Shri Balraj Rupani & Anr. vs M/S Telemart Communication India ...
2009 Latest Caselaw 3701 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                                       Pronounced on : 11.09.2009

+      IA No.9393/2008 (Under Order XII Rule 6 CPC) in CS(OS) 1319/2007
       SHRI BALRAJ RUPANI & ANR.                               ..... Plaintiffs
       Through Mr. Dinesh Garg, Ms. Ranuka Agrawal, Advocates
                                               versus

       M/S TELEMART COMMUNICATION
       INDIA (PVT.) LTD.                                      ..... Defendant
       Through Mr. Sanjay Jain, Sr. Adv. with Mr. Laliet Kumar and Ms. Ruchi Jain, Advs.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT

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

2.     To be referred to Reporter or not?                     Yes

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

HON'BLE MR. JUSITCE S.RAVINDRA BHAT (Open Court)
*

1. Heard with consent of counsel for the parties. This order will dispose of I.A.9393/2008

under Order XII Rule 6 Civil Procedure Code (CPC). The facts to the extent they are

undisputed for the purpose of deciding the application are that the plaintiffs let out the premises

(being second floor of K.No.20-K, Lajpat Nagar-II, 1st and IInd floor) to the defendant, through a

registered lease deed dated 26.3.2004; the lease was to be effective from 1.4.2004. The lease

rent reserved was Rs.96,000/- per month. It is not necessary to outline the terms except to notice

that the period that the lease deed was stated in clauses 1.1, 2.15 as follows :

"7.4 In the event the Lessee fails to hand over the vacant possession of the demises premises at the expiry of this Lease Deed or on sooner determination, the Lessee shall be liable to pay damages/mesne profits to the Lessors at the rate not less than of Rs.10,000/-

Per day of default from the date of expiry of this Lease Deed till handing over IA No.9393/2008 in CS (OS) 1319/2007 Page 1 of the vacant and peaceful possession of the demised premises to the Lessors. Paying of damages for non-vacation by the Lessee shall not tantamount to renewal of lease, but, it shall be unauthorized occupation by the Lessee."

2. The plaintiff contends having asked the defendants, by a registered letter dated 10.3.2007

to vacate the premises as they were required by it. The lease period was to end on 30.3.2007.

On 29.3.2007 the defendants wrote a letter. The letter is as follows :-

" To, Shri Balraj Rupani 113/62, Swaroop Nagar, Kanpur-208002 Dear Sir, I have received your letter dated 10.3.2007 wherein you have informed that the lease is coming to an end on 31.3.2007 and you have requested us to vacate the premises on or before 31.3.2007. In this regard I would like to submit as under:-

1. That the premises was agreed to be let out for a period of 9 year with effect from 26.3.2004 initially the lease agreement (in para 2.1) was executed for a period of 3 year wherein it is mentioned that after 3 years the lease may be renewed for a further two terms of three years each on a mutually agreed rent and terms and conditions.

2. That because of the above said stipulation we had invested a sum of Rs.80 lacs for renewal improvement and making it usable. Before we spent the amount we had intimated to you about our plan to our premises for nine years.

3. That as a matter of fact the land use of the tenanted premises is residential though as per the notify master plan the road which the premises is situated is a mix land road/commercial. We have given an undertaking to the Municipal Authorities in view of the direction of the Supreme Court that we will use the premises as per the permissible uses and will continue to use the part of the premises for residential purposes.

4. That as per the terms and conditions of the lease, a further lease is required to be executed in accordance with the lease agreement. As per the terms and conditions we are ready and willing to pay the rent after enhancing the existing rent by 5%. This is however without prejudice to our right accrued in our favour on account of such a heavy investment. "

3. The plaintiffs contend that the offer to renew the lease was not acceptable and they turned

it down by their letter dated 7.4.2007. Subsequently, on 17.5.2007 the plaintiffs caused a legal

notice to the defendants. It is not disputed that the said notice was received by the defendants.

IA No.9393/2008 in CS (OS) 1319/2007 Page 2

4. The defendants replied to the legal notice, stating that they wished to renew the lease. It

was also said in the legal notice (which is part of the record) that:-

"The offer given by my client for enhancing the existing rent @ 5% still exist and in view of the offer he had already send the demand draft by registered post bearing Nos.115369 for a sum of Rs.41,918/- for the month of April, 2007 and a demand draft bearing No.115370 for a sum of Rs.41,918/- for the month of May, 2007 both issued in the name of Sh. Balraj Rupani and demand draft bearing Nos.115371 for a sum of Rs.41,918/- for the month of April, 2007 and a demand draft bearing No.115372 for a sum of Rs.41,918/- for the month of May, 2007 both issued in the name of Sh. Alok Rupani.

That the contents of para 6 of your notice are wrong and are vehemently denied. It is wrong and vehemently denied that your client vide his rejoinder reply dated 07.04.2007 has not accepted the offer of 5% increase in rent. In fact, your client has not considered the same and had concluded in the following words "a lot of taxes are being imposed in the form of service tax on rental income by the Central Government and levies in the form of Regulation or commercialization of the property by the MCD, causing a lot of burden upon us. Therefore, we are not interested to let-out the said premises."

The rejoinder reply send by your client has nowhere declined the offer of 5% increase in rent though your client has asked for the mutual agreement on the enhancement of rent and on the contrary asking my client to vacate the premises on the pretext of levy of service tax and regulation charges by the MCD. The conduct of your client was not in accordance with the spirit of agreement entered between the parties on 26.03.2004.

That the contents of para 8 of your notice are wrong and are vehemently denied. It is wrong and vehemently denied that the prevalent market rate is 150sq. ft. per month and the monthly rental of the premises is @5,40,000/- per month. As submitted hereinabove, the premises in the adjoining area was given on rent with carpet area of approximately 1800 sq. ft. with monthly rent of Rs.45,000/- (forty five thousand only) for 1800 sq. feet and therefore, your demand of Rs.5,40,000/- is without any jurisdiction and basis and is therefore, denied.

In reply to the contents of para 10 of your notice, it is submitted that my client is open for discussion and therefore only he had asked me to give offer of increasing the rent by 5% of Rs.96,000/- per month to your client through you. You may please consider the same with your client and if there is my possibility of settlement of the monthly rental then you may please communicate to the undersigned or to my client directly."

5. It is contended by the plaintiff that the defendants did not fulfill the terms of the legal

IA No.9393/2008 in CS (OS) 1319/2007 Page 3 notice and confirmation in the premises beyond the stipulated period without a renewal of the

lease is unlawful. A decree for possession is sought. The plaintiff submits that in the written

statement that the defendants have admitted to receipt of the legal notice but however a set up a

parallel case about oral agreement to the lease. In this regard they rely upon the following

averments in the written statement:-

"That Shri Mukesh Gupta, Director of the defendant company had personally met the plaintiff Shri Balraj Roopani on 27th January, 2007 and had required him to renew the lease and execute and get the lease deed registered in their favour for such renewed period. The defendant had also expressed and conveyed the plaintiffs to increase the rent on such customs and practice as are prevailing in the market.

That in the said meeting the parties had negotiated and finally it was discussed and specifically agreed in between the parties that the lease would be renewed for the period 01.04.2007 to 31.3.2010 with a further renewal clause for the period 01.04.2010 to 31.03.2013 on the same terms and conditions as contained in the lease deed dated 26.03.2004 except that the rents would be enhanced at the rate of 5% on the existing rent. The parties had agreed to the terms and conditions of the lease for the renewed period and the plaintiffs were only left to execute and register the lease deed for the said period in the month of March, 2007."

6. It is submitted that the above plea regarding the renewal of the lease is palpably contrary

to the record, and that since the defendants have not disputed receipt of the legal notice in the

written statement, the plaintiffs are entitled to a decree for possession, on admissions.

7. Learned counsel reiterated the submissions on the application and relied upon the terms

of the reply dated 29.3.2007 issued by the defendant arguing that the plea taken that there was a

meeting on 27.1.2007 between representatives of the defendant and the plaintiffs, vis-à-vis

renewal of the lease for a further period ending on 1.4.2007 to 31.3.2010 and 1.4.2010 to

31.3.2013 is patently incorrect if not false. It is submitted that if such were the correct position it

would have been recorded in the letter dated 10.3.2007 and the reply to the legal notice issued on

its behalf, by the defendants.

IA No.9393/2008 in CS (OS) 1319/2007 Page 4

8. Learned senior counsel for the defendants submitted that there is no unambiguous

admission as alleged on behalf of the plaintiff. He relied upon the terms of the lease deed which

stipulated that the defendant is entitled to two renewals for three years each for a rent to be

mutually agreed upon. The defendant has filed a suit for specific purpose, being CS (OS)

No.1460/2007 in which summons were issued by the court. In those proceedings the defendant

sought for specific performance of agreement to renew the lease deed for a further period of

three years and further extension upto year 2013.

9. It was contended that in the circum stances of this case the defendant has set up a claim

for continuing in the premises on the basis of the renewal clause and therefore the written

statement cannot be so read so as to imply an admission when there is none. Learned counsel

relied upon judgments in Shri Bhanu Mehra v. Shri Dato Brij Kishore and others, 2001 (60)

DRJ1, where the Division Bench inter alia observed that in circumstances, where the defendant

had pleaded the right to continue for a further 9 years (as is done in the present case) and having

regard to the condition permitting the defendant the learned Single Judge could not imply an

admission and issue a decree. Learned counsel also relied upon the judgment of the Supreme

Court in Naveen Chand and another v. Nagarjuna Travels and Hotels Pvt. Ltd. AIR 2002 SC

2870. In the said decision the court has ruled that the right of a lessee to secure extension of the

term by virtue of the renewal clause could not be defeated through a decree based upon

admissions. The plaintiff had in that case contended that the renewal clause was vague and

indefinite. The relevant observations of the court are as follows :-

"From the above noted covenant in the lease deed it is clear that the lease was granted for a period of 25 years in the first instance with the right of renewal as hereinafter set out. Though the right of renewal is mentioned in the clause there is no mention about the terms and conditions of renewal either in the clause quoted above or elsewhere in the document. On a fair reading of the document it appears that the right of renewal stated therein is

IA No.9393/2008 in CS (OS) 1319/2007 Page 5 shrouded in uncertainty and vagueness. The renewal clause in a lease deed is an important term of the agreement. Ordinarily the Court should be reluctant to ignore such a term of the lease, unless on a fair reading and reasonable construction no meaning can be attached to it. Since the renewal clause is not clear and specific regarding the terms of renewal the Court is to ascertain the intention of the parties from the materials on record. As noted earlier, the lease deed read as a whole, does not indicate the manner in which the right of renewal is to be exercised by the parties and the terms and conditions of such renewal. It is not even stated in the document that the renewal will be subject to terms and conditions to be decided by the parties by mutual discussion or according to any other procedure. There is no indication whether such discussion will at all be held or not. Renewal being an important condition of lease, could not have been dealt with in such careless and slipshod manner and would not have been left in such vague and uncertain condition if the parties were serious about the renewal of the lease. On appreciation of the evidence the Courts below having not believed the case of the defendants that some verbal requests for renewal of the lease were made by them to the plaintiff after expiry of the period of lease, the Courts have found that no attempt was made by the lessees to suggest the terms and conditions for renewal of the lease particularly the rent to be paid by them except offering the rent for two months at the old rate."

10. The above discussion would show that in certain essentials there is no dispute between

the parties. The admitted fact are that the premises were leased through a registered deed dated

26.3.2004; the rent reserved was Rs.96,000/- . The three year lease period was to end on

31.3.2007. The bone of contention between the parties is as to the construction of the said

stipulations i.e. clause 1.1 and 2.1, both of which mention about two renewals of three years of

each but subject to increase in rent on mutually agreed terms, and subject to other terms and

conditions as may be agreed upon. That the plaintiff issued a legal notice on 10.3.2007 which

was replied to, and subsequently denied the request for renewal, and it also issued a legal notice

on 17.5.2007 have not been disputed by the defendant. What the latter states in the written

statement is that the plaintiff had agreed to renew the terms of the lease. Para G and H of the

preliminary objections sets out their case that Shri Mukesh Gupta, Director of the plaintiff was

asked to renew the lease and execute it. It is claimed that the defendant had expressed and

IA No.9393/2008 in CS (OS) 1319/2007 Page 6 conveyed the plaintiffs that the increase in rent would be, on such

terms as were prevailing in the market. The letter dated 23.3.2007 by the defendant, which is not

been denied however is conspicuously silent about such a meeting or agreement by the plaintiffs

regarding the extension of the lease. Likewise, the reply (to the legal notice issued by the

defendant) dated 26.3.2007 do not mention any oral agreement regarding renewal.

11. The tenor of both documents disclose that the defendant wanted the plaintiff to agree to

the terms. Therefore, the plea set up that there was some kind of agreement passed on a

meeting, is not based on any record. As far as the judgment in Naveen Chand's case (supra) is

concerned this court notes that the Division Bench was concerned with a case where the

defendant had denied that the plaintiffs sent a registered notice as claimed. Undoubtedly there

are certain observations in the judgment indicating that the defendant had a valuable right of

renewal. The court held that in such circumstances the Single Judge could not have proceeded to

decree decision as sought for on the basis of admission. So far as the decision in Naveen

Chand's case (supra) is concerned the defendant had pleaded that in terms of the renewal clause

it had exercised the right to renewal and even paid enhanced rents after which the plaintiffs filed

a suit. The plaintiffs here asked the defendants to vacate the premises and followed its letter with

a legal notice dated 17.5.2007; all of these are not disputed.

12. The court is mindful of the fact that in order to decree a claim for possession on the basis

of admission in the circumstances of the case have to be considered. The conduct of the

defendant here appears to rely on the existence of the renewal clause; it has filed a separate suit.

The summons in this case were issued earlier. The facts as existing, reveal that barring the plea

of renewal - based on pleading, the materials unequivocally point to the expiration of the

arrangement and a clear demand by the plaintiff, for possession. The receipt of legal notice is

IA No.9393/2008 in CS (OS) 1319/2007 Page 7 not denied. The fact that the defendant has entered into an agreement on mutually acceptable

terms, for a later, or renewed term, has not been shown. The mere fact that it seeks specific

performance of an obligation - the terms of which are indiscernible or not spelt should not deter

the Court from exercising its discretion to decree the suit, so far as the relief of possession is

concerned. In such cases the court is of the opinion that the mere existence to the claim for

specific performance cannot better the court and if it otherwise conclude the existence of

admission on the basis of the materials on record, from issuing a decree for possession.

13. In view of the above discussion, the court finds for the plaintiffs; let a decree for

possession directing the defendants to vacate and the suit premises be drawn. The defendant is

granted 12 weeks to vacate the premises before a decree can be executed.

CS (OS) No.1319/2007

Let a decree for possession, in terms of para 14 of the above order, in respect of the suit

premises, be drawn.

List before the Joint Registrar for admission/denial of documents on 18.11.2009.

List before court for framing issues on 26.3.2010.

                                                     S. RAVINDRA BHAT,J

SEPTEMBER 11, 2009
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IA No.9393/2008 in CS (OS) 1319/2007                                                       Page 8