M/S S.S. Investment vs Yogendra Sen Manchanda & Othres
2009 Latest Caselaw 2219 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                          Judgment reserved on: 23.05.2011
                           Judgment delivered on: 24.05.2011

+                          RSA No.31/2009

M/S S.S. INVESTMENT                 ...........Appellant
               Through: Mr. Rajesh Yadav, Advocate.

                     Versus

YOGENDRA SEN MANCHANDA & OTHRES ..........Respondent
             Through: Mr. S.C.Nigam, Advocate.

      CORAM:
      HON'BLE MS. JUSTICE INDERMEET KAUR

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

    2. To be referred to the Reporter or not?                       Yes

    3. Whether the judgment should be reported in the Digest?
                                                         Yes

INDERMEET KAUR, J.

1 This appeal had impugned the judgment and decree dated

22.9.2008 which has endorsed the finding of the trial judge dated

04.7.2005 whereby the suit filed by the plaintiff M/s

S.S.Investments seeking mandatory injunction against the

defendant (to the effect that the defendants be directed to vacate

the suit property i.e. Flat No.2B, Shanker Market, New Delhi) had

been dismissed.

2 Plaintiff was allotted the aforenoted suit property by

Ministry of Rehabilitation; thereafter on a permanent basis it was

transferred to him on lease basis. The original allottee Pran Nath

Mehta had died leaving behind his widow and two daughters,

plaintiff and Indra Sahni. Smt.Vidya Mehta had inducted

defendants no.1 and 2 as licensees qua the suit property at a

licence fee of Rs.300/-. Plaintiff revoked this licence by notice

dated 25.2.1997. Defendant had failed to vacate the suit

property; decree for mandatory injunction as also for damages has

been prayed.

3 In the written statement preliminary objections were taken.

It was stated that the suit property had been rented out at a rental

of Rs.300/- per month; suit was barred by Section 50 of the Delhi

Rent Control Act (hereinafter referred to as „the DRCA‟). It was

contended that the flat had been leased out on 10.11.1980 with

the condition that as soon as defendant no.1 and 2 float a joint

stock company, the tenancy would be transferred in favour of the

company; i.e. when M/s Manchanda Properties Pvt. Ltd. comes

into existence and they have since been paying rent to Vidya

Mehta who had recognized the company as a tenant; the

objections filed by the plaintiff has also been dismissed in the

court of Additional Rent Controller; the suit is not maintainable.

4 On the pleadings of the parties, the following six issues were

framed:

1. Whether the suit is bad for mis joinder of parties as alleged?

2. Whether the suit is barred by provisions of Section 50 of DRC

Act, as alleged?

3. Whether the plaintiff is not entitled to any relief as

approached to the court with unclean hands and has suppressed

the material facts, as alleged? OPD

4. Whether the suit is not maintainable as in grab of mandatory

injunction the plaintiff is trying to take the relief of possession as

alleged and hence, plaint is liable to be rejected under Order VII

Rule 11 CPC? OPD

5. Whether the plaintiff is entitled to the relief of mandatory

injunction as prayed for? OPP

6. Relief.

5 Oral and documentary evidence was led. Court had

adverted to the agreement Ex. PW-1/2 wherein it was noted that

the defendants no.1 and 2 were tenants in the suit property; suit

is barred under Section 50 of the DRCA. Suit stood dismissed.

6 This finding was affirmed in first appeal. First appellate

Court was of the view that the appeal had been filed belatedly; it

was barred by limitation. It had however proceeded to decide the

appeal on its merits; thereafter the appeal stood dismissed.

7 This is a second appeal. It has been admitted and on

05.10.2010 the following substantial question of law was

formulated:

"Whether EX.PW-12 dated 10.11.1980 was a lease or a licence."

8 On behalf of the appellant, it has been urged that the

document Ex. PW-1/2 had necessarily intended to create a license

and this is evident from a reading of its various clauses which

clearly stipulate that the parties had agreed that the tenancy

would be created only after the sale deed has been executed in

favour of the appellant; admittedly the appellant himself was only

a licensee in the suit property; he had no legal right to create a

lease in favour of the defendant; it was agreed that the tenancy

agreement would in fact be created in future i.e. after the sale

deed had been executed in favour of the appellant. Both the courts

below have illegally construed this document to be a lease.

Attention has been drawn to sub-clause (g) of para 3 wherein

again reference has been made to an agreement to be created in

the future. To support his submissions learned counsel for the

appellant has placed reliance upon AIR 1999 SC 2607 Delta

International Ltd. Vs. Shyam Sunder Ganeriwalla and Another,

AIR 1989 SC 1834 Provash Chandra Dalui & another Vs.

Biswanath Banerjee and another, AIR 1976 SC 1813 Board of

Revenue etc. Vs. A.M. Ansari as also another judgment of the Apex

Court in (1989) 1 SCC 19 Smt. Rajbir Kaur & another Vs. M/s S.

Chokesiri & Co. It is pointed out that where the party himself is

suffering from an inability and is unable to execute the lease, he

himself being a lessee, the question of his creating a further lease

did not arise. That apart the test of exclusive possession is not by

itself decisive of the factor as to whether the parties had intended

to create a lease or license and even presuming that exclusive

possession of the suit property had been given to the defendant;

that by itself would not decipher the intention of the party.

9 Arguments have been countered. It is pointed out that Ex.

DW-1/1 to Ex. DW-1/17 were rent receipts which had been

executed by the erstwhile owner in favour of the defendant; Ex.

DW-1/1 & Ex. DW-1/2 are dated 10.11.1980 which are documents

executed by S.K. Mehta; DW-1/13 to Ex DW-1/16 had been

executed by the plaintiff Uma Sethi. It is pointed out that the

aforenoted documents also have to be read along with Ex.PW-1/2

to decipher the intent of the party. Learned counsel or the

respondent has heavily placed reliance on paras 8 & 9 of the

judgment reported in (2004) 3 SCC 595 C.M. Beena & another Vs.

P.N. Ramachandra Rao.

10 Record has been perused. Question of limitation has been

conceded. Counsel for the respondent has fairly conceded that the

first appellate court having delved into the merits of the case, is

an implied acceptance of the delay having been condoned.

11 Both the fact finding courts had returned a finding in favour

of a lease; on the construction of the document, the impugned

judgment while endorsing the finding of the trial Judge had held

that the parties had intended to create a lease; Ex.DW-1/ to Ex.

DW-1/17 had also been noted in this context.

12 The agreement under scrutiny is Ex.PW-1/2. It is dated

10.11.1980. This document recites that party no. 1 is a lessee; he

is lessee of the Ministry of Rehabilitation; all payment had been

made to the Ministry qua the conferment of rights in the suit

property to party no. 1; the sale deed had not been effected but

would be finalized in due course; Ex. PW-1/2 further recites that

full payments and consideration qua the ownership rights of the

suit property have been received by the Ministry from party no. 1.

Clauses on page 2 of the document are relevant. It recites this a

"technically proper tenancy" would be created after the sale deed

of the premises had been created but a licensee for the user of the

flat had been granted by party no. 1 without any technical

objection whereas a "clear agreement" to create a "proper

tenancy" in favour of the second party i.e. in favour of the

defendant has been recited. Clause 2 further recites that as an

"interim measure" to met the technicality of the situation, this

license is created; agreed rate of rent was `300/- per month;

premises were to be used exclusively for office purpose; electricity

and water charges were to be borne by the defendant. It is not in

dispute that the exclusive possession of the property since the

date of the agreement i.e. from 10.11.1980 is with the defendant.

Clause g is also relevant. It states that a "regular tenancy

agreement" shall be created after the sale deed had been effected

in favour of party no. 1; clear intent being that a prospective

tenancy had been created by this document and a regular tenancy

would follow thereafter. This clause further recites that party no.

2 has proposed to promote a private limited company and this

agreement shall thereafter enure in favour of the said company. It

is not disputed before this Court today that this company has

since been created under the name of M/s Manchanda Properties

(Pvt.) Ltd. and documents Ex. DW-1/13 to Ex. DW-/16 are rent

receipts executed by the predecessor in interest of the plaintiff in

favour of M/s Manchanda Properties (Pvt.) Ltd. meaning thereby

that this clause has also acted upon. Exclusive possession of the

defendant qua the said premises has been detailed in para 4. Ex.

DW-1/1 to Ex. DW-1/17 are also undisputed documents.

Submission of the appellant that the word „rent‟ used therein is

only a casual reference and it is actually a reference to a license

fee is a submission which is not sustainable.

13 Documentary evidence had been scrutinized in detail by two

fact finding courts below to arrive at a correct interpretation of

the document i.e. that the document Ex. PW-1/2 had intended to

create a lease between the parties. The submission of learned

counsel for the appellant that the appellant himself not being an

owner and the sale deed not having been executed between the

Ministry of Rehabilitation and between himself, he could not have

created a lease is falsified by Ex. PW-1/2 itself. Ex.PW-1/2 has

recognized this fact that the Ministry of Rehabilitation is yet to

execute the sale deed; the parties had agreed that the regular

tenancy agreement would be entered into after the sale deed had

been effected in favour of party no. 1 and till that time as an

interim measure a provisional lease deed had been created.

Ex.PW-1/2 also recites that the complete payment for conferring

ownership on party no. 1 had been made to the Ministry; the

technicality of the sale deed only had to follow; this technicality

has been overcome by reciting in Ex.PW-1/2 that a "proper

tenancy" would be created later on i.e. after the sale deed has

been executed; till that time as an "interim measure" this

document is being created. The intention of the parties was

unambiguous; it was to create a lease. The finding on this score

suffers from no perversity.

14 The judgments relied upon by learned counsel for the

appellant are distinct on their own fact. In the case of Delta

International (Supra) upon which learned counsel has placed

heavy reliance (clauses C & D of para 5) are inapplicable; there is

no dispute to the proposition that exclusive possession of the

premises although the main factor is not the exclusive test for

determining the intent of the parties and this had been noted and

deciphered in the impugned judgment. Clause D had noted the

principle that where the grantor does not have the powers to

create a lease, such a document could not create a lease; facts of

the said case were distinct; clause 12 of the document had been

considered by the Apex court which had clearly and expressly

stated that the document under scrutiny will not been construed

as a tenancy or a lease under the West Bengal Premises Tenancy

Act to confer relationship of landlord and tenant between the

parties; weightage had been given to this clause. The other

judgments relied upon by learned counsel for the appellant also

recite the principles which have been enumerated by the courts in

construing such a document i.e. whether the intent is to create a

lease or license. There is also no doubt to the settled proposition

that the nomenclature of document is not important; whether the

word „lease‟, „license‟, „rent‟ or „license fee‟ is used would not over

close the other arguments to decide the intention of the parties

which intention has to be gathered from a close scrutiny of the

document along with other correspondence, if any, exchanged

between the parties, the conduct of the parties before and after

the document has been created as also the other surrounding

circumstances. All these aforenoted principles have been rightly

considered and weighed in the mind of the first appellate court in

construing this document to be a lease.

15 Substantial question of law is accordingly answered in

favour of the respondent and against the appellant. There is no

merit in this appeal. Dismissed.

INDERMEET KAUR, J.

MAY 24, 2011

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