Smt. Shakuntala Devi vs Central Bank Of India
2014 Latest Caselaw 2095 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RSA No.13/2014

%                                                    28th April, 2014

SMT. SHAKUNTALA DEVI                                ..... Appellant
                 Through:                Mr. U.K. Sharma, Advocate with Ms.
                                         Urmil Sharma, Advocate.

                          Versus

CENTRAL BANK OF INDIA                                     ..... Respondent

                  Through:               Ms. Ekta Choudhary, Advocate.

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

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This Second Appeal is filed by the appellant/plaintiff against

the concurrent judgments of the courts below; of the trial court dated

5.3.2012 and the first appellate court dated 4.10.2013; by which the suit of

the appellant/plaintiff for possession and recovery of damages/mesne profits

with respect to premises being ground floor and basement of property

bearing no.10, Community Centre, First Floor, Lawrance Road, Industrial

Area, Delhi was dismissed. The suit was dismissed because the courts

below have held that the respondent/defendant had exercised the option in

terms of clause 3(d) of the rent agreement Ex.PW1/C 30 days before expiry

of the lease period on 17.10.2008. The option is said to have been exercised

by means of the letter dated 15.9.2008 issued by the respondent/defendant to

the appellant/plaintiff.

2. The facts of the case are that the appellant/plaintiff let out the

suit property to the respondent/defendant on a monthly rent of Rs.15,000/-

for a period of five years commencing from 18.10.2003 and expiring on

17.10.2008. In terms of the clause 3(d) of the registered lease agreement,

respondent/defendant could exercise the option of extending the lease for a

further period of five years subject to increasing rent by 20%. Whereas the

case of the appellant/plaintiff was that she did not receive the renewal option

notice dated 15.9.2008, the respondent/defendant claimed that after the

renewal option notice dated 15.9.2008 was refused when the same was sent

personally through the peon of the respondent/defendant thereafter the same

was sent by courier and UPC to the appellant/plaintiff. As already stated

above, the courts below have held that renewal option notice has been served

upon the appellant/plaintiff and consequently the suit for possession has to

be dismissed.

3. The relevant observations of the first appellate court, in this

regard, are contained in para 12 of the impugned judgment and which reads

as under:-

"12. After hearing the arguments and going through the record, I found that there was a lease agreement reached between the parties which is Ex.PW1/C. In this lease deed clause 3(d) specifically provides that the lessee i.e. defendant/respondent herein if an option for exercise of lease period for two of 5 years each after the expiration of the period of the lease entered into by Ex.PW1/C. This option was to be exercised atleast 30 days before the day of expiry of the earlier lease and in writing. Admittedly the lease deed was going to expire on 17.10.08, therefore, this option was to be exercised one month prior to that i.e. on or before 17.09.08. There is a letter written by the defendant/respondent to the plaintiff/appellant on 15.09.08 and is Ex.DW1/2, though the plaintiff/appellant has denied having receive the same but there is evidence on record showing that this letter was delivered to them. Firstly there is statement of the peon PW2, who deposed that he took the letter to the plaintiff after making entry in the peon book, copy of which is proved on record as Ex.DW1/5. According to this entry plaintiff/appellant refused to receive the same. It is important to note here that plaintiff/appellant resides on the first floor, whereas defendant is on the ground floor. The notice was also sent through courier and by UPC. UPC receipt has been proved on record as Ex.DW1/4. Witness from post office was examined as DW4, who stated that this UPC was sent through post office, Keshav Puram Delhi, though it was argued that it is manipulated document but no such evidence has come on record that UPC is manipulated which is Ex.DW1/4. Under the circumstances the presumption arises that notice was received by the plaintiff/appellant which is not rebutted by the plaintiff/appellant. Merely saying that the plaintiff/appellant has not received the notice will not rebut the evidence which has come on record. It has to be shown under what circumstances it could not have been received by him when the address mentioned on the UPC as well as courier receipt is correct and there is also evidence of the peon DW2 that he himself went to the plaintiff and tendered this letter to the plaintiff/appellant but she refused. As this letter is served upon the plaintiff/appellant, therefore, defendant/respondent has exercised the option under clause 3(d) as required and the defendant/respondent is therefore also entitled to extension of lease for a further period of 5 years. Under the circumstances once the lease is already extended for further period of five years, the plaintiff/appellant is not entitled to the

relief as claimed. The rent at the enhanced rate is already tendered and given to the plaintiff/appellant as per the agreed terms."

4. Learned counsel for the appellant argues that there arises a

substantial question of law inasmuch as by a mere sending of letter of option

of renewal, there is automatically no fresh lease deed with respect to the

extended period and for which reliance is placed upon the judgment of the

Supreme Court in the case of Hardesh Ores (P) Ltd. Vs. Hede and

Company (2007) 5 SCC 614.

5. In view of the arguments urged on behalf of the

appellant/plaintiff, the following substantial question of law is framed:-

"Whether even assuming the renewal option notice dated 15.9.2008

was served upon the appellant/plaintiff, even then whether the tenancy of the

respondent/defendant does not stand terminated by means of the legal notice

dated 23.9.2008 in view of the fact that till there is a registered lease deed

executed for the renewal period the respondent remains only a month to

month tenant."

6. Supreme Court in the case of Hardesh Ores (P) Ltd. (supra)

has very clearly laid down that merely because the option of renewal is

exercised, there is automatically no registered lease deed for the fresh period

and it is necessary that for the fresh period, registered lease has to be

executed so that tenancy ceased to be month to month tenancy. Since law,

i.e Section 17(1)(b) & (d) of the Registration Act, 1908 and Section 107 of

the Transfer of Property Act, 1882 requires any lease over 11 months to be

by a registered document, it is not permissible to contend existence of a

lease merely by exercising an option because there cannot be estoppels

against law.

7. Since admittedly in the present case when the legal notice of

termination of tenancy was sent by the appellant/plaintiff to the

respondent/defendant, the tenancy was a monthly tenancy, the same could

have been terminated by a legal notice as per Section 106 of the Transfer of

Property Act, 1882. I may note that respondent/defendant has filed a suit for

specific performance and nothing is observed in the present judgment with

respect to entitlement of the respondent/defendant for specific performance

of renewal of lease in terms of clause 3(d) of the lease agreement dated

18.10.2003, and the said issue will be open for being decided in that suit in

which respondent/defendant can also seek appropriate interim orders which

can be granted if in the opinion of the civil court which is hearing the suit,

case for interim order is made out in favour of the respondent/defendant for

continuing the stay in the suit premises. This is being specifically observed

because the aspect with respect to whether renewal option was served upon

the appellant/plaintiff in terms of the notice dated 15.9.1998 is not finally

decided in this litigation and the same will be decided in the suit for specific

performance. I am consciously leaving this issue open and setting aside the

findings of the courts below that the renewal option notice dated 15.9.2008

is served upon the appellant/plaintiff by the respondent/defendant inasmuch

as in my opinion it is very strange that in spite of an alleged refusal to the

peon of the respondent/defendant to receive the renewal notice dated

15.9.2008 by the appellant/plaintiff, the respondent/defendant very

surprisingly did not send the notice dated 15.9.2008 by registered post AD

but only sent the same through UPC and a courier receipt. It has been held

by the Supreme Court in the cases of Gadakh Y.K. Vs. Bala Sahib AIR

1994 SC 678 and State of Maharastra Vs. Rashid B. Mulani (2006) 1 SCC

407 that UPC is not a reliable method of proving the service of notice. So far

as the courier receipt is concerned, it is noted that there are no signatures on

the same receipt of the courier by the appellant/plaintiff. Also, the alleged

entry of the peon dated 15.9.2008 is the only entry in the peon book of

15.9.2008 and which also can raise a doubt as to the validity of the said

entry. Accordingly, though the finding of the courts below are set aside

where it is held that the renewal option notice dated 15.9.2008 was served

upon the appellant/defendant, however this issue will now be finally decided

in the suit for specific performance which is said to have been filed by the

respondent/defendant and pending in the civil court.

8. In view of the above, once the relationship of landlord and

tenant is admitted, the fact that rent is more than Rs.3,500/- per month is also

admitted and notice terminating tenancy was served by means of the legal

notice dated 23.9.2008, the suit for possession and mesne profits filed by the

appellant/plaintiff has to be decreed. Since the tenancy is a commercial

tenancy in terms of the ratio of the judgment of this Court in the case of

M.C. Agrawal HUF Vs. Sahara India & Ors. 183 (2011) DLT 105, it is

held that appellant/plaintiff will be entitled to mesne profits by taking the

mesne profits payable at the admitted rate of rent plus 15% increase

cumulative every year commencing from 1.11.2008 from when the tenancy

of the respondent/defendant is held terminated.

9. In view of the above discussion, the substantial question of law

is answered in favour of the appellant/plaintiff and against the

respondent/defendant and it is held that appellant/plaintiff was entitled to

terminate monthly lease, and which was terminated by the legal notice dated

23.9.2008, Ex.PW1/D, and hence the suit for possession with respect to

property bearing no. 10, Community Centre, First Floor, Lawrance Road,

Industrial Area, Delhi is decreed and appellant/plaintiff is also entitled to

mesne profits from 1.11.2008 which would be 15% more than the last

admitted rate of rent payable as on 1.11.2008 and thereafter the mesne

profits would be increased by 15% cumulatively every year till the

respondent/defendant hands over possession of the suit premises to the

appellant/plaintiff. Parties are left to bear their own costs.

APRIL 28, 2014                                  VALMIKI J. MEHTA, J.
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