CR No.4087 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR No.4087 of 2010 (O&M) Date of decision: 27.4.2012 M/s Gilco Auto Engineers Pvt. Ltd., ......Petitioner(s) versus Jagdish Inder Singh .......Respondent(s) Coram: Hon'ble Mr. Justice Rakesh Kumar Garg * * * * Present: Mr. M.L.Sarin, Sr. Advocate with Ms. Hemani Sarin, Advocate for the petitioner. Mr. Arun Palli, Sr. Advocate with Mr. Salim Malik, Advocate for the respondent. Rakesh Kumar Garg, J. This is tenant's revision petition challenging the order dated 16.11.2009 of the Rent Controller, Chandigarh whereby its eviction was ordered from the demised premises and further the order dated 3.5.2010 of the Appellate Authority dismissing the appeal against the aforesaid order of eviction. The respondent-landlord filed the instant ejectment petition against the petitioner i.e. M/s Gilco Auto Engineers Limited, 652, Industrial Area, Phase I, Chandigarh, through its Managing Director Saral Gill seeking its ejectment from House No.123, Sector 28-A, Chandigarh (hereinafter referred to as the 'demised premises') on the ground of arrears of rent and personal necessity. As per the averments made in the ejectment petition, the demised premises was owned by late Major General Mohinder Singh, father of the respondent. It was let out to petitioner-Company vide CR No.4087 of 2010 2 registered lease deed dated 18.5.1984 at initial rent of Rs.4500/- per month and after gradual increase, the present rate of rent came to Rs.6500/- per month at the time of the filing of the petition. It was further stated that father of the respondent-landlord died on 25.5.1992 bequeathing the demised premises in his favour. Even otherwise, the respondent being one of the legal heirs was also entitled to maintain the present petition as a co-owner. After the death of his father, the petitioner started paying rent/depositing the same in a saving bank account No.3241 with Canara Bank Sector 35, Chandigarh. The petitioner lastly deposited the rent for the months of April and May, 1998 amounting to Rs.13000/- on 23.5.1998. Thereafter, the petitioner has not paid rent since 1.6.1998 onwards. It was further pleaded that earlier the respondent was doing farming and was living with his maternal uncle at Patiala. After his marriage on 4.7.2004, he shifted to Chandigarh in the month of January 2005 and occupied the first floor of House No.73, Sector 9-A, Chandigarh consisting of one bed room, one study room, one drawing cum dining, kitchen and two toilets on a rent of Rs.10,500/- per month. The respondent has been married in a well to do family and also connected with well to do families from paternal as well as maternal side. He has two cars but has not any lawn or place either to park his cars or to accommodate his guests. He was paying rent of Rs.10,500/- per month but getting rent of Rs.6500/- per month of the demised premises. He requested the petitioner to vacate the house which he refused. Hence, the petition for ejectment of the petitioner on the grounds of arrears of rent since 1.6.1998 onwards and personal use and occupation. The respondent has further averred that he has not vacated any premises in the urban area of Chandigarh nor he was in possession of any other CR No.4087 of 2010 3 accommodation. Upon notice, the petitioner-Company appeared and filed written statement through Sh. Saral Gill raising various preliminary objections inter alia that the petition was not maintainable. It was further averred that the respondent has not approached the Court with clean hands as he had entered into an agreement to sell with Saral Gill on 25.7.1999 and received earnest money of Rs.8,50,000/- However, he resiled from the agreement and refused to sell the property and to return the money. So an understanding was arrived at between the parties to keep the aforesaid amount as advance rent and to adjust the interest on the said amount towards the rent due that is why the respondent has not demanded any rent since 1.6.1998 but the petitioner always wanted to settle the accounts. However, the respondent always pretended not to having any fund with him. The interest amount of the aforesaid amount was Rs.8500/- per month whereas the rent settled between the parties was Rs.6500/-per month. Thus, as per understanding, the petitioner did not file any suit for specific performance and the ejectment petition was not maintainable against the petitioner in the present form. On merits, the petitioner denied the ownership for want of knowledge and submitted that the respondent had took false plea of his residence as a tenant in House No.73, Sector 9-A, Chandigarh. In fact the said house was belonging to his near relative. The respondent was having sufficient accommodation in the said house. It was also stated that the petitioner was not in arrears of rent rather it had to receive the amount from the respondent on account of settlement of accounts. Rate of rent at Rs.6500/- per month was admitted. Rest of the contentions were denied and dismissal of the petition was prayed for. CR No.4087 of 2010 4 The respondent did not file any replication. From the pleadings of the parties, the following issues were framed: “1. Whether the respondent is in arrears of rent w.e.f. 1.6.1998 onwards? OPP 2. Whether the petitioner requires the demised premises for his personal use and occupation? OPP 3. Whether the petition is not maintainable under the Rent Act? OPR 4. Whether the petitioner has not approached this Court with clean hands as he has concealed the fact that he entered into an agreement to sell with Saral Gill on 25.7.1998? OPR 5. Whether the petition is not maintainable in the present form? OPR 6. Relief.” It is also relevant to mention that an application under Order 6 Rule 17 CPC was filed for amending the written statement to incorporate the fact that the company is not in existence however, the said application was dismissed vide order dated 22.9.2007 which reads thus: “Arguments on application dt. 25.7.07 moved by the defendant under Order 6 Rule 17 CPC for amendment of the written statement heard. It has been submitted that the respondent-Company has since become defunct. Vide application dt. 30.7.2005 an application for striking of its claim was submitted to the Registrar of Companies, Jalandhar along with prescribed fee. As the company is the only respondent, the present petition is not maintainable against it. This CR No.4087 of 2010 5 fact came to the notice of one respondent on 24.7.07. Hence the present application to incorporate the preliminary objection No.4 in the written statement. In the reply filed by the petitioner it has been submitted that the lease was created against the respondent who is in possession of the demised premises. It has been denied that the company has become defunct as alleged. On 30.06.2006 the respondent Company tendered the rent to the tune of Rs.8,23,280/-. The respondent company still continued to be the tenant. The present application has been filed by Saral Gill with mala fide intention and therefore deserve dismissal. During arguments both the ld. Counsel for the parties reiterated the facts as contained in the application/reply. After hearing ld. Counsel for the parties, I have again perused the file. The present petition was received for assessment in this Court on 31.10.2005. After perusing through Miscellaneous proceedings, issues were framed on 26.9.2007 by the then ld. RC, Chandigarh. It was only after the present application was moved. The applicant/respondent has relied upon the application dt. 30.7.05 moved by the Company to the Registrar of Companies, Jalandhar. Meaning thereby the basis of the application is a fact which allegedly took place prior to the filing of even rent petition on 29.10.2005. Upon notice the respondent appeared and contested the proceedings playing his role. As per proviso to Order 6 Rule 17 CPC, no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. In view of the facts discussed above the Court is CR No.4087 of 2010 6 not of the opinion that despite due diligence the party could not have raised the matter before commencement of the trial, therefore, the applicant/respondent's claim is not covered under the provisions of Order 6 Rule 17 CPC. Accordingly, the application stands rejected with costs Rs.500/-. Now to come up on 28.11.2007 for cross- examination of PWs. Ld. Counsel for the petitioner is directed to produce the witnesses on date fixed for the purpose of their cross-examination.” The aforesaid order of the Rent Controller was never challenged by the petitioner. Even no such argument was raised by the petitioner before the Rent Controller at the time of arguments in the main petition. After examining the evidence and hearing counsel for the parties, the Rent Controller decided issue No.1 as infructuous, as arrears of rent having been tendered in the Court at the admitted rate of rent which was not disputed and were accepted by the counsel for the respondent- landlord vide statement of respondent's counsel dated 30.10.2006 made in the Court. Issue No.2 was decided in favour of the respondent-landlord and against the petitioner holding that need of the respondent-landlord was bona fide and he required the demised premises for his personal use and occupation. Issues No.3 and 5 were decided against the petitioner-tenant as both these issues were not pressed. However, issue No.4 was decided against the petitioner and in favour of the respondent-landlord holding that the contention of the petitioner regarding adjustment of amount towards rent was not tenable as the petitioner was bound to pay the rent till the execution of the sale deed as per clause 9 of the agreement and there was CR No.4087 of 2010 7 no document pertaining to any understanding in order to adjust the amount of earnest money towards rent. The said agreement had nothing to do with the ejectment petition filed under the provisions of Rent Act and it was for the petitioner to seek his civil remedy for relief in view the agreement Ex.R-1 and there was no concealment on the part of the landlord. Feeling aggrieved from the order of eviction of the Rent Controller, the petitioner-Company filed an appeal before the Appellate Authority through Surinder Singh and Saral Gill. The grounds of appeal as submitted before the Appellate Authority read thus: “1. That the respondent filed the rent petition for the eviction of the appellant from House No.123, Sector 28- A, Chandigarh on the ground of non payment of rent and personal requirement. The rate of rent is Rs.6500/- per month. 2. That the appellant is a tenant in House No.123, Sector 28-A, Chandigarh since 1984 and the premises were let out through a registered lease deed. Initially the rate of rent was Rs.4500/- per month, which was enhanced from time to time and now the rate of rent is Rs.6500/- per month. 3. That during the tenancy period, the respondent decided to sell the house and he entered into an agreement to sell with Mr. Saral Gill on 25.7.1999 for a total sale consideration of Rs.85.00 lakhs, out of Rs.8.50 lakhs were received as earnest money. The agreement to sell is Ex.R-1. 4. That due to some matrimonial problem of the respondent, he delayed the execution and registration of the sale deed and did not obtain NOC for sale from the Estate Officer as well as Income Tax Clearance certificate from the Income Tax Deptt as per clause 8 of Ex.R-1. Otherwise the last date for execution and CR No.4087 of 2010 8 registration 5. That due to execution of the agreement to sell, the respondent stopped receiving rent from the appellant and it was agreed that due to the payment of Rs.8.50 lacs, which is a very heavy amount, the respondent will not receive any rent and in lieu of charging interest on Rs.8.50 lacs, the rent shall be adjusted towards interest. The monthly interest @ 12% on Rs.8.50 lacs comes to Rs.8500/- per month, that is why it was agreed that in lieu of the interest, no rent shall be payable by the respondent. Although this settlement was oral but the learned Rent Controller has not given any weight to the arguments that why the respondent kept mum till 2005 after the execution of the agreement to sell on 25.7.1999. The petition has been filed after more than six years without any demand of rent. It is very important to mention here that till the filing of the petition, the respondent never served any notice for the cancellation of the agreement or forfeiture of the earnest money. This aspect has not been discussed in the judgment nor this aspect has been taken into consideration. 6. That while deciding the issue of personal requirement, the bonafide of the respondent is doubtful. In fact,the respondent has not taken any premises on rent, as alleged, in House No.73, Sector 9-A, Chandigarh. There are lot of contradiction in the statements of the witnesses of the respondent while appearing before the Rent Controller, which clearly proves that in fact, a fake tenancy has been created in House No.73, Sector 9-A, Chandigarh just to create a false ground of personal requirement. The landlord of the said house appeared as PW-3 has not produced any rent agreement and on the other hand, the petitioner and his brother-in-law are stating that there is a rent agreement. Even no proof of any payment of rent of CR No.4087 of 2010 9 the said house has been placed on file inspite of the fact that the same has been challenged by the appellant. In the absence of any proof of actual tenancy of House No.73, Sector 9-A, Chandigarh, there is no bonafide of the respondent and the ground of personal requirement is not made out. Hence, the petition was liable to be dismissed and the rent tendered is liable to be refunded. 7. That it was specifically pleaded that the appellant company is no more in existence and even at the time of arguments, the latest information obtained from the website of Registrar of Companies, Jallandhar was also produced, vide which it is clear that the appellant company M/s Gilco Auto Engineers Pvt. Ltd. is not in existence. However, the present appeal is being filed in its name now for the purpose of tenancy, both the brothers named in the heading of the plaint i.e. Surinder Singh Gill and Saral Gill have become the tenants of the premises. Inspite of this fact, the respondent did not amend the petition. Therefore, no eviction order can be passed against a company which is not in existence. Hence, on the grounds mentioned above, the ejectment order passed by the learned Rent Controller is liable to be set aside.” Vide judgment dated 3.5.2010, the said appeal was also dismissed by the Appellate Authority. The relevant part of the judgment reads thus: “It is claimed that petition is not maintainable because he had entered into an agreement to sell this house to Saral Gill. That is correct. Petitioner too has admitted it in his statement. Although he has not disclosed this fact in his petition but he has not disputed his signature in the agreement to sell Ex.R-1. So, this cannot be treated to be a concealment. It is claimed that once a landlord entered into an CR No.4087 of 2010 10 agreement to sell with the tenant, the relationship of landlord and tenant comes to an end. That is true. But simply entering into an agreement to sell is not sufficient to bind the parties in the present case. Landlord says this agreement was not acted upon because Saral Gill failed to pay Rs.20 lacs within three months after this agreement. So, they decided to apply Rs.8,50,000/- paid to him towards future rent. It has been denied by the appellant. According to it, this amount was to be kept as an advance and its interest was to be applied towards future interest. It means they both admit that this agreement to sell between them was not acted upon and it was treated as cancelled that is why no suit for specific performance was brought. Money was also not demanded. Once they mutually rescinded this agreement neither of two can turn around and say that said agreement is still alive. In such situation landlord can't be forced to give up his status. Hon'ble Supreme Court decided this question in case 'Shashi Kapila v. R.P. Ashwin PLR 2002 (1) VOL.CXXX 217. In that case admittedly appellant was tenant and respondent was landlord. He had entered into agreement to sell the house to appellant but it could not be materialized. Then tenant brought suit for specific performance. Same was resisted by landlord. There was clause in agreement that appellant was to pay arrears of rent till the date of compromise. In this case also appellant had claimed that interest was to be applied towards rent. It means appellant himself recognized the reversion to his pre- existing right of tenant. So, today he can not say that agreement to sell subsists and suit for ejectment under Rent Act is not maintainable. It is a different matter whether this principal amount was to be applied towards rent or its interest.” CR No.4087 of 2010 11 Still not satisfied, the petitioner-Company has filed the instant revision petition before this Court challenging the impugned orders of the Authorities below. The memo of parties, describing the petitioner-Company as petitioner reads as follows: “M/s Gilco Auto Engineers Pvt. Ltd., later known as Gilco Engineers Ltd., now dissolved, its name having been struck off pursuant to Section 560(5) of the Companies Act, 1956 from the Register of Registrar of Companies vide Notification dated 16.12.2006 published in the Gazette of India through its former Directors Mr. Surinder Singh and Mr. Saral Gill, r/o House No.123, Sector 28-A, Chandigarh. ........ Petitioner Versus Jagdish Virinder Singh s/o late Maj. Gen. Mohinder Singh, r/o House No.73, Sector 9-A, Chandigarh. .......(Landlord)-Respondent” Along with this petition, the petitioner has also placed on record certain documents as Annexures A-1 to A-5 which includes certificate of Registrar of Companies granting change of the name of the Company Gazette Notification dated 16.12.2006 striking off the name of the petitioner-Company from the Register of Registrar of Companies and dissolving the same under Section 560(5) of the Companies Act, agreement to sell dated 25.7.1999, registered lease deed dated 18.5.1984 between the parties and an order dated 22.9.2007 passed by the Rent Controller, Chandigarh rejecting the application of the petitioner for amendment of written statement seeking incorporation of the fact that the petitioner-Company has become defunct and since the Company was the CR No.4087 of 2010 12 only respondent before the Rent Controller, the petition was not maintainable. It may also be relevant to notice that CM No.16812-CII of 2010 has also been filed to implead Saral Gill son of Sh.Iqbal Singh, s/o House No.123, Sector 28-A, Chandigarh on the ground that the aforesaid Saral Gill, who is former Director of petitioner-Company has become a direct tenant under the respondent-landlord and has been recognized as such under Clause 9 of the agreement to sell dated 25.7.1999. It was specifically averred in the application that aforesaid Saral Gill was in possession of the house in dispute and the impugned orders have been passed without giving him an opportunity of hearing whereas he is directly affected and aggrieved by the impugned orders and therefore, his presence is necessary in the present revision petition. The relevant averments of the said application reads as follows: “That the applicant Mr. Saral Gill is a former Director of the abovementioned M/s Gilco Engineers Ltd. After the lease in favour of the abovenoted Company expired in 1987, the applicant became a direct tenant under the respondent, Jagdish Virinder Singh. That the status of the applicant, as a direct tenant in the house in dispute was recognized by the landlord in Clause 9 this agreement to sell dated 25.7.1999.” The respondent-landlord filed reply to the aforesaid application for impleadment denying the averments of the applicant Saral Gill for becoming a direct tenant under the respondent or the owner of the property in dispute on the basis of agreement to sell dated 25.7.1999. The applicant Saral Gill has also filed a rejoinder to the aforesaid reply of the respondent-landlord to the application for impleadment. On 12.7.2010, this Court passed the following order” CR No.4087 of 2010 13 “Notice of motion for 9.9.2010. Notice Re: C.M.No.16812-CII of 2010 as well. Dispossession of the applicant-petitioner shall remain stayed.” The record of the case was also summoned. Sh. M.L. Sarin, learned Senior Advocate appearing on behalf of the petitioner-Company as well as applicant-Saral Gill has vehemently argued that no ejectment order could have been passed against the petitioner-Company as the same had ceased to exist having been dissolved under Section 560(5) of the Companies Act vide notification dated 12.6.2006 published in the Gazette of India (Annexure A-2) attached with this petition whereby the name of the Company was struck off from the Register of Registrar of Companies. Both the Authorities below have failed to appreciate the fact that the present ejectment petition was not maintainable as it was filed against the Company which had become defunct and had ceased to exist much before the filing of the ejectment application which was filed on 31.10.2005 as it is well settled that no case can be filed against a dead person/non-existent person and as such the present ejectment application ought to have been dismissed outrightly. Mr. Sarin has further pointed out that in the grounds of revision also it has been specifically mentioned by the petitioner-Company that the present ejectment application was not maintainable against the company as the said company was not only defunct but also had long ago ceased to be the tenant in the house in dispute and Sh. Saral Gill (applicant) was accepted as a tenant therein. It has been further argued by Sh. M.L. Sarin, Senior Advocate that the Authorities below have failed to CR No.4087 of 2010 14 appreciate the fact that there existed no relationship of landlord and tenant between the parties as the petitioner-Company has ceased to exist prior to the filing of the present ejectment application and Sh. Saral Gill who is admittedly in possession of the premises in dispute has also ceased to be the tenant once agreement to sell was executed on 25.7.1999 (Annexure A-3). It is the further case of the petitioner that the agreement to sell has never been denied and thus, the Authorities below have erred in ignoring the said document. It was also argued by Mr. Sarin that the Rent Controller had erred in law while dismissing the amendment application filed by applicant-Saral Gill. The said amendment goes to the very root of the case and the order dated 22.9.2007 of the Rent Controller rejecting the said application is totally illegal, arbitrary and erroneous. The said amendment ought to have been allowed as it was necessary for determining the real questions of controversy between the parties. Sh. Sarin, has further submitted that the possession over the premises in dispute is that of prospective buyers and was protected under section 53-A of the Transfer of Property Act and therefore, applicant-Saral Gill cannot be ejected in a petition under the Rent Act. On the basis of the aforesaid argument, Sh. Sarin, learned counsel appearing on behalf of the petitioner has prayed that the impugned orders of the Authorities below be set aside. Learned counsel appearing on behalf of the petitioner has relied upon various judgments reported as Anil Kumar versus Smt. Anguri Devi 2003(1) RCR 149, Shrikishen Dhoot and ors. vs. S.D. Kamlapurkur and Ors. 1965(35) CompCas 913 AP, Rajesh Kumar Aggarwal and others versus K.K. Modi and others 2006(4) SCC 385, Jai Parkash Gupta (D) thr.LRs versus Riyaz Ahamad & Anr. 2009(2) RCR 474, R.Kanthimathi and other versus Mrs.