales tax. The liability of the Defendant is, however, unmitigated and uncontrovertable for the period commencing June 1992. Accordingly, for the period June, 1992 to November 1993 the Defendant is liable to pay license fee at the rate of Rs.10,000/- per month and thereafter, upto date at the rate of Rs. 20,000/- per month. All payments post June 1992, in terms of the Licence Deed, are also admittedly payable.

11. In para 3 of the application as well as in the plaint there is a specific averment that the Defendant paid licence fee only till October 1990. There is an evasive denial of this statement inasmuch as the Defendant has failed to state any alternative date upto which, according to Defendant, payment of licence fee and other dues had been made. I am satisfied, therefore, that there is an admission on the part of the Defendant of its liability to this extent.

12. The Defendant is in possession of the suit property. It is not prima facie evident that incorrect court fee has been paid on the plaint. In any event there is a clear and unequivocal undertaking made by the Plaintiff for payment of court fee if any when found due. Objections in this regard do not call for a detailed and final adjudication at this interim stage. The Objection pertaining to the applicability of the Public Premises (Eviction of Unauthorised Occupants) Act also do not call for a detailed and final adjudication at this stage. The eviction/ejectment procedure envisaged by the Public Premises (Eviction of Unauthorised Occupants) Act is far more stringent than any other law. No valuable right of the Defendant stands extinguished or jeopardised by the passing of the interim orders in this suit. On equitable grounds, therefore, the challenges to the maintainability of the suit on this ground can be conveniently and properly adjudicated upto at the final disposal of the suit. The ownership of the Plaintiff has not been denied. It is debatable whether the Plaintiff Corporation would fall within the ambit of Section 2 of the Act. Finally, the plea of waiver on the ground that the Plaintiff had used the Defendant's Restaurant is too absurd to be contemplated at the present stage.

13. In this view of the matter, the Defendant is liable for payment of all dues for the period commencing with June 1992: (a) in respect of the licence fee, the liability is adjudged at Rs. 10,000/- per month upto the period November 1993. With effect from December 1993 till date, the Defendant is liable to make payments at Rs. 20,000/- per month together with all other dues contemplated in the Licence Deed and (b) royalty commissions at the rate of 11 per cent would be payable with effect from June 1992, as given in Annexure A-1 to the application. These payments are to be made within thirty days from today.

14. The application is disposed of in these terms. However, the Plaintiff will also be entitled to costs which are adjudged at Rs.20,000/-.