RCR 31/2009 Page 1 of 22 * IN THE HIGH COURT OF DELHI AT NEW DELHI + RCR 31/2009 & CM 6929/2009 TAGORE EDUCATION SOCIETY REGD. ..... Petitioner Through: Mr. Sudhir Nandrajog, Senior Advocate with Mr. P.K. Seth, Advocate versus KAMLA TANDON & ANR. ..... Respondents Through: Mr. Harish Malhotra, Senior Advocate with Mr. Rajender Aggarwal, Advocate Reserved on: May 13, 2009 % Date of Decision: July 10, 2009 CORAM: HON'BLE MR. JUSTICE MANMOHAN 1. Whether the Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes J U D G M E N T MANMOHAN, J 1. Present petition has been filed under Section 25B(8) of Delhi Rent Control Act, 1958 (hereinafter referred to as “DRC Act”) challenging the orders dated 17th July, 2007, 19th September, 2008 and 13th April, 2009 passed by Additional Rent Controller (in short „ARC‟) in eviction petition being E No. 342/07/06 & M-13/08. RCR 31/2009 Page 2 of 22 2. By order dated 17th July, 2007, ARC granted petitioner- tenant leave to defend restricted to one issue, namely, whether tenanted property was let out for residential purpose or for composite purpose and/or even if it was let out for composite purpose, whether the dominant purpose was residential or not. Subsequently, by order dated 19th September, 2008, ARC allowed respondents-landlords‟ eviction petition after relying upon a judgment of Supreme Court in Satyawati Sharma (Dead) By LRs v. Union of India & Anr. reported in (2008) 5 SCC 287. Thereafter, by order dated 13th April, 2009, ARC dismissed petitioner‟s review application holding that petitioner could not urge those grounds which had been specifically rejected by ARC while granting restricted leave to defend. 3. Mr Sudhir Nandrajog, learned Senior Counsel for petitioner submitted that respondents-landlords‟ eviction petition was not maintainable in view of the specific bar under Section 14(6) of DRC Act as respondents-landlords had filed the present eviction petition prior to a period of five years having elapsed from the date of said acquisition of the tenanted premises by respondents-landlords. In this context, Mr. Nandrajog referred to clause 10 of the Conveyance Deed dated 4th March, 2005, executed between the respondents- landlords and erstwhile owners of the tenanted premises, which reads as under :- “10. It is further declared that as a result of these presents and subject to the conditions and RCR 31/2009 Page 3 of 22 covenants stated herein above, the Purchaser(s) from the date mentioned here above will become owner of the said property…….” 4. Mr. Nandrajog relied upon a judgment of this Court in Gurbachan Singh Awla Vs. Rajinder Singh & Anr. reported in 85 (2000) DLT 334 wherein it has been held as under :- “6. Learned counsel for the Petitioner drew my attention to the conveyance deed dated 24th October, 1996 which specifically mentions in the penultimate paragraph that the "transfer shall be deemed to have come into force with effect from the date of registration of this deed". This is quite contrary to what has been stated in the eviction petition. It is not clear when the conveyance deed was registered but even if it is taken to have been registered on the date of its execution that is, 24th October, 1996, in view of Section 14(6) of the Act, it appears that an eviction petition under Clause (e) of the proviso to Section 14(1) of the Act could not have been filed for a period of five years from October, 1996. Learned counsel for the respondents did contend that the conveyance relates back to 18th November, 1992. Prima facie, this does not appear to be so, but this is something which will have to be determined by the learned Additional Rent Controller. 7. Under the circumstances, I think it would have been appropriate for the learned Additional Rent Controller to have granted leave to the Petitioner to contest the eviction petition because there does appear to be a substantial doubt about the date of the transfer of the property in favour of the respondents and, therefore, the maintainability of the eviction petition.” 5. Mr. Nandrajog further submitted that ARC had completely misunderstood and misread the ratio of Supreme Court‟s judgment in Satyawati Sharma (supra). He submitted that Supreme Court in aforesaid judgment had only struck down the words “let out for residential purposes” in Section 14(1)(e) of DRC Act. But, according to him, it has nowhere been held by the Apex Court that even if premises are let out for commercial purposes, then on a bona fide need of the owner for only RCR 31/2009 Page 4 of 22 residential purpose, an eviction order in respect of the said premises let out for commercial purpose could be passed. 6. He lastly submitted that petitioner had been a tenant in the tenanted premises since 1966 and respondents did not require the said premises for their own bona fide need. 7. On the other hand, Mr. Harish Malhotra, learned Senior Counsel for respondents-landlords submitted that petitioner- tenant could not urge two out of the three submissions, namely, bar of Section 14(6) of DRC Act as well as bona fide need of respondents-landlords as the said two arguments had been rejected by ARC vide order dated 17th July, 2007, which order had attained finality as it had not been challenged by the petitioner. Since Mr. Malhotra extensively referred to the order dated 17th July, 2007, I deem it appropriate to reproduce the relevant portion of said order, which reads as under :- “4. First objection raised by the respondent is with respect to the maintainability of the petition. It was stated that because of the bar u/s 14(6) of DRC Act according to which the petition u/s 14(1)(e) cannot be maintained where a landlord has acquired any premises by transfer unless a period of five years has elapsed from the date of said acquisition. As contended by respondent merely passing of compromise decree does not confer any title in favour of the petitioner. Since no Sale Deed was executed in pursuance of the decree of specific performance and the Conveyance Deed was executed in the year 2005 therefore by virtue of said Conveyance Deed the petitioners have become owners only in 2005 and the period of five years w.e.f. 2005 has not elapsed therefore instant petition as argued is not maintainable. 5. On the other hand it was contended by petitioner that rights with respect to the property in question were devolved upon the petitioner no. 1 alongwith Dr. R.L. Tandon on the basis of Agreement of Sell dated 19.09.1980 since in the compromise decree the RCR 31/2009 Page 5 of 22 possession of the petitioner alongwith late Dr. R.L. Tandon on the First Floor of the property was admitted to be in part performance of the Agreement to Sell and petitioners were given the rights to deal with the said property as absolute owners and to recover rent from the respondent. Thus, after the said compromise decree was passed on 17.1.00, the petitioners have become owner/landlord of the said premises w.e.f. 19.09.1980 with respect to the property in question and consequently by operation of law the respondent became the tenant of the petitioner w.e.f. 19.09.1980. However the record particularly the application u/o 23 Rule 3 on the basis of which the compromise decree was passed does not support the above said contention of petitioners. In terms of the said application irrevocable Power of Attorney (General) as well as (Special), Will, Indemnity Bond, the application for substitution/mutation affidavits, no objections certificate etc. were executed by the previous owner as well as the original documents of title of the property were also agreed to be handed over to the petitioners at the time of making the payment while recording the statement before the court on said application and the petitioners were to deal with all the concerned authorities relating to the completion of all the formalities for getting the property recorded absolutely in their names in the records of various authorities such as Land and Development Office, MCD etc. including mutation/conversion into free hold registration of requisite documents etc. It was also made clear in the said application that the previous owner would be entitled to withdraw the entire rent up to the date of the application and thereafter the petitioner would be entitled to deal with the property in any manner and also to claim the rent. The abovesaid makes it clear that no right as such had devolved upon the petitioners w.e.f. 19.09.1980 i.e. the date of execution of Agreement to Sell besides the fact that mere Agreement to Sell does not confer ownership. Albeit as intended by the parties the ownership rights and the consequent rights inclusive of the right to claim the rent had been devolved upon the petitioners on 17.01.00 when the compromise decree as such was passed in favour of the petitioners and all the said documents namely GPA, SPA, Indemnity Bond, Will etc. were executed in favour of the petitioners. Further had it also been the case of petitioners themselves that ownership was transferred in their name in 1980 then they would not have withdrawn the previous petition filed since the five years time had not elapsed w.e.f. 2000, however I am in humble disagreement with the contention of I.D. Cl. for respondent also that the ownership rights transferred in favour of petitioners only after the execution of Conveyance Deed in their favour. In terms of the contents of compromise decree, as discussed above, all the rights had devolved upon the petitioners inclusive of the right to claim the rent from the respondent at the time of passing of the compromise decree therefore it RCR 31/2009 Page 6 of 22 cannot be said that the acquisition of the property by the petitioners was only after the execution of Conveyance Deed. I.d. CL. for petitioner has relied upon 1987 LRI 526 SC Shanti Sharma vs. Ved Prabha. Though the facts of the said case are distinguishable from the facts of the instant case but help can be taken from the said authority with respect to the preposition of law. It was observed the “Owner u/s 14(1)(c) had not been used in absolute sense and would include persons who had taken plot of land from Government, DDA or on lease and built a structure on the same. Owner is one who is something more than the tenant.” On the basis of irrevocable Power of Attorney, passing of compromise decree and the other set of documents as well as in terms of the relinquishment of the rights by the previous owner in favour of the petitioners in the year 2000 itself followed by Conveyance deed in their favour, petitioner had become the owner as well as the landlord qua the respondent with respect to the property in question, therefore the objection of respondent that petition has been filed within 5 years of the acquisition of the property by the petitioner is not tenable. 6. The next contention of the respondent is with respect to the dependency of the number of family members of the petitioner, petitioner no. 2 as stated is not residing with the petitioner no. 1 as well as grand daughter namely Reema who is stated to be residing somewhere in Noida but neither the specific address is given for the grand daughter of petitioner no. 1, nor it is pointed out if the Petitioner No. 2 is not residing with Petitioner No. 1, which is the alternative accommodation available with him whereas the documents like ration card, passport etc., have been placed on record by the petitioners in which their address is mentioned as 24, Ring Road, Lajpat Nagar-IV, New Delhi- 110024, considering the number of family members of the petitioners who are dependent upon them for the purpose of residence as well as considering their status whereby they require the accommodation commensurate to their status and also as per the specific requirements given in the petition, they definitely require much more accommodation than what is available to them at the moment. The respondent has also not pointed out any other alternative accommodation available with the petitioners therefore their need to claim the property in question for the purpose of residence cannot be said to be not genuine.” 8. Mr. Malhotra pointed out that, in fact, respondents- landlords had challenged the conditional leave to defend by filing a revision petition being CRP No. 153/2007, which was RCR 31/2009 Page 7 of 22 disposed of by a learned Single Judge of this Court in the presence of learned Counsel for petitioner-tenant. The said order dated 4th February, 2008 is reproduced hereinbelow for ready reference :- “Present : Mr. Harish Malhotra, Sr. Adv. with Ms. Namita Chaudhary, Advocate for the petitioner. Mr. R.S. Endlaw, Advocate for the respondent CRP No. 153/2007 The order impugned in this civil revision petition is an order passed on the application for seeking leave to defend filed by the respondent-tenant. Leave to defend has been granted only on a limited question that is with regard to the purpose of letting. According to the respondent the purpose of letting was residential-cum- commercial whereas according to the petitioner the purpose of letting was residential. This is a relevant issue for determination of a petition under Section 14(1)(e) of the Delhi Rent Control Act. Learned counsel for the respondent possibly cannot have and does not any objection to the early disposal of the eviction petition, particularly, considering the fact that the petitioner is an 85 years old lady. In the interest of justice this petition is disposed of with a direction to the learned Additional Rent Controller to dispose of the eviction petition within four months. Neither party shall ask for or be granted any adjournment in the matter. Copy of this order be sent to the concerned Court along with the record. Parties may appear before the Additional Rent Controller on 18.2.2008. Dasti.” 9. In any event, Mr. Malhotra submitted that respondents- landlords had purchased the tenanted property on the basis of an agreement to sell dated 19th September, 1980 and as there was a dispute with the erstwhile owner, present respondents- landlords had filed a suit for specific performance. During pendency of the said proceedings, on 17th January, 2000 a compromise decree was passed wherein it was agreed that from the date of the said compromise application, petitioner would RCR 31/2009 Page 8 of 22 become tenant of the respondents. Mr. Malhotra referred to paragraph 14 of the compromise application filed by the respondents-landlords and the erstwhile owner, which is reproduced hereinbelow :- “14. Tagore Educational Society (Registered), the tenant in the portion of the suit-property compromising, inter alia, the ground floor and the garage with servant quarters block on the mezzanine and the first floor, has, from the date of this application, become the tenant under the plaintiffs, and the plaintiffs would be substituted in place of the original defendant and/or the present defendants, in all proceedings and for all intents and purposes, including pending litigations.” 10. Consequently, according to Mr. Malhotra, respondents became landlords of the tenanted premises, at least with effect from 17th January, 2000 and as the eviction petition had been filed on 5th May, 2006, bar of Section 14(6) of DRC Act did not apply. 11. Mr. Malhotra further submitted that petitioner-tenant in the present proceedings had not taken any ground with regard to bona fide need of respondents-landlords and in any event petitioner could not raise this issue in the present proceedings as order dated 17th July, 2007 granting restricted leave to defend, had not been challenged by petitioner-tenant. Without prejudice to the aforesaid, he referred to various paragraphs of eviction petition to show that respondents-landlords had specifically mentioned in the eviction petition that tenanted premises were required by them for their bona fide need. 12. Mr. Malhotra further submitted that as the tenanted RCR 31/2009 Page 9 of 22 premises could only be utilised for residential purpose by virtue of perpetual lease deed executed between the President of India and the erstwhile owner, there was no question of tenanted premises being utilised for residential-cum-commercial purpose. In this connection, he referred to Clause I(v) and (vi) of Perpetual Lease Deed, which are reproduced hereinbelow:- “I. The Lesse doth to the intent that the burden of the covenants may run with the said land and may bind any permitted assignee thereof hereby covenant with the Lessor as follows:- xxxxx xxxxx xxxxxx xxxxxx (v) not to erect more than one building *single storeyed containing one residential flat or *double storeyed consisting of one or two residential flats in all, with a barsati on top, as may be approved by the Chief Commissioner, Delhi or such officer or body as the Lessor or the Chief Commissioner, Delhi may authorize in this behalf, except such outhouses and servant quarters as may be approved by the Lessor. Any servant quarters constructed by the Lessee shall not without any written permission of the Chief Commissioner, Delhi, be occupied or permitted to be occupied otherwise than by the bona- fide servants of the persons occupying the main building ; (vi) not without the written consent of the Chief Commissioner, Delhi, to carry on or permit to be carried on, on the said land and buildings erected thereon during the said lease any trade or business whatsoever or use the same or permit the same to be used for any purpose other than that of *single storeyed building consisting of one residential flat or a *double storeyed building consisting of one or two residential flats in all, with a barsati on top, as may be approved for the locality or as provided in the building already erected on the said aid land;” 13. Mr. Malhotra lastly submitted that even if tenanted premises were let out for commercial purpose, an eviction order under Section 14(1)(e) of DRC Act could be passed if respondents-landlords were able to show that premises were required by them for their bona fide residential use. RCR 31/2009 Page 10 of 22 14. In rejoinder, Mr. Sudhir Nandrajog submitted that ARC could not have granted restricted leave to defend. According to him, once ARC reaches the conclusion that leave to defend application filed by tenant raises a triable issue, then the only option with ARC was to grant unconditional leave to defend. In this connection, he relied upon the following judgments :- A) S.K. Dey Vs. D.C. Gagerna reported in 26 (1984) DLT 438 wherein it has been held as under :- “8. It is thus manifest that while granting leave the learned Rent Controller restricted the same to pleas sought to be raised by the respondent other than that relating to the parents of the petitioner being members of the family of the petitioner and being dependent upon him for residential accommodation. Strictly speaking, therefore, no issue could be raised by the respondent on this point. However, as stated above, he did urge this ground in his written statement and even the petitioner, taking note of it, refuted the same. While reiterating the averments made by him in the eviction petition, he asserted that he and his father constituted Joint Hindu Family and unless there was a petition is must be deemed to continue as such. 9. In its recent decision in Precision Steel and Engg. Works and Another v. Prem Deva Niranjan Deva Tayal, AIR 1982 SC 1518 while dealing with the relative scope of granting leave to defend under Order XXXVII Rule 3(5) of the Code of Civil Procedure and Sub-section (5) of Section 25B of the Act, the Supreme Court observed that: “Mere disclosure of facts, not a substantial defence is the sine qua non. Further the Court can grant conditioned leave or leave limited to the issue under Order XXXVII Rule 3(5).There is no such power conferred on the Controller under Sub-section (5) of Section 25B.” 10. On a bare reading of this observation it is manifestly clear that the Controller is not competent to grant restricted leave i.e. leave limited to any particular issue. In other words, whenever the Controller is satisfied that the respondent/tenant is entitled to leave to contest on one or more of the grounds disclosed in his application for leave to defend, such leave would be deemed to be unrestricted and untrammelled by any kind of fetters and RCR 31/2009 Page 11 of 22 it would be open to the respondent/tenant to take up whatever pleas are available to him under law in his written statement. The submission made by the learned Counsel for the respondent, however, is that the aforesaid observation of the Supreme Court being in the nature of obiter dictum cannot be looked upon as a precedent to be binding on this Court or for that matter the Controller. According to him, the quest) on whether restricted leave or leave limited to any particular ground can or cannot be granted by the Controller was not before the Supreme Court and it was only incidentally that while comparing the relative scope of the provisions contained in Order XXXVII Rule 3(5) of the Code of Civil Procedure and Sub- section (5) of Section 25B of the Act that the Supreme Court expressed the aforesaid opinion. Reliance in this context has been placed on H.H. Maharajadhiraja Madhav Rao Jivaji Rao Scindia Bahadur and Others v. Union of India, AIR 1971 SC 530, wherein it was observed by the Supreme Court that: “The Court was not called upon to decide and did not decide that Article 366(22) was a provision relating to covenant within the meaning of Article 363. It is difficult to regard a word, a clause or a sentence occurring in a judgment of this Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment”. 11. On a consideration of the matter, however, I do not feel persuaded to subscribe to the view taken by the learned Counsel for the respondent. It is for the simple reason that the Supreme Court was specifically dealing with and expounding the true ambit and scope of the provisions of Sub-section (5) of Section 25B of the Act and while interpreting the same it was natural for the Court to lay down the necessary guidelines to be followed by the Controllers and for that matter even this Court at the stage of revision, etc. while dealing with the question of leave to contest. Hence, the aforesaid observation can by no stretch of reasoning be said to be in the nature of obiter dictum.” B) Bhauri Devi (Deceased) Through LRs. Vs. Mahender Kumar reported in 146 (2008) DLT 117 wherein it has been held as under :- “6. With the above background, I now take up the issue posed in the very first paragraph of this order. It may be noticed at the outset that the question raised is no longer res-integra. It came up for consideration before a Single Judge of this Court in S.K. Dey v. D.C. Gagerna 26 (1984) RCR 31/2009 Page 12 of 22 DLT 438= AIR 1985 Delhi 169, wherein it was held that the Controller is not competent to grant restricted leave i.e. leave limited to any particular issue. It was further held that whenever the Controller is satisfied that the tenant is entitled to leave to contest on one or more of the grounds disclosed in his application for leave to defend such leave would be deemed to be unrestricted and untramelled by any kind of fetters and it would be open to the tenant to take up whatever pleas are available to him under law in his written statement. The learned Single Judge in taking the aforementioned view had relied upon a judgment of the Apex Court in