R.S.A.No. 226 of 1996 1 In the High Court of Punjab and Haryana at Chandigarh R.S.A.No. 226 of 1996 Date of decision: 7.8.2009 M/s Garg Steel Industries and others ......Appellants Versus M/s Bhakoo Industries .......Respondent CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr.M.L.Sarin, Sr. Advocate with Mr. Gursimran Sidhu, Advocate, for the appellants. Mr.A.K.Chopra, Sr.Advocate with Mr.Sumeet Abrol, Advocate, for the respondent. **** SABINA, J. Plaintiff M/s Bhakoo Industries filed a suit for recovery, which was decreed by the Sub Judge, Ist Class, Chandigarh vide judgment and decree dated 5.6.1991. In appeal, the said judgment and decree were upheld by the District Judge, Chandigarh, vide judgment and decree dated 31.8.1995. Hence, the present appeal by the defendants. R.S.A.No. 226 of 1996 2 Brief facts of the case, as noticed by the trial Court in para Nos. 1 to 4 of its judgment, are as under:- “ The plaintiff’s case, in brief, is that the plaintiff- firm is the owner and landlord of shed No.433, Industrial Area, Phase II, Chandigarh and the defendants were inducted as tenant in the shed portion (as shown in black colour in the map at the back of agreement dated 1.12.86) at a monthly rent of Rs.3,000/- excluding water and electricity charges. An agreement dated 1.12.86 was executed between the parties. 2. That the remaining portion, shown in red colour in the said map, remained in possession of plaintiff and the defendants were particularly deprived of the use of the same. It was further agreed between the parties that in case, the defendants will use the remaining portion (which was in possession of the plaintiff) of the shed in question the defendants will pay double the amount of lease money each month as damages. In the portion in possession of the plaintiff, the plaintiff placed machinery in order to use the portion of the shed in question. In the month of October, 1988, when the plaintiff visited the shed in question, came to know that the defendants were using the portion shown as red in the said map and the machinery of the plaintiff placed therein. R.S.A.No. 226 of 1996 3 3. The plaintiff requested the defendants to stop use of the portion and the machinery but the defendants inspite of the premises, did not stop using the portion and machinery. Since October, 1988, the defendants are using the portion in question of the plaintiff and the machinery of the plaintiff placed therein and are thus liable to pay Rs.6,000/- per month, to the plaintiff, which comes to Rs.24,000/- for the period from 1.10.88 to 31.1.89, which the defendants did not pay inspite of repeated requests and notice. 4. Notice of this suit was given to the defendants. On notice, the defendants filed the written statement and contested the suit. It has been alleged by the defendants in the written statement that the rent of the demised premises has already been paid by the defendants to the plaintiff in the rent petition filed by the plaintiff along with interest and cost and the defendants are not liable to pay any amount on account of damages for the premises in the use and occupation of the defendants. The entire shed is in use and occupation of defendants from the very inception of tenancy i.e. 1.12.86 at the rate of Rs.3,000/- per month including water and electricity charges. The agreement aforesaid is inadmissible in evidence. The defendants are in use and occupation of R.S.A.No. 226 of 1996 4 the entire shed and the plaintiff is not in use and occupation of any portion since 1.12.86 till date. After letting out the entire shed w.e.f. 1.12.86 the plaintiff never remained in possession of the premises and the entire shed is in their possession and factory is installed in the said shed. The rent was subsequently enhanced to Rs.3500/- per month. At the time when the rent was enhanced to Rs.3500/- the entire shed No.433 used to be in use and occupation of the defendants. The defendants never agreed to pay any amount of damages to the plaintiff, and neither the defendants are liable to pay the same. No notice was ever received by the defendants and that no cause of action accrued to the plaintiff to file suit against the defendants.” On the pleadings of the parties, following issues were framed by the trial Court:- “1. Whether the plaintiff is entitled for the recovery of Rs.24,000/- for use and occupation as alleged? OPP 2. Whether the plaintiff is entitled for the interest as alleged? OPP 3. Relief. ” Learned Senior ounsel for the appellants has vehemently argued that the suit of the plaintiff was liable to be dismissed. The R.S.A.No. 226 of 1996 5 plaintiff was owner of the shed in dispute. However, as per the conditions imposed by the Administration (CITCO), the plaintiff could not sub let more than 50% of the covered area of the industrial shed. In fact, the defendants had been sub let the entire shed in dispute. It was only due to the terms and conditions of the lease that agreement with regard to half of the portion of the premises in dispute was reduced into writing. However, the lease deed (Ex.P-8) was inadmissible in evidence as it was not a registered document. Hence, any of the conditions mentioned in the lease deed could not be taken in consideration while determining the damages. In fact, the defendants were not liable to pay any damages as the entire shed in question had been leased out to them. The rate of rent was initially Rs.3,000/- per month and thereafter, it was increased to Rs.3,300/- per month and on 14.1.1989, the rate of rent was increased to Rs.3,500/- per month. No interest could be allowed to the plaintiff on the damages. Plaintiff had failed to establish his claim for recovery of reasonable damages, if any. In support of his arguments, learned senior counsel for the appellants has placed reliance on the decisions of this Court in Choeth Ram v. Shri Deep Chand Jain and another 1977 (1) RCR (Rent) 499; Ram Kumar Khanna of Ludhiana v. Rajiv Garg, 1989 HRR 153 and M/s Bajaj Auto Limited v. Behari Lal Kohli, 1989 (4) SCC 39. Learned senior counsel for the respondent, on the other R.S.A.No. 226 of 1996 6 hand, has submitted that since the lease deed in question was for a period of 11 months, the same did not require registration and hence, was admissible in evidence. As per the lease deed, only half of the portion of the shed had been rented out to the defendants but later on they started using the entire shed in dispute and hence, were liable to pay damages for the remaining portion. In support of his arguments, learned senior counsel for the respondent has placed reliance on the decision of this Court in Jagdish Chand v. Surinder Kumar, 2005(1) RCR (Civil) 1. After hearing learned counsel for the parties, I am of the opinion that the present appeal deserves to be dismissed. Section 107 of the Transfer of Property Act, 1882 (for short 'the Act'), reads as under:- “Lease how made- A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee; R.S.A.No. 226 of 1996 7 Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immovable property, other then leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.” The question that requires consideration is as to whether in the present case, the sale deed Ex.P-8 was required to be registered or not. The said lease deed is for less than a year and as per Section 107 of the Act, the same could be made by a registered instrument or by an oral agreement. It is only the lease deed which is for more than a year that is required compulsory registration. The Apex Court in Satish Kumar v. Zarif Ahmed and others (1997) 3 Supreme Court Cases 679, held as under:- “9. xx xx xx xx xx xx xxx xx The combined effect of all the provisions is that an unregistered lease deed executed from month to month, for a period not exceeding 11 months, through reduced to writing and possession is delivered thereunder to a tenant, is not a compulsorily registerable instrument and, therefore, the prohibition R.S.A.No. 226 of 1996 8 contained in Section 49 of the Registration Act is inapplicable. Therefore, the document is admissible in evidence to consider the effect of the immovable property contained therein or to receive as an evidence of any transaction vis-a-vis such property.” Similarly, this Court in Jagdish Chand's case (supra) held as under:- “7. After hearing the learned counsel, I am of the considered view that this petition does not warrant admission. It is well settled that a lease deed executed for month to month tenancy or for a period of 11 months, though reduced to writing may not require compulsory registration even if possession of tenanted premises might have been delivered to the tenant.” Thus the judgments relied upon by learned counsel for the appellants fail to advance the case of the appellants in view of the decision of the Apex Court in Satish Kumar's case (Supra), wherein, the point of controversy was directly considered by the Apex Court. Since the lease deed Ex.P-8 was not required to be registered as per Section 107 of the Act, the terms and conditions of R.S.A.No. 226 of 1996 9 the lease deed can be taken in consideration. As per the lease deed, only shaded portion of the shed in question was given on rent to the defendants. The rate of rent was fixed at Rs.3,000/- per month. It was also submitted in the lease deed (Ex.P-8) clause (ix) that in case second party (defendants) made use of any portion of the first party (plaintiff), the second party would pay double the amount of lease money each month accordingly as damages in lieu of other losses, damages incurred by the first party. Admittedly, the defendants were using the entire portion of the shed in question. The case of the defendants is that they were, in fact, let out the entire shed in question and in lease deed Ex.P-8, it has been shown that only the shaded portion has been let out with a view to circumvent the terms and conditions of the lease deed executed by the Administration (CITCO) in favour of the plaintiff. However, the said defence taken by the defendants is liable to be discarded in view of the specific terms and conditions of the lease deed Ex.P-8. In the presence of documentary evidence, the oral evidence to the effect that, in fact, the entire premises had been let out to the defendants cannot be relied upon. Moreover, some thing which was prohibited by law could not be taken up as a defence by the defendants. Since the defendants had been using the entire shed in question, although half of the portion of the shed had been rented out to them, the Courts below rightly held that the plaintiff was R.S.A.No. 226 of 1996 10 entitled to claim damages. The damages fixed by the Courts below cannot be said to be exorbitant. The plaintiff was also entitled to receive interest on the amount of damages. No substantial question of law arises in this regular second appeal. Accordingly, the same is dismissed. (SABINA) JUDGE August 07, 2009 anita