REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI % DATE OF RESERVE: December 11, 2009 DATE OF DECISION: March 26, 2010 + RFA 329/2007 and CM Nos.16188/2007 and 17682/2007 M/S. CONSEP INDIA PVT. LTD. ..... Appellant Through: Mr. Saurabh Kirpal, Ms. Gauri Subramanian, Mr. Jatin Mongia, Ms. Abiruchi Mengi and Mr. Debmalya Banerjee, Advocates versus M/S. CEPCO INDUSTRIES PVT. LTD. ..... Respondent Through: Mr. B.B. Gupta, Advocate CORAM: HON'BLE MS. JUSTICE REVA KHETRAPAL 1. Whether reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether judgment should be reported in Digest? : REVA KHETRAPAL, J. 1. This appeal is directed against the judgment and decree dated 23rd May, 2007 passed by the learned Additional District Judge in a suit for ejectment, recovery of mesne profits and permanent injunction filed by the respondent against the appellant herein. RFA 329/2007 Page No. 1 of 44 2. The facts as they emerge from the record are that the appellant was inducted as a tenant under the respondent with respect to one big hall, one office room and one WC, all measuring 900 sq. ft. with a common passage on the second floor of property No.F-14/15, Connaught Place, New Delhi of the respondent. The said premises were let out by the respondent to the appellant by an agreement dated 1st December, 1976, whereunder the appellant had agreed to pay rent to the respondent at the rate of Rs.2,700/- p.m. for the first three years and at the rate of Rs.3,240/- p.m. for the next two years and at the rate of Rs.3,780/- p.m. to the respondent after five years of 01.12.1976, i.e., with effect from 01.12.1981. 3. On or about 29th November, 1983, the appellant instituted a petition in the Court of the Rent Controller, Delhi under Sections 6 and 9 of the Delhi Rent Control Act, 1958 against the respondent, inter alia, for the determination of the standard rent of the suit premises. In the said petition, the appellant in para 11 against the column “Monthly rent together with details of House-Tax, Electricity, Water and other charges paid by the tenant” stated: “Rs.3,780/- P.M. exclusive of water and electricity charges”. The said petition for determination of standard rent filed by the appellant against the respondent remained RFA 329/2007 Page No. 2 of 44 pending till 1st September, 1997 when the same was dismissed as withdrawn. 4. In the meanwhile, on account of the fact that the appellant had stopped payment of rent in spite of a notice of demand, the respondent herein, in or about the year 1984, instituted a petition for eviction of the appellant from the aforesaid premises under Section 14(1)(a) of the Delhi Rent Control Act, 1958. It was, inter alia, stated in the said petition that the rent of the premises was Rs.3,780/- p.m. and that initially the premises were let out by the respondent to the appellant by an agreement dated 01.12.1976 as per which the rent was Rs.2,700/- p.m. for the first three years, Rs.3,240/- p.m. for the next following two years and Rs.3,780/- p.m. for the following two years. It was further stated in the petition that the appellant, who was paying a rent of Rs.3,780/- p.m. to the respondent with effect from 01.12.1981, had stopped paying the rent with effect from 1st September, 1982. 5. The appellant filed a written statement/reply to the aforesaid petition for eviction filed by the respondent, in which the appellant did not dispute the agreement of 01.12.1976 and the agreement with the respondent to pay rent at Rs.2,700/-, Rs.3,240/- and Rs.3,780/- p.m. as aforesaid, but alleged that there was a prohibition under Section 4 of the RFA 329/2007 Page No. 3 of 44 Delhi Rent Control Act to the periodical increase of rent in such manner. 6. The aforesaid petition for eviction filed by the respondent against the appellant was decided by the Court of the Additional Rent Controller by order dated 7th March, 1999, in which it was, inter alia, held that the appellant was liable to pay rent at the rate of Rs.3,780/- p.m. which he had agreed to pay and in fact paid for one year since December, 1981. The learned Additional Rent Controller also held the appellant to be in default of payment of rent and being a case of first default, gave a liberty to the appellant to pay the arrears of rent. 7. The appellant preferred an appeal from the aforesaid order to the Rent Control Tribunal, Delhi, which was decided by the order dated 6th December, 2003. The Tribunal, inter alia, held that on the date of the issuance of the notice of demand by the respondent to the appellant, there was no rent due from the appellant to the respondent and for the aforesaid reason the order of the Additional Rent Controller could not be sustained. 8. Subsequently, on 21st September, 2005, the respondent got issued a legal notice of the said date to the appellant, determining the tenancy of the appellant and informing the appellant that upon its failure RFA 329/2007 Page No. 4 of 44 to vacate the premises in spite of determination of its tenancy, it shall be liable to pay mesne profits/damages for use and occupation at the prevalent letting value of the premises from time to time, which presently was Rs.150/- per sq. ft. p.m., together with interest at the rate of 24% p.a. on arrears thereof. In the said legal notice, it was asserted by the respondent that the appellant had been illegally paying rent at the rate of Rs.2,700/- p.m. only to the respondent and as such Rs.38,880/- were the arrears of rent which the appellant was liable to pay. The appellant, it was further stated, was also liable to pay mesne profits/damages for use and occupation for the month of November, 2005 to the respondent at the rate of Rs.1,35,000/- p.m. and thus, in all, a sum of Rs.1,73,880/- was due from the appellant to the respondent. The said notice was duly served on the appellant, to which the appellant got sent a reply dated 5th October, 2005. 9. On the appellant's failing to vacate the premises in spite of the determination of its tenancy, the respondent instituted the aforesaid suit, being Suit No.175 of 2005 for ejectment, recovery of mesne profits and permanent injunction against the appellant. 10. In the written statement filed by the appellant to the suit instituted by the respondent, the appellant raised a number of preliminary RFA 329/2007 Page No. 5 of 44 objections to the maintainability of the suit, inter alia, being that the suit was ill-conceived and had been filed with malafide intentions and ulterior motives – all as a counter-blast to the dismissal by the Rent Control Tribunal, vide its order dated 6th December, 2003, of the original petition for eviction filed by the respondent–landlord in or around 30th November, 1983; that the plaint was a repetition of, if not identical to, the case made out by the appellant before the Rent Control Tribunal on which orders had already been passed by the Tribunal on 6th December, 2003; that the suit was not maintainable and was liable to be dismissed as the contents of the alleged notice dated 21st September, 2005 were at variance with what was stated by the respondent before the learned Rent Control Tribunal; that the suit was instituted without any cause of action and was mischievous in nature; that the suit had been signed and filed by CEPCO Industries Pvt. Ltd. whereas the lease agreement dated 1st December, 1976 was executed with CYCLE Equipment Pvt. Ltd. – and not with CEPCO Industries Pvt. Ltd.; that the suit was untenable and non-maintainable as the relief sought for fell within the ambit of the Delhi Rent Control Act and not within the jurisdiction of Civil Courts; that the respondent was protected against eviction under the provisions of Section 14 of the Delhi Rent Control RFA 329/2007 Page No. 6 of 44 Act and there was an express bar on the jurisdiction of the Civil Court laid down by Section 14(1) of the said Act. 11. On merits, it was stated that the appellant was a tenant under CYCLE Equipment Pvt. Ltd. and not under CEPCO Industries Pvt. Ltd.; the petition for determination of the standard rent was withdrawn by the respondent only due to limitation and keeping in mind that the respondent was bound to pay not more than the initial agreed rent of Rs.2,700/- p.m., which was upheld by order dated 8th May, 1986 by the Additional Rent Controller. It was denied that a new contractual tenancy had come into force between the respondent and M/s. CYCLE Equipment Pvt. Ltd. or that there existed any contractual tenancy between the respondent and CEPCO Industries Pvt. Ltd. as purportedly implied in the plaint. It was contended that the suit was an abuse of the due process of law and totally mischievous, the eviction petition of the respondent on the ground of non-payment of 12 months outstanding rent at the rate of Rs.3,780/- p.m. with effect from 1st September, 1981 having been dismissed by the learned Rent Control Tribunal. It was emphatically denied that the appellant had ever increased the rent, as alleged, from Rs.2,700/- to Rs.3,240/- or to Rs.3,780/-, and stated that if payments by cheques in excess of Rs.2,700/- had been made it was only RFA 329/2007 Page No. 7 of 44 out of duress and ignorance of the law. It was also stated that no rent was outstanding as “on the date of the issuance of the notice of demand” and that the respondent-landlord, by his own written admission, had himself admitted that his earlier statement, vide notice of demand dated 22nd September, 1983, of 12 months outstanding rent being due was not correct and that he in fact had received rent for the period between 27.09.1982 and 12.08.1983 by way of 12 cheques amounting to Rs.45,360/-. It was submitted that that the eviction petition filed by the respondent-landlord had been rightly dismissed by the learned Rent Control Tribunal by its order dated 6th December, 2003 in RCA No.206/1999. It was denied that the appellant-tenant was subsisting on a month-to-month tenancy and that the tenancy of the appellant-tenant stood determined after 15 days of the notice dated 21st September, 2005 (received on 26th September, 2005). It was submitted that the suit was untenable and non-maintainable and had been filed as all earlier attempts by the respondent-landlord to force the appellant-tenant to pay an enhanced monthly sum of Rs.3,780/- had failed. The notice dated 21st September, 2005 was invalid and not in accordance with law while the suit instituted by the respondent-plaintiff was misconceived and liable to be rejected. RFA 329/2007 Page No. 8 of 44 12. In replication, the respondent-landlord reiterated and reaffirmed the averments made in the plaint while controverting and denying the averments made in the written statement. On 19.12.2006, from the pleadings of the parties, the learned trial court culled out nine issues for the adjudication of the suit. 13. Arguments were advanced by Mr. Saurabh Kirpal, the learned counsel for the appellant and Mr. B.B. Gupta, the learned counsel for the respondent on the findings given by the learned trial court on the nine issues framed for the trial of the suit, to which I now propose to advert. 14. Issues No.1 and 2 Issues No.1 and 2 were dealt with together by the learned trial court. The said issues read as under:- “Issue No.1: Whether the suit is barred by the provisions of DRC Act as alleged in the written statement? OPD. Issue No.2: Whether the rent is Rs.2,700/- as claimed by the defendant in the written statement or the rent is Rs.3,780/- as claimed by the plaintiff? OP Parties.” 15. At the outset, it may be noted that the onus of proving Issue No.1 was placed upon the appellant whereas the onus of proving Issue No.2 was upon both the parties. The relevant provision of law is Section 3(c) RFA 329/2007 Page No. 9 of 44 of the Delhi Rent Control Act, 1958 (as amended with effect from 01.12.1988), which provides that the said Act would not apply to any premises whose monthly rent exceeds Rs.3,500/- per month. 16. On the behalf of the appellant-tenant, it was argued that the relationship between the appellant and the respondent was governed by the Delhi Rent Control Act because the initial agreed rate of rent was Rs.2,700/-. The suit was barred by the provisions of the Act as after the order of the learned Rent Control Tribunal the appellant was required to pay rent at the rate of Rs.2,700/- p.m. and as such the premises is not taken out of the purview of the Act. It was submitted that the appellant had been compelled to pay rent at Rs.3,780/- p.m. with effect from 01.12.1981 under pressure and the increase of rent was illegal and arbitrary. 17. Mr. B.B. Gupta, the learned counsel for the respondent-landlord, on the other hand, argued that the onus of proving the rate of rent was upon both the parties, and not upon the respondent alone. He submitted that the respondent had discharged the onus placed upon him, but the appellant had miserably failed to discharge its onus. In support of this contention, Mr. Gupta placed reliance upon the admissions, expressly and impliedly made by the appellant admitting that he had made RFA 329/2007 Page No. 10 of 44 payment of rent at the rate of Rs.3,780/- p.m. till November, 1983, as contained in the following documents:- (i) The lease agreement dated 01.12.1976 (Exhibit RW-1/1). (ii) The petition under Sections 6 and 9 of the Delhi Rent Control Act filed by the appellant on 29.11.1983 (Exhibit PW-1/3). (iii) The order dated 1st September, 1997 (Exhibit PW-1/4) passed by the learned Additional Rent Controller regarding the unconditional withdrawal of the aforesaid petition. (iv) Notice of demand dated 22nd September, 1983 sent to the appellant by the respondent. (v) Petition under Section 14(1)(a) of the Delhi Rent Control Act filed by the respondent against the appellant (Exhibit PW-1/5). (vi) Written statement filed by the appellant to the aforesaid petition (Exhibit PW-1/6). (vii) The statement made by the appellant RW-1 Shri M.K. Bhagwagar (Exhibit PW-1/7). (viii) The judgment of the learned Additional Rent Controller RFA 329/2007 Page No. 11 of 44 dated 07.03.1999 (Exhibit PW-1/8). (ix) The judgment of the learned Additional Rent Control Tribunal dated 06.12.2003 (Exhibit PW-1/9). 18. Before I advert to the admissions allegedly contained in the aforesaid documents, it may be noted that the learned counsel for the respondent placed reliance upon the provisions of Sections 17 and 58 of the Indian Evidence Act and the following judgments rendered by this Court and by the Supreme Court to contend that judicial admissions by themselves can be made the foundation of the rights of the parties and an admission made by a party to the lis is admissible against him proprio vigore:- (i) Draegerwerk Aktiengesellschaft vs. Usha Drager Pvt. Ltd. & Anr. 136 (2007) DLT 355. (ii) Sangramsinh P. Gaekwad and Ors. vs. Shanta Devi P. Gaekwad (Dead) Through LRs and Ors. (2005) 11 SCC 314. (iii) Gautam Sarup vs. Leela Jetly and Ors. (2008) 7 SCC 85. (iv) Steel Authority of India Ltd. vs. Union of India and Ors. (2006) 12 SCC 233. (v) Uttam Singh Duggal & Co. Ltd. vs. United Bank of India and Ors. (2000) 7 SCC 120. RFA 329/2007 Page No. 12 of 44 (vi) Claridges Hotel Pvt. Ltd. vs. M/s. M.M. Bhagat & Company 2001 IV AD (DELHI) 790. 19. Having considered and weighed the rival submissions of the parties and gone through the records and the aforesaid decisions, I am of the view that the respondent has discharged the onus placed upon it of proving that the rent of the premises was Rs.3,780/- p.m. I say so for the following reasons. 20. The lease agreement dated 01.12.1976 (Exhibit RW-1/1) is an admitted document, the legality and validity whereof are not in dispute. The appellant itself has filed this document and placed reliance upon it. A bare perusal of Clause 1 and Clause 10 thereof make it abundantly clear that the monthly agreed rate of rent at the time of the determination of the tenancy of the appellant was above Rs.3,500/- p.m., i.e., Rs.3,780/- p.m. Clause 1 of the lease agreement provides as under:- “That the Lessor hereby demised to the lessee all that of portion of second floor adjacent to the office of Brady & Company having an area of 900 square feet with a facility to use the bathroom and service room and fixtures for a period of three years paying therefor during the said term the monthly rent of Rs.2,700/- per month only excluding water and electricity charges payable in advance by the 10th day of every English Calender month. The tenancy month shall commence from the 1st day of every such month.” RFA 329/2007 Page No. 13 of 44 21. The provisions with regard to the increase of rent are mentioned in Clause 10 of the Lease Deed, which reads as under:- “The Lease is hereby granted for the three years fixed lease. Further extension of two years will be on the terms and conditions as stipulated in this agreement with increase of rent by 20% of the existing rent. All further extension will also be on the same terms and conditions with increase of rent by 20% after every two years period of Lease Agreement hence onwards.” 22. From the above undisputed document, it stands clearly proved that the rate of rent at the time of determination of the tenancy was Rs.3,780/- p.m. as alleged by the respondent. I am fortified in coming to this conclusion from the standard rent petition filed by the appellant, bearing No.SR-52/83 (Exhibit PW-1/3), wherein the appellant had specifically stated in para 11 that the rate of rent was Rs.3,780/- p.m., exclusive of water and electricity charges. Again, in para 18(a), it was stated that the contractual tenancy came into force on 01.12.1981 at the rate of Rs.3,780/- p.m., exclusive of water and electricity charges. It was further stated: “This agreed rate of rent is exorbitant, excessive, unreasonable and out of all the proportion to the reasonable cost of construction including the cost of land on which the whole building is constructed.” RFA 329/2007 Page No. 14 of 44 23. The aforesaid petition filed by the appellant under Sections 6 and 9 of the Delhi Rent Control Act was unconditionally withdrawn by the appellant on 01.09.1987 (Exhibit PW-1/4). The necessary inference, to my mind, is that the appellant abandoned its claim for determination of standard rent (Order XXIII Rules 1 and 1A CPC). The plea of the appellant that the said petition was withdrawn as it was barred by limitation appears to me to be clearly untenable as the same is unsupported by any such evidence on the record. Even assuming it to be so, it does not now lie in the mouth of the appellant to contend that the rate of rent was not Rs.3,780/- p.m. as admitted by him in the petition itself. 24. Next, reference may be made to the notice of demand dated 22nd September, 1983 sent by the respondent to the appellant demanding the arrears of rent at Rs.3,780/- p.m. Based upon the said notice, as stated above, a petition under the provisions of Section 14(1)(a) of the Delhi Rent Control Act was filed by the respondent (Exhibit PW-1/5), stating therein that the tenant had stopped paying the rent with effect from 01.09.1982. The appellant-tenant filed a written statement (Exhibit PW-1/6) to the said petition, wherein in paragraph 5 of the preliminary objections, it was admitted that the rent was increased to Rs.3,780/- RFA 329/2007 Page No. 15 of 44 p.m., but asserted that there was a prohibition under Section 4 of the Delhi Rent Control Act to such increase. In reply to para 11 of the eviction petition also, wherein the rate of rent was again stated to be Rs.3,780/- p.m., the increase was stated to be illegal and it was submitted that the appellant was not liable to pay more than Rs.2,700/- p.m. Similarly, in para 18(a) of the written statement, the payment was admitted and again it was submitted that the rate of Rs.3,780/- p.m. was violative of the standard rent. 25. The admissions made in the statement of the appellant-tenant as RW-1 before the learned ARC, Delhi on 09.07.1987 (Exhibit PW-1/7) are also significant which read as follows:- “As per the lease, the respondent company was to abide by the same terms and conditions of perpetual lease as entered into between the parties and L&DO. Again said: The petitioner and respondent. As per after the initial period of three years the rent was to be increased by 20% and, thereafter, after every two years rent was increased by 20%. Therefore, after three years the rent was increased from Rs.2,700/- to Rs.3,240/- and then after a further period of two years the rent was increased from Rs.3,240/- to Rs.3,780/-. This increase in rent was and is illegal and the same cannot be increased from Rs.2,700/- to Rs.3,240/- or Rs.3,780/-. .................... The monthly rent used to be paid by cheques but the landlord was invariably reluctant in issuing stamped receipts for the same. Over a period of 82 months from 1.12.1976, I have with RFA 329/2007 Page No. 16 of 44 me only 10 receipts which the landlord would give with great reluctance and would cover 3/4 months in one receipt. In respect of monthly rentals I have paid 12 nos. cheques amounting to Rs.3,780/- each or the details of cheques nos. details of the cheques dates and the amount are available on record. In 1986/96 and petitioner has issued a overall statement which is totally false.” 26. The above deposition, to my mind, affirms that the rate of rent as per the lease deed was Rs.3,780/- p.m., which was being paid by the appellant by cheques. The only grievance of the appellant before the learned ARC, Delhi was that the rent so increased was arbitrary and illegal and in violation of the provisions of Section 4 of the Rent Control Act. The learned ARC, by her judgment dated 7th March, 1999 (Exhibit PW-1/8), adjudicating upon the dispute between the parties as to whether standard rent was liable to be paid by the tenant or as to whether the landlord was entitled to recover the agreed rent in accordance with the Lease Deed, in paragraphs 12 and 16 held as under:- Paragraph 12 “12. I, therefore, hold that the respondent was liable to pay the rent @ Rs.3,780/- per month which he had agreed to pay and in fact paid for one year since December 1981 as admitted by him as RW1. RFA 329/2007 Page No. 17 of 44 Paragraph 16 16. However, the present case is one of first default. Having come to the conclusion that the rate of rent was Rs.3,780/- per month and not Rs.2,700/- per month, the order u/s 15(1) of the DRC Act has to be modified and in order that the respondent be entitled to the protection of section 14(2) of the DRC Act, it is directed that the respondent shall pay or deposit the entire arrears of rent @ Rs.3,780/- w.e.f. 1.9.1982 upto the month preceding the month in which the deposit is made within one month of the date of this order. The respondent shall be entitled to adjust the amounts already deposited vide orders u/s 15(1) of the DRC Act passed on 14.3.1986 and 8.5.1986.” 27. Aggrieved and dissatisfied by the judgment of the learned Additional Rent Controller, the appellant-tenant preferred an appeal to the Additional Rent Control Tribunal. It would be apposite at this juncture to note that in the appeal itself (Ground 21), it is again stated