Delhi High Court

Pur Polyurethane Products P.Ltd. vs Geeta Bhargava on 17 December, 2008

Author: Pradeep Nandrajog

*                  IN THE HIGH COURT OF DELHI


                         Judgment reserved on : November 27, 2008
%                       Judgment delivered on : December 17, 2008


+                       RFA No. 200/2008


PUR POLYURETHANE PRODUCTS P.LTD.       ..... Appellant
             Through: Mr. Harshad V.Hameed, Adv.


                        versus


GEETA BHARGAVA                                     ..... Respondent
             Through:         Mr.   Jayant Bhushan, Sr. Adv. with
                              Mr.   Buddy Ranganadhan,
                              Mr.   Atul Shanker Mathur and
                              Mr.   Ajay Bhargava, Advs.


CORAM:


Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R. Midha

1. Whether reporters of local papers may be allowed
   to see the judgment?

2. To be referred to the Reporter or not?

3. Whether judgment should be reported in Digest?


: PRADEEP NANDRAJOG, J.

1. Vide Ex.DW-1/1, on 13.12.1977, Delhi State

Industrial Development Corporation (DSIDC for short) allotted

under a lease-hold tenure an industrial shed bearing No.22,

Okhla Industrial Complex, Phase II, New Delhi to the

respondent. On 27.8.1990, vide Ex.DW-1/2, respondent

executed a license deed in favour of the appellant permitting

the appellant to use the shed except the first floor thereof at a

monthly license fee of Rs.19,000/- for a period of 3 years with

effect from 1.9.1990.

2. A sum of Rs.1,14,000/- was paid as advance license

fee to be recovered @ Rs.4,750/- per month i.e. in 24 months.

Another sum of Rs.1,14,000/- was paid as interest free security

deposit, to be refunded when the licensed premises was

vacated.

3. Two months' license fee thereafter was paid by the

appellant who ceased to pay any further license fee because

DSIDC issued an eviction order against the respondent on

20.11.1990, Ex.DW-1/5. It was alleged therein that the lease

money payable by the respondent to DSIDC had not been paid

and that the respondent was liable to be evicted.

4. The appellant faced a threat of eviction. It filed a

writ petition registered as W.P.(C) No.3916/90. The order

Ex.DW-1/5 was challenged in the writ petition. Vide order

dated 10.12.1990, Ex.DW-1/6, while issuing show cause notice

in the writ petition, operation of Ex.DW-1/5 was stayed.

5. Respondent challenged the eviction order, Ex.DW-

1/5 by filing an appeal under Section 9 of the Public Premises

(Eviction of Unauthorized Occupants) Act 1971 which was

allowed vide order dated 15.5.1991, Ex.DW-1/17. The eviction

order was set aside. Matter was remanded before the Estate

Officer for fresh adjudication.

6. Vide Ex.PW-1/3, on 28.11.2000, respondent called

upon the appellant to surrender possession of the entire shed

alleging that the appellant had trespassed into the first floor

thereof pertaining to which area no license was granted to the

appellant. Stating that if appellant treated it to be a tenant,

tenancy was determined after 15 days of receipt of the notice

and that mesne profits would be payable for unauthorized

occupation. Not receiving back the possession, respondent

instituted a suit stating that as the licensor it was entitled to

recover possession of the licensed area and as the owner of

the remaining was entitled to receive possession thereof as

possession of the appellant was unauthorized. It was stated

that license fee for a period 3 years prior to the filing of the

suit in sum of Rs.6,84,000/- was payable. Future mesne profits

were claimed at Rs.1,50,000/- per month.

7. Appellant defended the suit by alleging

misrepresentation of facts, being the non-disclosure of the

eviction order passed against the respondent and the filing of

WP(C) No.3916/1990 by the appellant. It was stated that vide

Ex.DW-1/31 and Ex.DW-1/32, DSIDC had floated a scheme to

regularize the allotment in favour of the sub allottees and that

under the scheme, the appellant had deposited Rs.14,22,500/-

with DSIDC and that vide order dated 3.9.1993, Ex.DW-1/41,

the Division Bench before which W.P.(C) No.3916/90 was

pending had permitted the appellant to deposit the amount

with DSIDC. It was pleaded that aforenoted facts being not

pleaded in the plaint, the suit merited a summary dismissal. It

was pleaded that the respondent had lost title to the property

and that the appellant was in occupation as an owner being

directly recognized as the owner by DSIDC. It was alleged that

the respondent had entered into the license agreement under

a void title and hence could not rely upon the same. Bar of res

judicata was predicated with reference to the pendency of

W.P.(C) No.3916/90. It was pleaded that the suit was barred

by limitation. It was pleaded that the respondent was not

entitled to even maintain the suit by virtue of Section 41 of the

Specific Relief Act.

8. On the pleadings of the parties 13 issues were

settled, being as under:-

"1. Whether the suit is liable to be dismissed for concealment and misrepresentation of facts?

2. Whether the license granted by the plaintiff to the defendant was inoperative and void ab initio?

3. Whether the defendant is entitled to continue in possession of the premises?

4. Whether the plaintiff has no right to claim relief of Mandatory Injunction & Possession? OPD

5. Whether the present suit is barred by res judicata? OPD

6. Whether the present suit is barred by limitation? OPD

7. Whether the suit is not maintainable under Section 41 of the Specific Relief Act?

8. Whether the suit is not correctly valued for the purpose of court fees and jurisdiction? OPD

9. Whether the defendant was a licensee/tenant in the premises, if so, whether the license/tenancy of defendant has been validly determined? OPP

10. Whether the plaintiff is entitled to possession of the property? OPP

11. To what amount, if any, is the plaintiff entitled to recover from the defendant? OPP

12. Whether the plaintiff is entitled to mesne profits, if so, at what rate and from what period? OPP

13. Relief."

9. Before discussing the findings of the learned Trial

Judge and the arguments urged in the appeal, suffice would it

be to state that the defences pertaining to suppression of facts

and res judicata did not require any issue to be settled. We

say so for the reason certain pleadings are wholly irrelevant

and need not result in settlement of issues. Suppression of

facts has a relevance where the remedy sought is

discretionary and it is permissible to urge a defence that

because of the conduct of the plaintiff, the Court should not

exercise the discretionary jurisdiction in favour of the plaintiff.

But where the remedy is by way of right and no discretion is

left with the Court, such kind of defences have no place.

Similarly, pleas of res judicata have to be with respect to

decisions in an earlier proceedings between the same parties

or their predecessor-in-interest on the same subject matter or

substantially the same subject matter. In the instant case, no

reference whatsoever was made to an earlier decision. The

plea of res judicata was predicated on the matter being

allegedly in issue in W.P.(C) No.3196/90, which writ petition

was pending when the suit was filed. At best, Section 10 of

the Code of Civil Procedure 1908 could have been invoked.

10. Needless to state the decision of the learned Trial

Judge is against the appellant pertaining to issue No.1 and

issue No.5 which findings were not questioned during

arguments in the appeal.

11. Though various documents have been exhibited at

the trial, the material documents which have been considered

by the learned Trial Judge are the ones referred to by us in the

preceding paragraphs while introducing the facts relevant for

the present decision.

12. We may note certain other facts pertaining to

W.P.(C) No.3196/90 and another writ petition filed by the

appellant as also the fact that ultimately DSIDC settled its

dispute with the respondent and executed a conveyance deed

in favour of the respondent on 13.11.2006, conveying a free

hold tenure in the land in favour of the respondent and

ownership rights qua the super structure in property bearing

No.22, Okhla Industrial Complex, Phase II, New Delhi. The writ

petition No. W.P.(C) 3196/90 was dismissed by a Division

Bench of this Court on 3.7.2006. Review sought of said order

was dismissed vide order dated 25.7.2006. Petition seeking

Special Leave to Appeal against the order of the Division

Bench was dismissed on 14.8.2006. The appellant filed

another writ petition being W.P.(C) No.12589/2006 praying

that DSIDC be directed to execute title documents conveying

title in the shed in question in favour of the appellant. Said

writ petition was dismissed by a learned Single Judge vide

order dated 11.7.2007. Appeal being LPA No.1269/2007

against the order of the learned Single was dismissed by the

Division Bench on 9.10.2007. The appellant has filed another

writ petition being W.P.(C) No.2589/2007 challenging the

conveyance deed executed by DSIDC in favour of the

respondent, which is still pending.

13. To put it pithily, the finding returned by the learned

Trial Judge is that the appellant cannot question the title of the

licensor which title in any case stands perfected with the

execution of the conveyance deed in favour of the respondent.

The suit being filed before expiry of 12 years reckoned when

the license period was over or even reckoned from November,

1990, it has been held that the suit is within limitation. The

appellant has been directed to restore possession of the entire

property. Mesne profits @ Rs.50,000/- per month have been

awarded with effect from 22.5.2001 till possession is handed

over.

14. At hearing held on 27.11.2008, learned counsel for

the appellant urged that with the threat of ejectment by DSIDC

looming large when DSIDC cancelled the allotment in favour of

the respondent and ordered ejectment, the appellant applied

under the scheme of DSIDC which permitted unauthorized

occupants to regularize their possession under DSIDC by

paying Rs.14,22,500/- to DSIDC and hence the well-recognized

principle of law that the relationship between the licensor and

the licensee came to an end with simultaneous creation of a

right in favour of the licensee under the title paramount of the

licensor was fully applicable in the facts of the instant case.

Counsel urged that it was not necessary for the title

paramount to first eject the licensor or the licensee and

thereafter create a new relationship directly with the licensee.

Counsel urged that but for the intervention by the appellant

who had filed W.P.(C) No.3916/90 to challenge the ejectment

order by DSIDC, the respondent had lost title to the property

for good.

15. With respect to the said plea of the appellant, it

would be useful to note that the issue was considered, though

in a different context, when CM(M) No.645/2007 filed by the

respondent was decided by this Court on 30.7.2007. In said

petition, the respondent had challenged an order dated

5.3.2007 passed by the learned Trial Judge impleading the title

paramount i.e. DSIDC as a defendant.

16. Setting aside the order dated 5.3.2007 and allowing

CM(M) No.645/2007, it was observed as under:-

"6. The issues were framed on 19.9.2002. Parties proceeded to lead their evidence. Evidence was recorded. On 19.1.2006 case was notified for final arguments to be heard on 28.1.2006. Parties were directed to file their written submissions. On 28.1.2006, plaintiff filed the written submissions. Matter was renotified for the defendant to submit it's written statement. On 3.2.2007 the application under Order 1 Rule 10 CPC was filed by the defendant stating that in view of the defence taken in the written statement, namely, that DSIDC which had allotted the shed to the plaintiff under a hire purchase scheme had floated a scheme to regularize allotment in favour of the person who was occupying the premises, presence of DSIDC was necessary for a final and a proper adjudication of the suit. Learned Trial Judge has allowed the said application.

7. To be fair to the parties, I may note that various events have transpired after DSIDC allotted, under its hire purchase scheme, the shed to the plaintiff and thus learned counsel made extensive reference to the said facts. But in my opinion, an extensive narration of the said facts would result in penning down facts which ultimately have no bearing upon the issue, for the reason said facts relate to the passing of an order of eviction under the Public Premises (eviction of unauthorized occupation) Act 1971 by the Estate Officer, DDA. Challenge thereto by way of an appeal and a further challenge by way of a writ petition.

8. Suffice would it be to note that the respondent has filed a writ petition in this Court registered as W.P.(C) No.12589/2006 praying that DSIDC should be directed to formalize allotment of the shed in the name of the respondent and execute a lease deed in its favour.

9. During pendency of the said writ petition, DSIDC has executed a conveyance deed on 13.11.2006 in favour of the plaintiff. With the result, W.P.(C) No.12589/2006 was dismissed. The respondent has filed another writ petition, registered as W.P.(C) No.2589/07 challenging the conveyance deed executed by DSIDC in favour of the petitioner.

10. The principle of law that a tenant or a licensee cannot question the title of the lessor or the licensor as the case may be is subject to an exception, namely, it does not apply where the plea taken is that after grant of the license or the lease, the licensor or the lessor as the case may be has lost the title. If after so pleading, the licensee or the lessee pleads a direct attornment under a third party, presence of the said third party would be necessary in a suit for possession. The estoppel contemplated by Section 116 of the Indian Evidence Act is restricted to the denial of title at the commencement of the tenancy and does not extend to a plea of title being lost after the tenancy was created. [See AIR 1987 SC 1656 Mangat Ram Vs. Sardar Meharban Singh; Halsbury's Laws Of England, IVth Edition, Para 238 AIR 1987 SC 2192 D.Satyanarayana Vs. P.Jagadish and (2002) 3 SCC 1998 J.J.Lal Pvt. Ltd. Vs. M.R.Murali].

11. Pertaining to a litigation where the subject matter thereof would result in a declaration as regards status or a legal character, summarizing Order 1 Rule 10 of the Code of Civil Procedure, in the report published as AIR 1958 SC 886 Raziya Begum Vs. Sahebzadi Anwar Begum, in para 13, Supreme Court observed as under:-

"(13) As a result of these considerations, we have arrived at the following conclusions :

(1) That the question of addition of parties under R.10 of O.1 of the Code of Civil Procedure, is generally not one of initial jurisdiction of the court, but of a judicial discretion which has to be exercised in view of all the facts and

circumstances of a particular case; but in some cases, it may raise controversies as to the power of the court, in contradiction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in S. 115 of the Code;

(2) That in a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest, in the subject-matter of the litigation;

(3) Where the subject-matter of a litigation, is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party, it would be in a better position effectually and completely to adjudicate upon the controversy;

(4) The cases contemplated in the last proposition, have to be determined in accordance with the statutory provisions of Ss. 42 and 43 of the Specific Relief Act;

(5) In cases covered by those statutory provisions, the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon a clear proof apart from the admission;

(6) The result of a declaratory decree on the question of status, such as in controversy in the instant case, affects not only the parties actually before the Court, but generations to come, and in view of that consideration, the rule of 'present interest', as evolved by case law relating to disputes about property does not apply with full force; and

(7) the rule laid down in S. 43 of the Specific Relief Act, is not exactly a rule of res judicata. It is narrower in one sense and wider in another."

12. Thus, at first blush, considering the nature of the defence raised by the respondent in the written statement, impugned order appears to be in harmony

with the various decisions noted in paras 10 and 11 above, but the impugned order has to be set aside for the simple reason, the controversy pertaining to formalization of possession of the respondent directly under DSIDC has taken a different legal shape with DSIDC executing a conveyance deed in favour of the plaintiff, which conveyance deed has been challenged by the respondent by and under WP(C) No.2589/07 in this court.

13. Thus, as of today, admitted facts between the parties are that DSIDC recognizes the petitioner as the allottee under DSIDC. A conveyance deed has been executed. The legality of the action of DSIDC is being adjudicated under a writ petition filed by the respondent.

14. If DSIDC would be permitted to be impleaded as a co-defendant in the suit filed by the petitioner, the respondent would have to then amend the written statement and lay a challenge to the action of DSIDC in executing a conveyance deed in favour of the plaintiff. This would change the very nature of the suit. It would no longer be a case of a tenant or a licensee protecting possession on the plea that the licensor or lessor has lost title after the grant and that some third party has acquired title to the property and that the defendant has attorned to said third party."

17. Said order was challenged before the Supreme

Court vide SLP (C) No.21814/2007 which was dismissed vide

order dated 7.12.2007.

18. Ex facie, the issue of permitting the appellant to

raise a challenge to the title of the respondent does not even

arise for consideration because of the events which transpired

during the pendency of the suit resulting in the respondent

perfecting the title under the title paramount i.e. DSIDC.

19. We need to speak a few words on the law as to

when a tenant or a licensee can question the title of the

landlord or the licensor. Needless to state the rule of estoppel

under Section 116 of the Evidence Act does not prohibit the

tenant or the licensee to challenge the title of the landlord or

the licensor but the same has to be on the pleading that

subsequent to the lease/license, the landlord or the licensor as

the case may be, has lost title. Additionally, to non-suit the

landlord/licensor it has to be proved that the tenant attorned

directly to the title paramount or the licensee so attorned to

the title paramount. This was so held in the decision reported

as 1987 (4) SCC 424 D.Satyanarayana Vs. P.Jagdish.

20. In the decision reported as 2002 (2) SCC 50 Vashu

Deo Vs. Balkishan, the decisions of the Privy Council reported

as AIR 1915 PC 96 Bilas Kunwar Vs. Desraj Ranjeet Singh and

AIR 1933 PC 29 Currimbhoy & Co. Ltd. Vs. LA Creet were noted

and it was held as under:-

"As held by the Privy Council in Currimbhoy & Co. Ltd. Vs. L.A. Creet and Bilas Kunwar Vs. Desraj Ranjtit Singh the estoppel continues to operate so long as the tenant has not openly restored possession by surrender to his landlord. It follows that the rule of estoppel ceases to have applicability once the tenant has been evicted. His obligation to restore possession to his landlord is fulfilled either by actually fulfilling the obligation or by proving his landlord's title having been extinguished by his landlord's eviction by a paramount title-holder. Eviction by paramount title-holder is a good defence bringing to an end the obligation of the tenant to put the lessor in possession of the property under Section 108 (q) of the Transfer of Property Act. The burden of proving eviction by title paramount lies on the party who sets up such defence."

21. It is thus apparent that eviction by paramount title

holder is the sine qua non to non-suit the plaintiff who seeks

ejectment as a landlord or seeks a mandatory injunction to

restore possession as the licensor. It is true that to constitute

eviction by a title paramount, physical dispossession is not

necessary. But what is necessary is to establish that the title

paramount was armed with a legal process for eviction which

could not be lawfully resisted. In other words, a voluntary

attornment would not enable the tenant to non-suit his

landlord.

22. Their Lordships of the Hon'ble Supreme Court who

authored the decision in Vashu Deo's case (supra) penned

another decision soon thereafter, reported as 2002 (2) SCC

256 Om Prakash Gupta Vs. Ranbir B.Goyal. The ratio in Vashu

Deo's case was explained as culled out in para 10 of the said

decision as under:-

"To constitute eviction by title paramout so as to discharge the obligation of the tenant to put his lessor into possession of the leased premises three conditions must be satisfied: (i) the party evicting must have a good and present title to the property; (ii) the tenant must have quitted or directly attorned to the paramount title- holder against his will; and (iii) either the landlord must be willing or be a consenting party to such direct attornment by his tenant to the paramount title-holder or there must be an event, such as a change in law or passing of decree by a competent court, which would dispense with the need of consent or willingness on the part of the landlord and so bind him as

would enable the tenant handing over possession or attorning in favour of the paramount title-holder directly; or, in other words, the paramount title-holder must be armed with such legal process for eviction as cannot be lawfully resisted. The burden of raising such a plea and substantiating the same, so as to make out a clear case of eviction by paramount title-holder, lies on the party relying on such defence."

23. On facts, in Om Prakash Gupta's case (supra) it was

held that the tenant failed to establish direct attornment under

the landlord.

24. The facts in Om Prakash Gupta's case (supra) are

identical with the facts of the instant case. In said case, Ranbir

B.Goyal, the respondent before the Hon'ble Supreme Court i.e.

the plaintiff cleared the cloud over his title raised by the title

paramount i.e. Haryana Urban Development Authority during

pendency of the eviction proceedings against Om Prakash

Gupta. The Hon'ble Supreme Court held that merely because

at some stage the title of the landlord came under a cloud did

not entitle the tenant to resist the eviction. The facts of the

case were that the suit premises were constructed by Haryana

Urban Development Authority (HUDA for short). The same

were allotted to Ranbir B.Goyal on certain terms. Alleging

violation thereof and imposing a penalty, proceeding under

Section 17 of Haryana Urban Development Authority Act 1977

HUDA sought eviction of Ranbir B.Goyal who prior thereto had

let out the premises to Om Prakash Gupta sometimes in

August 1989. On 22.2.1999 the Estate Officer HUDA cancelled

the allotment in favour of Ranbir B.Goyal and issued a notice

dated 7.4.1999 to Om Prakash Gupta asking him to vacate the

subject premises. On 19.5.1999 Om Prakash Gupta requested

HUDA to allot the suit premises to him as per rules applicable.

Ranbir B.Goyal challenged the eviction order before the

Appellate Authority which quashed the same vide order dated

22.6.2000. The said order attained finality resulting in Ranbir

B.Goyal clearing the cloud over his title. In view of the

aforenoted facts, in para 10 of its decision, Hon'ble Supreme

Court observed as under:-

"For two reasons we do not think that the defendant-appellant is entitled to any relief and for setting aside of the decree for eviction. Firstly, there is neither any order of resumption and forfeiture within the meaning of Section 17 of the Act passed by HUDA against the respondent nor is there an allotment by HUDA directly in favour of the appellant. In view of the order of the Estate Officer having been set aside by the Appellate Authority under the Act the allotment made by HUDA in favour of the respondent continues to subsist. His title, under which he had inducted the appellant in possession of the suit premises, has not come to an end. The triple test, laid down by this Court in Vashu Deo case is not satisfied. Secondly, the appellant is placing reliance on an event happening after the institution of suit i.e. a subsequent event and a case for taking notice of such subsequent event by court so as to impair the judgment under appeal is not made out."

25. It is relevant to note that during the pendency of

WP(C) No.3916/1990, the appellant was permitted to amend

the writ petition vide order dated 28.1.1991 and seek a relief

against DSIDC i.e. to direct DSIDC to directly allot the shed to

the appellant. With the dismissal of WP(C) No.3916/1990 vide

order dated 3rd July 2006, said relief was declined. Review

sought by the appellant of the order dismissing the writ

petition was dismissed by the Division Bench on 25.7.2006.

Petition seeking Special Leave to Appeal being SLP(C)

No.12883/2006 was dismissed on 14.8.2006. The second writ

seeking relief of DSIDC being directed to allot the shed to the

appellant suffered a dismissal on 11.7.2007. Letters Patent