Delhi Financial Corporation vs V.P. Puri And Ors.
2006 Latest Caselaw 1473 Del

JUDGMENT

Mukundakam Sharma, J.

1. By filing the present Appeal, the sole appellant, namely, Delhi Financial Corporation (for short " DFC") has challenged the legality and validity of the order dated 7th August, 2006 passed by the learned Single Judge in IA No. 5852/2006 as also the order dated 13th January, 2006 which is passed by the learned Single Judge disposing of the various interim applications registered and numbered as IA 10995/99, IA 11322/99, IA 11143/2000, IA 3980/2005 and IA 7990/2005, after recording the settlement arrived at between the appellant herein/defendant No. 2 and the respondent/plaintiff.

2. In order to appreciate the contentions raised before us, it would be necessary to mention a few facts leading to the passing of the aforesaid two orders which are impugned in this appeal. The respondents being the landlords filed the Suit as plaintiffs against the Union of India seeking for a decree for their eviction from the suit premises and also for payment of mesne profits. It was stated in the said Suit filed by the respondents that a lease deed was executed between the respondent/plaintiff and the Union of India through Deputy Commissioner, Delhi in the month of January, 1994 in respect of the suit property. The said property was sub-let as per Clause 4 of the lease deed to the DFC, the Director General, Health Services and the Director General Home Guards and Civil defense, who were in occupation of the property. During the pendency of the aforesaid Suit in this Court, an application, being IA No. 3908/2000, was filed by the Union of India through the Deputy Commissioner, Delhi praying for deletion of the name of Deputy Commissioner as the defendant in the Suit and also praying for impleadment of DFC, the Director General Home Guards and Civil defense and the Director General Health Services, who are in use and occupation of the suit premises, as defendants. The aforesaid application was opposed by the respondents. The Court took up the said application for consideration and passed an order dated 11th July, 2000 dismissing the same as misconceived. While disposing of the said application by the aforesaid order, reference was made by the Court to paragraph 4 of the lease deed which provides that the lessee would have the right to sub-let the whole or any part of the tenanted premises with the consent of the Lesser but shall be responsible for the payment of rent. It also transpires from the record that an order was passed by the Division Bench of this Court on 20th December, 2000 in FAO(OS) 95/99. In the said order reference was made to the persistent failure on the part of the of the Union of India to pay the amounts towards use and occupation charges of the said premises. Reference was also made to the order dated 15th May, 1997 wherein a direction was given to the Union of India to pay use and occupation charges at the agreed rate of rent of Rs. 2,28,225/- per month.

3. Since the aforesaid orders were not complied with and as there was failure on the part of the Union of India in depositing the use and occupation charges, vide order dated 20th December. 2000, the Division Bench held that the Court is not powerless to see that the direction of the Court is obeyed by the Union of India. It was also held that the only way the same could be got obeyed is to make the order punitive under the inherent powers of the Court that on failure to comply with the same by a particular date, the right of the defendant to continue contesting the suit shall stand struck off. In terms of the aforesaid finding recorded, the Division Bench issued a direction that in case after adjusting the amount already paid by the Union of India to the respondents, the balance amount towards use and occupation charges at the agreed rate as per the order dated 15th May, 1997 is not paid by the respondent along with the interest accrued on the belated payments from due date till the date of payment at the rate of 18% p.a. on or before 31st March, 2000, right of the Union of India to continue contesting the suit would stand struck off. The aforesaid order of the Division Bench became final and binding as no further appeal was taken there from.

4. Despite the above said order, no payment was made by the Union of India and, therefore, the said fact was pointed out but the counsel appearing for the respondent plaintiff before the Court in the Suit i.e. Suit No. 1590/1995. Vide order dated 1st May, 2001, the learned Single Judge, after referring to the orders dated 20th December, 2000, held that after the striking off the defense of the Union of India as defendant as per the said order, no further opinion needs to be expressed.

5. Subsequent to the passing of the aforesaid order, the DFC was inducted into the premises and it is established from the record that they were inducted to the suit premises on 7th November, 2001. Be that as it may, an application, being IA No. 3574/2002 was filed by the DFC praying for its impleadment in the Suit on the ground that they are a necessary party as they have become a tenant of the suit premises on their own right. The said application was considered by the Single Judge of this Court but the Court dismissed the same by order dated 7th January, 2003. An appeal was preferred against the said order and a Division Bench of this Court, by order dated 2nd April, 2003, dismissed the same. In appeal to the Supreme Court, the matter was registered as Civil Appeal No. 41248/2004. The said appeal was considered by the Supreme Court and after recording various submissions of the counsel appearing for the parties, the appeal was disposed of by issuing a direction to the learned Single Judge to implead the Delhi Financial Corporation as a second defendant in the suit. Relevant portion of the said order is extracted hereinbelow:

Having regard to the facts and circumstances of the case, we feel that appellant Corporation would be a proper party for the proceedings as the disputes between the parties would be effectively settled. The learned Single Judge before whom the mater is pending, is directed to implead the Delhi Financial Corporation as second defendant in the Suit. The appellant shall file the written statement within four weeks from today and the Court is requested to dispose of the Suit at an early date. The appellant Corporation shall not seek adjournment on any flimsy ground. The appeal is disposed of.

6. Consequent upon the passing of the aforesaid order on 16th July, 2004, the DFC was imp leaded as defendant No. 2 in the Suit. The DFC also filed its written statement. After filing the written statement, an application was filed by the respondents/plaintiff under Order XII Rule 6 CPC, contending inter alia that on the basis of the admission made by the defendant No. 2./DFC on record, the respondents would be entitled to a decree of possession forthwith. It was also submitted that no friable issue had been raised by the said defendant No. 2/DFC inasmuch as the DFC has admitted the fact the the Union of India was a tenant under the respondents and that rent of the premises was above Rs. 3,500/- per month. The tenancy also stood determined by issuance of a notice which is also not in dispute. The aforesaid aspect came up for hearing before the Court.

7. The records disclose that counsel for defendant No. 2 after arguing the matter on 16th November, 2005 sought for and was granted an adjournment on 17th November, 2005 to obtain instructions. On 13th December, 2005, the matter was again listed when the counsel appearing for the DFC made a statement to the effect that said Corporation was ready to vacate and hand over the premises to the respondent by 31st August, 2006. Accordingly it was directed by the Court that an affidavit/undertaking should be filed in that behalf within two weeks. In terms of the aforesaid statement made, an undertaking was also furnished by the DFC alone by way of an affidavit dated 12th January, 2006, sworn by Smt. Kiran Mahajan, Senior Manager (Legal). In paragraph 2 of the said undertaking it was clearly stated that the appellant/D-2 would not induct any other person in the suit premises and would hand over vacant and peaceful possession of the suit premises to the landlord/respondents on or before 31st August, 2006. In paragraph 3, it was stated that the DFC would pay to the landlords/respondents future compensation for use and occupation of the suit premises month by month, before the 10th day of every month. As an affidavit of undertaking was filed, the learned Single Judge passed the following order on 13th January, 2006:

Plaintiff and defendant No. 2 have settled the matter. Plaintiffs have filed this suit for possession and mesne profits. According to the plaintiffs, suit premises, namely, 6 & 7 Saraswati Bhawan, E-Block, Connaught Place, New Delhi, were let out to the defendant/UOI. UOI did not contest the matter and its defense was stuck off. However, it appears that as per some arrangement between the UOI and Delhi Finance Corporation, suit premises (except basement) were given by the UOI to the Delhi Finance Corporation/defendant No. 2. Defendant No. 2 has been paying the rent in respect of the suit premises to the plaintiffs and it claimed that it had become tenant under the plaintiffs.

As per the settlement arrived at between the plaintiff and the defendant No. 2, the defendant No. 2 has agreed to vacate the premises and basement, which is in possession of the UOI, except one room(which is stated to be in possession of the plaintiffs) by 31st August, 2006. It is also agreed that the defendant No. 2 shall continue to pay the plaintiffs future compensation for use and occupation of the suit premises month by month before 10th of every month. Affidavit of Ms.Kiran Mahajan, working as Senior Manager (Legal) in the Delhi Finance Corporation is filed giving an undertaking to the aforesaid effect. This affidavit of undertaking is taken on record and the undertaking is hereby accepted. In terms thereof, decree is passed in favor of the plaintiffs and against defendant No. 2 in respect of ground floor, first floor and second floor of the suit premises except one room on the first floor. This decree, however, shall not be executed till 31st August, 2006.

In so far as basement of the premises, which is in possession of UOI/defendant No. 1, is concerned, matter is fixed for arguments on 30th January, 2006.

In view of the above, IAs No. 10995/99, 11322/99, 11143/2000, 3980/2005 and 7990/2005 have become infructuous and are disposed of accordingly.

8. Thereafter, after a lapse of good four months, on 15th May, 2006, IA 5852/2006 was filed by the DFC seeking the following reliefs:

a) Direct that the compromise is binding on the plaintiffs and the plaintiffs are not entitled to claim on account of mesne profits/damages from UOI and/or DFC.

b) In the alternative direct that the undertaking of DFC is not binding on DFC and the undertaking be deemed to be withdrawn.

In the said application the DFC, in paragraphs No. 2 & 3, pleaded as follows:

2. The plaintiff was charging for use and occupation was being taken by the plaintiff from DFC since 2001. Before 2001, the rent was being taken without any order of the court and hence no claim for the said rent can be made by the plaintiffs. The plaintiffs settlement with DFC was a clear representation that the settlement was not only with the DFC but overall settlement in the matter, particularly as the case of the plaintiff was with that DFC was inducted by the UOI and hence represents the UOI. The DFC cannot vacate the premises except with the consent/knowledge of the UOI through whom it was inducted, being an undertaking owned 100% by the Government of India and having come into the premises through the Govt. of India/Collector. In these circumstances, the undertaking consent of the plaintiff in settling the matter with DFC was settlement of the matter with the defendant UOI also.

3. The undertaking of DFC was on the specific understanding by the DFC/UOI that all the disputes were settled on the agreement to handover the suit premises on DFC continuing to pay rent at the agreed rate till the date of handing over of the premises."

9. The learned Single Judge considered all the pleas raised before him and passed the impugned order dated 7th August, 2006. The present appeal is directed against the said order as also order dated 13th January, 2006. Counsel appearing for the appellant specifically stated that she is pressing the appeal only for appellant No. 2/DFC and consequently an order was passed deleting the name of appellant No. 1/Union of India from the array of parties.

10. It is crystal clear from the record that the DFC had given a clear undertaking to vacate the suit premises on or before 31st August, 2006 as recorded by the Court on 13th January, 2006 and subsequent thereto, an attempt is being made to get away and resile from the said undertaking given to this Court. At the stage when the aforesaid undertaking was given by the appellant with solemn affirmation, the application of the respondents under Order XII Rule 6 CPC was being considered. In the said application a prayer was made for passing a decree of possession in the Suit in accordance with the admission of the appellant. In the undertaking filed by the appellant also, there is no whisper with regard to payment of mesne profits or even regarding waiver of it for the use and occupation by the DFC or the Union of India for the entire past period. It is now sought to be submitted that the appellants gave such an undertaking with a clear stipulation that no mesne profits would be paid or be payable for the past period. Neither such an averment or statement is made in the affidavit of undertaking nor any such order was passed by the learned Single Judge. In fact the order dated 13th January, 2006 clearly records that a settlement had been arrived at between the "plaintiff and the defendant No. 2". There is no reference in the order to any settlement having been arrived at between the plaintiff and both the defendants. Assuming that the order was silent on that point despite the plea and stand of the appellant, nothing prevented the appellant from raising the issue immediately and approaching the Court seeking for a correction. Nothing of this sort was done. Only at a subsequent stage, the aforesaid application was filed trying to wriggle out of the undertaking given to this Court under solemn affirmation.

11. The learned Single Judge held that the same cannot be done as the order dated 13th January, 2006 is also a judgment on admission on the basis of the ratio laid down by the Supreme Court in the case of Jineshwardas and Ors. v. Smt.Jagrani and Anr. .

12. We have also considered the submissions of the counsel appearing for the appellant in the light of the records. On perusal of the entire records it is crystal clear to us that at the stage when the aforesaid undertaking was filed by the appellants by way of an affidavit, no statement was made that the respondents would forgo payment for the use and occupation charges for the past period for which the appellant and/or the Union of India was a defaulter. On the other hand, there was a clear stipulation therein that for the future months during which the appellant would be in possession, occupation charges and mesne profit would be paid for all the months that they would be in possession and occupation. It is not possible on the part of the appellant to resile from the undertaking given to this Court on the basis of which a decree is passed in favor of the respondents with a direction that the suit premises shall be vacated by the appellant on or before 31st August, 2006. The aforesaid position is also clear from a reading of the order passed by the learned Single Judge on 13th January, 2006. By the said order the learned Single Judge has disposed of not the entire suit, but only the pending applications, while fixing the matter on another date for further proceeding. It is, therefore, crystal clear that by the aforesaid order, a decree for eviction was passed by the learned Single Judge on the basis of admission and undertaking given by the appellants. So far as the issue with regard to payment of mesne profits is concerned, the said issue was kept open for consideration. We may also notice the submission of the respondents that there is no claim of mesne profits against the appellant, but according to them Union of India is liable to pay about Rs. 17 Crores to the respondents towards mesne profits.

13. We, therefore, agree with the views taken and findings arrived at by the learned Single Judge to the effect that the issue of mesne profits has to be decided. In this connection, reference may be made also to the provisions of Rule 3A of Order XXIII CPC which provides that no suit shall lie to set aside the decree on the ground that the compromise on which the decree is passed was not lawful. The aforesaid undertaking was also given by the appellants when the application under Order XII Rule 6 CPC was under active consideration. The undertaking has to be read in that context for the appellant desired to have some time to enable it to vacate the suit premises for which the aforesaid undertaking was filed and in terms thereof and upon acceptance of the said undertaking, time was granted to the appellant to vacate the premises on or before 31st August, 2006. The appellant having taken advantage of the aforesaid undertaking by way of getting an opportunity to stay in the suit premises for an extended period of over six months and it having fully availed of the said benefit, subsequently it could not have filed the aforesaid application attempting to wriggle out of the undertaking given to the Court so as to make out a case to avoid payment for use and occupation charges. The appellant cannot adopt such a circuitous method of becoming a mouthpiece of Union of India whose right to continue contesting the Suit stood struck off vide order dated 20th December, 2000. Admittedly, the DFC has made full use of the suit property except the basement and one room on the first floor and occupied the same at least with effect from 7th November, 2001, as stated by the appellant itself at page 52 of the paper book, till virtually the last day of August, 2006, the present appeal having been preferred only on 28th August, 2006. We accordingly hold that the decree passed for eviction effective from 31st August, 2006 cannot be recalled as the same was correctly passed and biding on the parties. The application filed by the appellant and registered as IA 5852/2006 was misconceived and rightly rejected by the learned Single Judge.

14. Accordingly we dismiss this appeal holding the same to be without any merit. dusty.