M/S Kirit Films Pvt. Ltd. & Anr. vs M/S Eagle Theaters And Ors.
2015 Latest Caselaw 2037 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                          Judgment pronounced on: 10th March, 2015

+                    I.A. No.9964/2014 in CS(OS) 351/2009

       M/S KIRIT FILMS PVT. LTD. & ANR.            ..... Plaintiffs
                      Through Mr.A.K. Singla, Sr. Adv. with
                                Mr.Deepak R. Dahiya, Adv.

                          versus

       M/S EAGLE THEATERS AND ORS.            ..... Defendants
                    Through Mr.Amarjit Singh Chandhiok,
                            Sr. Adv. & Mr.Pradeep Diwan, Sr.
                            Adv. with Ms. Anupam Dhingra,
                            Mr.Abhimanyu, Ms.Harleen Kaur
                            & Mr.Tejas Parashar, Advs.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order, I propose to decide the pending application bearing I.A. No.9964/2014 under Order VI Rule 17 CPC filed by the plaintiffs.

2. The plaintiffs have filed the present suit for declaration and injunction against the defendants in respect of premises consisting of Flat No.10, 2nd Floor, Plaza Cinema Building, Connaught Place, New Delhi (hereinafter referred to as the "suit premises"). Plaintiff No.1 is a body corporate of which plaintiff No.2 is the Managing Director.

Defendant No.1 is a partnership firm of which defendants No.2 to 11 are partners.

3. It was stated in the plaint that pursuant to an agreement and understanding vide letter dated 23rd May, 1988, the parties entered into a Lease Deed dated 24th May, 1988 which was registered on 26th May, 1988. It was averred in the plaint that the plaintiff company under the said Lease Deed had a right to obtain renewals of lease of the suit premises for successive periods of ten years from time to time on increasing rent by 50%. The plaintiff company had used, possessed, enjoyed the suit premises accordingly in consonance with covenanted terms.

4. It was stated that vide letter dated 18th April, 1998 sent to the defendant firm, plaintiff company exercised its right to renew the said Lease Deed dated 24th May, 1988 for a further period of 10 years w.e.f. 24th May, 1998. Plaintiff company also remitted increased rent of Rs. 599/- towards rent for the period 24th May, 1998 to 23rd June, 1998 which was acknowledged by the defendant firm who issued receipt No.2891 dated 28th May, 1998.

5. It was also stated that plaintiff company in the letter dated 18th April, 1998 and all its subsequent letters, which were acknowledged by the defendant firm requested the defendant firm to execute and register the Renewed Lease Deed from period 24th May, 1998 to 23rd May, 2008.

6. It was stated that vide letter dated 17th April, 2008 addressed to the defendant firm, the plaintiff company exercised its right to renew the lease for a further period of 10 years w.e.f. 24th May, 2008. It was

notified vide the said letter that rent payable w.e.f. 24th May, 2008 will be Rs. 899/- per month. The plaintiff company also requested the defendant firm to execute and register the renewed lease deed for the period of 24th May, 2008 to 23rd May, 2018. Plaintiff company remitted rent at increased rate for the period commencing from 24th May, 2008 to 23rd June, 2008, and for the period 24th June, 2008 to 23rd September, 2008. Though the amounts sent by the plaintiff company were duly received by the defendant firm but without issuing receipt there against.

7. On 5th December, 2008, plaintiff company received letter dated 3rd December, 2008 on behalf of defendant firm contending that plaintiff company's communication dated 17th April, 2008 is not tenable in law. The lease deed dated 24th May, 1988 executed between the parties is an unregistered document drawn on insufficient stamp paper and is neither admissible in evidence nor is enforceable. The defendant firm stated that it was exercising its right to terminate the tenancy of the plaintiff company in respect to the suit premises by giving 15 days notice expiring on 30th December, 2008. Plaintiff company sent a reply dated 23rd December, 2008 disputing the contentions of the defendant firm. Thereafter the plaintiffs filed the present suit.

8. By way of the present application, the plaintiffs seek leave to amend the prayer clause of the plaint by bringing clarity in the reliefs pressed for decision in the case, to limit the prayer clause for cause accruing for the current period i.e. for period of 10 years commencing from 24th May, 2008 and as cause for next tenure of renewal will arise

only in future. It is stated that considering that the reliefs already prayed for in the plaint, raise questions of law, as noted in proceedings taken in the matter on 20th March, 2014 and 12th May, 2014, and the agreement of renewal of lease is since admitted by defendants during admission/denial proceedings in the matter, the plaintiffs seek to amend the prayer clause as enumerated in Para 4 of the application.

9. It is stated that amendment of the prayer clause as prayed is to secure ends of justice, besides efficacious adjudication of the lis and the issues/questions framed for decision in the matter. The amended prayer is found on pleadings and documents already on record. The amendment prayed for would cause no prejudice to the defendants.

10. Reply to this application has been filed on behalf of defendant Nos.1, 2 (ii) to (v), 3 (i) to (iii) and 4 to 11. It is stated thereunder that the application is not maintainable in law. The trial in the suit has already commenced and there is no ground made out in the application to indicate that the amendment sought to be made could not be raised before the commencement of trial.

11. It is contended that the application is an abuse of process of law and the allegations therein are made in a presumptive manner. It is stated that merely because a document is allegedly admitted by the defendants during the course of admission/denial, will not give a cause to the plaintiffs to mould or recast the relief as originally sought by the plaintiffs. The effect of the said document so admitted by the defendants on the reliefs sought, is yet to be seen for which purpose, an issue has already been framed by this Court.

12. It is contended that the application if allowed shall change the nature of the suit. It is an attempt on part of the plaintiff to evade the law of limitation. The original lease deed dated 24th May, 1988 came to an end by efflux of time on 23rd May, 1998. Thereafter, no fresh lease deed was executed between the parties and the plaintiff became a month to month tenant of the suit premises. The monthly tenancy of the plaintiff stands terminated by virtue of legal notice dated 3rd December, 2008. The limitation for seeking relief of execution and registration of a fresh registered lease commenced in the year 1998, while the present suit is filed in the year 2009 which is clearly barred by time. The plaintiff cannot be permitted to allege that the cause of action for renewal of lease arose only in the year 2008.

By virtue of the present application, the plaintiff seeks to amend the prayer clause on an unfounded presumption that the lease for the period 1998 to 2008 for ten years automatically stood renewed without execution and registration of any formal lease deed.

13. It is contended that the proposed amendment is legally and factually misconceived. The same is not necessary for deciding the real questions in controversy between the parties. The present application is filed only for the purpose of delaying the proceedings and the same is not maintainable and is liable to be dismissed.

14. The plaintiffs have filed the rejoinder wherein the contentions of the defendants taken in the reply have been denied and the stand of the plaintiffs taken in the application is reiterated.

15. It is the case of the plaintiffs in the plaint that plaintiff company is promoted by father of plaintiff No.2 with other members of said

family as shareholders, promoters and directors. Such members also managed partnership firm called M/s B.M.Shah. In the year 1955-56 or so, such family members occupied the suit premises ad measuring 2100 sq.ft. along with an area measuring 300 sq.ft. on ground floor in the above said building as a tenant with tenancy rights granted by owners of said property in the name of partnership firm M/s B.M.Shah. At that time the suit premises was used for residential- cum-commercial purposes and the suit premises at the ground floor as garage. The partners and the firm had right to sublet the premises and also to make additions and alternations to the premises. In the year 1963-64, defendant firm became owners of property known as Plaza Cinema Building situated at Connaught Place, New Delhi. In March, 1976 the building came to be included in category-III consisting of Cinemas and Theatres whereupon NDMC revised the water charges. Vide letter dated 6th July 1976, defendant firm gave an option to the partnership tenant firm to obtain separate water connection or else pay the rates revised by NDMC and demanded by them vide said letter. In continuation to their above said letter dated 6th July 1976, defendant firm vide its letter dated 20th July, 1976 confirmed and recognized to all the terms of letting held by the partnership firm since the beginning of the tenancy in respect to the suit premises.

16. Plaintiff No.2 as partner of firm M/s B.M.Shah accepted defendant firm's demand of water charges as stated in the said letter. Learned Senior counsel for the plaintiff has relied upon the letter dated 7th May, 1988 on the letterhead of defendant firm, titled as

Letter of Authority given by the then partners of defendant firm, i.e. Shri Jaspal Singh Sawhney (Defendant No.6), Shri Shyam Mehra representing Shri F.C.Mehra (defendant no.2). Shri Shamsher Raj Kapoor (Defendant No.3), Smt. Pushpinder Kaur (Defendant No.5), Shri Parmeet Singh Sawhney (Defendant No.7), Shri Kartar Singh (Defendant No.8), Shri Gurdial Singh and Shri Tara Singh authorized Shri Joginder Singh Sawheny (Defendant No.4) in the following terms:

"We hereby authorize you to execute and register a Lease Deed in favour of M/s. Kirit Films Pvt. Ltd. in respect of Flat No.10, Plaza Cinema Bldg., New Delhi, on such terms and conditions and for such period as you may deem fit and proper in your sole discretion.

Without prejudice to the generality of aforesaid and in particular you are authorised to permit M/s. Kirit Films Pvt.Ltd. to use the premises for commercial purposes and to sublet, assign or part with the possession of whole or any part of the premises from time to time to any party or parties. You are also authorized to agree that M/s. Kirit Films Pvt. Ltd. shall have a right to renew the lease from time to time on such terms and conditions as may be agreed upon between you and M/s. Kirit Films Pvt. Ltd."

17. Counsel for the plaintiffs argues that by letter dated 23rd May, 1988 given by the plaintiff No.2 in the name of M/s. B.M. Shah advised the defendant firm in the following terms :

"This has reference to the personal talk the undersigned had with your Managing Partner Shri Joginder Singh Sawhney. At our request, you have agreed to give fresh tenancy in respect of the aforesaid flat in the favour of our sister concern M/s. Kirit Films (P) Ltd.

As agreed we have this day surrendered the tenancy in respect of the aforesaid flat measuring approximately 2100 sq.ft. and the room on the ground floor measuring approximately 90 sq.ft. in your favour. However, please allow our Driver Shri Gulab Singh s/o.Shri Bherhon Singh to keep his goods upto 15.7.1988. The keys of the ground floor room measuring 90 ft. shall remain with you."

18. It is also argued by learned Senior counsel appearing on behalf of the plaintiffs that pursuant to the above stated agreement and understanding, a lease deed dated 24th May 1988 was signed and executed between the parties. Defendant firm represented by defendant No.4 in terms of authorization given to him by the other partners of the firm, is described as the 'LESSOR' and plaintiff company represented by plaintiff no.2 is the 'LESSEE', with a covenant that EACH PARTY to the LEASE DEED shall mean and include firm/company howsoever constituted from time to time, its partners, their heirs, executors, administrators, successors and assigns as applicable to the class of party described therein.

This deed was registered with the office of Sub Registrar, New Delhi, on 26th May 1988 and by virtue of aforesaid deed, the terms of lease in respect to the suit premises in the name of plaintiff company and the defendant firm represented by defendant No.4, vide letter dated 31st May, 1988 addressed to plaintiff company confirmed the right of plaintiff company to obtain renewals of lease of the suit premises, for successive periods of ten years from time to time, by covenanting as under :

"We confirm that you will have option to renew the Lease for successive periods of ten years from time to time on the same terms and conditions except for the condition regarding rent. On each renewal, the rent payable by you shall increase by 50%. It is also agreed that you must exercise your option of renewal by giving a written notice to this effect any time before the expiry of the lease period or renewed lease period as the case may be. It is also agreed that we shall execute and register the renewed Lease Deed in your favour if so desired by you."

Along with the above covenant, defendant firm through its partner covenanted under its letter dated 31st May, 1988 addressed to plaintiff-Company in following terms;

"This refers to the Lease deed dated 24.5.1988 and the discussions you had with us.

We confirm that even after the determination of the lease, you will continue to enjoy all the rights granted to you under the said Lease Deed."

19. Reliance was placed on large number of decisions by the learned Senior counsel appearing on behalf of the defendants in order to satisfy the Court that the suit of the plaintiffs is not maintainable being unregistered lease-deed and the notice of termination is issued, as the suit/prayer in itself is not sustainable, the question of amendment does not arise.

20. As per law, ordinarily, if the other side is compensated by costs, then there is no injustice but in practice hardly any Court grants actual costs to the opposite side and basic principles which ought to be taken into consideration while allowing or rejecting the application

for amendment are: (i) whether the amendment sought is imperative for proper and effective adjudication of the case; (ii) whether the application for amendment is bonafide or malafide; (iii) the amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money; (iv) refusing amendment would in fact lead to injustice or lead to multiple litigation; (v) whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case; and (vi) as a general rule, the Court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of application. The above are some of the important factors which may be kept in mind while dealing with application filed under Order VI Rule 17 CPC. These are only illustrative and not exhaustive.

21. It is held in the case of Abdul Rehman and another vs. Mohd. Ruldu and others, reported in (2012) 11 Supreme Court Cases 341 that an amendment seeking declaration of title shall not prejudice the case of the other side unless the reliefs claimed are not barred by limitation. It was observed in the case referred that no prejudice would be caused to the respondents if amendments were allowed. In order to avoid further litigation, the same should be allowed as all amendment which are necessary for the purpose of determining the real questions in controversy between the parties should be allowed if it does not change the basic nature of the suit. A change in the nature of relief claimed shall not be considered as a change in the nature of suit and the power of amendment should be exercised in

the larger interests of doing full and complete justice between the parties.

22. The Supreme Court in the case of Rajesh Kumar Aggarwal and others vs. K.K.Modi and others¸ reported in (2006) 4 Supreme Court Cases 385 held as under:

"18. As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the Court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused. On the contrary, the learned Judges of the High Court without deciding whether such an amendment is necessary has expressed certain opinion and entered into a discussion on merits of the amendment. In cases like this, the Court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard rights of both parties and to sub-serve the ends of justice. It is settled by catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties before the Court.

19. While considering whether an application for amendment should or should not be allowed, the Court should not go into the correctness or falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment. This cardinal principle has not been followed by the High Court in the instant case."

23. If the amendments are necessary for the purpose of determining real questions in controversy and do not change the nature of the suit and would not cause any prejudice to the other side, the same are liable to be allowed. Merit or demerit of the case is not to be examined at this stage of deciding the application. The same are even cannot be gone into at this stage because of the reason, the chance is always given to the other side to rebut the same. In the present case, counsel for the defendants has argued at great length and referred large number of decisions in order to try to establish that the suit itself is not maintainable, however, it is also settled law that it is immaterial that even if a party has a weak case, still at the stage of dealing the application for amendment, the strength of the case is not to be kept in mind. Therefore, if the amendments are necessary in order to decide the real controversy, the same can be allowed. Merely delay in making the application is not a sole ground for refusal of amendment. Amendment sought does not make out new case or new cause of action and facts remain to be same and in substance do not introduce new material fact.

24. On the other hand, learned Senior counsel for the plaintiffs has argued that the trial in the matter is yet to be commenced, the amendments sought by the plaintiffs are clarificatory in the nature of the prayer clause of the suit and no prejudice would be caused to the defendants if the same are allowed. Thus, after having examined the pleadings and documents placed on the record, prima facie, this Court is of the view that the amendments sought by the plaintiffs cannot be refused and the defendants would otherwise be entitled to

raise their objections in the written statement to the amendment plaint.

25. In view of the aforesaid exhaustive discussion and the averment made in the application, this Court is of the opinion that the amendments proposed by the plaintiff are necessary to determine the real controversy between the parties as the merit of the case is not to be discussed at this stage.

26. Therefore, considering the overall facts and circumstances in the present case and in order to avoid multiplicity of the proceedings and to save the time of Court and costs of the parties, the prayer made in the application is allowed. Amended written statement be filed within 4 weeks. Replication, if any, be filed within 4 weeks thereafter.

27. The application is accordingly allowed.

CS(OS) No.351/2009 List the matter before the Roster Bench on 15th April, 2015, subject to orders of Hon'ble the Chief Justice.

(MANMOHAN SINGH) JUDGE MARCH 10, 2015