IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: July 23rd, 2007 CM(M) NO.746/2007 # M/s.Federal Motors (P) Ltd. ..... PETITIONER Through: Mr.A.S. Chandhiok, Sr. Advocate with Ms.Tatini Bau, Advocate Versus $ M/s.Atma Ram Properties (P) Ltd. ..... RESPONDENT Through: Mr.Deepak Gupta with Mr.B.B. Gupta, Advocates. CORAM :- * HON'BLE MR. JUSTICE ANIL KUMAR 1. Whether reporters of Local papers may be allowed YES to see the judgment? 2. To be referred to the reporter or not ? NO 3. Whether the judgment should be reported NO in the Digest? ANIL KUMAR, J. (Oral) * 1. The petitioner has impugned the order of Additional Rent Control Tribunal dated 26th March, 2007 dismissing the application for amendment filed by the petitioner/applicant after the sixth year of disposal of the eviction petition which was instituted in 1992. 2. Some relevant facts are that respondent filed an eviction petition in 1992 against the petitioner on the ground that the petitioner has sublet, CM(M) No.746/2007 Page 1 of 26 assigned or otherwise parted with the possession of a portion of the suit premises to M/s.Jay Vee Trading Company Pvt. Ltd. without obtaining the consent in writing from the petitioner and the said M/s.Jay Vee Trading Company Pvt. Ltd. is in exclusive possession and occupation of garage No.13 and a portion in the showroom of the suit premises. It had been contended by the respondent that showroom No.9 half portion is commercial whereas bathroom, kolki and garage are non-commercial. The eviction petition was instituted on 26th March, 1992 to which a written statement dated 16th December, 1992 was filed. 3. The petitioner in reply to the application of subletting or parting with the possession of the premises to M/s.Jay Vee Trading Company Pvt. Ltd. categorically contended that M/s.Jay Vee Trading Company Pvt. Ltd. is not in possession much less in exclusive possession or occupation of the premises. 4. Para 18(a)(ii) of the written statement dated 16th December, 1992 is as under:- “Para 18(a)(ii) of the petition is denied as wrong and incorrect. It is denied that the respondent had sublet, assigned and/or otherwise parted with the possession of the whole or any part of CM(M) No.746/2007 Page 2 of 26 the suit premises or parted with the occupation of Garage No.13 and a portion of the show room as in the site plan filed alongwith the petition to M/s.Jay Vee Trading Company Pvt. Ltd. It is further denied that M/s.Jay Vee Trading Company Pvt. Ltd. is in possession, much less in exclusive possession of occupation of the said garage or the said portion as alleged or at all. The respondent/tenant is in full possession, occupation, control and command of the tenancy premises, which it has retained with it and M/s.Jay Vee Trading Company Pvt. Ltd. has not been sublet or assigned the tenancy premises or a part thereof, and nor has any portion of the tenancy premises been parted with by the respondent to the said M/s.Jay Vee Trading Company Pvt. Ltd. as alleged or at all”. 5. On the plea of the parties, the respondent/landlord led his evidence and closed his evidence in 1996. Shri Jai Singh, Managing Director of the petitioner, appeared and deposed on 10th December, 1996 that M/s.Jay Vee Trading Company Pvt. Ltd. had never been in possession of any portion. The relevant deposition of the Managing Director of petitioner as on 10th December, 1996 is as under:- “Jay Vee Trading Company Pvt. Ltd., (Jay Vee Trading Company Pvt. Ltd.), had never been in possession of any portion of the portion in control and possession of the respondent company. It has nothing to do with the portion in possession of the respondent company. (Counsel for the respondent is trying to put question regarding the structural CM(M) No.746/2007 Page 3 of 26 position of the premises of the suit). The same is not being permitted as the ground of eviction is subletting. It is clarify that if anything has been said by the witness of the petition in this regard, the same will not be looked into and merely because the respondent has not controverted the claim of the petitioner regarding structural changes, would not mean that the respondent has accepted the claim of the petitioner with regard to structural changes. I need not reproduce the claim of the A.W.1. The particular observation applies to the cross- examination of A.W.1.” 6. On 10th December, 1996, the deposition of the petitioner's Managing Director was deferred and on 13th March, 1997 in the cross-examination he categorically, on oath, stated that he did not know anything about M/s.Jay Vee Trading Company Pvt. Ltd. and he had never been its Director or Managing Director and whether this is a registered company or has a certificate of incorporation and as to how many Directors are in the M/s.Jay Vee Trading Company Pvt. Ltd are not known to him. The deposition of the Managing Director of petitioner recorded on that date is as under:- “I have no knowledge about JV Trading Co. Pvt. Ltd. I do not know anything about it. Again said, I have some shares in this particular company. I had never been its director of M.D. I am not aware of the fact as to whether this JV Trading Co. Pvt. Ltd. is a regd. company under the Companies Act or has a certificate of incorporation issued by any competent authority. I am not aware as to how many directors are there in JV Trading Co.Pvt. Ltd., Smt.Geeta Gupta is wife. I have seen her writing and signing. I can identify her signatures if shown to me. I do not think that mark 'A' bears signatures of Geeta Gupta, at point 'A' duly encircled.” CM(M) No.746/2007 Page 4 of 26 7. Thereafter petitioner sought amendment to his written statement which was allowed as the respondent/landlord did not contest the amendment sought by the petitioner. By amendment the petitioner incorporated that the erstwhile landlords Sardar Khushwant Singh and Sardar Gurbax Singh had filed two eviction petitions against the respondent before the Rent Control Tribunal, Delhi, and in one of the eviction petitions which was numbered as Eviction Petition No.920/1969, the earlier landlord from whom the respondents claimed title was filed regarding showroom No.9, kolki, bathroom in the passage in garage No.12 and 13 and the other eviction petition was filed by earlier landlord being petition No.921 of 1969 regarding garage Nos.18 and 19 and both the tenancies were considered as separate and accordingly the independent eviction petitions were filed. After the application for amendment was allowed, a written statement was filed. The amended written statement filed by the petitioner, however, it did not incorporate the amendments as had been allowed and as had been sought by the petitioner. Consequently, an application was filed by the petitioner for filing the amended written statement in terms of order passed on his application allowing the amendment. On 22nd July, 1999, therefore, another written statement dated 5th January, 1999 was filed incorporating the CM(M) No.746/2007 Page 5 of 26 amendments which were allowed. 8. After the amended written statement was filed, Managing Director of the respondent again appeared as a witness and stated that the holdings of both companies, i.e., Mussoorie Trading Company and M/s.Jay Vee Trading Company Pvt. Ltd. are exclusive with their respective Directors and the M/s.Jay Vee Trading Company Pvt. Ltd. remained in the premises which was in the tenancy of Mussoorie Trading Company. The deposition of Managing Director as recorded on 23rd February, 2002 after the amendment is as under:- “It is wrong to suggest that we have sublet, assigned or parted with possession in favour of J.V. Trading Pvt. Ltd.”. 9. The petitioner's Managing Director was recalled for further cross- examination on 27th March, 1997 when he categorically denied that the possession of the property has been parted with in favour of M/s.Jay Vee Trading Company Pvt. Ltd. The deposition of the Managing Director of the petitioner is as under:- “It is wrong to suggest that we have sublet, assigned or parted with possession in favour of J.V. Trading Pvt. Ltd. company. It CM(M) No.746/2007 Page 6 of 26 is correct that Federal Motor was the tenant qua show room No.9 garage No.12 & 13, 18 & 19 since long. (Volt the tenancy was separate). It is correct that previous owner was M/s.Sobha Singh and Sons & thereafter property devolved to Mr.Khushwant Singh & Gurbux Singh. Thereafter, the property in suit has been purchased by the petitioner. It is wrong to suggest that in the year 1990 or their about half of the showroom No.9 was surrendered to the present petitioner (Volt In 1990. there was a family settlement in between myself & younger brother. In order to put the records straight, I approached Sh.CM Chadha to agree for creation of separate tenancy with respect to show room No.9 only. Mr.C.M. Chadha agreed in view of the explanation offered & separate tenancies were created. A partition wall was raised & the show room was divided into two portions. The other premises mentioned in above (super premises) remained with Federal Motors. This took place in 1990. my brother namely Mr.Virender Singh became the direct tenant of Mr.C.M. Chadha who is carrying on business in the showroom. It is wrong to suggest that as such in the year 1990 the demised premises was re-organised. As the rent receipts have never been issued since last five six years, there is no question of showing rent receipts, however the rent is being sent regularly by two separate cheques for two separate tenancies. It is wrong to suggest that we have never sent two different cheques qua payment of rent with respect to two separate tenancies (volt: the cheques were sent along with covering letter explaining the position. It is wrong to suggest that tenancy was always one & two different cheques even prior to 1990 were being sent for the purposes of audit. It is wrong to suggest that after 1990 their was only one tenancy i.e. it was treated as one. It is correct that factum of creation of two separate tenancies with the director Mr.C.M. Chadha regarding show room No.9 as deposed by me, was not pleaded in the court as it was not necessary at any print of time. For the purpose of Income Tax. Federal Motor & J. Vee Company are two distinct Company with separate registered offices & distinct business. However, the Directors & the share holders are the same and in my previous deposition I was not clear about this position & was confused. Both my statements as given just above and the statement to the effect “I have no knowledge CM(M) No.746/2007 Page 7 of 26 about J.Vee Trading Company Pvt. Ltd. are correct. Q. On the last date you statement you had no knowledge about J.B.Trading whereas today you have depose otherwise. Please explain. Answer:- It was under confusion as I was confused between J.V. Agencies & J.V. Trading as the initials are the same. I was having no shares in J.B. Agency (P) Ltd. on 13.3.97”. 10. The eviction petition was heard and an order of eviction was passed in favour of respondent against the petitioner holding that the premises was sublet by the petitioner to M/s.Jay Vee Trading Company Pvt. Ltd. The appeal was filed in 2001 along with an application under Order XLI Rule 27 of the Code of Civil Procedure seeking production of the following documents:- “1. Certified copy of eviction petition bearing No.E-57/84 filed by M/s.Atma Ram Properties Private Limited against M.sFederal Motors Private Limited. 2. Certified copies of the orders dated 20.9.1984 passed in the above noted case. 3. Letter dated 15.10.1990 (carbon copy duly signed) written by the respondent to M/s.J.V. Agencies Private Limited. 4. Site plan forming part of the aforesaid letter. 5. Original letter dated 17.2.1988 written by the respondent to the appellant. 6. Photocopy of confirmation of family settlement dated 31.10.1990'. 11. The application for placing the additional documents in eviction petition was declined including confirmation of family settlement dated 21.10.1990. CM(M) No.746/2007 Page 8 of 26 However, the letter dated 15th October, 1990, a site plan annexed thereto and letter dated 17th February, 1988 which was annexed with the application were allowed to be taken on record as the same were not disputed by the respondent on 1st November, 2006. 12. Thereafter the petitioner filed the application under Order VI Rule 17 of the Code of Civil Procedure dated 31st January, 2007 contending inter alia that the alleged sub-tenant company was got incorporated by the Managing Director of the respondent and Shri Virendra Singh in the year 1976-77 which is evident from the certificate of incorporation, memorandum of articles of association. It was also contended that priot to 30th October, 1990, the entire share holding of M/s.Jay Vee Trading Company Pvt. Ltd. was owned by Shri Virendra Singh and his wife Smt. Rashmi Gupta and Shri Jai Singh and his wife Smt.Gita Gupta which is evident from the annual return upto 30th September 1991 of M/s.Jay Vee Trading Company Pvt. Ltd. duly filed in the office of RoC, Delhi and Haryana. Along with the application, the petitioner also filed following documents including the copy of family settlement which was disallowed by order dated 1st November, 2006:- SR. No. PARTICULARS CM(M) No.746/2007 Page 9 of 26 1. Attested true copy of certificate of incorporation, Memorandum and Articles of Association of M/s. Jay Vee Trading Co. Pvt. Ltd. 2. Original office copies of Annual returns of M/s. Federal Motors Pvt. Ltd. upto September 1991 and upto September 1993 duly submitted in the office of ROC Delhi & Haryana, showing the details of its directors and shareholders; along with original receipt no. 4985 dated 25.2.1992 and original receipt no. 4722 dated 29.10.1993 regarding submission of aforesaid returns. 3. Original office copies of Annual returns of M/s. Jay Vee Trading Co. Pvt. Ltd. upto September 1991 and upto September 1993 and upto September 2006 duly submitted in the office of ROC Delhi & Haryana, showing the details of its directors and shareholders; alongwith original receipt no. 4986 dated 25.2.1992 and receipt no. 4723 dated 29.10.1993 and challan no. AO 434501 dated 14.9.2006 regarding submission of aforesaid returns. 4. Original letter dated 12.3.1992 issued by the Asstt. Registrar of Companies, Delhi & Haryana to M/s. Jay Vee Trading Co. Pvt. Ltd. 5. Original letter dated 21.1.1998 by respondent to appellant and Original letter dated 10.2.1988 by appellant to respondent. 6. True copy of indenture of confirmation of family settlement dated 31.10.1990. 13. In the application for amendment, it was contended by the petitioner that lapse and/or professional incompetence on the part of his counsel led to not lifting the corporate veil and not filing the appropriate and complete written statement and some of the documents filed along with the application for amendment. Had it been done it would have easily proved that not only CM(M) No.746/2007 Page 10 of 26 the directors and shareholders of both the companies are same but both the companies are wholly owned family companies of Sh.Jai Singh and his wife Smt.Gita Gupta who are the common directors and shareholders in both companies and the allegation of sub-letting by petitioner to M/s.Jay Vee Trading Company Pvt. Ltd. is absolutely baseless, false and an eyewash to somehow evict the petitioner from the tenanted premises which is the prime commercial premises in Connaught Place, New Delhi and is a source of livelihood for the petitioner. The relevant portion of averment made by the petitioner in his application for amendment is as under:- “The appellant submits that due to lapse and/or professional incompetence on the part of appellant's counsel before the trial court which led to improper and incomplete drafting of written statement no evidence has been led during trial of eviction petition to lift the corporate veil of the appellant company and alleged sub-tenant company which would have easily proved that not only the directors and shareholders of both the companies are same but both the companies are wholly owned family companies of Sh.Jai Singh and his wife Smt.Gita Gupta who are the common directors and shareholders in both companies and the allegation of sub-letting by appellant to M/s.Jay Vee Trading Company Pvt. Ltd. are absolutely baseless, false and an eyewash to somehow evict the appellant from the tenanted premises which is the prime commercial premises in Connaught Place, New Delhi and is a source of livelihood for the appellant. In fact even the evidence led by respondent where the witness of the respondent states that common telephone numbers and common seals are being used by the appellant company and the alleged sub0tenant company, also proves the aforesaid common characteristic of both the companies and also the fact that both the companies are in fact CM(M) No.746/2007 Page 11 of 26 two sides of the same coin rather than two different coins because of commonality of individuals who are directors and shareholders of the both aforesaid companies.” 14. The application by the petitioner for the amendment of written statement in appeal, six years after the appeal was filed, was contested by the respondent contending inter-alia that the application is belated and by filing the application the petitioner is making an attempt to get the same relief which has already been declined in its earlier application moved under Order 41 Rule 27 of CPC. The application for filing the additional documents had been declined and the petitioner was not allowed to produce the family settlement dated 31st October, 1990 and other documents except two documents which were admitted by the respondent. The respondent contended that the petitioner is making an attempt to bring a totally new defence and the petitioner is trying to retract from its earlier stand averred in its pleadings and the statements made by the Managing Director of the petitioner. 15. The respondent also relied on the observations made by the trial Court in respect of the conduct of Mr.Jai Singh, RW.1, Managing Director of petitioner as stipulated in judgment dated 19th March, 2001 passed by CM(M) No.746/2007 Page 12 of 26 Sh.Sunil Kumar Aggarwal, Additional Rent Controller which is as under:- “I would like to observe that RW 1, who appears to be a reasonably good educated person tried to be smart while deposing in the Court. Though he had been a director of M/s Jay Vee Trading Co (P) Ltd. Along with his wife yet pleaded blank when asked whether it is a company incorporated under the Companies Act. In fact he had denied any knowledge about it. He also pleaded doubt about signatures of his wife on the letter head of this company on Ex RW 1/P1. In the adjourned date he pleaded that he was confused as there are two companies M/s Jay Vee Trading Co (P) Ltd. and M/s Jay Vee Agencies. The witness was not a stranger to these two names who could have been confused easily. In fact even after the removal of alleged confusion he did not recollect whether he had been director of M/s Jay Vee Agencies of which he in fact was promoter with Sh.Virender Singh. RW 1 thus tried to sieve out facts before the Court instead of deposing with a clear hurt.” 16. The respondent also raised the plea of delay and latches. He emphasised that the copies of annual returns of petitioner and M/s.J.V.Trading Company Co.Pvt Ltd for the period upto 1991 and thereafter are not found on the records of Registrar of Companies. An affidavit of Mr.Rakesh Kumar Sachdeva, Legal Assistant/General Attorney of the respondent dated 13th March, 2007 was also filed categorically stating that the returns of the petitioner company for the period 1991-1993 on which the petitioner relied in support of his contentions and pleas in the amendment applications are not on the record of Registrar of Companies and similarly the CM(M) No.746/2007 Page 13 of 26 returns of M/s.J.V.Trading Company Limited for the year 1991 upto 1993 are not on the records of the Registrar of Companies. The allegations of incompetence made by the petitioner against his counsel in order to justify not seeking these amendments earlier when the written statement was amended by the petitioner, were also denied by the respondent. 17. The learned Tribunal in its order dated 26th March, 2007 impugned before this Court has noted in detail the amendments sought by the petitioner and the statement of Mr.Jai Singh, Director of the petitioner company showing complete ignorance about the affairs of M/s J.V.Trading Company Limited and even the fact that a certificate of incorporation has been issued by a competent authority. The Tribunal has also referred to the observation of learned Additional Rent Controller regarding the conduct of Sh.Jai Singh, Managing Director of the petitioner during his testimony. The Tribunal has also noted the fact that the copies of annual returns which is also one of the basis for seeking amendment, are not found in the record of Registrar of Companies. The Tribunal has considered whether the plea raised by the petitioner in the application for amendment is a new plea or retraction of the pleas already raised by him or the explanation of the pleas already raised by the petitioner. Reliance has also been placed by the Tribunal on various CM(M) No.746/2007 Page 14 of 26 judgments of the High Court and the Apex Court. 18. The Tribunal was of the view that the application is neither bonafide nor shows due diligence on the part of the petitioner as to why the respondent company filed the application after more than six years of the filing of the appeal and after a period of 11 years after the last amendment was sought by the petitioner in 1996. The Tribunal has based its decision to dismiss the application also on the fact that the facts disclosed in the amendment application were within the knowledge of the petitioner but no cogent or reliable explanation has been given by the petitioner as to why the application was not moved for bringing the alleged facts now disclosed in the application for amendment. The Tribunal also relied on the fact that there was no explanation by the petitioner about the non-availability of the documents relied on by the petitioner in the record of Registrar of Companies and why the facts were also not disclosed in the earlier applications filed under Order 41 Rule 27. 19. I have heard learned counsel for the parties in detail and have perused the pleadings, statements and other relevant material produced along with this petition. It is no more res integra that piecemeal adjudication of disputes CM(M) No.746/2007 Page 15 of 26 is to be abjured and avoided. The petitioner had sought amendment of his written statement 1996 where the facts regarding filing of separate eviction petitions by erstwhile landlords Sh.Khushwant Singh and Sh.Gurbax Singh were incorporated. These facts as alleged by the petitioner now were also within their knowledge. The only excuse given by the petitioner for not disclosing these facts earlier, is of professional incompetence on the part of the petitioner's counsel before the trial Court. The Tribunal relying on the observation of the Controller regarding the conduct of the Director of the petitioner that he appears to be a reasonably good, educated person who tried to be smart while deposing in the Court and the fact that the Managing Director was not a stranger to the names of M/s J.V.Trading Company Pvt Ltd and M/s J.V.Agencies, as he had given an excuse that the two names had confused him, has disbelieved the explanation given for seeking amendment six years after filing of the appeal and 11 years after seeking earlier amendment on the ground that the facts could not be alleged before the Court earlier on account of professional incompetence of his lawyer. In exercise of jurisdiction under Article 227 of the Constitution of India, this Court is not to substitute the plausible inference