Abhinav Outsourcing Pvt. Ltd. vs Sunita Seth
2011 Latest Caselaw 5880 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           RFA No.557/2011

%                                                     2nd December, 2011

ABHINAV OUTSOURCING PVT. LTD.        ...... Appellant
                Through: Mr. Siddharth Yadav with
                          Ms. Wasim Ashraf, Advs.

                            VERSUS

SUNITA SETH                                         ...... Respondent

                            Through:     Mr. Yakesh Anand with
                                         Mr. Murari Kumar with
                                         Mr. Nimit Mathur, Advs.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

Caveat No.1077/2011

Counsel appears for the caveator. Caveat stands discharged.

CM No.21762/2011(exemption)

Allowed, subject to all just exceptions.

Application stands disposed of.

RFA No.557/2011 & CM No.21761/2011(stay)

1. The challenge by means of this Regular First Appeal filed

under Section 96 of the Code of Civil Procedure (CPC), 1908 is to the

impugned judgment of the Trial Court dated 28.9.2011 by which judgment

the Trial Court decreed the suit of the respondent/landlord/plaintiff under

Order 12 Rule 6 CPC. In order to pass a decree under Order 12 Rule 6

CPC in suits such as the present the following aspects are required to

exist:-

i) Relationship of landlord and tenant between the parties,

ii) The rate of rent being more than `3,500/- per month and

iii) That the lease has been terminated by a notice

2. In the present case, there is no dispute that there is a

relationship of landlord and tenant between the parties. There is also no

dispute that the rate of rent is more than `3,500/- per month; the rate of

rent being `21,150/- per month when the lease was determined by the

notice dated 25.10.2007 with effect from 31.1.2008, and that the notice

terminating tenancy was, in fact, duly received by the

appellant/defendant/tenant.

3. There are two main issues which have been argued by the

appellant before this Court. The first issue was that the registered lease in

question entitled the appellant/tenant on exercising an option to continue in

the premises for a total period of 3years + 3 years +3 years with effect

from 1.11.2004 and the first option of three years till 31.10.2010 having

been exercised and therefore the suit for possession could not have been

filed. The second point which is in fact incidental to the first point is that

after exercise of the option, the appellant has paid enhanced rent and

consequently there arises a relationship of landlord and tenant between the

parties for an additional period of 3 years which would have only expired

on 31.10.2010, and therefore, the suit could not have been filed before

31.10.2010. Reliance is placed on behalf of the appellant on two

judgments. The first judgment is the judgment of the Supreme Court in the

case of Caltex (India) Ltd. vs. Bhagwan Devi Marodia AIR 1969

Supreme Court 405 and the second judgment is the judgment in the case

of Smt. Sneh Vasih & Anr. Vs. Filatex India Ltd. 95(2002) DLT 373.

The judgment in the case of Caltex (supra) is relied for the proposition

that once an option is exercised, then, a person contractually is entitled to

continue in possession of the tenanted premises. The decision in the case

of Smt. Sneh Vasih (supra) is relied for the proposition that in view of the

facts such as the present, the Courts should not exercise its discretion

under Order 12 Rule 6 CPC.

4. In my opinion, both the arguments as raised on behalf of the

appellant are wholly devoid of substance. The first aspect as to whether by

mere exercising an option of renewal, a person can continue for a fixed

period in the tenanted premises, though there is no lease for the fixed

period was the subject matter of the decision of the Supreme Court in the

case of Hardesh Ores (P) Ltd. Vs. Hede and Company, 2007 (5) SCC

614. The Trial Court has referred to this judgment in para 17 of the

impugned judgment. The Supreme Court in the decision in the case of

Hardesh Ores(supra) has specifically observed that to give effect to a

renewal of a lease, a document has to be executed evidencing the renewal

of the agreement of lease and there is no concept of automatic renewal of

the lease by a mere exercise of option by the lessee. This proposition of

law that mere exercise of option cannot automatically mean entitlement of

continuation in a tenant for a fixed period without any lease being

executed, is on account of the provisions of Section 17(1)(b), Section

17(1)(d) of the Registration Act, 1908 and Section 107 of the Transfer of

Property Act, 1882. By virtue of these provisions, there cannot be a lease

for a fixed period in excess of one year, unless, there is a registered lease

deed for the fixed period. The argument as raised on behalf of the

appellant flies in the face of the aforesaid provisions of the Registration

Act, 1908 and the Transfer of Property Act, 1882 which require that a

lease deed for a period in excess of 12 months has necessarily to be only

by means of a registered instrument, and, there cannot be estoppel against

law i.e. these statutory provisions of the Transfer of Property Act, 1882

and the Registration Act, 1908. Therefore, the argument as raised on

behalf of the appellant is misconceived. The judgment in the case of

Caltex(Supra) has no application to the facts of the present case which was

only dealing with the aspect of the period within which an option has to be

exercised and which has to be strictly exercised in the period as mentioned

in the contract between the parties. The judgment in Caltex's Case(supra)

does not lay down that if the option is exercised within the required period,

but if no registered deed is executed, the tenant can without existence of a

registered lease deed continue in the tenanted premises for a fixed period.

5. Even in the facts of the present case, there is no doubt that a

fresh lease deed was to be executed for the additional term inasmuch as the

registered lease deed dated 15.10.2004 contains para A.4 which

specifically sates that a fresh lease deed will be executed at the time of

renewal of the lease.

6. Accordingly, the argument on behalf of the appellant that an

option having been exercised, the appellant is entitled to continue in the

tenanted premises solely by virtue of option exercised, without there

existing a registered lease deed for the period for which an option is sought

to have been exercised, is clearly misconceived and hence rejected.

7. The incidental argument on behalf of the appellant that parties

have acted on the renewal by accepting enhanced rent, will not take the

appellant any further, because even in such circumstances, at best after the

expiry of the original period of lease, for the further period, the tenant

continues as a month-to-month tenant and such monthly tenancy can

always be terminated by giving a notice under Section 106 of the Transfer

of Property Act because the payment by the tenant can be received by the

landlord as use and occupation charges payable for occupation of the

premises after termination of tenancy. So far as the requirement of a

notice under Section 106 of the Transfer of Property Act, 1882 of having

been served before filing of the suit for possession, I have had an occasion

to consider the aspect of requirement of a service of notice under Section

106 of the Transfer of Property Act, 1882 prior to the institution of the suit

in the case of M/s. Jeevan Diesels & Electricals Ltd. vs. M/s. Jasbir Singh

Chaddha (HUF) & Anrs. 2011 (182) DLT 402. I have in the judgment of

M/s. Jeevan Diesels (supra) held that the service of summons in a suit

filed by landlord accompanied by the plaint can always be treated as notice

under Section 106 of the Transfer of Property Act, 1882. I have also held

that along with the suit, the notice by which the tenancy was terminated is

filed as a document, and which document/notice is again served on the

defendant along with the other documents in the suit, and which also can

be treated as service of the notice of termination of tenancy. I have taken

the aforesaid two aspects read with Order 7 Rule 7 CPC which entitles the

Courts to take notice of subsequent events. The subsequent event being

that at the very maximum, the tenant has to vacate on a 15 days' notice

being given for vacating the premises and which period expires on service

of summons of the suit and the copy of the notice terminating the tenancy

which is sent with the suit plaint. In fact there is such legislative

intendment by virtue of the Act 3 of 2003 which amended Section 106 of

the Transfer of Property Act, 1882, and which amendment has done away

with the objections pertaining to defences of improper service of notice of

termination of tenancy, once a period of 15 days expires giving the tenant

that time of 15 days to vacate the premises. An SLP against this judgment

has been dismissed by the Supreme Court vide SLP No15740/2011 dated

7.7.2011.

8. Accordingly, in my opinion, there is no disputed question of

fact which required trial and therefore the Trial Court has rightly decreed

the suit under Order 12 Rule 6 CPC. So far as the decision in the case of

Smt. Sneh Vasih & Anr. (supra) is concerned, in my opinion, the said

judgment ignores the binding judgment of the Supreme Court in the case

of Hardesh Ores (supra) and therefore cannot be said to lay down good

law. Once, the Supreme Court lays down that there cannot be a lease

merely on exercise of the option without actually there coming into

existence a duly registered lease deed, the position in law which will

follow is that the tenancy will have to be monthly tenancy in the absence

of such registered lease, and which tenancy can be terminated by a notice

under Section 106 of the Transfer of Property Act, 1882. In case of a

categorical legal position arising from the admitted facts, clearly the

provisions of Order 12 Rule 6 CPC must apply otherwise the legislative

intendment of shortening the litigation when there are clear cut admissions

will be defeated and a tenant will be allowed to unnecessarily delay and

drag the proceedings.

9. In the present case, in view of the above, I do not find any

illegality or perversity in the impugned judgment of the Trial Court which

has decreed the suit of the respondent/landlord under Order 12 Rule 6 CPC

by granting a decree for possession with respect to the tenanted premises.

The appeal is therefore dismissed with costs of `15,000/-. The Supreme

Court in the recent judgment of Ramrameshwari Devi & Ors. Vs. Nirmala

Devi (2011) 8 SCC 249 has observed that it is high time that actual and

realistic costs must be imposed in order to discourage unnecessary

litigation. I am also entitled to impose actual costs by virtue of Volume V

of the Punjab High Court Rules and Orders (as applicable to Delhi)

Chapter VI Part I Rule 15. I must add that had the intention of the

appellant been fair and honest it would have not filed this appeal or at the

outset would have straightaway agreed to vacate inasmuch as the period of

the option i.e. 3 years from 1.11.2007 i.e. till 31.10.2010 had already

expired during the pendency of the suit.

10. The appeal is accordingly dismissed and disposed of.

VALMIKI J. MEHTA,J DECEMBER 02, 2011 ak