Gajender Kumar Loond vs Samant Barara
2012 Latest Caselaw 898 Del

*    IN THE HIGH COURT OF DELHI AT NEW DELHI


+             IA No.13740/2011 in CS(OS) 1132/2011

GAJENDER KUMAR LOOND              ..... Plaintiff
            Through: Mr. Muneesh Malhotra, Advocate

             versus

SAMANT BARARA                                      ..... Defendant
            Through:             Mr. M.S. Ahluwalia, Advocate


%                          Date of Decision : February 09, 2012

CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

                           JUDGMENT

: REVA KHETRAPAL, J.

1. This order will dispose of an application under Order XII Rule

6 of the Code of Civil Procedure moved by the plaintiff.

2. The facts succinctly stated for the purpose of the present order

are that the plaintiff filed the above suit, inter alia, claiming recovery

of arrears of rent of ` 74,71,000/- along with the agreed rate of

interest @ 18% per month predicated on a registered Lease Deed

executed by the plaintiff on 19.11.2009, leasing to the defendant the

commercial property bearing No.M-40 (Market), Greater Kailash-II,

New Delhi-110048, having built up area of approximately 8,000 sq.

ft. super area on a monthly rent of ` 9,50,000/- after deducting the

TDS. The said lease was executed for a period of 9 years with the

„lock-in-period‟ of 36 months, commencing from 01.11.2009. It was

also agreed between the parties that the monthly rent shall be

increased equivalent to 15% over and above the amount of rent last

paid, every three years during the lease period. It was further agreed

by the defendant that in case of any delay in paying the monthly rent

beyond the period of first day of each calendar month, the same shall

attract penal interest @ 18% per month on delayed monthly rent.

3. In terms of the Lease Deed, the possession of the said property

was handed over to the defendant on the first day of November, 2009

for carrying out the repairs and doing the interiors, though the rent

commenced from 01.01.2010. The term of the lease commencing

from the effective date, that is, 01.11.2009, was to expire at the end of

108 months with the lock-in-period of 36 months as stated above. It

was also agreed between the parties that in case the defendant

terminates or causes breach of any term of the agreement during the

lock-in-period, in that event the defendant shall pay the entire rent for

the remaining lock-in-period, i.e., balance unexpired term of the lock-

in-period of 36 months and for the aforesaid purpose, the lessor shall

have lien on the entire stocks, goods, machinery, equipment,

inventories, etc. or any other item belonging to the lessee.

4. The plaintiff submits by way of the present application that the

written statement filed by the defendant contains admissions

regarding the execution of the registered Lease Deed dated

19.11.2009 and his being inducted in the demised premises pursuant

to the said document. Plaintiff contends that, at the very threshold,

the defendant has admitted the fact that the defendant had taken on

lease the property bearing No.M-40 (Market), Greater Kailash-II,

New Delhi at the monthly rent of ` 9,50,000/-. Further, the defendant

in its written statement has not raised any dispute with regard to the

execution or admissibility of Lease Agreement dated 19.11.2009. In

such an eventuality, the said Lease Agreement is not only admitted

but becomes legally binding on both the parties and only the contents

of the document need to be read.

5. The plaintiff further contends that keeping in view the

aforesaid, the suit deserves to be decreed in favour of the plaintiff and

against the defendant, inasmuch as admittedly there is an outstanding

to the tune of ` 74,71,000/- on account of unpaid rent till May, 2011

and further liability to pay rent till the subsistence of the Lease Deed

i.e. till 19.11.2012 is not denied. It is also contended that the

defendant has agreed for the payment of penal interest @ 18% per

month both present and future till the subsistence of the period of the

lock-in-period of the Lease Deed. Thus, there is no triable issue left

to be adjudicated in the present suit and the suit be decreed as prayed

by the plaintiff.

6. The defendant, though given ample opportunity to file reply to

the present application and granted one last opportunity on November

02, 2011, did not choose to file reply to rebut the contentions of the

plaintiff. However, the defendant resists the application by

contending that the facts on record are not sufficient to justify the

passing of a decree on the admissions of the defendant. As regards

the delay in paying the monthly rent beyond the period of first day of

each calendar month, the defendant denies that the same was to attract

penal interest @ 18% per month and states that the plaintiff is trying

to take unfair advantage of a typographical error, in that the agreed

rate of interest was 18% per annum and not 18% per month.

7. The defence set up by the defendant, in the written statement

filed by him, is to the effect that consequent to the disconnection of

the power supply by BSES in the showroom of the defendant situate

in the demised premises, the defendant suffered a severe set back in

the business and loss of reputation in the market, as a result of which

the defendant suffered a loss of ` 1,50,00,000/-. To support his claim,

the defendant has placed reliance on following two clauses of the

lease deed:-

Clause No.4

"4. REPRESENTATIONS AND WARRANTIES OF THE LESSOR

.....................There are no pending proceedings, litigation or administrative actions or any other matters relating to the use or occupancy or otherwise relating to the leased premises."

Clause No.7

"7. FURTHER AGREEMENTS BETWEEN THE LESSOR AND THE LESSEE

..................... In the event of the premises or any part thereof, at any time during the terms of the lease or the extended term thereof, be destroyed and damaged by

external fire, acts of God, Riots and civil commotion, terrorist attack and such like damages not within the control of lessor and/or lessee so as to be wholly or partially unfit for the use of lessee, or lessee is deprived of the use of the demised premises for any reason whatsoever, then the rental or proportionate part thereof, according to the damage sustained, shall cease to be payable from the time of such destruction or damage or deprivation of the use of the demised premises until the demised premises is re-instated to its original position by lessor or enable lessee to resume its operation from the premises. Lessor shall upon such reinstatement be bound to put lessee in possession of the demised premises again and the term of the lessee shall be extended by such period for which lessee is deprived the use of the demised premises because of the aforesaid reasons. Action by miscreants, outside persons because of enmity, completion etc. is not covered in this clause."

8. In the above context, the plaintiff‟s version as set out in the

plaint itself is that the plaintiff had agreed to provide a sanctioned

three-phase commercial electricity connection of 45 KW for the

defendant‟s use, which was duly provided to the defendant. The

property in question also had a Diesel Generator Set for 100% power

backup on the roof of the leased premises. The property had been in

continuous possession of the defendant from 01.11.2009. In

November, 2010, the BSES caused a certain notice to be served on

the said premises in relation to some unjustified demand in respect of

Meter No.100010124. The said notice was affixed/pasted at the said

property which was in the complete possession and enjoyment of the

defendant. However, the defendant at no point of time informed the

plaintiff with respect to the said notice or any demand raised by the

BSES. As such, the plaintiff had no occasion to deal with the said

demand raised by the BSES. It subsequently came to the notice of the

plaintiff that the defendant had manhandled and wrongfully confined

an employee of BSES, when he visited the leased premises. As a

result of the aforesaid misdeeds of the defendant, the electricity meter

bearing No.100010124 was disconnected on 03.11.2010. However,

after the disconnection of the aforesaid meter, the defendant who was

in complete control of the suit premises tampered with the other

meter, bearing No.100010080, also installed at the said premises and

having sanctioned load of 45 KVA, by shifting the load of meter

No.100010124 to the said meter, as a result of which BSES

disconnected the electricity supply of meter No.100010080 as well.

Since both the electricity meters are in the name of the plaintiff, the

plaintiff was perforce made to pay the unjustified demand of the

BSES of ` 28,55,225/- for the restoration of the electricity

connection, even though the said demand was disputed and denied by

the plaintiff. After the payment was made by the plaintiff, the

electricity meter No.100010124 was restored on 11.01.2011 and

subsequently the second meter No.100010080 was also restored in the

month of January, 2011. To the utter shock of the plaintiff, the

defendant stopped making payment of the monthly rent from the

month of January, 2011 and even paid a sum of ` 75,000/- less for the

month of December, 2010 on the pretext that the said amount had

been adjusted because of the dispute between BSES and the

defendant, to which the plaintiff immediately protested. Ultimately,

on 04.04.2011, the plaintiff sent a legal notice to the defendant calling

upon the defendant to pay the arrears of rent, including the sum of `

75,000/- less paid for the month of December, 2010. Till date, the

defendant has not paid the rent, hence, the present application under

Order XII Rule 6 Code of Civil Procedure.

9. In the course of hearing, the learned counsel for the plaintiff in

support of his prayer for a judgment based on admissions of the

defendant relied upon the decisions of the Supreme Court and of this

Court reported in JT 2005 (3) SC 213, Charanjit Lal Mehra and Ors.

vs. Smt. Kamal Saroj Mahajan and Anr.; 121 (2005) DLT 98,

Kanwal Kishore Manchanda & Anr. vs. S.D. Technical Services

Pvt. Ltd.; AIR 2004 DELHI 248, Rajiv Sharma and Anr. vs. Rajiv

Gupta; (2000) 7 SCC 120, Uttam Singh Duggal & Co. Ltd. vs.

United Bank of India and Ors. and CS(OS) No.1439/2008, M/s.

Satya Narain Sharma - HUF vs. M/s. Ashwani Sarees Pvt. Ltd.

dated April 06, 2009 rendered by a learned Single Judge of this

Court. He contended that where the defendant wants to vacate the

suit premises before the expiry of the lock-in-period, then it is well

settled that it is under a contractual obligation to pay the rental for the

period until the expiry of the lock-in-period at the rate provided in the

lease agreement.

10. Reliance was also placed by the plaintiff‟s counsel on a

judgment of this Court reported in 86 (2000) DLT 53, Delhi Tourism

& Transportation Development Corporation Ltd. vs. Leman

International (P) Ltd. In the said case, on the strength of a licence

deed which was admitted, a learned Single Judge of this Court

(Hon‟ble Mr. Justice Vikramajit Sen) opined that the terms contained

therein were admittedly to be fulfilled by the parties. The law

enunciated in the said case with regard to admissions of parties,

which has a direct bearing on this case, is for the sake of ready

reference extracted hereinbelow:-

"6. On the strength of the license deed itself I am satisfied that a prima facie case has been successfully established by the plaintiff. Since the license deed is admitted, the terms contained therein are admittedly to be fulfillled by the parties. The defense put forward is that the plaintiff did not fulfill some of its obligations as a consequence of which the defendant has sustained damages. The claim for damages, contained in the counter claim, has however been withdrawn, and hence these do not fall for adjudication. In any event it appears to me to be unassailable that even if the plaintiff had neglected to comply with some of the obligations, the correct and legal recourse open to the defendant was to put an end to the licence, and hand back possession of the suit property to the plaintiff. By adopting this course it would have stopped the clock of liability for payment of license fees and other dues. The defendant could also have initiated proceedings for adjudication of the damages sustained by it as it has done and subsequently abandoned, the existence of a possible claim for damages cannot be considered as an answer to claims for payment of arrears of rent or license fees.

7. Clause 1 of the license deed uncontrovertibly mentions that the license fee would be Rs. 10,000/- per month together with 11 per cent of the gross sales from all sources after deducting sales tax and payment of the proportionate share on property tax. Clause 13

records that the license would after the first quinquennium be Rs. 20,000/- per month in addition to the 11 per cent share of gross sales for the second quinquennium. Other payments are also contemplated.

8. It is now well-established that admissions are not restricted to pleadings. More often than not, contents of the plaint are denied in order to delay proceedings and procrastinate the incidence of liability. Admissions can, therefore, be justly and soundly drawn even from attending circumstances, such as pleadings in other suits or proceedings, or documents exchanged between the parties. Infact, in my opinion, documents constitute the best source of admissions of facts. In the present case, admittedly a license deed was executed by the parties, and the Court need not travel any further. It is bound to treat the contents of such a document as admissions between the parties, and give effect to its contents at the very earliest. Failure to do so would tantamount to encouraging dishonest pleadings. All the averments put forward by the plaintiff are predicated and are sustainable merely from a reading of this deed itself."

11. Per contra, the counsel for the defendant relies upon the

judgments of the Supreme Court reported in (2010) 6 SCC 601,

Jeevan Diesels and Electricals Ltd. vs. Jasbir Singh Chadha (HUF)

and Anr. and 2011 (7) SCALE, Himani Alloys Ltd. vs. Tata Steel

Ltd., to contend that before a Court can act under Order XII Rule 6 of

the Code, the admissions relied upon by the plaintiff must be clear

and unambiguous. The discretion of the Court should not be

exercised to deny the valuable right of a defendant to contest the

claim unless the admission is a categorical one.

12. Indubitably, Order XII Rule 6 CPC confers a wide discretion

upon the Court to decree any suit to the extent of admissions made.

Such admissions may be made in the pleadings "or otherwise". The

discretion is to be exercised judicially; however, the power

encompasses not only pleadings but other materials such as

documents, correspondence and the like. Viewed from this angle and

on close examination of the pleadings including the written statement

and the documents, the following facts in my opinion deserve to be

noted:-

(i) The execution and admissibility of the Lease Deed is not

denied by the defendant.

(ii) The handing over of the possession to the defendant by

the plaintiff on 1st November, 2009 and the three years‟

lock-in-period provided for in the Lease Deed with the

corresponding obligation to pay rent for the lock-in-

period commencing from 01.01.2010 is also not denied

by the defendant, as also Clause 3 of the Lease Deed

affording liberty to the Lessor to take such action as

may be available to him in accordance with law for the

recovery of rent for the balance lock-in-period.

(iii) It is not denied that the rent was ` 9,50,000/- per month

and if the defendant failed in its obligation to pay the

contractual rate of rent it was liable to pay interest @

18% per month on the aforesaid amount from the date of

delay (though according to the defendant it was 18% per

annum and not 18% per month).

(iv) It is not controverted that the defendant neglected to

make payment of the rent from January, 2011 onwards

till date and the defendant has not even denied the

deduction of ` 75,000/- from the rent payable to the

plaintiff for the month of December, 2010, allegedly

made on account of the loss caused to him by the BSES,

which amount has been claimed by the plaintiff in the

present suit.

(v) Service of the legal notice dated 04.04.2011 upon the

defendant and its receipt by the defendant are not denied.

(vi) Last but not the least, it is not denied that the defendant

continued to retain possession of the premises during the

period of 47 days when the electricity connection was

disconnected and is still in possession. To be noted that

the defendant has also not denied that business was being

transacted by it for the aforesaid period of 47 days from

the premises in question, and therefore the question of its

being "deprived of the use of the premises" and of

Clause 7 of the Agreement being attracted does not arise.

13. It is also noteworthy that though the defendant‟s case that he is

not liable to pay the arrears of rent is wholly premised on his yet to be

established contention that the plaintiff was in breach of his

obligation to provide electricity at the demised premises for a period

of 47 days, no set off or counter-claim to the suit was filed by the

defendant with the written statement filed by it. It was subsequently,

i.e., after the filing of the present application under Order XII Rule 6

CPC, that the defendant filed a suit, being CS(OS) No.2341/2011 as a

counter blast, claiming damages in the sum of ` 1,50,00,000/- on the

ground that in view of the electricity disconnection in the premises

the sales had fallen drastically and the defendant had suffered losses.

Interestingly though, the said suit is not supported by any

documentary evidence to show that losses were in fact sustained by

the defendant during the relevant period. Even otherwise, the question

of entitlement of the defendant to recover amounts from the plaintiff

is a separate issue and can be gone into in the suit filed by the

defendant.

14. It is trite that in order to determine whether the alleged

admissions of the defendant are clear and unambiguous, the Court has

to examine the averments as a whole. The material averments and

particulars in the present case so far as they concern the claim of the

plaintiff for arrears of rent, in the opinion of the Court, are not in

dispute. Reference at this stage may usefully be made to the judgment

of a learned Single Judge of this Court (Hon‟ble Mr. Justice S.

Ravindra Bhatt) rendered in Mr. Rane Prakash and Ors. Vs. N.R.

Buildcon Private Limited in CS(OS) No. 1382/2007 decided on

23.01.2008. In the said case, in reply to an application under Order

XII Rule 6 of the Code of Civil Procedure moved by the plaintiff, the

learned counsel for the defendant urged that the defendant had also

counter claimed against the plaintiff for a sum of Rs. 41,91,040/-.

She relied upon para 12 of the counter-claim to say that a substantial

amount of Rs. 35,02,590/- was spent by the defendant towards

renovation, repairs and fitness in the property. In addition, the

defendant was also entitled to refund of security deposit of Rs.

13,89,300/-. This court while dealing with the contention on behalf

of the defendant that the averments in the written statement do not

amount to unambiguous or clear admissions opined as follows:-

"Now, in order to determine whether the alleged admission is clear and unambiguous the Court has to examine averments as a whole. Undoubtedly, the defendant has disputed plaintiffs title and alleged fraud against it but that does not itself render the averments made in the other parts of the written statement unambiguous. The question of entitlement of defendant to recover amounts from the plaintiffs for the amounts due is a separate issue and can be gone into in the counter claim. That cannot prevent the Court from considering whether other parts of the written statement contain clear admissions entitling the plaintiffs to a decree on admissions."

15. Reference may also be made to another judgment of the same

learned Single Judge rendered in the case of Pacific Develcon Pvt.

Ltd. Vs. Indus Renaissance Partners Entertainment Pvt. Ltd. and

Anr. in CS(OS) No. 2022/2007 decided on 01.07.2008. In this case,

the defendants sought to resist an application filed by the plaintiff

under Order XII Rule 6 of the Code of Civil Procedure predicated on

admissions made by the defendants by alleging that the plaintiff was

in breach of Clause 3.1 of the lease deed as regards the availability of

amenities like electricity and water and this relieved it of its duty to

pay rent according to the agreement. Significantly, in this case, the

Division Bench had ordered the defendants to pay the plaintiff the

total amount of 1,48,08,000/- against which they had only paid Rs.

14,31,563/-, while they continued to carry on business from the

premises of the plaintiff. It was alleged by the defendants that they

had suffered financially due to breach and failure of agreement by the

plaintiff. According to the defendants, the extent of loss or damages

suffered by them was upto Rs. 2,25,00,000/-. The defendants relied

on Clause 3.1 of the lease deed to say that the lessor, that is, the

plaintiff had to arrange for installation for water and electricity meters

and A/C plant by a certain date, which it failed to do. This Court on

an overall conspectus of the facts held that there was no denial of the

plaintiff‟s averments on material facts such as execution of the

registered sale-deed; the rate of rent; non-payment of rent for

specified period; issuance of the notice of termination by the plaintiff

to the defendants; receipt of the said notice; and the plaintiff‟s right to

terminate the lease deed before the expiry of the lease period under

Clause 4.2 of the registered lease deed and lastly the directions of the

Division Bench to pay the amounts. The Court accordingly exercised

its discretion to grant the decree prayed for by the plaintiff holding

that the defendants‟ admission was sufficient to necessitate the orders

sought in the application.

16. In the present case, as already stated above, the pleadings do

not reveal any dispute as to the material aspects of the lease

agreement between the parties. Even otherwise, it stands to reason

that the defendant cannot be allowed to continue running its

showroom from the posh commercial premises belonging to the

plaintiff without payment of rent to the plaintiff. The consistent non-

payment of rent over a prolonged period of time by the defendant is

bound to lead to financial constraints to the plaintiff. It would have

been understandable if the defendant had vacated the premises in

December, 2010 itself and claimed damages, but as it appears the

claim of the defendant is nothing but an endeavour to escape from the

liability of payment of the rent for the premises being enjoyed by it.

At the risk of repetition, it deserves to be mentioned at this juncture

that the defendant filed a suit for recovery of damages against the

plaintiff after the plaintiff had filed the present application under

Order XII Rule 6 of the Code of Civil Procedure. The defendant,

therefore, after continuing to use the premises of the plaintiff despite

the inconvenience faced by it for a period of 47 days on account of

partial electricity disconnection and not raising any claim for damages

allegedly sustained by him in the first instance, cannot be allowed to

use his counter claim to ward off the payment of rent legitimately

payable by him to the plaintiff. Measured by any yardstick, this

would be altogether inequitable and unfair. The question of

entitlement of defendant to recover amounts from the plaintiff, if

found due, is a separate issue and can be gone into in the separate suit

filed by the defendant against the plaintiff.

17. The provisions of Order XII Rule 6 of the Code of Civil

Procedure have vested a wide discretion in the Court to decree the

suit to the extent of admissions made by the defendants. Such a

power can be exercised by the Court on an examination of the

pleadings and other materials appearing on the record. In the present

case, the defendant, in his written statement, has admitted all the

averments made by the plaintiff but is using the plea of electricity

disconnection by the BSES for a short span of time as a bulwark to

avoid the payment of his rental dues to the plaintiff. Such a course of

prevarication cannot be allowed to cloud the entitlement of the

plaintiff to a decree on admissions. What is important and relevant is

that a counter-claim/set off, unlike an adjustment does not have the

effect of adjusting or satisfying the admitted dues claimed in the

present suit. The counter-claim filed as an independent suit is to be

established during trial, and only on the same being decreed would an

entitlement thereto arise, that is, it is not a liquidated claim on date.

18. In view of the above discussion, this Court is of the opinion

that the plaintiff is entitled to a decree on admissions. Decree is

accordingly passed declaring that the Lease Deed executed between

the plaintiff and the defendant on 19.11.2009 is subsisting, continuing

and valid till 31st October, 2012. The defendant is directed to pay the

entire arrears of rent with the service tax and other dues payable

thereon till date with interest thereon @ 18% per annum pendentelite

and future (accepting the contention of the defendant that the same is

a typographical error and it is not 18% per month). The aforesaid

payments shall be deposited by the defendant with the Registrar

General of this Court within 15 days of the date of passing of this

order. The defendant is also directed to pay, in the future, advance

monthly rent on the first day of each month in terms of the registered

Lease Deed dated 19.11.2009.

19. Decree-sheet shall be drawn up by the Registry on the stamp

paper to be provided by the plaintiff.

20. CS(OS) 1132/2011 and IA Nos.7610/2011, 7611/2011,

7612/2011, 8815/2011, 8816/2011, 12454/2011 as also the present

application stand disposed of accordingly.

REVA KHETRAPAL (JUDGE) February 09, 2012 km