Hansalaya Properties vs Reservation Data Maintenance ...
2012 Latest Caselaw 5725 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     CS(OS) No.189/1999

%                                              24th September, 2012

HANSALAYA PROPERTIES                           ...... Plaintiff
                                   Through:    Mr. H.L. Tiku, Senior
                                               Advocate with Ms.
                                               Yashmeet, Advocate.

                            VERSUS

RESERVATION DATA MAINTENANCE INDIA PRIVATE LIMITED
                                 .... Defendant
                      Through: Mr. R.K. Mehta, Advocate
                               with Mr. Kunal Mehta,
                               Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?     YES


VALMIKI J. MEHTA, J (ORAL)


1.

The subject suit has been filed by the plaintiff/landlord for

recovery of an amount of Rs.33,82,258.06/-. The amount claimed is

rental charges @ Rs. 4.5 lacs from 1.1.1999 to 16.8.1999.

2. The facts of the case are that the plaintiff/landlord gave on

lease the subject premises being Flat Nos.3-G and 3-H admeasuring 3000

sq ft situated on the 3rd floor commonly known as „Hansalaya‟ and

bearing municipal No.15, Barakhamba Road, New Delhi to the

defendant. The first registered lease deed in this regard is dated

16.12.1993 and which lease expired on 16.8.1998. After this first lease

deed came to an end a second lease deed on 25.8.1998 was entered into

for the period of one year from 17.8.1998 to 16.8.1999. This second lease

deed is again a registered lease deed. The defendant vacated the premises

on 12.3.1999 but as per the plaintiff the lease could not be determined

before the fixed period of one year expiring on 16.8.1999, and therefore

the plaintiff has filed the subject suit for recovery of rent from 1.1.1999 to

16.8.1999. Learned senior counsel for the plaintiff at this stage clarifies

that rent has been paid for January, 1999 and the claim in the suit is

restricted to rent from 1.2.1999 to 16.8.1999.

3. The defendant contested the suit and the defence which was

raised was that the defendant under force, coercion and undue influence

had to enter into the registered lease deed dated 25.8.1998 for the period

from 17.8.1998 to 16.8.1999. It is claimed that since the plaintiff was a

landlord it was in a dominant position and therefore there was coercion

upon the defendant. It is pleaded that hence the defendant is not bound

by the terms of the lease deed dated 25.8.1998. It is also pleaded that

since the defendant handed over possession on 12.3.1998, thereafter it is

not liable to pay the rent.

4. The following issues were framed in this suit on 11.8.2008:-

"1. Whether the present suit is barred in view of Section 69 of

the Partnership Act, 1932? OPP

2. Whether the defendant is liable to pay rent/use and occupation charges for the period between March, 1999 to August, 1999 and if so at what rate? OPP

3. Whether the defendant had executed Lease Deed dated 25th August 1998 under force and coercion? OPD

4. Whether the plaintiff is entitled to interest and if so, at what rate and for what period? OPP

5. Relief."

Issue No.1

5. Plaintiff has filed and proved on record certificates issued

from the Registrar of Firms Ex.PW1/2 and Ex.PW1/3 and which show

that plaintiff is a duly registered firm under Section 69 of the Partnership

Act, 1932. Smt. Pushpa Vadera who has filed the suit is shown at serial

No.1 in the list of partners in the document Ex.PW1/2. I therefore decide

issue No.1 in favour of the plaintiff and against defendant and hold that

suit is not barred under Section 69 of the Partnership Act, 1932.

6. Issue Nos.2 and 3 are related and therefore are being

disposed of together. The basic aspect is the liability of the

defendant/tenant to pay rental charges from 1.2.1999 till 16.8.1999

although the defendant has vacated the suit premises on 12.3.1999.

7. The fact that the lease deed dated 25.8.1998 was duly

entered into between the parties and registered is not disputed. This lease

deed is proved and exhibited as Ex.P1. The defence of the defendant is

that this lease deed is not binding on account of coercion and undue

influence. Reliance is placed upon Section 16(3) of the Indian Contract

Act, 1872 that the defendant being a tenant and already paying rent, the

plaintiff-landlord was in a dominant position and therefore the

defendant/tenant had no option but to agree to the terms of the lease deed

Ex.P1.

8. Normally, Sections 91 and 92 of the Evidence Act, 1872 will

prevent a person from urging anything contrary to the terms as contained

in the written document. The terms of the written document being the

lease deed dated 25.8.1998 Ex.P1 will therefore be binding upon the

parties, provided of course the defendant does not succeed in proving the

issue of coercion and undue influence.

9. I am unable to agree with the contention of the defendant

that there was any coercion and undue influence in entering into the lease

deed Ex.P1 dated 25.8.1998. Firstly, the defendant is a company and

surely it cannot be said that there is coercion and undue influence on the

entire Board of Directors of the defendant. Further, the defendant has in

fact acted upon this lease deed Ex.P1, paid the rent from 17.8.1998 to

31.12.1998 @ Rs. 3 lacs per month, and thus taken benefit of the same.

Having acted upon the lease deed and having taken benefit of the same,

the defendant is estopped from raising the plea of undue influence or

coercion.

10. Further, if really the lease deed Ex.P1 was got entered into

through coercion and undue influence, nothing prevented the defendant

from immediately writing a letter after the lease deed dated 25.8.1998

was entered into that the lease deed is not binding on account of coercion

and undue influence, however, no such notice was immediately sent or

even for many months after the lease deed Ex.P1 was entered into

between the parties. The first communication alleging coercion on behalf

of the defendant is the letter dated 25.1.1999, Ex.DW1/9 wherein the

defendant has alleged coercion and undue influence. I thus refuse to

believe this argument of undue influence and coercion which has been

raised for the first time around five months after the lease deed Ex.P1 was

entered into and acted upon between the parties. Obviously, this

communication Ex.DW1/9 is a convenient communication on behalf of

the defendant. I therefore hold that there was no undue influence or

coercion on the defendant for entering into of the lease deed dated

25.8.1998, Ex.P1.

11. The next issue is that whether the defendant is liable to pay

the rent from 1.2.1999 to 16.8.1999. I may note that the lease deed in

question Ex.P1 is a lease for a specified period of one year from

17.8.1998 to 16.8.1999. This lease deed does not contain any termination

clause whereby the defendant could have terminated the lease by giving

of a notice i.e there is no clause of no fault termination by giving a notice

of one month or two months etc. Once, there is no clause entitling

termination of lease by the tenant, and which lease is for one year, the

lease in fact will be for a fixed period of one year. Once the lease is for a

fixed period of one year and if the tenant wants to vacate earlier, the

tenant in law will be bound to pay the rental charges for the entire period

of one year. Of course, it was open to the defendant to plead and prove

that the plaintiff in spite of breach of contract by the defendant in

vacating the premises earlier than the fixed period expiring on 16.8.1999

did not suffer a loss to claim the rent from 1.2.1999 to 16.8.1999,

however, there is no such pleading of the defendant and no such issue is

framed. Pleading and framing of an issue would have been relevant

because notice then would have been given to the plaintiff who

could/would have led evidence to show that in spite of his taking steps no

tenant could be found from 13.3.1999 to 16.8.1999, and which period in

any case is not a long period, but only of about five months. In any case,

I need not say anything further on this aspect because neither there is any

pleading nor an issue raised by the defendant in this regard.

12. I therefore hold that there was no force, coercion or undue

influence upon the defendant at the time of entering into of the lease deed

Ex.P1. I refuse to accept this argument that merely because the defendant

was a tenant in the same premises, the plaintiff was in a dominant

position being the landlord. The relations are commercial relations and

the documents are commercial documentation and therefore I cannot

accept the plea urged on behalf of the defendant with respect to that the

plaintiff allegedly being the landlord was in a dominant position.

Obviously, the lease was taken for the benefit of the defendant inasmuch

as though the defendant has purchased another premises, but in those

premises work was going on and therefore the defendant was in no

position to shift from suit premises and therefore the lease Ex.P1 was

entered into between the parties. I also hold that in view of the lease

being for a period of one year without a no-fault termination clause, the

defendant/tenant is liable to pay rent from 13.3.1999 to 16.8.1999.

13(i) Counsel for the defendant has sought to argue that the

plaintiff cannot claim the amount of rent from 1.2.1999 to 16.8.1999

inasmuch as the plaintiff itself had terminated the lease vide letters dated

16.12.1998, Ex.PW1/5 and 1.1.1999, Ex.PW1/7. On the basis of these

letters, it is argued that plaintiff had terminated the lease.

(ii) So far as the letter dated 16.12.1998, Ex.PW1/5 is

concerned, there is not even a whisper in the same for the termination of

the lease, and which only seeks payment of rent.

(iii) In the second letter dated 1.1.1999, Ex.PW1/7, all that the

plaintiff has done is that it has put the defendant to notice that in case of

failure to pay rent the lease would stand determined. There is a

difference between the expressions „would be terminable‟ and „lease is

terminated‟. A lease would be determined only when it is actually

terminated with effect from a particular date. The threat to terminate

lease is different from actual termination of the lease. The letter

Ex.PW1/7 does not terminate the lease as is sought to be urged on behalf

of the defendant.

(iv) The argument of the defendant is therefore rejected that the

plaintiff itself had terminated the lease in terms of the letters Ex.PW1/5

and Ex.PW1/7.

14. Learned counsel for the defendant has cited the following

judgments:-

(i) ICRA Limited Vs. Associated Journals Limited 2007 (8)

AD (Delhi) 437.

(ii) Hansalaya Vs. RDM India Pvt. Ltd. 86 (2000) DLT 734.

(iii) Ram Prakash Vs. Amitosh Moitra 2010 (170) DLT 347.

(iv) Janki Vashdeo Bhojwani Vs. Indusind Bank Ltd. & Ors.

AIR 2005 SC 439.

15. So far as first judgment is concerned, it has been cited on the

proposition that after possession is handed over, the tenant is not liable to

pay the rent. The second judgment is the interim order in this very suit.

The third judgment is on the same proposition as the first judgment. The

last judgment is on the proposition that an attorney who is not aware of

the facts of the case and which are in the knowledge of the principal

cannot depose on such facts.

16. So far as the first judgment in the case of ICRA Limited

(supra) is concerned the same has no application to the facts of the

present case where the lease is a fixed period lease of one year. Of

course, after vacation of premises, a tenant is not liable to pay the rent,

however, when the lease is for a fixed period of one year and the tenant

vacates premises before the fixed period it is ordinarily liable to pay rent

for the balance period, subject to the defence of the tenant under Section

74 of the Contract Act, 1872, that plaintiff did not suffer a loss as it could

have but failed to let out the premises for the balance period of the lease

and which defence is not set up by the defendant in the present case.

The judgment in the case of ICRA Limited (supra) therefore

does not apply to the facts of the present case.

17. So far as the second judgment in the case of Hansalaya

(supra) dealing with interim proceedings in this very suit is concerned, all

need say is that a judgment at an interim stage does not bind the parties at

the stage of final arguments in the suit after evidence has been led.

18. So far as third judgment in the case of Ram Prakash

(supra), besides the fact that it is under Section 138 of Negotiable

Instruments Act, 1881, the same is distinguishable on the same reasons

which have been given qua the first judgment of ICRA Limited (supra).

19. So far as the last judgment in the case of Janki Vashdeo

Bhojwani (supra) is concerned, the same does not apply to the facts of

the present case where the witness has specifically deposed that he is

aware of the facts and hence competent to depose. Also, as the

discussion in the present judgment shows, the findings and conclusions

basically turn upon the reading of the documents being the lease deed and

the notice exchanged, besides the conduct of the defendant in acting upon

it by taking benefit of the lease deed dated 25.8.1998, and therefore, the

judgment in the case of Janki Vashdeo Bhojwani (supra) has no

application to the facts of the present case.

Issue No.4

20. Once the plaintiff is entitled to arrears of rent from 1.2.1999

to 16.8.1999, in terms of the judgment of the Supreme Court in the case

of Indian Oil Corporation vs. Saroj Baweja 2005(12) SCC 298, the

plaintiff will also be entitled to interest on arrears of rent payable. I grant

interest @ 12% per annum from end of the month for which the rent was

payable till the date the amount is paid. Plaintiff will also be entitled to

pendente lite and future interest till payment of decretal amount @ 12%

per annum simple.

Relief

21. In view of the above, the suit of the plaintiff is decreed for

rent @ ` 4.5 lacs per month for the period from 1.2.1999 to 16.8.1999

alongwith interest @ 12% per annum simple from the end of the tenancy

month for which the rent was payable. Plaintiff will also be entitled to

same rate of interest pendente lite and future till payment of decretal

amount. Plaintiff will also be entitled to costs in terms of Rules of this

Court. In case, any amount has been paid by the defendant during the

pendency of the suit for the period from 1.2.1999, then, the defendant will

be entitled to adjustment of such amount paid to the plaintiff, and which

aspect will be seen in the execution proceedings, if any. Suit is decreed

and disposed of accordingly. Decree sheet be prepared.

VALMIKI J. MEHTA, J SEPTEMBER 24, 2012 Ne