CS(OS) No.131/2005 Page 1 of 56 * HIGH COURT OF DELHI : NEW DELHI + CS (OS) No. 131/2005 % Decided on: July 30, 2010 Sh. Mohinder Pal Singh Khurana & Anr. ...Plaintiffs Through : Mr. Arun K. Verma with Mr. Aman Anand, Advs. Versus M/s Modi Alakalies & Chemicals Ltd. & Ors. ...Defendants Through : Mr. Rahul Gupta with Mr. Rajnish Mishra, Advs. AND CS(OS) 206/2002 S. Mohinder Pal Singh ..... Plaintiff Through : Mr. Arun K. Verma and Mr. Aman Anand, Advs. Versus Modi Alkalies & Chemicals ..... Defendant Through : Mr. Rahul Gupta and Mr. Rajnish Mishra, Advs. AND CS (OS) No.594/1998 Sh. S. Mohinder Pal Singh Khurana & Anr. ...Plaintiffs Through : Mr. Arun K. Verma with Mr. Aman Anand, Advs. Versus M/s Modi Alakalies & Chemicals Ltd. & Ors. ...Defendants Through : Mr. Rahul Gupta with Mr. Rajnish Mishra, Advs. CS(OS) No.131/2005 Page 2 of 56 Coram: HON'BLE MR. JUSTICE MANMOHAN SINGH 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported Yes in the Digest? MANMOHAN SINGH, J. 1. The plaintiff No.1 and original plaintiff No.2 (since deceased and now represented by his widow) after purchasing a plot of land from D.D.A. by virtue of a perpetual lease dated 7th April, 1980 which is exhibited as PW1/1 constructed a commercial building on 18, Community Centre, New Friends Colony, New Delhi. The property consisting of basement, ground floor, mezzanine floor and first floor totally 9492.10 Sq. ft. (hereinafter referred to as suit premises) was rented out to defendants in Suit No.131/2005. 2. The plaintiffs as mentioned above have filed three suits against the defendants as per details given as under: i) Suit No.131/2005 (original number 344/1998) for recovery of possession of the suit premises. ii) Suit No.594/1998 for recovery of Rs.25,44,000/- towards mesne profits for unauthorized construction and its use by the defendants and for mandatory injunction against the defendants seeking removal of a large hoarding put up by them on the suit premises. CS(OS) No.131/2005 Page 3 of 56 iii) Suit No.206/2002 for mandatory and other injunctions to stop the defendants from carrying out alterations, demolitions and for stopping the use of part of the suit premises for a coffee shop by the name of Barista Espresso Bar (Defendant No.4). 3. The said three suits filed by the plaintiffs herein were consolidated by this Court vide order dated 8.8.2005. This Court was further pleased to direct that CS(OS) 131/2005 (Old No.344/1998 & 174/2003), the suit for recovery of possession in respect of the aforesaid property, would be treated as the lead suit. 4. The said suits of the Plaintiffs have been contested by the Defendant No. 1 by filing its written statement. 5. The entire litigation between the parties revolve around the document lease-deed which is the admitted document by the parties. The tenancy was created by a Lease Deed dated 14.12.1981 Ex.PW1/2, which was registered on 22.02.1982. Salient features of the Lease Deed are: a) The plaintiffs are the lessors. b) The defendants in suit No.131/2005 are the lessee being different companies of the Modi Group. c) Commencement date of tenancy was 16.12.1981. d) Total area rented out was 7647.12 Sq. ft. apportioned amongst the three companies. e) The rate of rent was Rs.3 sq. ft. payable monthly by the 7th day of each month. After four years the rate of CS(OS) No.131/2005 Page 4 of 56 rent was to be paid @ Rs.3.70 sq. ft. and then was to increase by 10% every 4 years. 6. The relevant clauses of the lease deed are as follows: ―2. The tenancy will commence by the 16th of December 1981 and after the expiry of first four years the rent would be revised to Rs.3.70 paise per sq ft, per month and would be revised by 10% on the first of the expiry of every four years. In case permanent electricity connection is not provided by 16/12/1981 then the rent will be charged from the date the permanent connection is given. 3. The tenants shall be entitled to make alterations in the tenanted premises in accordance with the plan to be approved by the Municipal and/or other authorities but shall restore the same in the same conditions if the tenants vacate the premises on their own. In case of any illegal construction or alterations violating the laws of DDA or municipal corporation, the penalty, if any, levied would be paid by the Tenants.‖ 4. The tenants shall be entitled to use the said tenanted premises for commercial purposes and/or for the purpose of running their offices and/or carrying on business therein. 5. The Tenants, if they of their own decided to vacate the premises, will be entitled to remove all fixtures, fittings or additional equipment brought in by them by way of air-conditioning or for any other purposes in the tenanted premises. The Landlords will not in any manner claim any ownership for retaining all those fixtures and fittings and additional materials brought in by the Tenants in the tenanted premises and will not in any manner cause any difficulty in their removal by the Tenants. 6. (iii) The Tenants will have the right to use the whole or any part of the tenanted premises during the tenancy for companies, firms, trusts, associates of the Tenants. However, the responsibility of paying the rent will be of the Tenants under this Dead. 7. The Landlords do hereby covenant with the Tenants in the manner followings: (a) the tenants paying the rent and other charges and outgoings hereby reserved on the days and in the manner hereinbefore mentioned and observing and performing all covenants and conditions herein contained and on their part to be observed and CS(OS) No.131/2005 Page 5 of 56 performed shall peacefully and quietly held, occupy and enjoy the tenanted premises and the said fittings and fixtures free from all disturbances by the Landlords or any person or persons rightfully claiming from, under on in trust for the Landlords. (b) To bear and pay the Municipal rates and taxes, house-taxes any imposition by DDA or other authority or authorities in respect of the tenanted premises during the said term of tenancy.‖ 7. In the Lease Agreement there was no clause for the termination of lease by the Lessor. The Defendant No.1 in view of the above terms and clauses of the lease agreement has set up the defence of perpetual and permanent tenancy in its favour. 8. The parties also entered into a supplementary agreement of tenancy dated 19.9.1985 Ex. PW1/4. As per the said supplementary agreement of tenancy, the landlord leased out the extended area of 1845 sq. ft., which had been recently constructed on the mezzanine floor. It was decided that for the extended portion too, the terms of the agreement dated 14.12.1981 would be applicable. The rate of rent of the area was Rs.6/- sq. ft. per month. 9. Total rent of the entire premises on the date of filing of the suit was Rs.49,570/- per month. 10. The plaintiffs in the year 1997/1998 issued two notices to the defendants for termination of lease and for recovery of possession of the suit premises, the details of which are given as under: i) First notice of termination of the lease deed was sent by the plaintiffs to the defendants on 29.11.1997. ii) As per the plaintiffs since the earlier notice could not CS(OS) No.131/2005 Page 6 of 56 be served on the defendants properly another notice without waiving the earlier notice was sent by the plaintiffs to the defendants on 21.1.1998. 11. Despite due service of the Notice dated 21.1.1998, no reply was given by the defendants and they failed to vacate the premises and the plaintiffs filed Suit No.344/1998 (now numbered as Suit No.131/2005). 12. The defendants No.2 and 3 were proceeded ex-parte in this suit on 6.4.2000. 13. The main defences raised by the defendants in the first suit are as under: a) Tenancy in question is perpetual in nature and therefore could not be terminated and the suit for possession filed upon such a termination is liable to be rejected. b) The plaint does not disclose any cause of action. c) Notice of termination of tenancy was not served on the Defendant No.1. d) Suit is bad for mis-joinder and non-joinder of parties. e) One suit is not maintainable against three companies. 14. On the pleadings filed by the parties, the following issues were framed in CS (OS) No.131/2005 on 8.8.2005: “1) Whether the plaintiff is entitled for recovery of possession of property bearing no. 18, Community Centre, New Friends Colony, New Delhi? OPP 2) Whether the tenancy in favour of the defendants was perpetual and could not be terminated by the plaintiff as stated in the preliminary objection of the written statement, CS(OS) No.131/2005 Page 7 of 56 if so to what effect? OPD 3) Whether the plaint does not disclose any cause of action as alleged in the preliminary objections of the written statement? OPD 4) Whether notice for termination of tenancy was not served on the defendant no. 1 as alleged in the written statement, if so to what effect? OPD 5) Whether the suit is bad for mis-joinder and non-joinder of causes of action? OPD 6) Whether the defendant Nos. 1 to 3 are three separate independent companies and same suit for possession is not maintainable against them? OPD 7) Relief” 15. The second suit bearing no. CS(OS) No.594/1998 was filed by the plaintiffs for recovery of Rs.25,44,000/- towards mesne profits for unauthorized construction and its use by the defendants and for mandatory injunction against the defendants seeking removal of a large hoarding put up by them on the suit premises. Issues were framed on 4.2.2000. 16. The third suit being CS (OS) No.206/2002 was filed by the plaintiffs for mandatory and other injunctions to stop the defendants from carrying out alterations, demolitions and for stopping the use of part of the suit premises for a coffee shop by the name of Barista Espresso Bar (defendant No.4). Issues were framed on 8.8.2005. Evidence of the Plaintiff 17. CS (OS) No.131/2005 being suit for recovery of possession was ordered to be treated as the main suit. The parties were directed to lead their evidence in all the three suits together and they produced their respective evidence in CS (OS) No.131/2005. Sh. Mohinder Pal Singh Khurana, plaintiff No. 1, in his affidavit Ex. PW1/A deposes that the CS(OS) No.131/2005 Page 8 of 56 deponent is the joint owner of the suit premises. The lease deed dated December 14, 1981 has been admitted along with the fact that it was registered on February 22, 1982. Rent of the suit premises was paid with effect from February 1982 although possession was given on December 16, 1981. The increase of Rs. 3.70 paise as per the lease deed has been admitted. It has been deposed that a supplementary lease deed was executed on September 19, 1985 with regard to additionally constructed 1845 sq. ft. area on the mezzanine floor, which was leased out to the defendants at Rs. 6/- per sq. ft. per month. Further, the rent of the suit premises has always been paid by defendant no. 1 on behalf of all of the tenants. Two notices dated November 29, 1997 and January 21, 1998 have been admitted to have been sent by the plaintiffs to the defendants calling upon the latter to vacate the premises. It is also deposed that the defendants have unauthorisedly trespassed over the roof of the first floor for the construction of a room of about 1000 sq. ft. and a toilet of about 200 sq. ft. Damages have been demanded @ Rs. 48,000/- per month for the unauthorizedly constructed area. The putting up of a hoarding has been mentioned, for which damages of Rs.30,000/- per month has been prayed for. Further, for wrongful removal of the water tanks on the terrace, Rs. 24,000/- has been prayed for as damages. It has also been deposed that the defendants have demolished three WCs on the first floor and have removed and constructed new walls and changed the colour scheme etc. of the entire suit premises. All the damages have been prayed for a period of 3 years prior to the filing of the suit though CS(OS) No.131/2005 Page 9 of 56 the illegal construction had been existent earlier. 17.1 During cross examination, Mr. Mohinder Pal Singh, PW1 stated that the lease deed dated December 14, 1981 was not intended to be perpetual in nature. He further stated that no lease agreement was executed after the above-mentioned lease deed on its expiration after four years except the supplementary lease deed dated September 19, 1985. He further stated that the defendant no. 1 was the only lessee in the original lease agreement. He then volunteered that all the three defendants were joined and rent was paid by defendant no. 1. He denied that the plaintiffs constructed any additional area in 1985 and gave the same to the defendants vide supplementary lease deed. He then stated voluntarily that the defendants have themselves secretly constructed the newly constructed area without seeking any permission from the plaintiff and in gross violation of the bye-laws of the DDA. He stated that he made no complaint against the defendants for raising the unnauthorised construction. He then stated voluntarily that he tried to make complaints but was told that the same would be a waste of time. He denied that the lease deed of December 1981 afforded no condition for the plaintiffs to terminate the lease or raise any dispute in case of illegal construction by the plaintiff. Further, he denied that legal notices were never sent to the defendants as alleged by him in the plaint. 17.2 On being recalled for further cross examination, PW1 stated that he did not remember the date and time when the defendants companies got construction made on the terrace. He stated that he CS(OS) No.131/2005 Page 10 of 56 seldom went to the suit property after 1981 and it was the other co- owner Sardar Khushbir Singh Baweja (now deceased since May 18, 2004) who visited the same. He stated that he never interfered with or enquired into the matter of the suit property, though he was told once by the deceased co-owner that the guards did not allow him to enter the suit premises. He has then stated that since his partner was taking care of the matter, he has no idea when the alleged illegal construction was carried out by the defendants nor does he know if the same has been stated in the plaint or not. However, he has knowledge as to construction on the ground floor of the suit premises, though the defendants have not allowed him to enter the premises, as he has seen the same from outside. He cannot tell if any written notice was sent to the defendants as his partner (legal representatives of deceased partner) might have done so. He could not point out the notices from the documents stating that he has a poor eye sight due to glaucoma. He then stated that around 1981 there was already existing construction on the first floor and neon sign, however, the same may have been made of asbestos sheets. In the end, when questioned whether the witness has any personal knowledge about the three cases filed by him against the defendant companies, he replied that he had no knowledge as regards the said cases. Evidence of the defendants 18. On behalf of the defendants, affidavit has been filed by Mr. S.K. Nair, Director of defendant no. 1 marked as Ex.DW-1/A, who has deposed: ―that the lease deed and supplementary lease deed both created CS(OS) No.131/2005 Page 11 of 56 perpetual tenancy in favour of the defendants as they were not terminable. The 10% increase in rent every four years was agreed upon by both parties and payment was made accordingly by the defendants to the plaintiffs. He denied in his examination-in-chief that the defendants ever received any notices dated November 29, 1997 and January 21, 1998 from the plaintiffs for vacation of the suit premises. He deposed that illegal construction alleged by the plaintiffs to have been raised by the defendants had existed since 1981 when the structure was made of asbestos sheets. Further, as per the terms of the lease deed of December 1981, the defendants were liable to pay the penalty etc. for violation of any MCD/DDA bye-law etc. The defendants were entitled to raise hoardings on the suit premises as they were carrying on commercial business at the same. Even if they were not, the plaintiffs never objected to the same since 1981 and their suit is clearly time barred. Further, since the plaintiffs have filed one suit for recovery of possession against three companies which are three separate legal entities and independent tenants, the suit is liable to be dismissed due to mis-joinder of parties. As regards mesne profits and damages, no evidence or particulars have been furnished. 18.1 In his cross examination, Mr. S.K. Nair stated that he was not the Director of defendant no. 1 on December 14, 1981. However, he has been an Officer working with defendant no. 1 from the first day that the suit premises were leased out. He stated that he could not recall if the lease deeds were signed or not. Further, as per him no specific areas CS(OS) No.131/2005 Page 12 of 56 were demarcated for each of the defendants. Two temporary structures on the terrace were also given to the defendants, though the same were not mentioned in the lease deeds and it was understood between the parties that the same would be used by the defendants. 18.2 On being recalled for further examination, Mr. Nair stated that the words ‗perpetual lease‘ do not appear in the lease deeds as there was no need for the same, considering that there was understanding between the parties and there were huge investments made by the defendants in the bare structure of the suit premises to make the same usable. It is also mentioned that the rent was paid by defendant no. 1 alone due to some internal arrangement between the defendants. Further, the three defendants are companies which belong to Modi Group. However, he has stated that the tenancy was not a single tenancy just because defendant no. 1 was paying the rent. On being further questioned, Mr. Nair stated that it was wrong to suggest that his affidavit was drafted by his counsel without his instructions and that the construction over the terrace which is allegedly illegal existed since 1981. However, on being asked whether after 1981 the entire construction on the terrace was carried out by the defendants, Mr. Nair contradicted his earlier statement and said that it would be wrong to say that the entire construction had been carried out by the defendants. When questioned as to the size of the hoarding put up at the suit premises, he seemed not to recall the detailed of the same. He admitted that Barista was allowed to use the suit premises and that there was an agreement to CS(OS) No.131/2005 Page 13 of 56 this effect. On being questioned whether the sale of coffee is an authorized purpose in the memorandum of association of defendant no. 1, he stated that though it may not appear as a main or supplementary object therein, there were enough clauses allowing the company to have associates and new businesses which may sell coffee. 19. The other two witnesses Mr. Ashok Kumar and Mr. G. Raj Kumar from the defendant No.1‘s company were not called upon by the defendant No.1 for the purpose of cross-examination. 20. DW2, Sh. M.P. Singh, Assistant (Commercial land) DDA, Vikas Sadan, I.N.A., New Delhi in his statement has stated as under: ―that as per records, the suit premises were in the name of Smt. Harcharan Kaur and Sh. Mohinder Pal Singh. As per records, the DDA never received any complaint/notice of any nature from the owners of the suit property. On further examination, he stated that in the DDA file of the suit property there is an office noting on August 30, 1983 which states that on inspection, misuse of the basement of the suit premises were found and approval was sought for determination of the lease. Thereafter, the contents of a series of office notings of the DDA as regards the suit premises have been referred to by the cross-examiner and CS(OS) No.131/2005 Page 14 of 56 confirmed by the witness DW2. Office noting dated February 2, 1984 states that Modi Alkalies is running its office in the basement of the suit premises whereas as per office noting dated May 8, 1985 the basement of the suit premises could only be used for storage, and the ground and the upper floors could be used for shops and offices respectively. According to office noting dated August 20, 1985 the basement and ground floor of the suit premises were being used as offices at that time. Further, office noting dated August 22, 1985 states that the misuse of the mezzanine and basement as offices needs to be stopped. Office noting dated March 27, 1986 states that two rooms have been unauthorisedly constructed on the second floor and are being used for residential purposes and due to the same, a show cause notice is to be issued to the plaintiffs. Further, office noting dated January 17, 2003 states that there is unauthorized construction of two rooms and a toilet on the terrace of the suit premises as well as misuse of the basement and mezzanine floors and a show cause notice CS(OS) No.131/2005 Page 15 of 56 dated February 24, 2003 as regards the former was issued by the DDA to the plaintiffs. The plaintiffs‘ reply to the said show cause is located on page 109 of the DDA‘s records, and the plaintiffs vide the said reply brought the DDA‘s attention to the various instances of misuse and unauthorized construction in the said property which had been brought to the DDA‘s notice on earlier occasions also. At the end, the witness admitted that his statement during examination-in-chief that the DDA never received any complaint of any nature from the owners of the suit property as regards the suit property was incorrect.‖ 21. The following documents have been filed and exhibited by the plaintiffs: i.) Exhibit PW1/1 is the copy of lease deed dated 07.04.1980 between DDA and plaintiffs. ii.) Exhibit PW1/2 is the photocopy of agreement of tenancy dated 14.12.1981 between the parties. iii.) Exhibit PW1/3 is the certificate issued by the defendant confirming the agreement between the parties. iv.) Exhibit PW1/4 is the supplementary agreement of tenancy dated 09.09.1985. v.) Notice dated 29.11.1997 marked as Exhibit P1/5 and its Regd A/D receipts marked as CS(OS) No.131/2005 Page 16 of 56 Exhibit PW1/6 to 1/8A. Notice dated 21.01.1998 marked as Exhibit PW1/11 and its Regd. AD marked as Exhibit PW1/12 to PW1/16. vi.) Notice dated 26.07.2000 to produce original documents marked as Exhibit PW1/17. vii.) Copies of sanctioned plans marked as Exhibit PW1/18 to PW1/20. Case of the defendants 22. The main submissions of the Defendant No.1 in the three suits are: I. That the lease created in favour of defendant No.1 was a perpetual and permanent tenancy. From a mere reading of the lease agreement dated 14.12.81 the following conditions and also the intentions of the parties are clear— (i) there is no time period prescribed in the lease for its expiry, (ii) there is not a single clause providing any right of termination of tenancy on the part of the landlords under any circumstances; (iii) the terms in clause 2 clearly mentioned that on revision of rent by 10% every four years the lease will continue,