CS(OS) No.57/2009 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 13.07.2010 Pronounced on: 19.07.2010 + CS (OS) No. 57/2009 & IA No.11575/2009 SHRI KRISHAN KUMAR AGGARWAL & OTHERS ..... Plaintiffs Through : Mr. Vijay K. Gupta and Shri Mahip Dutta, Advocates versus LIFE INSURANCE CORPORATION OF INDIA LTD. ..... Defendants Through : Mr.Kamal Mehta, Mr. Sudeep Singh and Mr. Deependra Sharma, Advocates. CORAM: MR. JUSTICE S. RAVINDRA BHAT 1. Whether the Reporters of local papers YES may be allowed to see the judgment? 2. To be referred to Reporter or not? YES 3. Whether the judgment should be YES reported in the Digest? MR. JUSTICE S.RAVINDRA BHAT % 1. In the present suit, the plaintiff seeks money decree for Rs. 21,35,984/- and a further decree for Rs. 3,18,750/- with effect from 01.12.2008. 2. The facts which are not in dispute are described as follows. The plaintiff leased-out the premises, being CGF-1, 2, 3 and 4, Ground Floor, C-Block, Dilkhush Industrial Estate, G.T. Karnal Road, Delhi (hereafter referred to as “the suit premises”) to the defendants through a registered Deed dated 09.05.2008. The premises measure 3700 sq. feet and the lease was with effect from 01.05.2008. The total term of the lease was agreed to be 12 years, renewable at the end of the first three year term, at the option of the lessee, with increase of 15% rent upon the CS(OS) No.57/2009 Page 2 expiry of three years. The defendants paid Rs. 2,92,485/- by a cheque dated 13.06.2008 towards monthly rental for May 2008 after deducting the tax, at source. It is contended that while the defendants were in possession of the suit premises, a frivolous suit was filed by one Smt. Arvinder Kaur before the Civil Judge, being Suit No. 436/2008, seeking permanent injunction restraining the plaintiff and the first defendant (hereafter referred to as “the LIC”) from entering into a tenancy. The injunction was refused. The suit was later withdrawn on 11.09.2008 and a fresh proceeding, being CS (OS) 2104/2008 was instituted before this Court, seeking cancellation of title documents, inuring in favor of the plaintiff. 3. The plaintiff contends that the LIC was free to use and enjoy the suit premises in terms of the lease deed. It is further alleged that the LIC has been defaulting in the discharge of its contractual obligations and has not paid rents after the initial payment of Rs. 2,92,485/-. The plaintiff adverts to a written notice to the LIC dated 23.08.2008 as well as a legal notice dated 08.11.2008 demanding payment of rentals after 01.06.2008. It is submitted that the defendants have refused to make the payments on frivolous grounds, i.e. pendancy of Smt. Arvinder Kaur's suit before the Court, alleging cloud on the title to the leased premises. The plaintiff submits that such excuse is impermissible and, therefore, claims the reliefs sought for in the present case. 4. The plaintiff, besides the pleadings, relies upon the Lease Deed as well as the letter dated 23.08.2008; a copy of the legal notice dated 08.11.2008 and has placed on the record; as also copies of the Flat Buyer's Agreement, claiming to be the owner entitled to full benefits of title in respect of the suit premises. 5. It is urged on behalf of the plaintiff that in terms of Clause-1 (g) of the lease deed, in the event the lessee/LIC opts for termination of the tenancy, it is duty-bound to issue one month's notice and thereafter hand-over peaceful and vacant possession which has not happened. In these circumstances, submits the plaintiff, he is entitled to the money decree sought for. Reliance is also placed upon Sections 108 (g) and 108 (q) of the Transfer of Property Act, 1882, in support of the submission that so long as the premises are under occupation, of a tenant even after the termination of the lease, he is duty-bound to pay the rents or damages, till date of handing over vacant possession. CS(OS) No.57/2009 Page 3 6. LIC in its written statement resists the suit and contends that the plaintiff has not disclosed certain material facts such as the pre-existing dispute between him and Smt. Arvinder Kaur, which led to filing of Suit No. 600/2007 which was disposed of in terms of the compromise between the parties on 21.06.2008. It is urged that in the said compromise, the plaintiff had accepted Smt. Arvinder Kaur as the lawful owner of the suit property. 7. The defendants urge, besides, that they have spent considerable amounts to the extent of about Rs. 8 lakhs towards renovation of the premises but could not enjoy the same on account of physical obstructions at the instance of Smt. Arvinder Kaur Sethi. It is claimed that the agreement between the plaintiff and Smt. Arvinder Kaur clearly stipulated that the Lease Deed in LIC's favor had enjoined that the lawful owner was Ms. Arvinder Kaur Sethi. In these circumstances, contends the LIC, it sought for refund of the amount paid to the plaintiff and also expressed desired to vacate the premises. Reliance is placed in this regard on LIC’s letters dated 22.07.2009, 23.08.2009 and 20.09.2009. It is submitted that despite these requests, the plaintiff prevaricated and took no steps; instead he has chosen to come forward with a baseless claim for a money decree. The defendant has placed on record the letters relied upon by it. 8. During the course of submissions, the defendant had volunteered to vacate the premises - a statement to that effect was recorded by the Court on 19.02.2010. The Court, therefore, appointed a Local Commissioner to facilitate the process of handing-over vacant possession and directed that the keys to the suit premises should be deposited in Court. In these circumstances, the parties agreed that the suit should be heard on the existing materials as the only question which required adjudication was as to the entitlement of the plaintiff to the money decrees or amounts claimed. 9. The relevant parts of the lease deed (produced as Annexure P-1) to the suit are as follows: “XXXXXX XXXXXX XXXXXX FOR LEASE DEED AGREEMENT THIS INDENTURE MADE AT Delhi. This 9th day of May BETWEEN Sh. Krishan Kumar resident of B-31 Phase-1, Ashok Vihar, New Delhi (hereinafter referred to as 'the CS(OS) No.57/2009 Page 4 Lessor' which expression shall unless repugnant to the context or meaning thereof be deemed to include their respective heirs, executors, administrators and assigns) of the one part AND THE LIFE INSURANCE CORPORATION OF INDIA, a Corporation established by the Life Insurance Corporation Act, 1956 and having its Divisional Office- II at SCOPE MINAR 9th Floor, Laxmi Nagar, Distt. Centre, Delhi-92, hereinafter called Corporation (which expression shall include its successors and assigns whatever the context or meaning shall so require or permit) of the other part. WHEREAS the Lessor is seized and possessed of or otherwise well and sufficiently entitled to the land and building situated at CGF-1, 2, 3, 4 Ground Floor, C Block, Dilkhush Industrial Estate, GT Karnal Road, Delhi. AND WHEREAS the Lessors have agreed to let to the Corporation and the Corporation has agreed to take on lease from the Lessors Mr. Krishan Kumar, Ground Floor, of the said building bearing no. CGF-1, 2, 3, 4 Ground Floor, C Block, Dilkhush Industrial Estate, GT Karnal Road, Delhi, Ground Floor aggregating in all to 3750 sq. ft. more particularly described in the schedule hereunder written for the consideration and at the rent and upon the terms and conditions hereinafter contained. NOW THIS INDENTURE WITNESSETH THAT IN pursuance of the said agreement and in consideration of the rents hereinafter reserved and the covenants terms and conditions hereinafter contained and to be observed and performed the lessors do hereby demise unto the Corporation a Carpet Area admeasuring in all 3750 sq. ft. and comprising of entire ground floor of the building, situated at CGF-1, 2, 3, 4 Ground Floor, C Block Dilkhush Industrial Estate, GT Karnal Road, Delhi the registration district and sub-District of Delhi together with the use of the fittings and fixtures and the water closets, lavatories, staircase and other conveniences in the said premises hereby demised and together also with the right for the Corporation its servants, employees, visitors customers and all other persons authorized by the Corporation to use in common with the tenants and other occupiers of other portions of the said building the entrance, doorways, lobbies, passages, and corridors in the said building leading to and from the portion hereby let for the purpose of ingress thereto and agrees there from and together with also with the further right to use the compound and other open space pertaining to the demised premises for the use thereof by the Corporation its servants, occupiers, visitors, customers and all other persons concerned or interested with the business of the Corporation for their parking of Cars, Trucks, Cycles and other vehicles mechanical and or hand driven and also for going to and out of the demised premises all of the said land and fittings and fixtures and appurtenances for the sake of brevity hereinafter referred to as the demised premises to hold the demised premises unto the Corporation and from 1.5.2008 XXXXXXXX for the term of three yrs, yielding and paying therefore during the said terms and the monthly rent Rs.3,18,750/- (Rs. Three lack eighteen thousand seven hundred fifty) + Service Tax as applicable, only inclusive of providing fully AC arrangement, shall be paid on or before the 5th of the next month of each month and the subsequent rent on or before 5th of the next month of each month and the subsequent rent on or before the 5th of each succeeding month. Further the lessee will have the option to terminate the lease by giving one month's advance notice. CS(OS) No.57/2009 Page 5 XXXXXX XXXXXX XXXXXX” “XXXXXX XXXXXX XXXXXX 1. The Corporation to the intent that the obligations may continues through out the term hereby created and hereby covenant with the lessors as follows: a) To pay to the Lessors the rent hereby reserved on the days and the manner herein before appointed for payment thereof. b) To pay the charges for the electricity and water consumed by the Corporation and registered in separate electric and water meters provided by the lessors for these purposes. c) To use the demised premises for the purpose of business of the Corporation and for other purposes connected therewith. d) At the expiration or sooner determination of this lease to and renewed lease as agreed upon to peacefully and quietly yield up the demised premises and the lessor's fixtures and fittings therein (except the Lessee's Fixtures and fittings) in good condition reasonable wear and tear excepted and put the lessor is vacant possession thereof. XXXXXX XXXXXX XXXXXX” 10. The LIC's letters dated 22.07.2008, 23.08.2008 and 20.09.2008 are reproduced below: “XXXXXX XXXXXX XXXXXX 22.07.2008 Ref: Estate 12T Sh. Krishan Kumar S/O Late Sh. Muni Lal R/O B-31 Ashok Vihar Phase-I. Delhi-110052 Dear Sir, Re: Possession of Premises situated at CGF-1, 2, 3, 4 Ground Floor, C Block Dilkhush Industrial Estate, G.T. Karnal Road, Delhi. We have taken the abovementioned premises on lease for our Branch office 12T w.e.f. 01.05.2008. As you are aware that Smt. Harvinder Kaur has filed a suite regarding the CS(OS) No.57/2009 Page 6 same premises against you and LIC. Due to litigation we are not interested to shift into this premises. Please refer our various Telephonic Conversation requesting to take the possession back of the abovementioned premises. But you have not responded in this regard so far. You are again requested to take the possession of the abovementioned premises and Deposit back the amount of rent which was paid to you for the month of may 2008. Yours faithfully Sd/- Manager (O.S.) XXXXXX XXXXXX XXXXXX” “XXXXXX XXXXXX XXXXXX 23.08.2008 Ref: Estate 12T Sh. Krishan Kumar S/O Late Sh. Muni Lal R/O B-31 Ashok Vihar Phase-I. Delhi-110052 Dear Sir, Re: Possession of Premises situated at CGF-1, 2, 3, 4 Ground Floor, C Block Dilkhush Industrial Estate, G.T. Karnal Road, Delhi. Please refer our various Telephonic Conversation and letter dated 22.07.2008 requesting to take the possession back of the abovementioned premises. But you have not responded in this regard so far. You are once again requested to take the possession of the abovementioned premises and Deposit back the amount of rent which was paid to you for the month of may 2008. Yours faithfully Sd/- Manager (O.S.) CS(OS) No.57/2009 Page 7 XXXXXX XXXXXX XXXXXX” “XXXXXX XXXXXX XXXXXX 20.09.2008 Ref: Estate 12T Sh. Krishan Kumar S/O Late Sh. Muni Lal R/O B-31 Ashok Vihar Phase-I. Delhi-110052 Dear Sir, Re: Possession of Premises situated at CGF-1, 2, 3, 4 Ground Floor, C Block Dilkhush Industrial Estate, G.T. Karnal Road, Delhi. We have taken the abovementioned premises on lease for our Branch office 12T w.e.f. 01.05.2008. As you are aware that Smt. Harvinder Kaur has filed a suite regarding the same premises against you and LIC. Due to litigation we are not interested to shift into this premises. Please refer our various Telephonic Conversation and letters dated 22.07.2008 and 23.08.2008 in which you were requested to take the possession back of the abovementioned premises. But you have not responded in this regard so far. You are again requested to take the possession of the abovementioned premises and Deposit back the amount of rent which was paid to you for the month of may 2008. Yours faithfully Sd/- Manager (O.S.) XXXXXX XXXXXX XXXXXX” 11. The plaintiff claims to have replied to the LIC on 23.08.2008 and later issued a legal notice on 08.11.2008; the same are reproduced below: “XXXXXX XXXXXX XXXXXX 23rd August, 2008 CS(OS) No.57/2009 Page 8 Life Insurance Corporation Divisional Office II Scope Minar, 9th Floor, Laxmi Nagar District Centre, Delhi-110092. Kind Attn. : Mr. Bajaj/Mr. Pandita Sub. Leasing out of premises being commercial flats bearing Nos. CGF-1, 2, 3 & 4, Dilkhush Industrial Estate, G.T. Karnal Road, Azadpur, Delhi, vide lease deed dated 09.05.2008 duly registered before the Sub-Registrar. Sir, This is to inform you that we are the lawful owner of the four commercial flats bearing No. CGF-1, 2, 3 & 4, Dilkhush Industrial Estate, G.T. Karnal Road, Azadpur, Delhi,and have lawfully leased out the said four flats to you vide aforesaid lease deed. The lease has already come into existence and already commenced w.e.f. 01.05.2008. We are further acknowledged having received a sum of Rs. 2,92,485/- vide cheque no. 593632 dated 13.06.2008 towards monthly rental for the month of May, 2008 after deducting tax at source. You are required to send certificate to tax deduction at source for income tax purposes. One Smt. Arvinder Kaur alleging herself to be the owner of the entire complex has filed a frivolous suit, being suit No. 436/08, which is presently pending adjudication before the court. The peaceful legal possession has already been delivered to you in terms of the said registered lease deed, as much the said suit has become infructuous being filed only on 23.06.2008 i.e. much after the commencement of your lease. It is pertinent to mention that there is no declaration of title sought by Smt. Arvinder Kaur in the said suit. Thus the suit as a whole has become infructuous and is liable to be dismissed. As regards the fabricated documents created by Smt. Arvinder Kaur along with her husband Mr. J.S. Sethi, a counter claim has been made to declare the said agreement to be null and void being fraudulently obtained by them under the false pretext of a maintenance agreement. They represented to be running maintenance agency in the said complex and as such we had agreed that in case they were authorized to render maintenance, they could charge maintenance charges etc. without knowing or having any idea about their underlying intention. The fact remains there was no such agreement ever intended to be entered into by us nor such fabricated and forged document has any legal tenability. In any case counter claim has been filed in the court and a copy of the same would be forwarded to your shortly. In the prevailing facts and circumstances, you have no privity of contract with any other person except the lessors in terms of the said lease deed and you are within your rights to enjoy the said four flats by running your office. We assure that we would protect and safeguard your interest under the said lease deed and would take adequate legal measures in the court of law to raise your comfort level. Necessary directions in this regard would be obtained from the court so that no prejudice CS(OS) No.57/2009 Page 9 is likely to be caused to you for the use and enjoyment of the leased flats as above. We hope that you would cooperate with us to take the matter to a logical end. Thanking you Yours sincerely, Sd/- (K.K. AGGARWAL) B-31, Ashok Vihar, Phase-I, Delhi-110052. Copy to: Life Insurance Corporation, B-1, Panchvati, Adarsh Nagar, G.T. Karnal Road, Delhi. XXXXXX XXXXXX XXXXXX” The legal notice reads as follows : 8th November 2008 Life Insurance Corporation Divisional Office II Scope Minar, 9th Floor, Laxmi Nagar District Centre, Delhi-110092. Sub: Leasing out of premises being commercial flats bearing nos. CGF-1, 2, 3 & 4, Dilkhush Industrial Estate, G.T. Karnal Road, Azadpur, Delhi, vide lease deed dated 09.05.2008 duly registered under the Sub Registrar. Sir, We act and represent on behalf of Mr. K.K. Aggarwal, R/o B-31, Ashok Vihar, Delhi- 110052 (hereinafter called as 'our client'), to serve upon you a notice as under: This is to inform you that in terms of the lease deed you are in peaceful and legal possession of the leased premises as mentioned above. The suit filed by one Smt. Arvinder Kaur being civil suit No. 436/08 has since been dismissed. There is no interim order operating in respect of the said property. In a fresh suit filed by Smt. Arvinder Kaur before Hon'ble High Court being CS (OS) No. 2104/08, no injunction has been granted in her favor. It is important to bring to your kind notice that the aforesaid matter came up for consideration before Hon'ble High Court on 04.11.2008, on which date the Ld. Judge CS(OS) No.57/2009 Page 10 was pleased to summon the records of the Civil Court for perusal and passing appropriate orders and it was indicated that the parties would not create trouble and after perusing the record of the Civil Judge, appropriate orders would be passed. The suit before the Civil Judge has been dismissed on 11.09.2008. A copy of which is being annexed herewith and no injunction has been granted by Hon'ble High Court in the pending suit. In this manner there is no impediment for you to use and enjoy the said leased premises. It was your own decision to keep the premises locked under your control. We have no controlling powers upon you for the user of the said premises. We have been regularly writing letters to you including letter dated 12.08.2008 and you are called upon to pay the agreed monthly rental in terms of the lease deed. It is surprising that instead of adhering to your contractual obligation, you are insisting for the refund of the amount paid by you in terms of the lease deed. We may make the position very clear that you are a lessee in terms of the lease deed as aforementioned and you are liable to pay a monthly rent of Rs. 3,18,750/- together with service tax etc. and other charges payable on 5th of each English calendar month in advance in terms of the duly registered lease deed dated 09.05.2008. You are under a contractual obligation to honour your commitment in terms of the said lease deed. So far you have only paid rent for one month after deducting TDS vide Pay Order No. 593632 dated 13.06.2008 drawn on Corporation Bank on deducting applicable TDS and service tax. As such you have been in default in making payment of leased rental w.e.f. June - July, 2008 onwards till date. You are requested to pay leased rental in terms of lease agreement including arrears of rent accrued as on date and you are further called upon to pay rent every month. It is further made clear to you that it is your own decision to keep premises locked and in no manner you can escape liability of payment of rent. A copy of this notice is being forwarded to the Chairman for needful action in the matter so that our client is not illegally deprived of his legal rights. A copy of this notice is being retained in our office for follow up action. Sd/- (VIJAY K. GUPTA) Advocate Copy to: 1. Chairman, LIC Building, Connaught Place, New Delhi. 2. Life Insurance Corporation, B-1, Panchvati, Adarsh Nagar, G.T. Karnal Road, Delhi. XXXXXX XXXXXX XXXXXX” CS(OS) No.57/2009 Page 11 12. The relevant portion of the agreement alleged to have been entered into between the plaintiff and Smt. Arvinder Kaur on 21.06.2008 are extracted below: “XXXXXX XXXXXX XXXXXX Agreement This agreement is made between Sh. K.K. Aggarwal, S/o Sh. Mani Lal, R/o B-31, Ashok Vihar Ph-1, New Delhi hereafter called the 1st party and Smt. Arvinder Kaur Sethi, W/o Sh. Joginder Singh Sethi R/o C-30, Rajouri Garden, New Delhi hereafter the 2nd party. WHEREAS the 1st party had acquired & was in possession of CGF-1, 2, 3 & 4 Dilkhush Estate, G.T. Karnal Road, Delhi-110033 the same very four flats admeasuring a total area 3750 Sq. ft. was purposed to be let-out to Life Insurance Corporation of India at a monthly rent of Rs. 85/- per Sq. ft. vide agreement of lease dated 09/05/2008 excluding maintenance charges and the LIC was purported to start its business in the aforesaid 4 flats from 23.06.2008 but the 2nd party who had acquired her rights in the absolute owner of the said property, the property known as Dilkhush Industrial Estate measuring 8712 Sq. Yards (1.8 acres) bearing khasra no. 387, 388 & 389 min in the revenue estate of Village Malikpur, Chawni, now known as Model Town, Delhi by way of sale deed dated 25/06/2007 executed by its previous owner Sh. Narinder Chadha and when It came in the knowledge of 2nd party regarding creation of third party rights in favor of LIC, the 2nd party filed a suit for permanent injunction against 1st party and LIC before the vacation judge which is now listed for hearing on 23.06.2008. AND the parties of this agreement have decided now to settle their disputes amicably therefore the parties of this agreement have decided to settle their all disputes on the following terms & conditions. TERMS & CONDITIONS That the First Party, who was having possession xxxxxxxxxxxxxxxx shall protect the rights of the 2nd party as vested by way of sale deed xxxxxxxxxxxxxxxxx request the xxxxxxxxx to execute required Lease Agreement in this respect pertaining to CGF-1, 2, 3 & 4, Dilkhush Estate, G.T. Karnal Road, Delhi-110033 in favor of the 2nd party where in the 1st party shall have no objection and the lease deed dated 09/05/08 hereby stands revoked/cancelled unconditionally or transferred to the owner xxxxxxxxxxxx. That the 2nd party shall be at liberty to approach LIC for protecting her rights and get executed legal documents pertaining to the aforesaid four flats in which the 1st party has no objection/Claim what so ever of any nature. CS(OS) No.57/2009 Page 12 That the 1st party is in receipt of Rs. 292485/- which the first party undertake will refund to LIC unconditionally and after there shall be no claim of any nature whatsoever from 2nd party or LIC or the owner Smt. A.K. Sethi hence for all disputes, Claim etc. stand settled after the execution of this agreement against the above mentioned property. The possession is hereby stands surrendered to the 2nd party owner. The possession of the property CGF-1, 2, 3 & 4 Dilkhush Estate, G.T. Karnal Road, Delhi-110033 may