Raj Sarogi vs American Express (I) Pvt. Ltd.
2000 Latest Caselaw 1115 Del

JUDGMENT

S.K. Agarwal, J.

1. In this application under order 7 Rule 11 read with Section 151 of the Code of Civil Procedure (for short CPC) the defendant has prayed for summary rejection of the plaint on the ground that the plaint discloses no cause of action.

2. Brief facts necessary for disposal of the above application are; that the plaintiff filed the suit for recovery of Rs. 34,00,242/- along with interest and for mandatory injunction directing the defendant to hand over copy of the lease deed by which he took on rent premises No. S-51A, Panchsheel Park, New Delhi. It is alleged that the plaintiff rented out premises No. E-23, Poorvi Marg, Vasant Vihar, New Delhi to the defendant vide lease agreement dated 6th April, 1994 for a period of 3 years on monthly rent of Rs. 28,000/- w.e.f. 10th May, 1994. The lease was to expire on 9th May, 1997 but the plaintiff required the accommodation earlier and requested the defendant to vacate the same by 30th September, 1996 offering him to refund the security, proportionate rental and hire charges. The defendant agreed to consider the plaintiff's request subject to his being able to find alternative accommodation. On 12th March, 1996 the defendant vide fax massage sought confirmation from the plaintiff that in case the defendant finds an alternative accommodation and decides to shift before the expiry of the lease term, the plaintiff would compensate him for "additional costs" including additional rental for the unexpired period of lease and security deposit, renovation expenses and other costs. The plaintiff agreed to do the same. An agreement was duly executed on 19th July, 1996 and as per its terms Rs. 3 lacs was paid in advance and balance of Rs. 100 lacs was paid by post dated cheque on 13th August, 1996. The defendant vacated the premises and shifted to S-51A, Panchsheel Park, New Delhi (for short the New Premises). The plaintiff on 14th October, 1996 requested the defendant for supply of the copy of documents of lease of the new premise so as to enable him to file along with his Income Tax returns. The request was rejected. These facts are not disputed.

3. It is further pleaded that the plaintiff came to know that new premises taken on rent by the defendant were on Plot of land measuring about 500 sq. yds whereas the plaintiffs property was on a plot of land measuring about 1208 sq. yds located in the better locality; that the defendant was not entitled to and had not incurred the amounts obtained by him towards rent differential and towards renovation costs of the new premises under the agreement dated 19th July, 1996; and that the defendant by misusing his position had illegally and unjustly enriched himself taking advantage of the weak position of the plaintiff. It is thus prayed that the defendant is, liable to furnish the requisite documents to the plaintiff regarding new lease and liable to refund the full amount of Rs. 34,00,242/- which he had received unjustly under the agreement dated 19th July, 1996 and to compensate the plaintiff for the loss that he may suffer on account of non-receipt of the documents/information.

4. The defendant filed the written statement inter alia pleading that on the basis of the representations of the plaintiff the defendant entered into an agreement dated 19th July, 1996 agreeing to vacate the plaintiff's premises before the expiry of the lease upon his paying the sum stipulated in the agreement. The plaintiff is estopped from raising fresh disputes. The agreement was duly acted upon and that the plaintiff is not entitled to ask for the documents of the subsequent lease to which he is not a party and that furnishing of the documents never formed part of the agreement. The execution of the agreement dated 19th July, 1996 and vacation of the plaintiff's premises in terms thereof is not denied.

5. The defendant also filed an application under Order 7 Rule 1.1 read with Section 151 CPC for rejection of the suit on the ground that the plaint does not disclose any cause of action. The plaintiffs have filed reply reiterating the averments made in the plaint. I have heard learned counsel for the parties on this application and have been taken through record.

6. Learned counsel for the defendant relying on Clause 6 of the agreement dated 19th July, 1986 argued that as per the agreement the defendant had realised the amount and has handed over possession of the plaintiff's property to him thus all claims stood fully satisfied and that the plaintiff has tried to create false and fictitious cause of action and the suit is liable to be dismissed. Learned counsel for the plaintiff has argued to the contrary. In order to appreciate the rival contentions it is necessary to refer some of the clauses of the agreement dated 19th July, 1996 which run as under:-

"1. The lessor shall refund to the lessee for the premises at E-23, Poorvi Marg, New Delhi -110057 the following sums:-

Refund. of security deposit:Rs. 59 lacs

Refund of advance rent from Sept' 7,96 till 7 June 97: Rs. 2,520 lacs

Refund of advance hire charges for fittings and fixtures and built in furniture from Sept' 7,96 till June 97: Rs. 4,986 lacs

Refund of proportionate renovation expenses: Rs. 6,250 lacs

2. The lessor has also agreed to reimburse the cost of additional rent and part of the additional renovation expenses that the lessee will be burdened with on account of earlier vacating of the leased premises and on account of taking another premises on lease, as follows:-

A. Rent Differential per month from Sept' 7, 96 till 7 June, 1997: Rs. 13.230 lacs

B. Towards renovation costs for the new premises being borne by the lessee: Rs. 17.014 lacs

The aggregate of the aforesaid sums amounting to Rs. 103 lacs shall be paid by the lessor to the lessee and the lessor has handed over post dated cheques for the same as follows:-

On signing of this agreement - Rs. 3 lacs, vide cheque dated July 19, 1996 cheque No. 520954 drawn on Bank of Maharashtra, Greater Kailash, Delhi- 110 048 in favour of American Express (India) Private Limited.

Cheque dated August 13, 1996 - Rs. 100 lacs vide cheque dated August 13, 1996 cheque No. 520955 drawn on Bank of Maharashtra Greater Kailash, Delhi -110 048 in favour of American Express (India) Private Limited."

3. XXXX

4. XXXX

5. XXXX

6. It is mutually agreed that with the realisation of the aforesaid monies by the lessee and the handing over of the vacant possession by the lessee to the lessor in terms of this agreement (alongwith the handover of the fittings, fixtures and built in furniture in working order in terms of the agreement dated April 6, 1994 for the same) all claims of the parties against each other shall stand fully and finally settled and the lease agreement shall stand terminated."

7. Clause 2 of the agreement reveals that Rs. 13,230 lacs was paid towards rental differential from the month of September, 1996 till 7th June, 1997 (unexpired period of lease). It prima facie shows that at the time of the execution of the agreement it was represented to the plaintiff that the defendant had to take accommodation on the higher rent otherwise the question of rent differential would not arise. Similarly Rs. 17,014 lacs was paid towards renovation costs for the new premises.

8. Law with regard unjust enrichment and restitution is well settled by several authoritative pronouncements of the Apex Court. Section 70 of Contract Act, 1872 (for short the Act) deals with the obligation of the person enjoying benefit of non-gratuitous act and Section 72 of the Act mandates that a person to whom money has been paid or anything delivered under mistake or coercion must repay or return it. If the plaintiff succeeds in proving conditions embodied in Sections 70 and 72 of the Act namely that the payment was made lawfully and not gratuitously and that the defendants had enjoyed benefit thereof the plaintiff may succeed. The doctrine of restitution prevents unjust enrichment. It envisages restitution of any such payment. It requires that the party must return such things which does not belong to him to the person from whom he had received. In Mulamchand v. State of M.P., it was held:-

"In other words if the conditions imposed by Section 70 of the Indian Contract Act are satisfied then the provisions of that section can be invoked by the aggrieved party to the void contract. The first condition is that a person should lawfully do something for another person or deliver something to him; the second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously; and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied, Section 70 imposes upon the latter person the liability to make compensation to the former in respect of, or to restore, the thing so done or delivered. The important point to notice is that in a case filling under Section 70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract, nor ask for damages for the breach of the contract, for the simple reason that there is no contract between him and the other person for whom he does something or to whom he delivers something. So where a claim for compensation is made by one person against another under Section 70 it is not on the basis of any subsisting contract between the parties but on a different kind of obligation. The juristic basis of the obligation in such a case is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution."

9. In the above decision Supreme Court had also quoted with approval following two English Court decisions..

1) In Fibrosa y. Fairbairn, (1942) 2 All ER 122, wherein it was hold:-

'...any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit that is, to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been called quasi-contract or resolution'.

2) In Nelson v. Larholt, (1948) 1 KB 339 it was held:-

"It is no longer appropriate to draw distinction between law and equity. Principles have now to be stated in the light of their combined effect. Nor is it necessary to canvass the niceties of the old form of action. Remedies now depend on the substance of the right, not on whether they can be fitted into a particular framework. The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution if the justice of the case so requires."

10. Learned counsel for the defendant relied upon T. Arivandandam v. T.V. Satyapal, and argued that the allegations contained in the plaint must be examined thoroughly to find out whether the cause of action set out in the plaint is substantial or purely illusory. It is true that clever drafting creating illusory cause of action is not permitted by law. Reliance was also placed on Supreme Court decision in ITC Limited v. DRAT and Ors., wherein the Supreme Court after referring its several earlier decisions including law laid down in UP Coop. Federation Ltd. v. Singh Consultants & Engineers (P) Ltd., (1998) 1 SCC 174 held that the bank has to honour the bank guarantee or the letter of credit with two exceptions where there is a fraud or irreparable injury; it was held that bank must pay if the documents are in order and that bank is not allowed to determine whether seller had actually shipped the goods or whether the goods conformed with the requirement of the contract. In that case the plaint was based only on the allegations regarding absence of movement of goods. Under the circumstance, it was held that non-movement of the goods by seller could be due to the variety of tenable and untenable reasons the seller may be in breach of contract but that by itself does not permit the plaintiff to use the word 'fraud' in the plaint. Facts in this case are entirely different. It may be recalled that the whole suit is based on the agreement dated 19th July, 1996. The suit is for recovery of payments received by the defendant towards rent differential and towards renovation etc. on misrepresentation. It is alleged that the defendant thereby got himself unjustly enriched. In view of the averments made in the plaint I am of the view that at this stage it cannot be said that the plaint does not disclose any cause of action.

11. For the aforesaid reasons, I find there is no merit in the application and the same is dismissed. Any observation made herein shall not effect the merits of the case.