M/S Kusum Enterprises & Ors. vs Vimal Kochhar & Anr.
2013 Latest Caselaw 5847 Del

         *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                               Date of decision: 18th December, 2013

+     RFA No.466/2013, CMs No.15423/2013 (for stay), 15422/2013 (for
      condonation of 909 days delay in re-filing the appeal) &
      19694/2013 (for restoration of the appeal )

      M/S KUSUM ENTERPRISES & ORS.            ..... Appellants
                  Through: Mr. K.C. Mittal & Mr. A. Chauhan,
                           Advs.

                                 Versus

    VIMAL KOCHHAR & ANR.                      ..... Respondents

Through: Mr. R.S. Mahla, Adv.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The appeal impugns the judgment and decree (dated 15.12.2010 of the

Court of Additional District Judge (ADJ)-07, Central, Tis Hazari Courts,

Delhi in CS No.191/2007 (ID No.02401C0235462007) filed by the

respondents / plaintiffs) holding the rent / mesne profits payable by the

appellants / defendants to the respondents / plaintiffs till 30.06.2008 @

Rs.60,000/- per month and @ Rs.6,000/- per day with effect from

01.07.2008 to 12.02.2009 with interest at 16%, without specifying from

which date to which date. The appeal is accompanied with an application

for condonation of 909 days delay in re-filing the same.

2. Notice of the appeal and of the application for condonation of delay

was issued and conditional stay granted and in response whereto a sum of

Rs.15,00,000/- is reported to have been deposited in this Court. The appeal

was on 02.12.2013 dismissed in default of appearance of the appellants /

defendants. The appellants / defendants filed an application for restoration

and notice whereof was issued for yesterday. The counsel for the

respondents / plaintiffs appeared and stated that though as per dicta of this

Court in Brij Mohan Vs. Sunita 166 (2010) DLT 537, no case for

condonation of long delay in re-filing the appeal is made out but subject to

the appeal itself being heard, he has no objection to the appeal being restored

to its original position and the delay in re-filing being condoned.

3. Accordingly, for the reasons stated, the appeal is restored to its

original position and the delay in re-filing the appeal is condoned.

4. The counsels have been heard and the Trial Court record requisitioned

in this Court perused.

5. The respondents / plaintiffs on 06.03.2007 instituted the suit from

which this appeal arises, for ejectment of the appellants / defendants from an

area of 3800 sq. fts. on the ground floor of property No.C-254, Maya Puri,

Phase-II, New Delhi let out by the respondents / plaintiffs to the appellants /

defendants, pleading:

(i) that the said premises were let out for a period of two years

with effect from 01.07.2006 vide three lease deeds, two dated

28.08.2006 and duly registered with the office of the Sub-

Registrar, Delhi and the third dated 01.09.2006, duly attested by

Notary Public, on total lease charges of Rs.60,000/- per month

i.e. Rs.20,000/- per month under each of the three leases;

(ii) that the appellants / defendants had failed to pay the entire

legally recoverable arrears of rent and had paid rent at the rate

of Rs.40,000/- per month only instead of at the rate of

Rs.60,000/- per month;

(iii) that the lease deeds provided for termination of the lease in the

event of violation of any of the terms thereof;

(iv) that the respondents / plaintiffs vide notice dated 08.01.2007

determined the tenancy of the appellants / defendants with

effect from 28.02.2007 and called upon the appellants /

defendants to deliver possession of the premises;

(v) though the said notice was duly served on the appellants /

defendants but no reply was given thereto;

(vi) that the possession of the appellants / defendants of the

premises with effect from 01.03.2007 was thus unauthorized

and the respondents / plaintiffs in accordance with the lease

deeds were entitled to recover mesne profits / damages for use

and occupation at the rate of Rs.6,000/- per day;

accordingly, the suit for ejectment / recovery of possession and

for recovery, i) of arrears of rent and mesne profits till

28.02.2007 of Rs.2,81,400/-; and, ii) of mesne profits /

damages for use and occupation with effect from 01.03.2007 till

the date of delivery of possession at the rate of Rs.6,000/- per

day, together with interest at 18% per annum from the date of

institution of the suit and till realization was filed.

6. The appellants / defendants contested the suit, by filing a written

statement, on the grounds:

(A) admitting only the two registered lease deeds each of which

provided for payment of rent at the rate of Rs.20,000/- per

month; and,

(B) denying that the appellants / defendants were in violation of any

term of the lease deed as the appellants / defendants had paid /

tendered rent at the rate of Rs.40,000/- per month less tax

deducted at source.

7. Needless to state that the respondents / plaintiffs filed a replication

controverting the contents of the written statement and reiterating the case in

the plaint.

8. A perusal of the Trial Court record shows that during the pendency of

the suit, a direction for payment of Rs.40,000/- per month less tax liable to

be deducted at source was made and the unregistered and insufficiently

stamped lease deed was impounded and sent to the Collector for assessing

the proper stamp duty and penalty of two times of the amount of deficiency

in stamp duty was imposed.

9. On the pleadings of the parties, the following issues were framed in

the suit on 29.11.2007:

"1. Whether the rent of premises was Rs.60,000/- per month or whether the Plaintiff is entitled to a sum of Rs.2,81,400/- as balance of arrears of rent from 01.07.2006 to 28.02.2007? (OPP)

2. Whether the tenancy of the defendant was duly terminated by the plaintiff, if so, its effect? (OPP)

3. Whether the Plaintiff, is entitled to possession of the ground floor of premises bearing No.C-254, Mayapuri, Phase-II, New Delhi? (OPP)

4. Whether the Plaintiff, is entitled to use and occupation charges at the rate of Rs.6,000/- per day or any other amount w.e.f. 01.03.2007?

5. Whether the Plaintiff, has filed the present suit after concealing material facts? If so, its effect? (OPD)

6. Relief."

10. Thereafter, the respondents / plaintiffs filed an application under

Order 12 Rule 6 of the CPC for an order of ejectment on admissions and

which application was allowed on 03.09.2008 and a decree of ejectment

passed against the appellants / defendants. It is informed that in compliance

therewith, possession of the premises was delivered on 13.02.2009.

Thereafter, only the adjudication of rent / mesne profits remained and on

which the parties went to trial.

11. The learned ADJ, in the impugned judgment, has found / observed /

held:

(I) that the respondents / plaintiffs had not indulged in any

concealment;

(II) that of the two registered lease deeds, one was for an area of

1800 sq. ft. and the other for an area of 2000 sq. fts. and the

third unregistered lease deed was for the entire area of 3800

sq. fts.;

(III) that it was the plea of the appellants / defendants that the third

unregistered lease deed was a sham one;

(IV) that though the third unregistered lease deed pertained to the

same area to which the two registered lease deeds pertained

but the intention behind creation of the three lease deeds was

to provide for payment of rent at the total rate of Rs.60,000/-

per month i.e. Rs.20,000/- per month under each of the three

lease deeds;

(V) the third un-registered lease deed was admittedly signed by

the appellants / defendants;

(VI) all the three lease deeds were admitted at the stage of

admission / denial of documents;

(VII) the Transfer of Property Act, 1882 does not require a lease

deed to be necessarily in wring or by a registered document;

(VIII) once the appellants / defendants principally agreed to take on

lease 3800 sq. fts. at rent of Rs.60,000/- per month, they

cannot be permitted to violate the said agreement, more so

when the appellants / defendants got possession of the

premises only upon execution of all the three lease deeds;

having availed fruits of the three lease deeds, the appellants /

defendants were estopped from agitating the legality and

veracity of the unregistered lease deed;

(IX) thus, the agreed rent of the premises was held to be

Rs.60,000/- per month;

(X) that the respondents / plaintiffs were however not entitled to

the shortfall in the rent paid for the months of July, August,

and September, 2006 because in the cross-examination of the

appellant / defendant, he had stated that the shortfall in rent of

Rs.60,000/- for the months of July, August and September,

2006 stood received by the respondents / plaintiffs vide

cheque dated 11.10.2006; the respondents / plaintiffs are not

entitled to seek recovery of the shortfall in rent for the said

months for this reason;

(XI) the respondents / plaintiffs were held entitled to recovery of

rent at the rate of Rs.60,000/- per month for the months of

December, 2006 and January and February, 2007 i.e. to a sum

of Rs.1,80,000/-;

(XII) that all the three lease deeds contained a stipulation as under:

"Clause 5 : That in case due to any reason if the lease is not extended for further period, the lessee will hand over the possession of the premises by vacating peacefully to the lessor on or before the midnight of 30.06.2008. In case of default the lessee shall be liable to pay a sum of Rs.2,000/- per day as damages to the lessor for use and occupation of the premises"

(XIII) however the aforesaid stipulation was applicable only after the

expiry of lease period on 30.06.2008 and not prior thereto,

even in the event of earlier termination of the lease;

(XIV) the aforesaid stipulation was in accordance with Section 74 of

the Indian Contract Act, 1872;

(XV) though the respondents / plaintiffs had not led any evidence to

show that the property could fetch more than Rs.60,000/- per

month for the period after 30.06.2008 but since the appellants

/ defendants had in each of the three lease deeds agreed to pay

damages at the rate of Rs.2,000/- per day i.e. Rs.6,000/- per

day, the appellants / defendants were liable to pay the same.

accordingly, it was held that the respondents / plaintiffs are

entitled to agreed rate of Rs.60,000/- per month with effect

form 01.03.2007 to 30.06.2008 and to Rs.6,000/- per day with

effect from 01.07.2008 till the date of vacation of the premises

on 13.02.2009.

12. The counsel for the respondents / plaintiffs has fairly admitted there

is no evidence of mesne profits.

13. The Division Bench of this Court in National Radio and Electronic

Company Ltd. Vs. Motion Pictures Association 122 (2005) DLT 629 has

held that in the absence of proof of rate of mesne profits, mesne profits at a

rate higher than the rate of rent by taking judicial notice of increase in rent

cannot be given.

14. The controversy in this appeal is thus two fold. Firstly, whether in the

face of the two registered lease deeds providing for payment of rent at the

total rate of Rs.40,000/- per month, the direction for payment of rent / mesne

profits for the period from December, 2006 till 30.06.2008 at the rate of

Rs.60,000/- per month on the basis of additional sum of Rs.20,000/- being

payable under the third unregistered lease deed is justified or not. Secondly,

whether in the absence of any evidence and invoking Section 74 of the

Indian Contract Act, 1872, damages from 01.07.2008 till the date of vacation

of the premises at the rate of Rs.6,000/- per day could be granted.

15. I am unable to sustain the finding of the learned ADJ of the total rent

agreed between the parties being Rs.60,000/- per month instead of

Rs.40,000/- per month as stipulated in the two registered lease deeds for the

following reasons:

(a) the unregistered lease deed is admittedly for the same premises

for which the two registered lease deeds have been executed;

(b) neither of the three lease deeds bears the date of execution

thereof; however the two registered lease deeds were registered

on 28.08.2006 and the unregistered lease deed bears the stamp

dated 01.09.2006 of the Notary Public; the date of execution of

the registered lease deeds is thus taken as 28.08.2006 and of the

unregistered lease deed as 01.09.2006;

(c) Section 91 of the Indian Evidence Act, 1872 provides that

where the terms of a contract have been reduced in the form of

a document and where the matter is required by law to be

reduced in the form of a document, no evidence shall be given

in proof of the terms of such contract except the document

itself; Section 92 of the Evidence Act provides that where the

terms of the contract required by law to be reduced in the form

of a document have been proved according to Section 91, no

evidence of any oral agreement between the parties for the

purpose of contradicting, varying, adding to, or subtracting

from its terms shall be admitted; though there are exceptions to

both the said provisions but the same have not been invoked by

the respondents / plaintiffs or their counsel and the case is not

found to be falling in any of the exceptions;

(d) it is also the settled position in law (See Chandrakant

Shankarrao Machale Vs. Parubai Bhairu Mohite (2008) 6

SCC 745 and S.Saktivel Vs. M.Venugopal Pillai (2000) 7 SCC

104) that the terms of a registered document can be varied /

altered by a registered document only; in Raval & Co. Vs. K.G.

Ramachandran (1974) 1 SCC 424 it was specifically held that

any variation of rent reserved by a registered lease deed must be

made by another registered instrucment;

(e) the learned ADJ has failed to notice the said binding provisions

of law and the finding returned by the learned ADJ is contrary

thereto;

(f) a lease of immovable property for any term exceeding one year,

as the instant leases were, as per Section 107 of the Transfer of

Property Act, 1882 could be made only by a registered

instrument; the finding / observation of the learned ADJ of

there being no bar to make a lease orally is also contrary to law;

(g) the leases for the period of two years were thus required in law

to be reduced to the form of a document and were so reduced

and the only evidence of the terms could be that document only

and not other;

(h) the plea and evidence of the respondents / plaintiffs of the total

rent agreed for area of 3800 sq. fts. being not Rs.40,000/- per

month as mentioned in the said lease deeds but being

Rs.60,000/- amounted to contradicting or varying the registered

lease deeds;

(i) even though the unregistered lease deed is recorded in the

impugned judgment to have been impounded and the deficient

stamp duty penalty having been paid thereon, but the same will

still not cure the defect of non registration;

(j) Section 49 of the Registration Act, 1908 prohibits a document

required to be registered from being received as evidence of any

transaction affecting such property unless it has been registered.

The unregistered lease deed, even if had been cured from the

defect of deficiency of stamp duty thus could not have been

received in evidence; the rent in a lease deed cannot be a

collateral transaction; reference if any required in this regard

can be made to K.B. Saha & Sons Pvt. Ltd. Vs. Development

Consultant Ltd. (2008) 8 SCC 564;

(k) I am surprised that the learned ADJ has glossed over the

aforesaid mandatory provisions of law; and,

(l) there could be no estopple against law; the Supreme Court in

Raghunath Rai Bareja Vs. Punjab National Bank (2007) 2

SCC 230 has held that equity cannot defeat the law;

(m) even otherwise, the plea of the respondents / plaintiffs amounts

to the respondents / plaintiffs having indulged in violation of

laws, obviously for the purpose of saving of stamp duty and

income tax and have no equity in their favour and are rather

barred from any relief on the said ground on the principle of

pari delicto.

16. I am also of the view that the reasoning of the learned ADJ of the

respondents / plaintiffs being entitled to mesne profits / damages for use and

occupation with effect from 01.07.2008 and till the date of delivery of

possession at the rate of Rs.6,000/- per day, on the basis of a clause to the

said effect in the lease deeds is erroneous. The said finding again overlooks

the consistent stream of judgments from Fateh Chand Vs. Balkishan Dass

AIR 1963 SC 1405 till the dicta of the Division Bench of this Court in

Vishal Engineers & Builders Vs. Indian Oil Corporation

MANU/DE/6829/2011 holding that Section 74 of the Contract Act merely

provides the maximum compensation which could be given for breach of

contract and without any evidence of loss, merely because of a penalty

clause, such penalty cannot be awarded.

17. Thus, both the questions entailed in the appeal are decided in favour

of the appellants / defendants and against the respondents / plaintiffs.

18. The judgment and decree impugned in the suit is thus set aside and

substituted by a judgment and decree in favour of the respondents / plaintiffs

of recovery of arrears of rent / mesne profits from the appellants / plaintiffs

with effect from the month of 01.12.2006 till the date of vacation of the

premises i.e. 13.02.2009 at the rate of Rs.40,000/- per month. The

appellants / defendants shall of course be entitled to adjust from the amounts

so becoming due, the amounts already paid to the respondents /plaintiffs.

The respondents / plaintiffs shall also be entitled to interest at the rate of 9%

per annum on the amounts so found due,with effect from 13.02.2009 till the

date of payment.

19. No costs. Decree sheet be prepared.

20. Since it is not evident from the record as to how much amount has

been paid by the appellants / defendants to the respondents / plaintiffs, it is

deemed proper to list the matter before the worthy Registrar General for

determination on the said aspect. The parties to appear before the worthy

Registrar General on 28th January, 2014. The appellants / defendants to at

least one week before the said date, file with advance copy to the counsel for

the respondents / plaintiff, a statement showing the payments if any made for

the aforesaid period together the proof thereof. If the respondents / plaintiffs

controvert the same, the worthy Registrar General shall adjudicate the said

dispute and upon adjudication thereof, the amount if any found due to the

respondents / plaintiffs as per decree of this Court shall be got paid to the

respondents / plaintiffs out of the amount of Rs.15,00,000/- deposited by the

appellants / defendants in this Court and the balance amount if any together

with interest accrued thereon shall be refunded to the appellants /

defendants.

RAJIV SAHAI ENDLAW, J

DECEMBER 18, 2013 'gsr'..