Delhi High Court

Trans Asia Industries Exposition ... vs Iqubal Chand Malhotra on 29 May, 2014

Author: Rajiv Sahai Endlaw

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                             Date of decision: 29th May, 2014

+                                  FAO(OS) No.265/2014

       TRANS ASIA INDUSTRIES EXPOSITION PVT. LTD. Appellant
                    Through: Mr. Aman Lekhi, Sr. Adv. with Mr.
                             Rajat Wadhwa, Mr. Ashish Batra, Mr.
                             Honey Jain, Advs.

                                     Versus

       IQUBAL CHAND MALHOTRA                                ..... Respondent
                   Through: None.

                                     AND

+                                  FAO(OS) No.266/2014

       TRANS ASIA INDUSTRIES EXPOSITION PVT. LTD. Appellant
                    Through: Mr. Aman Lekhi, Sr. Adv. with Mr.
                             Rajat Wadhwa, Mr. Ashish Batra, Mr.
                             Honey Jain, Advs.

                                     Versus
    ANU MALHOTRA                                             ..... Respondent
                  Through: None.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. These intra-court appeals impugn the consolidated order dated

03.04.2014 on identical applications under Order XXXIX Rule 10 of the Code

of Civil Procedure, 1908 in identical suits being CS(OS) No.1768/2013 and

CS(OS) No.1769/2013 filed by the respondent / plaintiff in each of the appeals

against the appellant / defendant. Vide the impugned order, the learned Single

Judge (exercising Ordinary Original Civil Jurisdiction) has held the appellant /

defendant liable for payment of an amount at the rate of last paid rent to the

respondents landlords in each of the appeals till the date of vacation on

05.02.2014 of the premises held by the appellant / defendant as a tenant under

the respondent landlord in each of the appeals and accordingly directing

adjustment thereof from the security deposit held by the respondent landlord in

each of the appeals and directing the appellant / defendant to pay the balance

two months rent within two months - of course without prejudice to the rights

and contentions of the parties and subject to the final order in the suit.

2. The senior counsel for the appellant / defendant has argued that the order

is erroneous inasmuch as in exercise of powers under Order XXXIX Rule 10 of

the CPC such a direction could have been made only in the face of an

admission by the appellant / defendant of liability to any extent. It is argued that

on the contrary, the appellant / defendant had disputed the said liability.

3. We have however invited attention of the senior counsel for the appellant

/ defendant to order XV-A of the CPC as applicable to Delhi.

4. The undisputed position is:

(i) that the appellant / defendant was a tenant in the premises subject

matter of FAO (OS) No.265/2014 and CS(OS) No.1769/2013

under the respondent / plaintiff therein at a rent of Rs.6 lacs per

month and on the other terms and conditions contained in the

registered lease deed dated 07.12.2009;

(ii) the appellant / defendant was similarly a tenant in the premises

subject matter of FAO (OS) No.266/2014 and CS(OS)

No.1768/2013 and under the respondent / plaintiff therein at a rent

of Rs.7.5 lacs per month and on the other terms and conditions

contained in the registered lease deed dated 07.12.2009;

(iii) the respondents / plaintiffs instituted the suits from which these

appeals arise, averring that though the lease had expired by efflux

of time on 28.02.2013 but the appellant / defendant had not

vacated the premises and was also in default of payment of rent

and other terms and conditions of the lease, for the reliefs of

ejectment of the appellant/defendant from the premises and for

recovery of the amounts due till the institution of the suit and for

recovery of future mesne profits. The plaints in the suits were

accompanied with applications under Order XXXIX Rule 10 of

the CPC seeking a direction to the appellant / defendant to, for the

period of occupation after the expiry of the term of the leases, pay

double the last paid rent as agreed by the appellant / defendant in

the registered lease deeds;

(iv) the learned Single Judge, while issuing summons of both the suits,

directed the appellant / defendant to deposit in the Court as interim

damages the arrears of rent and mesne profits / damages for use

and occupation for the period after the expiry of the lease by efflux

of time at the rate at which the appellant / defendant had agreed to

pay the rent;

(v) the appellant / defendant during the pendency of the suits, as

aforesaid, delivered possession of the premises to the respondent

landlord in each appeal on 05.02.2014;

(vi) that the appellant / defendant did not comply with the direction

aforesaid issued while issuing summons of the suits and on the

contrary filed applications for recall of that order.

5. The learned Single Judge has vide the impugned order dismissed the

applications of the appellant / defendant for recall of the order and allowed the

application of the respondent / plaintiff in both the appeals under Order XXXIX

Rule 10 of the CPC and held the respondent / plaintiff in each appeal to be

entitled to adjust the unpaid rent / mesne profits from the security deposit held

by the respondent / plaintiff and directed the appellant / defendant to pay the

balance amount within two months.

6. The senior counsel for the appellant / defendant though has not made any

argument qua Order XV-A of the CPC to which attention was drawn, has

invited our attention to the registered lease deeds and has contended that it was

a term thereof that on the expiry of the lease by efflux of time, the appellant /

defendant shall handover possession of the tenancy premises to the respondent /

plaintiff, simultaneously with the refund of the security deposit held by the

respondent / plaintiff to the appellant / defendant. The lease deeds further

provided that if the security deposit is not refunded back at the time of

handover of the possession of the leased premises, not only would the

respondent / plaintiff be liable to pay interest thereon at the rate of 18% per

annum but the appellant / defendant would also be entitled to retain possession

of the leased premises with use, without payment of rent. It is argued that the

respondent / plaintiff in each appeal will have to prove that he / she was so

ready to refund the security deposit and if fails in proving so, the appellant /

defendant would not be liable to pay any amount for the period after the expiry

of the term of the lease deeds and till the date of delivery of possession.

7. The learned Single Judge in the impugned order has held that the

appellant / defendant did not at any time write to the respondent / plaintiff to

take possession of nor handed over possession, thus the question of the

respondent / plaintiff being not ready to return the security deposit did not arise.

8. The senior counsel for the appellant / defendant though does not

controvert that the appellant / defendant did not at any time write to the

respondent / plaintiff in each appeal to take possession but contends that since

the date of expiry of the lease was fixed and was known to the respondent /

plaintiff also, there was no need for the appellant / defendant to write any such

letter to the respondent / plaintiff and it was for the respondent / plaintiff to

come forward to refund the security deposit and had the respondent / plaintiff

done so, the appellant / defendant would have delivered possession -- the

respondent / plaintiff having not done so, the appellant / defendant was entitled

to continue in the premises for the period after the expiry of the term of the

lease without paying any amount / charges therefor.

9. The appellant / defendant was using the tenancy premises for commercial

purposes. We have enquired from the senior counsel for the appellant /

defendant, whether the appellant / defendant had removed its furnitures,

fixtures, fittings and personnel from the premises or had taken any other

premises or shifted thereto.

10. The answer is again in the negative.

11. We have yet further enquired from the senior counsel for the appellant /

defendant, whether it was the plea even of the appellant / defendant that it had

so offered possession to the respondent / plaintiff and the respondent / plaintiff

was not in a position to take possession owing to being not in a position to

refund the security deposit.

12. The senior counsel for the appellant / defendant fairly admits that it is not

the plea in the reply to the application under Order XXXIX Rule 10 CPC and

only reference to the clauses aforesaid of the lease deed was made though

subsequently under instructions, he stated that such a plea was taken in the

written statement.

13. However the written statement was filed belatedly and in fact the delay

in filing the written statement was condoned and the written statement ordered

to be taken on record vide the same order dated 03.04.2014. The plea to the

said effect, even if any taken in the written statement, is thus an afterthought.

14. In the aforesaid state of affairs, no error is found in the impugned order.

The error sought to be shown by relying upon clauses of the lease deed is a

figment of legalese and legal acumen; else there are no factual pleadings to take

advantage thereof. The appellant/defendant, in the ordinary course of human

conduct and behavior, if had been intending to vacate the premises on the

expiry of the term of the lease thereof, would have communicated so to the

respondent/plaintiff, well in advance, also calling upon the respondent/plaintiff

to ensure that the security deposit is refunded against delivery of possession.

Not only was nothing of this sort done, but even thereafter no communication

was sent to the effect that inspite of appellant/defendant being ready to deliver

possession, the same had not been taken. The appellant / defendant having

neither made any preparation nor taken any steps for vacation of the tenancy

premises inspite of expiry of the lease thereof and having continued to use and

occupy the premises, cannot on such basis shake off the liability for payment

therefor, at least at the rate at which it was last paying the rent.

15. We have recently, in judgment dated 15.05.2014 in FAO(OS)

No.597/2013 titled Raghubir Rai Vs. Prem Lata held:

(I) that the Court, in exercise of powers under Order XV-A of the

CPC is not incapacitated from directing deposit / payment at a rate

higher than that admitted by the defendant;

(II) that the Court in exercise of powers under Order XV-A of the CPC

is empowered to direct deposit / payment at such rate as the

erstwhile tenant / defendant may on the basis of material on record

be found to have agreed to pay to the landlord for the said period

even if the tenant, before the Court may not have admitted the

same or may have disputed / controverted the same;

(III) however the Court in exercise of powers under Order XV-A,

cannot without evidence assess mesne profits or, merely by taking

judicial notice and without any material on record, arbitrarily

direct the defendant to deposit a much higher amount than what he

had been paying or had agreed to pay; of course if the erstwhile

tenant / defendant was found to have agreed to periodically

increase the rent / user charges, even if such contract may have

come to an end, in exercise of powers under Order XV-A of the

CPC, direction for deposit with such increases can be made unless

strong grounds exist for such increases being not due.