IN THE HIGH COURT OF DELHI AT NEW DELHI CS(OS) No.2563/2000 # M/s Riviera Apartments Pvt. Ltd. $ Punjab National Bank A VERSUS CS(OS) No. 321/2003 # Mrs. Shafali C. Diwanji VERSUS $ Punjab National Bank CS(OS) No. 323/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS)No.2563/00 Plaintiff Defendant Plaintiff Defendant Plaintiff Defendant Pg.No.lof49 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified CS(QS) No. 324/2003^ # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 325/2003 / # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 326/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 327/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No.2563/00 Pg.No.2 of 49 CS(OS) No. 328/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No. 329/2003 # Shri Inder P. Choudhrie 1 $ Punjab National Bank VERSUS CS(OS) No. 330/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No. 331/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No.2563/00 Plaintiff Defendant Plaintiff Defendant Plaintiff Defendant Plaintiff Defendant Pg. No.3of49 CS(OS) No. 332/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No. 333/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No. 334/2003 # M/s Riviera Apartments Pvt. Ltd. I VERSUS $ Punjab National Bank CSfOS) No. 335/2003 # M/s Riviera Apartments Pvt. Ltd. VERSUS $ Punjab National Bank CS(OS) No.2563/00 Plaintiff Defendant Plaintiff Defendant Plaintiff Defendant Plaintiff Defendant Pg. No.4 of 49 4^ CS(OS) No. 395/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 396/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 397/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No. 398/2003 # M/s Riviera Apartments Pvt. Ltd. Plaintiff VERSUS $ Punjab National Bank Defendant CS(OS) No.2563/00 Pg. No.5 of 49 CS(OS) No. 399/2003 # M/s RivieraApartmentsPvt. Ltd. Plaintiff ! VERSUS $ PunjabNationalBank Defendant CS(OS) No. 400/2003 # M/sRivieraApartmentsPvt. Ltd. Plaintiff I VERSUS $ PunjabNationalBank Defendant CS(OS) No. 401/2003 # M/s RivieraApartmentsPvt. Ltd. Plaintiff I VERSUS $ PunjabNationalBank Defendant ! through: Mr.DineshGarg, Adv. with Ms.Rachna Aggarwal, for plaintiff. Mr.Y.P. Chandna, Adv. for defendant. RESERVED ON : 05-07-2006 % DATE OF DECISION: 13-07-2006 CS(OS)No.2563/00 Pg- No.6 of49 r.ORAM: * Hon'ble Mr.Justice Pradeep Nandrajog 1. Whether reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whetherjudgment should be reported in Digest? : PRADEEP NANDRAJOG, J. 1. The above captioned 22 suits have been filed by Riviera Apartments Pvt. Ltd. (19 suits), Shafali Choudhrie (1 suit) and Inder Prakash Choudhrie (2 suits). Shafali Choudhrie is the daughter of Inder Prakash Choudhrie. Inder Prakash Choudhrie is the Managing Director of Riviera Apartments Pvt. Ltd. The suits relate to a commercial building bearing municipal No.D-1, Alaknanda Shopping Centre, Kalkaji, New Delhi. Different units are owned by the plaintiffs and by and under 22 separate registered lease deeds the said units were taken on lease by the defendant. For record, the tenant inducted at the time of the lease(s) was New Bank of India which merged with Punjab National Bank. Save and except 2 leases, admitted case of the parties is that all other leases expired on 16.3.1998. 2 leases expired on 22.5.1998. Details of the suits, the lessor, unit number, area, and agreed rent at the time of the expiry of the lease(s) is as under;- CS(OS) No.2563/00 Pg. No.7 of 49 SI. No. Suit No. Lessor Unit No. Area (sq.ft.) Rate of rent (Rs.) p.m. at the time of ..expiry of Date of expiry of lease 1. 2563/2000 RAPL GF-3 189, 8,164.80 16.03.1998 2. 321/2003 SCD GF-6 200 8,640.00 16.03.1998 3. 323/2003 RAPL GF-5 166 7,171.20 16.03.1998 4. 324/2003 RAPL GF-2 189 8,164.80 16.03.1998 5. 325/2003 RAPL GF-4 233 10,065.60 16.03.1998 6. 326/2003 IPG GF-1 268 11,577.60 16.03.1998 7. 327/2003 RAPL B-6 200 3,456.00 22.05.1998 8. 328/2003 RAPL SF-1 449 10,086.33 16.03.1998 9. 329/2003 IPG B-7 195 3,369.60 22.05.1998 10. 330/2003 RAPL FF-3 258 5,795.71 16.03.1998 11. 331/2003 kAPL FF-2 258 5,795.71 16.03.1998 12. 332/2003 RAPL FF-1 365 8,199.36 16.03.1998 13. 333/2003 RAPL FF-5 258 5,795.71 16.03.1998 14. 334/2003 RAPL FF-6 205 4,605.12 16.03.1998 15. 335/2003 RAPL FF-4 365 8,199.36 16.03.1998 16. 395/2003 RAPL SF-5 205 4,605.12 16.03.1998 17. 396/2003 RAPL SF-6 278 6,245.00 16.03.1998 18. 397/2003 RAPL SF-7 225 5,054.40 16.03.1998 19. 398/2003 RAPL GF-7 210 9,072.00 16.03.1998 20. 399/2003 RAPL SF-2 260 5,840.64 16.03.1998 21. 400/2003 RAPL SF-3 283 6,357.31 16.03.1998 22. 401/2003 RAPL SF-4 268 6,020.35 16.03.1998 2. Inder Prakash Choudhrie has filed suit No.326/2003 as also suit No.329/2003 under his own signatures. He has instituted the suit on behalf of his daughter Shafali Choudhrie stating that he is her constituted attorney. He has instituted the suits on behalf of Riviera Apartments Pvt. Ltd. in its capacity as its CS(OS) No.2563/00 Pg. No.8 of 49 i Managing Director. Additionally, he has relied upon a board resolution in his favour. 3. Relationship of lessor and lessee is admitted. That the lease(s) was for a commercial purpose is also admitted. Agreed rent when the lease(s) came to an end by efflux of time is also admitted fact. Rentals for each unit are more than Rs.3500/-per month save and except the rentalsfor unit No.B-6 and B-7 which are t" a subject matter of suit No.327/2003 and 329/2003, which as noted above were Rs.3456/- and Rs.3369.60 per month. 4. On the pleadings of the parties 7 issues were framed on 21.7.2004. The issues are as under:- "1. Whether the plaint has been signed and verified by a competent person on behalf of the plaintiff? OPP. 2. Whether the clann of damages as pleaded in the plaint is within time? OPP. 3. Whether the plaintiff is entitled to the relief of possession? OPP. 4. Whether the plaintiff is entitled to claim the damages? If so, at what rate and for what period? OPP 5. Whether the plaintiff is entitled to pendente lite and future interest; if so, at what rate? OPP. CS(OS)No.2563/00 Pg- No.9 of49 6. Whether the defendant is occupying in the capacity of a contractual tenant as pleaded in the written statement? If so, what effect? OPD. 7. Relief." 5. By and under the same order all suits were consolidated and suit No.2563/2000 was treated as the lead case. 6. Before proceeding to deal with the issues framed I may note that the 22 leases have been admitted by the defendant and are Ex.P-1 in each suit. Dimensions of the different units as reflected in the site plan stand admitted inasmuch as the 22 site plans filed by the plaintiff(s) have been admitted by the defendant and have been exhibited as Ex.P-2. 7. As is evident from the issues framed, possession has been claimed by the plaintiffs of the different units and in addition damages on account of stated unauthorized use and occupation by the defendant have also been claimed. Rate of damages claimed is Rs.40/- per square foot in respect of the basement units, Rs.l05/- per square foot for the ground floor units, Rs.80/- per square foot for the first floor units and Rs.70/- per sq. foot for the second floor units. The arrears of damages, after adjusting the payment received each month being the last agreed CS(OS) No.2563/00 Pg.No.l0of49 rent, have also been claimed with effect from 17.3.1998 till date of suit and pendente lite damages for continued use and occupation have also been prayed for. According to the plaintiffs the last agreed rent which was tendered was accepted without prejudice and with specific intimation to the defendant that the same was being adjusted towards damages. 8. I may straight away proceed to deal with the issues as agreed between learned counsel for the parties who argued the matter issue wise. 9. On issue No.l plaintiffs have examined Inder Prakash Choudhrie who has deposed that he is the managing director of the Rivera Apartments Pvt. Ltd. Certificate of incorporation of the company has been proved as Ex.PW-1/1. Board resolution empowering him to file the suit(s) has been proved as Ex.PWl/2. Power of attorney executed by Shafali Choudhrie in his favour has been proved as Ex.PWl/3. Learned counsel for the defendant did not dispute that in view of the Ex.PW-1/1 and PW-1/2 it stands established that Inder Prakash Choudhrie is competent to institute and file the suits on behalf of the company as also to sign and verify the pleadings. In view of the Ex. PW-1/3, learned counsel conceded that Inder Prakash Choudhrie was competent to institute the suit on behalf of his CS(OS) No.2563/00 Pg. No.11 of 49 V. daughter as he was duly empowered to do so. I accordingly decide issue No.l by holding that it stands established that the suits have been signed and verified as also instituted by a duly competent person. 10. On issue No.2, learned counsel for the plaintiff(s) conceded that claim for damages preceding 3 years from the date of filing of the suit would be barred by limitation and therefore on issue No.2,1 hold that reckoned from the date of filing of the 22 suits, claim preceding 3 years from date of filing of the suits alone is within limitation. 11. Issue No.3 and 6 were the real issues which were debated at the bar by learned counsel for the parties. As noted above, rent for 20 units is above Rs.3,500/- per month and rent for 2 units is below Rs.3,500/- per month. 12. Notwithstanding issue No.6 as framed, learned counsel for the defendant conceded that in effect the plea of defendant was that it was a tenant holding over. 13. Learned counsel for the parties conceded that to succeed, plaintiff had to establish relationship of lessor and lessee; that the agreed rent was more than Rs.3,500/- and that the tenancy stands determined. First limb is an admitted fact because the defendant has not disputed the relationship of landlord and tenant. On CS(OS) No.2563/00 Pg. No.12 of 49 the second limb i.e. the monthly rent, save and except the 2 suits the admitted position is that the monthly rent was more than Rs.3,500/- per month. In respect of 2 units agreed position is that the agreed last paid rent was Rs.3,500/- per month. 14. Since Delhi Rent Control Act 1958 prohibits the eviction of a tenant paying rent less than Rs.3,500/- per month save and except on the grounds set out in Section 14 of the Act and forum of rent court being created to try eviction petitions, status of the defendant qua the leased premises subject matter of suit No.327/2003 and 329/2003 is that of a statutory tenant and plaintiffs of said suits cannot evict the defendant from leased units by way of a civil suit. I accordingly hold that in suit No.327/2003 and 329/2003 issue No.3 is decided against the plaintiff(s) and in favour of the defendant. Qua issue No.6,1 hold that status of the defendant is that of a statutory tenant ad the suit(s) is not maintainable. 15. I now discuss the third limb which was seriously contended in the other suits and in respect whereof a dispute arises between the parties. 16. As is to be noted from issue No.3 and 6, fate of issue No.3 would depend on fate of issue No.6. Case pleaded by the defendant is that even after the expiry CS(OS) No.2563/00 Pg.No.13 of 49 > of the lease period, plaintiffs continued to accept the last agreed rent and therefore a contractual tenancy came into existence because of tender of rent by the defendant and its acceptance by the plaintiffs. 17. Documentary evidence of the parties which has a bearing on the third limb requires to be noted for the purposes of decision of issue No.3 and 6, apart from the oral testimony of Inder Prakash Choudhrie. 18. 20 leases, as per lease stipulated period came to an end on 16.3.1998 and 2 leases came to an end on 22.5.1998. Before lease period expired under all 22 leases, Inder Prakash Choudhrie wrote a letter on 28.11.1997, Ex.PW-1/4, to the Assistant General Manager of the defendant informing that since the leases were going to expire and since the lessors were willing to extend the leases parties should agree on the rent payable. In the said letter he indicated the increased rent which the landlords were desirous of and indicated that if said rent was agreed to be paid, leases could be extended. 19. He wrote another letter dated 7.1.1998, Ex.PW-1/10, in which while referring to Ex.PW-1/4, he informed the Assistant General Manager of the defendant that in spite of over a month having lapsed he had not heard anything on CS(OS) No.2563/00 Pg.No.l4of49 the issue. He specifically informed the bank that with effect from the date the tenancy lapses the landlord would be charging liquidated damages @ Rs.25,000/- per day for the first 3 months and thereafter @ Rs.35,000/- per day till possession was returned. 20. On 19.3.1998, vide Ex,PW-l/5, Inder Prakash Choudhrie informed the defendant that the leases having expired the landlords were willing to renew the leases at the rentals indicated in the said letter. On 26.3.1998, 20 leases having expired, vide Ex.PW-1/12 Inder Prakash Choudhrie informed the defendant that henceforth damages @ Rs.25,000/- per day would be charged. On 17.6.1998, vide Ex.PW-1/20, a bill in the sum of Rs.23,27,345/- was sent towards damages for unauthorised use and occupation by the defendant. On 6.8.1998, vide Ex.PW-1/22 another bill was sent and while raising the said bill amount received from the bank being the monthly cheque received as per last agreed rent was shown as having been adjusted towards damages. Again on 23.10.1998, vide Ex.PW-1/25 claim for damages was raised. 21, In between, vide Ex.P-6, on 9.7.1998, the bank wrote informing that it was willing to have the leases extended. CS(OS) No.2563/00 Pg. No.15 of 49 22. I may eschew other proved documents except Ex,P-10, being bank's letter dated 23.10.1998 wherein the bank offered to have the lease extended at the rates set out in the said letter. 23. Parties had negotiations, but unfortunately at the regional level. On 15.1.2000, the authorities at the regional level agreed, subject to approval from the competent authority, to pay the following lease rentals Basement - Rs.30/- per square foot. Ground floor - Rs.80/- per square foot. First floor - Rs.70/- per square foot. Second floor - Rs.60/- per square foot. 24. Inder Prakash Choudhrie agreed, and the decision was minuted vide Ex.P-5 dated 15.1.2000 recording as aforenoted. 25. Unfortunately, the higher authorities did not give consent to the rates agreed to between the plaintiff and the regional office. This led to the institution of suit No.2563/2000. 26. Purpose of filing one suit appears to be to bring pressure on the competent authority to give approval to what was agreed to by the regional authorities of the bank. The said pressure did not bear the desired result. So, 21 other suits were filed in the year 2003. CS(OS) No.2563/00 Pg.No.l6of50 27. When the correspondence aforenoted was being exchanged between the parties and various discussions were being held, the bank continued to tender cheques at the last agreed rent which was received by the plaintiff(s). 28. From the factum of tender of the cheques as per the last agreed monthly rent and acceptance thereof by the plaintiffs, defendant seeks to urge that the defendant is a tenant holding over. Shri Y.P.Chandna, learned counsel for the r defendant urged that the status of the defendant being that of a tenant holding over, a month to month tenancy came into existence on the same terms as contained in the lease(s) agreement Ex. P-1 and admittedly no notice of termination of the lease(s) having been served upon the defendant by the plaintiffs, plaintiffs cannot regain possession. 29. From a narration of evidence hereinabove noted in paras 18 to 24, it is apparent that the facts are not in dispute and the questions being, one which arises very often - rather is raised very often - whether the status of the defendant is of a tenant holding over needs adjudication in light of said facts. I may address the issue at some length and discuss the law. 30. Section 105 of the Transfer of Property Act, 1882 defines a lease of an CS(OS) No.2563/00 Pg. No. 17 of 50 immovable property as a transfer of a right to enjoy immovable property for a certain time, or in perpetuity,in considerationof a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodicallyor on specified occasions to the transferor by the transfereewho accepts the transfer on such terms. The transferor is called the lessor and the transferee is called the lessee. The price is called the premium and the money, share, service or other thing to be so rendered is called the rent. 31. Section 106 of the Transfer of Property Act 1882 deals with the duration of leases and states that in the absence of a contract, or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposesshallbe deemedto be a lease from year to year, terminableon the part of either lessoror lessee, by six month'snotice and a lease of immovablepropertyfor any other purpose shall be deemedto be lease from month to month, terminable, on the part of either lessor or lessee by 15 days' notice. Section 107 of the Transferof Property Act, 1882stipulatesthat a lease of immovablepropertyfrom year to year, or for any term exceeding1 year can be made only by and under a registeredinstrument. Law is clear. If a lease is evidenceby a contract,as in the CS(OS)No.2563/00 Pg. No.18 of 49 instant case, the duration of the lease would be as per the contract and at the expiry of the lease period as per contract the lease expires by efflux of time. Expiry of lease by efflux of time results in the determination of the relationship between the lessor and the lessee and since the lease expires under the contract by efflux of time, no notice of determination of the lease is required. 32. Once a lease expires, the mandate of clause q of Section 108 of the Transfer of Property Act 1882 makes it the bounden duty of the lessee to put the lessor into possession of the leased premises. 33. To the extent aforenoted there is no problem in law, but as in the present case, more often than not, rent is tendered post expiry of the lease period by efflux of time and accepted by the landlord. What happens? 34. Section 116 of the Transfer of Property Act 1882 reads as under:- "116. Effect of holding over-If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106." 35. The tenant who tenders the rent starts claiming that the landlord having CS(OS) No.2563/00 Pg.No.l9of49 accepted the rent has consented to his continuing in possession as a lessee and he claims a status of a tenant holding over. The effect thereof would be that this tenancy i.e. tenancy by holding over would require a notice of determination under Section 106 of the Transfer of Property Act 1882. In the absence of such a notice, suit for ejectment would fail. 36. Where a lessor seeks to regain possession from the lessee on the ground that the lease has expired by efflux of time or that the lease has been determined it would be a misnomer to label such a suit as one for possession. Really speaking it is a suit for ejectment of a tenant who has lost a right to continue to occupy the leased premises. Possession is regained from a trespasser or a person who is in possession of a property purely gratis. 37. As noted above, mandate of clause q of Section 108 of the Transfer of Property Act 1882 is that on the expiry of the lease the lessee is bound to hand over possession of the leased premises to the lessor and therefore the lessor would be entitled to maintain an action to compel the lessees to abide by the mandate of clause q of Section 108 of the Transfer of Property Act 1882. 38. What is the nature of possession of this lessee who continues to retain CS(OS) No.2563/00 Pg.No.20of49 <3 possession without complying with his legal obligation to restore possession? 39. A person who enters upon the property of another without authority of law is a trespasser. It could be argued that the very next moment after the period of lease stands expired the act of entering upon property by the tenant is an act of trespass. But law says no. A lessee who continues in possession after expiry of the lease, without the consent of the lessor or without any agreement between the parties or in disagreement with the lessor, is treated in law as a tenant by sufferance. But where the lessor consents to the continued possession of lessee on the same terms and conditions as per the original lease a tenancy by holding over comes into operation. 40. The words "accepts rent or otherwise assents to his continuing in possession" in Section 116 of the Transfer of Property Act contemplates that from the side of the lessee there should be an offer to take a new lease and on the side of the lessor there must be a definite consent to the continuation of possession. In other words there must be a bilateral contract. 41. Such a bilateral contract could be express or implied. Thus mere continuance of possession after the expiry or determination of the lease is not CS(OS) No.2563/00 Pg. No.21 of 49 I enough to entitle the tenant to establish tenancy by holding over. 42. More often than not, the only evidence which surfaces is the tender of rent and its acceptance by the landlord. As observed in the decision reported as AIR 1951 SC 285, Eastern Investment Ltd. Vs. Commissioner of Income Tax the acceptance of rent is only one form of the assent of the lessor to the lessee remaining in possession of the property. But, as observed in the decision reported as AIR 1949 FC 124, Kai Khushroo Bezoniee Cavadia Vs. Bai Jerbai Hiriibhoy Warden &Anr.. the acceptance must be of rent as such. 43. Since law requires a bilateral agreement between the parties for the tenant continuing to holding over, offer and acceptance of rent is at best an evidence raising a presumption of assent but would not amount to a conclusive proof of such assent. It could be rebutted by other evidence. 44. In order that the acceptance of rent may amount to assent of the lessor it has to be shown that the offer of rent was made on the express ground that the lessee intended to continue the lease and that the acceptance was with the full knowledge of the nature of the offer. This is a question of fact which has to be determined from the circumstances of each case. Greater is the period of continued possession CS(OS) No.2563/00 Pg.No.22 of 49 4'^ coupled with receipt of rent, stronger would be the presumption in favour of