Delhi Development Authority vs Balraj Virmany
2011 Latest Caselaw 2930 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                              Judgment reserved on : 27.05.2011
                               Judgment delivered on : 31.05.2011

+                  R.S.A.No. 6/1983

DELHI DEVELOPMENT AUTHORITY           ...........Appellant
                 Through: Ms. Anusuya Salwan, Sr.
                          Advocate with Ms. Neha
                          Mittal, Advocate.

                   Versus

BALRAJ VIRMANY                                 ..........Respondent
                         Through:    Mr.Harish    Malhotra,  Sr.
                                     Advocate   with   Mr.  N.K.
                                     Kantawala and Mr. Rahul
                                     Kumar, Advocates.

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 has impugned the judgment and decree dated

29.08.1982 which had endorsed the finding of the trial Judge

dated 07.03.1981 whereby the suit filed by the plaintiff Balraj

Virmani seeking a perpetual injunction to the effect that the

defendant/Delhi Development Authority (DDA) be restrained from

taking action for taking possession of the disputed plot i.e. plot

No. 2, Jhandewalan E Block, Delhi had been decreed.

2       Below noted facts are undisputed:-

(i)     The Delhi Improvement Trust had granted lease to the

plaintiff vide Ex.D-1 dated 06.01.1951 qua the suit land. It was

initially for a period of 20 years to be extended for a further

period of 20 years in terms of the conditions contained therein.

Clause (vi) is relevant and reads as under:-

"not to use the said land and buildings that may be erected thereon during the said term for any other purpose than for the purpose of Cold Storage plant without the consent in writing of the said lessor; provided that the lease shall become void if the land is used for any purpose other than that for which the lease is granted not being a purpose subsequently approved by the Lessor;"

Clause III (b) reads as under:-

"In case this lease with the lessee shall continue for the said period of 20 years and provided the lessee has observed performed and complied with the terms and covenants conditions of this lease, the Government shall grant to the lessee an option to renew the lease on such terms and conditions as the lessor deems fit for further period of 20 years; provided that the notice of the intention of the lessee to exercise this option of renewal is given to the lessor six months before the expiration of the lease; provided further that if the lease is extended for a further period of 20 years the lessor shall have the right to enhance the rental upto 50% at the original rent."

(ii) Lease was to expire on 10.08.1968.

(iii) On 23.02.1967, the plaintiff had given his option to renew

the lease deed.

(iv) On 09.02.1968 (Ex.D-2) the defendant had notified him four

breaches (as detailed therein) had been committed by the

defendant; he was directed to rectify the said breaches failing

which his lease was liable to be determined.

(v) On 16.02.1968 (Ex.DW-4/1) the contents of Ex.D-2 were

reiterated.

(vi) On 01.03.1968, the defendant filed his reply (ExDW-5/2)

admitting the breaches in the lease deed.

(vii) Vide Ex.PW-3/5 dated 03.10.1969 DDA gave information to

the plaintiff informing him that a sum of `666.87 paise is payable

by him as ground rent in terms of the lease.

(viii) Vide Ex. D-3 dated 01.09.1972 lease of the suit land was

determined; DDA vide this communication had communicated to

the plaintiff that since he has failed to observe, perform and

comply with its terms and covenants; breaches being continued,

the DDA had decided not to renew the lease deed.

(viii) Vide Ex.PW-3/3, Ex.PW-3/4, & Ex.PW-3/6, the plaintiff has

paid rent for the aforenoted premises; these documents are all

after 10.08.1968.

3 There are two concurrent findings of fact by the two courts

below in favour of the plaintiff.

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

10.03.1983, the following substantial question of law had been

formulated:-

"The RSA raises the question of interpretation of the lease, particularly with regard to the renewal which is likely to arise in a large number of cases."

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

judgment of the court below holding that the lease (Ex.-D-1) had

given a unilateral option to the plaintiff to renew the lease deed is

a perversity; document has to read in its entirety and aforenoted

clauses (vi) a read with clause III (b) clearly postulate a

situation that if there was any breach committed by the plaintiff,

he is not entitled to a second renewal; it is submitted that the

defendant has admitted the breaches and this is evident from his

reply dated 01.03.1968 (Ex DW-5/2). The impugned judgment

reading it in this manner is clearly a perversity. The finding in the

impugned judgment calls for an interference. It is further

submitted that mere acceptance of rent for the subsequent

months after the lease period does not amount to renewal of a

lease. To support this submission, learned counsel for the

appellant has placed reliance upon the judgments of the Apex

Court reported in (2005) 5 SCC 543 Shanti Prasad Devi and

another Vs. Shankar Mahto & others; 2006 (4) SCALE 14 Sarup

Singh Gupta Vs. S. Jagdish Singh & Ors. as also 1717 (2010) DLT

78 Ravi Chadha & Ors. Vs. Bank of Maharashtra. The finding

returned on this score in favour of the plaintiff is also a perverse

finding.

6 Arguments have been rebutted. It is pointed out that in

terms of Ex.PW-3/5 dated 03.10.1969 a communication had been

sent by the lessor to the lessee demanding rent for these premises

pursuant to which rent payments had been made; this is not a

case where the rent has been tendered without any demand from

the lessor. It is pointed out that the lease deed Ex.D-1 envisages a

permission to the defendant to construct the premises on the

lease hold plot which had been granted to him; it is pointed out

that vide Ex.D-2 (09.02.1968) and Ex.DW-4/1 (16.02.1968) four

breaches had been pointed out by the DDA yet in the inter-se

communication of the Department dated 17.06.1968 (DW-5/1) it is

clear that these four breaches had been reduced to two; these

related to the running of a printing press by the plaintiff which

even as per Ex. DW-1/5 was a condonable breach and on the

question of sub-letting by the plaintiff to another party, the same

had also since been rectified. It is pointed out that admittedly the

plaintiff had exercised his option to renew his lease vide his letter

dated 23.02.1967; breaches had been pointed out by the

Department but in the aforenoted communications Ex.D-2 (dated

09.02.1968), Ex.DW-4/1 (dated 16.02.1968) as also in the

subsequent notice Ex.D-3 (dated 01.09.1972) the defendant had

till date not determined the lease of the plaintiff; the first two

communications merely asked the plaintiff to rectify the breaches

and the last communication (Ex.D-3) stated that the Department

has no intention to renew the lease; it is pointed that non-renewal

of lease is distinct from the determination of lease which till date

has not been done. Certain subsequent events have also been

pointed out by learned counsel for the respondent. It is submitted

that the policy of the DDA for conversion from lease hold to free

hold is under consideration and this is clear from the

communication dated 22.01.2008 sent by the DDA to the present

appellant, copy of which has been placed on record and this is an

admitted document. It is pointed out that case of the plaintiff is in

fact under consideration and he has paid ` one crore as

conversation charges. Another subsequent event which has been

brought to the notice of the Court is that in case of the adjoining

property i.e. E-1 Jhandewalan, Delhi (suit property is E-2) has

since been regularized which was also a lease granted by the

DDA; on the payment of conversion charges, the lease hold rights

had been converted into free hold. Copy of the judgment dated

05.05.2009 passed in Writ Petition (Civil) No. 173/1988 D.L.F.

Universal Limited Vs. Union of India & Others has also been

placed on record. It is pointed out that these subsequent events

must kept in mind while deciding this issue.

7 Record has been perused. There is no dispute to the

proposition that the subsequent events which are admitted can be

taken into account. The High Court in a second appeal can take

note of such subsequent events and grant relief in accordance

with it. This has been held by Apex Court in the judgment

reported in AIR 1985 SC 111 Laxmi Narain Guin & Ors. Vs.

Nirayan Modak. The aforenoted two subsequent events which

have been pointed out and noted supra are even otherwise

admitted.

8 Be that as it may, the merits of the controversy have to be

detailed and discussed. The lease deed is Ex. D-1. The lease had

been granted for a cold storage purpose stating therein that it is

to be used for a cold storage and for no other purpose. Clause III

(b) also cannot be interpreted to be read as a clause giving

unilateral option to the plaintiff to renew the lease; it clearly

contained a proviso which proviso states that the lessee will have

the option to renew the lease provided that lessee has observed,

performed and complied with the terms covenant and conditions

of the lease. It is also not in dispute that notices dated 09.02.1968

(Ex.D-2) and 16.02.1968 (Ex.DW-4/1) had been served upon the

defendant pointing out these breaches. These breaches had been

pointed out before the period of lease had expired. The lease deed

was dated 06.01.1951 and it was to expire on 10.08.1968. It is

also not in dispute that prior to this date i.e. 23.02.1967, the

plaintiff had exercised his option to renew the lease. It is also not

in dispute that vide the inter-se communications and noting of the

Department, four breaches as pointed out had been reduced to

two. This was in terms of the noting dated 17.06.1968 of the

defendant (Ex. DW-5/1). Ex.PW-3/5 is a very relevant document.

This document dated 03.10.1969 is a communication by the

department informing the plaintiff that he has to pay ground rent

pursuant to which rent has been paid by the plaintiff to the

defendant. This letter was sent by the Department admittedly

after the period of the expiry of the lease i.e. after 10.08.1968.

This is thus not a case where the defendant was a passive party; it

was on his demand and asking (Ex.PW-3/5) that the ground rent

was paid in terms of this lease (Ex. PW-3/3 dated 03.04.1970, Ex.

PW-3/4 dated 04.10.1969 and Ex. PW-3/6 dated 23.06.1969

evidence payments of rent); acceptance of rent in such a case

does tantamount to an intention of the lessor to continue with the

lease. The first lease had admittedly expired on 10.08.1968. This

communication of 03.10.1969 (Ex.PW-3/5) asking the plaintiff to

pay the arrears of rent for this lease is nothing but a clear

indicator of the lessor to continue with the lease.

9 It is also not in dispute that the Department has formulated

a policy for conversion of lease hold rights into free hold of

properties at Jhandewalan and the adjoining property E-1 has

since been converted from lease hold to free hold. It is also

admitted that `1 crore has been paid by the plaintiff seeking a

conversion from lease hold into free hold and his representation is

under consideration.

10 This is a second appellate court. Findings of fact can be

interfered with only if there is perversity. This finding in the

impugned judgment that there was a unilateral option on the part

of the plaintiff to renew the lease can on no count sustained.

However the act of the defendant in demanding and accepting the

rent clearly indicates the intention of the lessor to renew the

lease.

11 Substantial question of law is accordingly answered as

under:-

Although the plaintiff did not have a unilateral right to

renew the lease yet in the factual scenario of the present case,

acceptance of rent by the defendant pursuant to a demand made

by the defendant, did amount to a renewal of lease.

12 Substantial question of law is accordingly answered in

favour of the respondent and against the appellant. Appeal has no

merit. Dismissed.

INDERMEET KAUR, J.

MAY 31, 2011 a