Case: Karan Kapoor Vs. Madhuri Kumar

3. The brief facts of the matter are that Appellant was a tenant in the Residential Property owned by Respondent bearing No. B-228, Ground Floor, Greater Kailash-1, New Delhi-110048, including the built-up area in the stilt portion of the building (hereinafter referred as the Suit Property), which comprises of drawing room, dining room, a foyer, four bedrooms with attached bathrooms, kitchen, lounge, service area and a servant quarter with common bathroom and parking for two cars. The Respondent-Landlord entered into a Lease Agreement dated 07.08.2011 with proprietorship concern of the Appellant, namely M/s. Fantasy Lights, at monthly rent of Rs.1,17,000/- for a period of 24 months starting from 07.08.2011 till 07.08.2013 and interest free security deposit of Rs.3,51,000/- (Three Lakhs Fifty – One Thousand Only) was paid by the Appellant at the time of the execution of the Lease Agreement. After the expiry of the Lease Agreement, an extended Lease Agreement for subsequent term of 11 months was executed on 07.08.2013 at the rate of Rent of Rs.1,50,000/- per month which was to expire on 06.07.2014. The Security Deposit paid earlier was retained as Interest Free Security Deposit towards Lease Agreement dated 07.08.2013 as well.4. The Appellant tenant did not pay any rent after the expiry of the extended Lease Agreement dated 06.07.2014 with effect from 07.07.2014 and continued in occupation of the Suit Property. A Legal Notice dated 12.04.2018 was served by the Respondent landlord upon the Appellant calling him to vacate the Suit Property. However, even thereafter, neither the Suit Property was vacated, nor the rent was paid which led the Respondent/Plaintiff to file Civil Suit No.867 of 2018 for recovery of possession, arrears of rent, mesne profit, Pendent Lite, and interest before ADJ-O7, Saket Court, (South East), New Delhi. The Appellant/Defendant filed a Written Statement contending that after the expiry of the Lease Agreement dated 07.08.2013, the Respondent/Plaintiff had approached to him and made the offer to sell the right, title and interest in the Suit Property, in furtherance of which Agreement to Sell dated 22.04.2017 (herein after referred as ATS-I) was executed between the parties for a sum of Rs.3,60,00,000/- (Three Crores and Sixty Lakhs Only) and it was allegedly agreed that the rent accrued for the year 2014- 2017 be adjusted into the said Agreement to Sell. Appellant also contended that in addition to the execution of ATS-I, he also agreed to transfer its right, title and interest of a plot of land situated at Amloh in favor of Respondent for a consideration of Rs.15 Lakhs through Agreement to Sell (ATS-II) which would partially satisfy the obligations of sale consideration of ATS-I. Further, it was averred in the Written Statement that certain adjustments were made to the consideration payable for the subject property consequent to a new Agreement to Sell (ATS-III) was executed.5. In view of the averments made in Written Statement filed by the Appellant/Defendant in Civil Suit No.867 of 2018, the Respondent/Plaintiff filed an Application under Order XII Rule 6 and another application under Order XXXIX Rule 10 of the Code of Civil Procedure (in short CPC) with a prayer to pass a judgment on admission of facts made in Written Statement and to draw a decree accordingly.6. The contention of the Respondent/Plaintiff before the Trial Court was that looking to the admissions made with respect to the Landlord-Tenant relationship, rate of rent and the defense taken by the Appellant/Defendant in Written Statement is sham, as no consideration was exchanged. While on the other side, the Appellant/Defendant contended that the Respondent/Plaintiff has concealed the material facts regarding existence of ATS-I, II and III, though the two Lease Agreement dated 07.08.2011 and dated 07.08.2013 were not denied. It was said only on the expiry of the term of the extended Lease Agreement, the Respondent/Plaintiff approached the Appellant/Defendant and offered to sell the Suit Property. Further it was contended that, no demand to the accrued rent was made as it was agreed between the parties that the amount of rent shall be adjusted in ATS. In furtherance of which ATS-I dated 22.04.2017 was executed by the Respondent/Plaintiff in favor of Appellant/Defendant with respect to Suit Property where Appellant agreed to pay Rs.3,60,00,000/- as consideration. It was also contended by the Appellant/Defendant before the Trial Court that earlier Rs.4.7 Cr. was agreed towards consideration, however, after the payment of enormous earnest money to the Respondent before signing ATS-I, the consideration was reduced to Rs.3.6 Cr. Subsequently, Second Agreement to Sell dated 22.05.2017 was signed to transfer Appellants rights, title and interest in the property situated in Amloh to representatives of Respondent for a sum of Rs.15,00,000/- (Fifteen Lakhs Only) which was to be adjusted towards the consideration of Rs.3.6 Cr. payable to the Respondent. Further, Third Agreement to Sell dated 30.12.2017 was executed between the parties consequent to the aforesaid adjustments. The Appellant/Defendant also argued before the Trial Court to have approached the Allahabad Bank for loan amounting to Rs.1.7 Cr. to purchase the Suit Property, but the Respondent/Plaintiff refused to execute the subject Sale Deed. Lastly, it was submitted that there is no clear and categorical admission from his side and the Written Statement filed by him and the suit has to be read as a whole and not in isolation. Moreover, the present Suit involves adjudication of facts and serious questions of law which is possible only after leading oral evidence and on appreciating it, therefore, no decree under Order XII Rule 6 can be passed on the pleadings of the parties.7. The Trial Court perused the material on record and in Para 17 of the order dated 01.12.2020 recorded that there are certain undisputed facts. Those are: (a) The Plaintiff being absolute owner of the suit property is not disputed; (b) The identity of the suit property is not disputed; (c) Execution of the Lease Agreement dated 07.08.2011 between the Plaintiff and M/s Fantasy Lights @ Rs.1,17,000/- per month for the period of two years is not disputed; (d) Interests free security deposit of Rs.3,50,000/- paid by the Defendant to Plaintiff is not disputed; (e) The execution of Lease Agreement dated 07.08.2013 between the Plaintiff and Defendant for 11 months @ Rs.1,50,000/- per month is also not disputed; (f) It is not disputed that no rent has been paid since July 2014 though certain defenses have been taken with respect to payment of the said rent; (g) The issuance and receipt of the legal notice dated 12.04.2018 calling upon the Defendant to hand over the possession is also not disputed.8. Apart from dealing with the aforementioned admissions, the Trial Court also dealt with each defense taken by the Appellant in the written statement and observed: (i) Appellant/Respondent did not mention any amount which has been paid by him as Bayana in lieu of the ATS-I dated 22.04.2017. It is beyond the comprehension of the Court as to what stopped the Appellant from mentioning the exact figures of the amount paid by the Appellant as Bayana; (ii) No document was placed before the Court by Appellant/Defendant to show the quantum of amount paid as consideration thus ATS-I executed without any consideration has no significance; (iii) ATS-II with respect to the Amloh Property has also been filed and the same cannot be relied upon for the aforesaid reasons; (iv) None of the original Agreements to Sell have been filed; (v) It is a settled proposition of law that even if the consideration has been exchanged the purchaser does not become the owner of the property till the time the registered Sale Deed is executed in his favor and the Tenant-Landlord relationship cannot come to an end on the execution of the Agreement to Sell.9. The Trial Court relying upon the admissions as aforementioned, passed the judgment and decree allowing the application under Order XII Rule 6 of CPC for delivery of possession with respect to the Suit Property in favor of the Respondent/Plaintiff. Aggrieved Appellant/Defendant sought review of the Order dated 01.12.2020 wherein the Trial Court was pleased to dismiss the same vide order dated 17.02.2021.10. The Appellant preferred Regular First Appeal No.218 of 2021 before the High Court of Delhi challenging both the orders i.e. order dated 01.12.2020 passed by Trial Court and review order dated 17.02.2021. It was the case of the Appellant before the High Court that a Suit for specific performance in relation to aforementioned three Agreements to Sell is pending, in which the High Court has issued notice, but nowhere the Trial Court has considered the same in the impugned judgment. Further, Appellant also contended that no categoric admission was made in the Written Statement to pass judgment granting decree of possession to the Respondent in exercise of discretion under Order XII Rule 6 of CPC. Lastly, it was argued that the Sale Deed is not required to be registered in view of Section 17(2) of the Registration Act.11. The High Court vide impugned order dated 08.04.2021 rejected the Appeal with observations that the Trial Court in its order dated 17.02.2021 has noted that there has been clear admission with regard to relationship of Landlord- Tenant and the rent paid by the Appellant. Further, the Appellate Court upheld the Trial Courts findings qua admission of the facts. The High Court also noted that the findings qua admissions is not challenged by the Appellant which is sufficient to grant the decree for possession of suit property. Further, High Court observed that it is settled in law that the suit for specific performance filed by the Appellant is of no impediment for the Trial Court to proceed with or decide the Suit for possession based on Landlord- Tenant relationship. Lastly, an ATS of immovable property where the possession of premises is delivered in part performance can only be possible by registered document after paying the requisite stamp duty. The High Court dismissed the Regular First Appeal with the said observations, which is challenged by the Appellant by filing instant appeal.

Court's reasoning:
16. Thus, legislative intent is clear by using the word may and as it may think fit to the nature of admission. The said power is discretionary which should be only exercised when specific, clear and categorical admission of facts and documents are on record, otherwise the Court can refuse to invoke the power of Order XII Rule 6. The said provision has been brought with intent that if admission of facts raised by one side is admitted by other, and the Court is satisfied to the nature of admission, then the parties are not compelled for full-fledged trial and the judgment and order can be directed without taking any evidence. Therefore, to save the time and money of the Court and respective parties, the said provision has been brought in the statute. As per above discussion, it is clear that to pass a judgment on admission, the Court if thinks fit may pass an order at any stage of the suit. In case the judgment is pronounced by the Court a decree be drawn accordingly and parties to the case is not required to go for trial.18. On the issue of discretion of Court to pass judgment on admission, a three-Judge Bench of this Court in the case of S.M. Asif v. Virendar Kumar Bajaj – (2015) 9 SCC 287  made the legislative intent clear to use the word may which clearly stipulates that the power under Order XII Rule 6 of CPC is discretionary and cannot be claimed as a matter of right. In the said case, the suit for eviction was filed by the Respondent-Landlord against the Appellant-Tenant. The relationship of tenancy was admitted including the period of Lease Agreement. The Plaintiffs claim was resisted by the Defendant setting up a plea that the property in question was agreed to be sold by an agreement and the advance of Rs. 82,50,000/- was paid. The Defendant in course of taking the defense stoutly denied that Respondent/Plaintiff has continued to be the landlord after entering into Agreement to Sell. The suit for specific performance was also filed which of course was contested by the Plaintiff. In the said case, this Court was of the view that deciding such issues requires appreciation of evidence. Mere relationship of landlord and tenant cannot be said to be an unequivocal admission to decree the suit under Order XII Rule 6 of CPC. Resultantly, this Court by setting aside the judgment passed by the High Court remitted the matter back to the Trial Court subject to deposit of the arrears of the rent and the compensation for use of occupation of the suit premises. Such deposit was subject to final outcome of the eviction as well as suit for specific performance.19. In the context of the said legal position, reverting to the facts of the present case, it is apparent that the first Lease Agreement was executed on 07.08.2011 on a monthly rent of Rs.1,17,000/- of a suit premises. The said Lease Agreement was for a period of 02 years ending in July 2013. By the consent of the parties extended Lease Agreement dated 07.08.2013 was executed for a further period of 11 months for a monthly rent of Rs.1,50,000/- with approximate increase in rent amount by 30% for the next one year. Admittedly, the notice for eviction was issued terminating the lease due to non-payment of the rent after the expiry of the extended lease period which is due for payment by the Defendant. The suit for eviction was filed on 18.05.2018 for possession (based on Landlord-Tenant relationship), arrears of rent, mesne profit and pendente lite. The said suit was contested by the Defendant in which the ownership was not denied. The execution of first Lease Agreement dated 07.08.2011 and the extended Lease Agreement dated 07.08.2013 was also not denied. The monthly tenancy and payment of rent in terms of Lease Agreement is also not denied by the Defendant. The Defendant has taken a defense that the property belonging to him in Amloh was agreed to be sold to the Plaintiff to which effect ATS-II dated 25.05.2017 was executed. Further the Defendant has contended that, ATS-III dated 30.12.2017 was executed after some adjustments in consideration was made. Hence, the Defendant argued that on account of execution of the three Agreements to Sell with respect to the suit property for a sum of Rs. 3,60,00,000/-, the relationship of Landlord-Tenant ceased to exist and the Defendant acquired the status of the owner as he has already parted with the possession of the property under the Lease Agreement.22. Be that as it may, the arguments advanced by both the sides, in our view can be appreciated by the Trial Court by affording opportunity to them to lead evidence. As per the pleadings, there may be admission to the extent of execution of the Lease Agreement, rate of rent and monthly payment but simultaneously the defense taken by the Defendant is also based on ATS-I, II and III. In view of the contents of those agreements and terms specified therein, the defense as taken by the Appellant/Defendant is plausible or not is a matter of trial which may be appreciated by the Court after granting opportunity to lead evidence by the respective parties. There may be admission with respect to tenancy as per lease agreements but the defense as taken is also required to be looked into by the Court and there is need to decide justiciability of defense by the full-fledged trial. In our view, for the purpose of Order XII Rule 6, the said admission is not clear and categorical, so as to exercise a discretion by the Court without dealing with the defense as taken by Defendant. As we are conscious that any observation made by this Court may affect the merit of either side, therefore, we are not recording any finding either on the issue of tenancy or with respect to the defense as taken by the Defendant. We are only inclined to say whether the judgment and decree passed in exercise of the power under Order XII Rule 6 of CPC is based on clear and categorical admission. In our view, the facts of the case in hand and the judgment in S.M. Asif (supra) are altogether similar, therefore, the ratio of the said judgment rightly applies to the present case. Consequently, the judgment and decree passed by the Trial Court, as confirmed by the High Court, only on admission of fact without considering the defense in exercise of power under Order XII Rule 6 of CPC is hereby set-aside. The matter is remitted back to the Trial Court to decide the suit as expeditiously as possible affording due opportunity to the parties to record evidence that shall be appreciated by the Court on merit.23. In the present case, the tenant has not paid any amount of rent w.e.f. 07.07.2014. In a suit based on Landlord-Tenant relationship, the amount of rent and arrears thereof ought to be paid in terms of the order of the Court. The said view is fortified by the judgment of S.M. Asif (supra). As the Lease Agreement dated 07.08.2011 and the extended Lease Agreement dated 07.08.2013, which are not in dispute and by the extended Lease Agreement, which was for one year, the rent was increased for the year 2013-2014 by 30%.