Atma Ram Trust vs Dr. Chiranji Lal And Anr.
2007 Latest Caselaw 103 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The present landlord tenant dispute spans a period of over four decades and various rounds of litigation.

2. One Sh. R.S Basaka Singh, the owner of a shop bearing No. 14, 'C' Block Connaught Place, New Delhi consisting of a ground floor (hall) and a balcony in the rear portion let out the same to M/s Lal and Co in 1941. The sole proprietor of M/s Lal and Co., Dr. Chiranji Lal (respondent No. 1/tenant) inducted a partner Sh. Dwarka Nath in the business. Disputes arose between the partners and a receiver was appointed for the assets of the partnership by a Civil Court.

3. The property in question was purchased by Sh. Atma Ram Chadha (predecessor in interest of the Appellant/landlord) on 20.08.1962. On 22.03.1963, Sh Atma Ram Chadha filed an eviction petition against the respondents under Section 14(1)(a), (b) and (g) of the Delhi Rent Control Act, 1958 (hereinafter referred to as the said Act) on grounds of non-payment of rent; subletting and bona fide requirement by the landlord for the purpose of rebuilding and making substantial additions and alterations respectively.

4. An application was filed for the impleadment of Sh. Dwarka Nath (the partner of respondent No. 1/tenant) and the official receiver as parties. The said application was allowed on 3.12.1963.

5. An agreement is stated to have been arrived at between the landlord and the tenant on 02.06.1964 (hereinafter referred to as 'compromise deed') in terms whereof it was recognized that the premises in question required repairs and renovation as they had become dilapidated. The electricity wiring was required to be redone and even the interiors needed to be modernized. Sh. Atma Ram Chadha/landlord agreed to carry out all the repairs and renovation and to create an inter floor by extending the balcony in the shop both in the front and back for which plans had been got sanctioned from the NDMC and to provide an up to date modern and air conditioned accommodation including fitting of fans, modernizing lights and other facilities. Sh. Chiranji Lal/the tenant agreed to allow Sh. Atma Ram Chadha to carry out the said repairs, renovations and extensions. In view of these renovations to be carried out by Sh. Atma Ram Chadha, the inter floor consisting of the renovated balcony including its back and front extensions was to be given on a monthly rent of Rs 235/- and Rs 50/- respectively to the tenant inclusive of house tax and related charges. The tenant was also entitled to carry on any business or profession under any name or style including allowing his sons or heirs to do so. The tenant had the option to take on rent the ground floor of the reconstructed premises as well provided that they were willing to pay rent at the rate of Rs 2.75/- per square feet of the demised area. It was also agreed that Sh. Atma Ram Chadha would have no right to terminate the tenancy or increase the rent.

6. On 3.06.1964, the respondents filed an application under Section 44 of the said Act for an order directing the landlord to carry out repairs and reconditioning of the property failing which the tenant should be granted the opportunity to carry out the same. A reply with regard to the said application was filed on 06.06.1964 stating that the repairs and substantial alterations would be carried out for which premises be given back. This application was disposed of on 12.06.1964 in the following terms:

This is an application by a tenant under Section 44 of the Delhi Rent Control Act, 1958 requiring the landlord to carry out the repairs in the premises. The parties have filed a compromise today that the landlord will carry out necessary repairs, renovations and extensions mentioned in the compromise deed and the tenant in occupation will allow them all facilities to carry out this work. The possession of the tenant will continue. The petition is consigned to the record room as satisfied. The parties shall bear their costs of these proceedings.

7. On 30.09.1964, the premises were inspected by the learned Rent Controller who found that the inter-floor was in the possession of the landlord. The report of the Rent Controller shows that there were many alterations carried out in the main hall and an inter floor had been put at the height of the balcony by which the height of the shop had been lowered and inter floor had been created above this shop and below the first floor. The shop had a new roof and new pillars. The official receiver was also present.

8. On 31.10.1964, the respondent/tenant filed an application for the suspension of rent and on 12.11.1964, another application was filed under Sections 44 and 45 of the said Act. On 26.12.1964, the said applications were dismissed.

9. The learned Rent Controller vide an order dated 07.02.1966 allowed the petition of the landlord insofar as the ground under Section 14(1)(g) was concerned. The claim in so far as it related to non-payment of rent under proviso (a) to Section 14(1) appears to have not been pressed as the entire arrears had been deposited and the claim on the ground of subletting, assigning or otherwise parting with possession under proviso (b) to Section 14(1) was dismissed. The Rent Controller observed that the tenant had exercised the option for being put in possession of the premises under Section 20 of the said Act and thus was entitled to re-entry after the construction. It was held with regard to the inter-floor that the inter-floor had already been constructed and there was no question of evicting the tenant from the said floor but the further work was at a standstill and there may be some dispute about the legal and actual possession of the inter-floor and thus the landlord was entitled to the possession of the inter-floor. The Rent Controller thus granted an order of eviction with regard to the entire tenanted premises, with the landlord being entitled to take immediate possession of the inter-floor and grant of time till 31.03.1966 with regard to the ground floor.

10. Sh. Atma Ram Chadha filed an application on 08.02.1966 for execution of the order of eviction passed by the learned Rent Controller. Warrants of possession were issued. An application was filed by the tenant under Section 20 of the said Act on 14.07.1966 wherein it was pleaded that the inter-floor was carved out of and formed part of the tenanted premises and the entire inter-floor had been completed and Sh. Atma Ram Chadha was trying to let out the same to some other persons while the tenant was entitled to possession of the said inter-floor. The said application was dismissed vide order dated 29.09.1966 on the ground that the tenant had allowed the landlord to construct the inter floor on a compromise and possession was given.

11. The tenant filed an appeal against the order dated 29.09.1966 and Sh. Atma Ram Chadha filed an appeal against the order dated 7.02.1966 which dismissed the eviction petition on the ground under Section 14(1)(b) of the said Act. Of the said appeals, the appeal filed by the tenant against the order dated 29.09.1966 was allowed and the landlord was to hand over possession of the ground floor and the inter-floor in accordance with the provisions of Section 20 of the said Act while the appeal filed by the landlord was dismissed. Sh. Atma Ram Chadha filed two appeals in this Court against the order allowing the application of the tenant under Section 20 of the said Act and the order dismissing the appeal of the landlord on the ground under Section 14(1)(b) of the said Act. The orders were set aside and the matter was remanded back vide order dated 13.08.1968 of this Court.

12. The Rent Control Tribunal (hereinafter referred to as Tribunal) allowed the appeal of Sh. Atma Ram Chadha under proviso (b) to Section 14(1) of the said Act vide order dated 24.01.1969 and since the appeal was allowed no order was passed under Section 20 of the said Act. The tenant filed an appeal against this order which was allowed on 26.05.1969 by this Court and the Tribunal was directed to go into the issue under Section 20 of the said Act. The SLP filed against this order was dismissed by the Apex Court on 24.03.1970.

13. In the meantime, the property in question had been transferred to the Atma Ram Trust (Appellant herein) in 1968.

14. On 27.05.1971, a fresh petition was filed by the Appellant herein under Sections 14(1)(a) and 22(d) of the said Act on the grounds of non-payment of rent and bona fide requirement by a public institution for the furtherance of its activities respectively (for setting up of a charitable dispensary).

15. On 16.08.1972, in respect of an application filed under Section 20 of the said Act by the respondents, the Tribunal held that the application can be treated as one under Section 144 of the Code of Civil Procedure 1908 (hereinafter referred to as the said code) and remitted the matter back to the Additional Rent Controller (hereinafter referred to as ARC) to decide afresh.

16. It would be useful at this stage to set out the relevant provisions of the said Act which are as under:

14. Protection of tenant against eviction. - (1) Notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favor of the landlord against a tenant:

Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only, namely:

(a) That the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a landlord in the manner provided in Section 106 of the Transfers of Property Act, 1882 (4 of 1882);

(b) That the tenant has, on or after the 9th day of June, 1952, sublet, assigned or otherwise parted with possession of the whole or any part of the premises without obtaining the consent in writing of the landlord;

...

(g) That the premises are required bona fide by the landlord for the purpose building or re-building or making thereto any substantial additions or alterations and that such building or re-building or addition or alteration cannot be carried out without the premises being vacated;

20. Recovery of possession for repairs and re-building and re-entry. - (1) In making any order on the grounds specified in Clause (f) or Clause (g) of the proviso to Sub-section (1) of Section 14, the Controller shall ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if the tenant so elects, shall record the fact of the election in the order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or re-building, as the case may be.

(2) If the tenant delivers possession on or before the date specified in the order, the landlord shall, on the completion of the work of repairs of building or re-building, place the tenant in occupation of the premises or part thereof.

(3) If, after the tenant has delivered possession on or before the date specified in the order, the landlord fails to commence the work of repairs or building or re-building within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with Sub-section (2), the Controller may, on an application made to him in this behalf by the tenant within such time as may be prescribed, order the landlord to place the tenant in occupation of the premises or part thereof or to pay to the tenant such compensation as the Controller thinks fit.

22. Special provision for recovery of possession in certain cases. - Where the landlord in respect of any premises is any company or other body corporate or any local authority or any public institution and the premises are required for the use of employees of such landlord or in the case of a public institution, for the furtherance activities, then, notwithstanding anything contained in Section 14 or any other law, the Controller may, on an application made to him in his behalf by such landlord, place the landlord in vacant possession of such premises by evicting the tenant and every other person who may be in occupation thereof, if the Controller is satisfied-

(d) that the premises are required bona fide by the public institution for the furtherance of its activities.

Explanation.- For the purposes of this section, "public institution" includes any educational institution, library, hospital and charitable dispensary [but does not include any such institution set up by any private trust]

17. The Learned ARC vide judgment dated 18.08.1978, allowed the petition of the landlord under Section 22(d) of the said Act. The respondents were also found to be in arrears of rent but the benefit of Section 14(2) of the said Act was held to be available to the tenant as it was found to be the first default.

18. On the plea of suspension of rent raised by the respondent, the ARC found that this had been rejected in the earlier proceedings vide order dated 26.12.1964 which order had not been assailed by the respondents and held that the respondents cannot now agitate the theory that they are not liable to pay the rent when they had suffered the order dated 26.12.1964 and complied with the same.

19. With regard to the application under Section 20 of the said Act/Section 144 of the said Code, it was found that the possession had been handed over voluntarily by the tenant and the same was dismissed. The ARC observed that the compromise deed arrived at between the parties was acted upon and vide the compromise deed the covered area was not to be reduced and the possession of the tenant was to continue. The possession of the tenant/respondents on the inter-floor was not found even when the interim order dated 26.12.1964 was passed. The balcony which formed the base of the inter-floor undoubtedly was a new construction in entirety The restitution was further not possible in as much the premises (balcony) did not exist now. The inter floor was not the subject matter of eviction in the earlier suit. The landlord had taken possession before passing of the decree, in fact by acting on the compromise. The ARC observed that restitution in this case was not possible and at the most damages may be claimed by the tenant for which this is not the forum.

20. The tenant filed appeals against the said judgment which were allowed by the Tribunal vide common judgment dated 19-07-1982.

21. It may be noticed that the learned Tribunal made reference to the file in the earlier eviction proceedings and the parties had made statements before the trial court that they had no objection if the file of the earlier proceedings is read as evidence.

22. The appellants plea of the case being one of second default in respect of the ground of non-payment of rent Section 14(1)(a) of the said Act was considered by the Tribunal. The Tribunal held that this ground was not pressed in the earlier eviction proceedings. No order under Section 15(1) of the said Act had been passed and the question of taking benefit under 14(2) of the Act, thus did not arise.

23. The Tribunal also considered the plea of suspension of rent raised by the respondents with regard to the ground under 14(1)(a).The judgments inter alia of the Apex Court in Surendra Nath Bibra v. Stephen Court Ltd. and this Court in N.K. Baslas v. Krishan Lal 1973 Rajdhani Law Reporter 14 were taken note of with regard to the proposition that the principles of suspension of rent have been accepted to be applicable in India. The Tribunal observed that the notice of demand admittedly was served and there is no plea that rent was tendered or paid to the Appellant trust and nothing to indicate that that rent was deposited in favor of the Appellant Trust except the plea that the landlord damaged the property and made it unusable and had deprived the tenant of part of the premises. The Tribunal was of the opinion that the earlier decision in which the plea of suspension of rent was rejected was not res judicata as no final finding on the question of suspension of rent was given therein. The learned Tribunal held in the context of the ground under Section 14(1)(a) that as the respondents (appellants therein) had been deprived of the tenanted premises, they cannot be said to be defaulters.

24. On the ground under Section 22(d) of the said Act, the Tribunal considered the judgments in Siva Ram Gupta v. Smt Ganga Devi Jain Dharamath Trust 1960 Punjab Law Reporter 104 and Gulab Rai Kishori Lal v. Shri Banarsidas Chandiwal Sewa Samarak Trust 1964 Punjab Law Reporter 731 with regard to the proposition that in order to take advantage of the provision, there must be an existing public institution and not an institution wanting to be a public institution. It was found that in so far as the building in question was concerned, there were no activities being carried on by the appellant and that the public institution was not functioning already. The trust came into being in 1968 and major portions of the cheques issued (as donations to educational institutions) were issued after 1971 or just before that or thereafter which was only a modus operandi to create an evidence. The Tribunal observed that the transactions were not genuine. It was further observed that the Trust had been created by the father and the son. The previous landlord had failed to get possession and lost the earlier eviction proceedings and the trust seems to have been created as a result of it and on the face of it, it was not bona fide. Another fact that appears to have weighed with the Tribunal is that when the Trust was created in 1968, litigations were pending between Sh. Atma Ram Chadha and the Respondent and appeals were also filed but neither Sh. A.R. Chadha nor his son who was aware of the earlier litigation put in an application for impleadment of the Trust. It was only when Sh. A.R Chadha lost that a fresh petition was filed and it was disclosed that a Trust had come into being in 1968.

25. The learned Tribunal also took into account inter alia the fact that the mezzanine floor during the pendency of the appeal was let out to a bank and observed that if a dispensary was to be set up the same could have been set up in the mezzanine floor. The judgment in Birdhi Chand Jain Charitable Trust v. Kanhaiyalal Shamlal 1972 Rajdhani Law Reporter 143, wherein the landlord had filed an eviction petition and failed and thereafter a trust was created which was not carrying on any such activity, and where the need for the premises was not held to be genuine, was found to be squarely applicable to the facts of the present case and the Tribunal held that the Trust did not require the property bona fide.

26. The Tribunal also considered the issue whether the mezzanine floor had been taken back by the appellant and whether the respondents were entitled to get the same back. Insofar as the compromise deed was concerned, the Tribunal observed that the compromise deed (a photocopy of which was proved as Ex. RX 1) between Sh. A.R. Chadha and respondent No. 1 was apparently not acted upon as an application (Ex. RW12/1) was filed by the respondents under Section 44 of the said Act before the Controller to which a reply was also filed. On the application under Section 44 of the said Act, a compromise was arrived at (Ex. RW12/3). It was made clear in the application that the repairs and renovation would not affect the rights of the parties for eviction and also that the covered area of the shop would not be decreased. In the order (dated 12.06.1964- Ex. RW12/9) passed by the Rent Controller for the repairs to be carried out as per the compromise, it was stated that the possession of the tenant would continue. Also, in the suit pending for the dissolution of partnership in the court of learned Sub judge, an affidavit filed by Sh. A.R. Chadha was also to the effect that the repairs, alterations etc. could not be carried out unless the premises were vacated. The landlord and tenant agreed that the landlord would undertake the repairs without causing undue inconvenience to the tenant and possession was not to be disturbed. The Tribunal observed that certain repairs were carried out, though not all, and the work was stopped. It was also noted that after the eviction order under Section 14(1)(g) had been passed, Sh. A.R. Chadha filed an application for execution and took possession. Even if the landlord was given possession for carrying out the construction work, it would only mean that Sh. A.R. Chadha was in permissive possession while the actual and constructive possession would be of the respondents. The Compromise deed was not acted upon and was relevant only for the purpose of determining the extent of tenancy. The Tribunal held that the structure is only the extension of the earlier balcony and would be accretion to the tenanted premises. The respondents (appellants therein) were held entitled to the restoration of the same.

27. The order of the Learned ARC was set aside and petition of eviction filed by the appellant was dismissed. The present appeals have been filed by the appellant aggrieved by the said judgment.

28. It may be mentioned at this stage that since the eviction proceedings were initiated prior to the amendment of the said Act in December 1988, the provisions as they stood prior to that date would apply. The result would be that the first appeal would lie to the Tribunal under Section 38 of the said Act both on a question of law and of fact while a second appeal would lie to this Court under Section 39 of the said Act only on a question of law. In pursuance to the amendment the second appeal has been abolished and the first appeal to the Tribunal lies only on a question of law.

29. Learned Counsel for the appellant contended that insofar as the compromise deed is concerned that there are admissions of the tenant which show that the construction was in furtherance of the compromise deed. The application under Section 20 of the said Act filed by the respondent on 14.07.1976 refers to the compromise deed whereunder Sh. Atma Ram Chadha agreed to extend the floor area by extending the balcony in the shop both in front and at the back. The application contains a prayer for restoration of the inter floor and refers to a condition under the compromise deed. Reference to the compromise deed has also been made in the replication filed by the respondents to the Written Statement of Sh. Atma Ram Chadha in respect of the application under Section 20 of the said Act. Learned Counsel further submitted that the tenant had admitted in the replication that the possession of the inter floor is not with him since 06/07.11.1964 while the order of eviction was passed only on 07.02.1966. The findings of the learned ARC in the order dated 26.12.1964 were inter alia on the basis of the personal inspection by the ARC and the other material on record.

30. Learned Counsel submitted with regard to the plea that the compromise deed was acted upon that in the replication filed by the respondents in the application under Section 20, it was stated that that the major additions and alterations were carried out in accordance with the compromise deed, but at the final stage the intentions of the appellant became dishonest. The Rent Controller by the order dated 29.09.1966 rejecting this application had observed that the floor was built under the compromise deed and not under the order of the court.

31. Learned Counsel contended that the finding of the Tribunal that possession was taken after passing of the Order dated 07.02.1966 is contrary to the findings and material on record including the admissions of the tenant. Therefore, the learned Tribunal ought not to have allowed the application under Section 144 of the said Code. The finding that the compromise deed was not acted upon is contrary to the admissions of the tenant in this regard.

32. Learned Counsel referred to the judgment of the Apex Court in Ishwar Dass Jain (Dead) through Lrs v. Sohan lal (Dead) by Lrs to advance the proposition that there are two situations in which interference with findings of fact is permissiblefirstly when a material or relevant evidence is not considered which if considered would have led to an opposite conclusion and secondly, where a finding has been arrived at by placing reliance on inadmissible evidence, which if it were omitted, an opposite conclusion was possible. The Court noted that in either of the above situations, a substantial question of law can arise.

33. Learned Counsel referred to the decisions of the Apex Court in Yadarao Dajiba Shrawane (Dead) by Lrs v. Naniwal Harakchand Shah (Dead) and Ors and Neelakantan and Ors. v. Mallika Begum to submit that the High Court, in a second appeal can interfere where a finding/judgment is based on misrepresentation of evidence or is without any legal evidence, is on consideration of inadmissible evidence, ignores material evidence, is on a misreading of evidence or on a finding of fact has ignored admissions and concessions by witnesses or parties or suffers from any legal infirmity. Learned Counsel also placed reliance on the decision of the Supreme Court in Kochukakkada Aboobacker (Dead) by Lrs and Ors. v. Attah Kasim and Ors. wherein the trial court and the first appellate court had not considered the documents in proper perspective and it was held that the High Court was entitled to reconsider evidence by drawing inferences from the admitted documents.

34. Learned Counsel submitted as regards Section 144 of the said Code that admittedly the appellant was not in possession under an order of the Court but under the compromise deed de hors the proceedings and therefore the question of restitution does not arise. Learned Counsel referred to the Judgment of learned single Judge of this Court in Bhagwat Dayal v. Sunehari to contend that the proceedings for restitution cannot be used to get substantive relief.

35. Insofar as the the question of Section 22(d) of the said Act is concerned, learned Counsel for the appellant submitted that merely because there was litigation pending between the respondents and Sh. Chadha, the same cannot cast a shadow on the bona fide intention of the Trust. The learned Tribunal relied upon a decision which was peculiar to the facts of the case of Birdhi Chand Jain Charitable Trust supra. The findings of the learned ARC were based on the correct appreciation of evidence and facts while the findings of the Tribunal are based on a misreading of evidence and suffer from legal infirmity.

36. Learned Counsel for the respondents, on the other hand, submitted that the question that whether a particular agreement has been abandoned by the parties is a question of fact and not a question of law much less a substantial question of law.

37. Learned Counsel further submitted without prejudice to the aforesaid argument that the compromise deed was not relied upon by either of the parties during the pendency of the petition under Section 14(1)(g) of the said Act. The compromise deed does not find mention inter alia in the application filed by the respondents on 03.06.1964, the reply to the same filed by Sh. Chadha on 06.06.1964, the joint compromise application dated 12.06.1964, in the order of recovery of possession passed on 07.02.1966 or in the affidavit of Sh. Atma Ram Chadha filed in the proceedings between respondent No. 1 and his partner. It was only in the application under Section 20 of the said Act filed by the respondents on 14.07.1966 that the compromise deed was placed on record to show the extent of the tenancy to the Court. In reply to the said application filed on 01.08.1966, the landlord had alleged that the tenant was seeking specific performance of the compromise deed which was denied in the replication by the respondents.

38. Learned Counsel submitted that while rejecting the application of the tenant under Section 20 of the said Act (vide order dated 29.09.1966), the learned Rent Controller observed that the compromise deed was never implemented between the parties. In the judgment allowing the appeals against the order dated 29.09.1966 and the eviction order, the then Tribunal held that the compromise deed did not see the light of the day for a considerable period of time after its execution. The observation of the learned ARC in the Order dated 18.08.1978 that the the compromise deed was enforceable and that it was filed in the proceedings under Section 44 of the said Act, and thereafter the Order dated 12.06.1964 was passed is against the record. The Tribunal in the impugned Judgment has come to a specific finding that the compromise deed was not acted upon (para 78) and is relevant for determining the extent of the tenanted premises (para 81). Learned Counsel thus submitted that these findings are a pure question of fact and the First Appellate Court having come to a conclusion that the compromise deed was not acted upon being a final finding of fact, is binding on the Second Appellate Court.

39. Insofar as the applicability of the principles of restitution as contained in Section 144 of the said Code are concerned, learned Counsel submitted that the answer depends upon a factual finding as to whether possession of the inter floor was taken in pursuance to the Order of Eviction passed by a Court of Competent Jurisdiction or otherwise. Learned Counsel pointed out that it is evident from the replication filed by the appellant in the present proceedings the finding of the Tribunal while disposing of the appeals against the Order dated 06.03.1967 and the findings on 16.08.1972 on the application under Section 20 of the said Act that possession had been taken in execution of a court order. Further, the report of the Local Commissioner dated 30.11.1964 and the report of inspection carried out by the Sub Judge (EXRW 12/5) in the proceedings between respondent no.1 and his partner show that the respondents were in possession of the inter-floor

40. The Tribunal has reached a finding in the impugned Judgment that possession was taken by the landlord through Court by executing Warrants of possession and not de hors a decree/order of the Court. Learned Counsel for the respondents thus contended that as the possession was taken in pursuance of the Order of a Court, the only provisions applicable are Section 144 of the said Code and Section 20 of the said Act.

41. As regards the question whether the application under Section 20 of the said Act can be treated as one under Section 144 of the said Code as per the earlier directions of the Tribunal and whether the same can be agitated at this stage, learned Counsel submitted that the clear finding of fact is that possession was delivered in execution of a decree. The Tribunal vide order dated 06.08.1972 directed the application under Section 20 of the said Act to be treated as one under Section 144 of the said Code which is in fact the only provision applicable to the circumstances of the case. The said order was not challenged and the learned ARC was thus bound by the order. Secondly even before the learned ARC, no evidence was given in support of the contention that the application cannot be treated as one under Section 144 of the said Code.

42. Learned Counsel contended that whether a thing is bona fide or not is a pure question of fact and nothing of law is involved therein. Learned Counsel referred to the judgment of learned Single Judge of this Court in Bluestar Limited v. N.R. Sharma and Anr. 1977 Lab. I.C. 328 the judgment of a division bench of the Rajasthan High Court in Firm Ram Nath Ram Chander v. Firm Bhagat Ram and Co. , and of a learned Single judge of this Court in in Kailash Chand v. Sakir Chand; in support of the proposition that whether an action is bona fide or mala fide is essentially a question of fact. In this behalf learned Counsel also referred to the judgment of a learned single judge of the Patna High Court in Arun Kumar Saha v. Mohd. M.D. Basir Ahmad and Anr. wherein it was observed that the finding as to whether the landlord requires a premises reasonably and in good faith is a question of fact.

43. The Appellant Trust was created when proceedings were pending and the landlord had lost his cause before the Courts. The fact of Sh Atma Ram Chadha gifting a portion of his properties to his son Sh. Chander Mohan Chadha on 28.03.1967 as also the fact of transfer of the demised premises to the Trust was not disclosed at any point in the earlier proceedings, in the Tribunal or this Court or in the Supreme Court. The Tribunal being the First Appellate Court reached a definite finding of fact from the evidence that the creation of the Trust was not bona fide and was only for the purposes of filing the eviction petition. Nothing was done by the Trust to show its bona fides and even the cheques issued as donations were issued by Sh. Atma Ram Chadha and not by the Trust. Learned Counsel thus canvassed that the fact of creation of the Trust not being bona fide cannot be disturbed in a second appeal.

44. Learned Counsel referred to the Judgment in Kshtish Chandra Purkait and Ors. v. Santosh Kuma Purkait and Ors. to contend that the existence of a substantial question of law is a sine qua non for the exercise of jurisdiction under the amended provision of Section 100 of the said Code.

45. Learned Counsel placed reliance on the judgment in Sir Chunni Lal V Mehta and Sons Ltd v. Century Spinning and Manufacturing Company Ltd. in which it was held that the test for determining whether a question of law is raised is whether it is of general public importance or whether it directly or substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or the Federal Court or is not free from difficulty or calls for discussion of alternative views and if the principles to be applied in determining the question are well settled and there is a mere question of applying these principles or the plea raised is palpably absurd, the question would not be a substantial question of law. Similar observations were made in the judgment of a Division Bench of this Court in Bhagat Construction Co. P. Ltd v. Commissioner of Income Tax, Delhi-II, 90 (2001) DLT 78 (DB). In this case, it was also observed that a question of fact becomes a question of law if the finding is either without any evidence or material or if the finding is contrary to the evidence or is perverse or that there is no direct nexus between the conclusion of fact and the prime fact upon which the conclusion is based. It is not possible to turn a mere question of fact into a question of law by asking whether as a matter of law, the authority came to a correct conclusion in a matter of fact.

46. Again in a recent decision of the Apex Court in Hero Vinoth (Minor) v. Seshammal it was held that the High Court should be satisfied that the case involves a substantial question of law and not merely a question of law. A question of law having a material bearing on the decision of the case (i.e. a question, the answer to which affects the rights of the parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principles emerging from binding precedents, and involves a debatable legal issue. A substantial question of law would also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the Court below has decided the matter either ignoring or acting contrary to such legal principles. In the second type of cases, the substantial question of law arises not because the law is debatable but because the decision rendered on a material question violates the settled position of law. In this behalf, learned Counsel also referred to the decision of the learned Chief Justice (as he then was) of this Court in Parkash Chander Gupta v. Tara Chand Malik 1968 IV DLT 200 wherein similar observations were made. It was also noted that mere application of settled principles to a particular set of facts would scarcely constitute a substantial question of law. It is only when the existence of certain facts gives rise to a legal right or liability that the inference from these facts becomes a question of law.

47. Learned Counsel further referred to the decision of the Apex Court in V. Ramachandra Ayyer and Anr. v. Ramalingam Chettiar and Anr. with regard to the scope of interference of a High Court in a second appeal. It was observed that in hearing a second appeal if the High Court is satisfied that the decision is contrary to law or some usage having the force of law or if there is a substantial error or defect in the procedure as provided by the Code or by any other law for the time being in force which may have produce error or defect in the decision of the case on merits, it can interfere with the decision of the lower appellate court. The Apex Court took note of the judgment of the Privy Council in Mst. Durga Choudhrain v. Jawahir Singh Choudhri 17 Indian Appeals 122 (PC) where it was observed that an erroneous finding of fact is a different thing from an error or defect in procedure and there is no jurisdiction to entertain an appeal on the ground of an erroneous finding of fact, however, gross or inexcusable the error may seem to be. It was also observed that nothing can be clearer than the direction in the Code that no second appeal will lie except on the grounds specified in Section 584 (corresponding with Section 100 of the said Code) and they uttered a word of warning that no court in India or elsewhere has the power to add to or enlarge these grounds. In this respect, Learned Counsel for the respondents also drew the attention of this Court to the decision in Commissioner, Hindu Religious and Charitable Endowment v. P. Shanmugama and Ors. 2005 (1) Scale 154 to contend that the High Court has no jurisdiction in the Second Appeal to interfere with the findings of facts recorded by the First Appellate Court after careful consideration of the evidence, oral and documentary on the record.

48. Learned Counsel placed reliance on the Judgment of the learned Single Judge of the Patna High Court in Bhagwan Das Sharma v. Gaya Saha and Ors. wherein it was observed that the mere fact that the lower appellate court has made a specific reference in its Judgment to only some of the witnesses, examined by the parties, cannot lead to the inference that it was unmindful of the other evidence led in by them especially when the Judgment refers to their respective contentions and cases which should mean the evidence led in by them. Its factual conclusions reached on scrutiny of the evidence on record, oral and documentary, cannot be set aside in a second appeal. Learned Counsel further referred to the decision of the Apex Court in Kondiba Dagdu Kadam v. Savitribai Sopan Gujar AIR 1989 SC 2213. It was observed in this case that it is not within the domain of the High Court to investigate the grounds on which the findings were arrived at by the First Appellate Court. It is true that the First appellate Court should not ordinarily reject witnesses accepted by the Trial Court; the same is no ground for interference in Second Appeal when it is found that the Appellate Court had given satisfactory reasons for doing so. The High Court cannot substitute its opinion for the opinion of the last court of fact being the First Appellate Court unless it is found that the conclusions drawn by the lower Appellate Court were erroneous being contrary to mandatory provisions of law applicable or the settled position on the basis of pronouncements made by the Apex Court or was based on inadmissible evidence or arrived at without evidence. It was also observed that the mere appreciation of facts, the documentary evidence or the meaning of the entries and the contents of the document cannot be held to be raising a substantial question of law.

49. Learned Counsel for the parties have been heard at length over different days largely on account of the factual matrix though really speaking the dispute is not so large.

50. Learned Counsel for the respondents continued to emphasize that the present appeal being a second appeal on a question of law, there were really no questions of law so arising as to call for adjudication by this Court. In this behalf, it may be noticed that at the stage of admission of the appeal no questions of law were framed. When the hearing began, I deemed it appropriate to set out the questions of law in the order dated 16.11.2006 which read as under:

a) Whether the Compromise Deed/Agreement can be said to have been abandoned?

b)Whether the principles of restitution as contained in Section 144 of said Code are applicable in view of the plea of the appellant that possession was taken de hors any decree/order of the Court?

c) Whether the application under Section 20 of the said Act) could be treated as one under Section 144 of the said Code as per the earlier directions of the Tribunal and whether it is permissible for the appellant to agitate this issue at this stage?

d) Whether the petitioner trust was not bonafide created?

51. It is not necessary to deal with each of the questions separately as the substratum for their consideration is interlinked.

52. There is no doubt that the scope of interference in a second appeal on a question of law is limited. However, in order to appreciate the scope of a second appeal in such a matter, reference can be made to the Judgment of the Apex Court in G.K. Bhatnagar (Dead) by Lrs v. Abdul Alim wherein it was observed that in such a second appeal where there is reappraisal of the original findings of the ARC by the Tribunal, if the findings of the Tribunal are based on surmises and conjectures, while taking a contrary view, the High Court was justified in restoring the findings of the Rent Controller. It was held that where a first appellate Court reversed the well reasoned findings of the Rent Controller, a substantial question of law arose calling for the High Court's interference in second appeal. Thus the accepted legal position is that if the well reasoned findings of the ARC are disturbed by the Tribunal in a cavalier fashion that itself would raise a question of law. Thus I am unable to accept the plea of the learned Counsel for the respondents that there are no questions of law which arise for consideration in the present case.

53. There have also been certain subsequent developments which have to be noticed. The position at present is that in view of the interim orders operating, the inter floor is in the possession of the appellant while the ground floor is in possession of the tenant. There are no charitable activities being carried out from the premises by the appellant. The parties have opened show rooms in the respective portions in their occupation. The respondents claim to have obtained a franchise from M/s Arvind Brands Ltd and the show room is being run by them which position is disputed by the appellant. Be that as it may that is a subject matter of a separate dispute on account of eviction proceedings initiated by the appellant against the respondent and which is still pending before the ARC. The inter-floor is stated to have been let out to M/s Indian Rayon and Industries Ltd. The object of noting this is to emphasize that both parties are carrying on commercial ventures from the portions in their respective possession.

54. There were endeavors made by the counsel for the parties to persuade the parties to arrive at an amicable arrangement, but the same did not prove to be fruitful. Thus it is necessary to decide the appeals on merits.

55. An application CM 13951/2005 was filed by the appellant seeking directions to the respondents to place on record the documents in relation to the transaction between the respondents and M/s Arvind Brands Ltd pertaining to the ground floor of the premises and to inform M/s Arvind Brands that in case of the appellant succeeding in the appeal, the ground floor would have to be vacated. The documents in respect of which directions are sought by the appellant would serve no purpose in the present proceedings and hence are not required to be filed in these proceedings. The effect of the documents would have be examined in the separate eviction proceedings pending between the parties.

56. In my considered view the most important aspect in the present matter which has been completely given a go-by by the Tribunal is the factum of the compromise deed having been arrived at and executed on 02.06.1964 and its ramification. There is no dispute that the parties have appended their signatures to the compromise deed. It can also not be said that the parties were taken unawares since there were past litigations between the parties and the parties were legally advised. The sub stratum of the compromise deed is the condition of the original tenancy premises which again is really not in dispute. The passage of time had taken its toll on the tenanted premises. The tenanted premises were valuable being located in the heart of the commercial area. The landlord was getting meagre rent. In such a situation, both the landlord and tenant decided to arrive at a mutually convenient and commercially lucrative option. It may also be noticed that respondent no.1 at that time was facing business disputes with his partner and the business was lying closed. Even a receiver had been appointed at that stage of time.

57. The object of the compromise deed is obvious. Instead of the respondents continuing to enjoy the dilapidated tenanted premises, it was agreed that the premises would be renovated for which the monies would be spent by the landlord. The landlord was also not motivated by any altruistic object but was looking to commercial benefits. The landlord would naturally expect that if such large scale renovations and extensions are made, the landlord should derive benefits of the same. Thus the arrangement envisaged: the extension of the balcony, creation of inter floor, renovation of both the levels and in lieu thereof the tenant was to occupy the inter floor as extended on similar conditions as the original ground floor. The tenant was also to get the option to occupy the ground floor at certain pre determined rates as a first option. Thus it is the enhanced rent for the ground floor which was to compensate the landlord for the large scale renovations and extensions to be made by him. If the tenant chose not to exercise the option then naturally the landlord would have the option to let it out to third party.

58. The conclusion arrived at by the Tribunal accepting the plea of the respondents that this compromise deed was never acted upon is without any basis and in fact disturbs the well reasoned findings of the ARC on this aspect. There is no doubt that though the compromise was arrived at on 02.06.1964, respondents filed the application under Section 44 of the said Act on 03.06.1964. The reply was filed on 06.06.1964 and the compromise was recorded on 12.06.1964. The order dated 12.06.1964 recording the compromise in turn refers to the compromise deed. The occasion to refer to the compromise deed would not have arisen in the order dated 12.06.1964 if the same had been abandoned. The reason as to why this process was gone through appears to be obvious. The parties outside Court had arrived at a compromise deed. Thereafter they wanted the same to be recorded in court proceedings so that parties would remain bound by it rather than an arrangement whereby the same was to be enforced through separate legal proceedings. This was achieved by the compromise arrived at on 12.06.1964 which had to be read along with the compromise deed.

59. Learned Counsel for the respondent pressed for sustaining the Order of the Tribunal on the ground that everything must fall to the tenant. A question which one poses is as to why the landlord would have spent so much of money if there was nothing in it for him? As to what benefit would accrue to the landlord is what is set out in the compromise deed.

60. The consequence is that resolution of the present appeals is a mixed bag for the parties. It cannot be said that there is some charitable activity being carried on by the appellant as a result of which the respondent must be thrown out and the whole premises left to the landlord. Similarly the tenant cannot be permitted to enjoy the benefits of the whole renovated premises along with extensions contrary to what was arrived at through process of compromise. I am thus of the considered view that it is this compromise deed coupled with the compromise dated 12.06.1964 which must be given effect to.

61. Insofar as the application for restitution under Section 20 of the said Act/Section 144 of the said Code is concerned, in terms of the compromise deed the possession of the entire premises (ground floor and inter floor) cannot be restored to the respondents unconditionally. While the possession of the inter floor is to be restored to the respondents, the possession of the ground floor can be given only if the respondents exercised the option given under the compromise deed on the terms and conditions envisaged therein.

62. The problem however does not rest at this. As discussed above, insofar as the inter floor and the extended portion is concerned, the same had to fall to the respondents. This portion is, however, in the occupation of the appellant. The respondents would also be entitled to the occupation of the ground floor on the terms and conditions as set out in the compromise deed. This aspect was even raised during the court proceedings but on instructions learned Counsel for the respondents clearly stated that the respondents are not interested in occupying the ground floor. The rationale of the same is explained that in view of the amendment to the said Act in 1988 whereby the premises for which the rental is more than Rs. 3,500/- per month fall outside the purview of the said Act. Thus even if the respondents were to accept such tenancy, the rate being more than Rs. 3,500/- per month the appellant would have the right to forthwith terminate the tenancy and seek occupation and thus really no benefit would flow to the respondents.

63. I may add at this stage that in order to put an end to the dispute, learned Counsel for the appellant was willing even to give a certain specified time period to the respondents for occupation of the ground floor on those terms as agreed under the compromise deed apart from the occupation of the inter floor. Even that was not acceptable to the respondents.

64. The consequence of this is that conclusion is reached that the respondents are not interested in exercising the option under the compromise deed for occupying the ground floor and thus the landlord must be left to deal with the ground floor in any manner deemed appropriate.

65. The result of the aforesaid is that really speaking there has to be an exchange of portions occupied by the parties and that would also require some time. I thus consider it appropriate to grant three months time to the parties to exchange the ground floor and the inter floor whereby the inter floor with the extensions would be occupied by the respondents while the ground floor would be occupied by the appellant.

66. The appeals and application are disposed of in the aforesaid terms leaving the parties to bear their own costs.