REPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DATE OF RESERVE: February 17, 2010
DATE OF DECISION: May 25, 2010
+ RFA 421/2009
Bank of Baroda. ..... Appellant
Through: Mr.Adarsh B.Dial, Sr. Advocate with
Mr.R.P.Aggarwal and Mr.Arvind Kumar,
Advocates
versus
M/s.Vijay Mahipal & Co. ..... Respondent
Through: Mr.Rajat Aneja, Advocate
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
: REVA KHETRAPAL, J.
1. In this appeal, the appellant seeks to assail the judgment and decree
dated 19.09.2009 passed by the learned Additional District Judge whereby the
suit of the respondent/plaintiff was decreed for the relief of possession.
2. The facts relevant for the disposal of the present appeal are not in
controversy. The appellant and the respondent had entered into a lease deed
dated 27.05.2004 in respect of the ground floor measuring 1203.12 sq.ft.,
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basement 1378.12 sq.ft. and mezzanine floor measuring 1011.74 sq.ft.,
admeasuring in all 3592.98 sq.ft., situated at 32, Community Centre, Industrial
Area, Phase-I, Naraina, New Delhi on a monthly rent of Rs.71,860/- (Rupees
Seventy One Thousand Eight Hundred Sixty Only), subject to tax deduction at
source as per Income Tax Rules in force from time to time. The said lease
deed was for a period of five years from 01.09.2003 to 31.08.2008.
3. By a letter dated 28.04.2008, the appellant extended an offer to the
respondent for renewal of the aforesaid lease deed as follows:-
“Therefore as per Clause 5 on page 8 of the Lease Deed, we
request you to let us have your written consent (with terms of
offer) for renewal of lease latest by 31.5.08 or convey otherwise
for our further action.”
4. In response to the aforesaid letter, the respondent intimated the appellant
by its termination notice dated 03.05.2008 that the respondent was no longer
interested in continuing the lease any further. Paragraph-2 of the said letter,
which is apposite, is reproduced hereunder:-
“That the said Lease Deed was to come to an end by
efflux of time on 31.08.2008 as the period of 5 years will expire
on that day. Since you had offered to our clients for renewal of
the said lease by your letter dated 28.04.2008, expressing your
intention to renew the Lease, we have specific instructions from
our aforesaid clients to apprise you about their decision on the
said issue. Our clients have instructed us to say that they are not
interested in continuing the Lease any further. We also wish to
apprise you that as per Clause (5) embodied in the Lease Deed
executed between the parties, it has been clearly, unambiguously
and unequivocally provided that the Lessor shall be liable to giveRFA 421/2009 Page No. 2 of 14
to the Lessee a notice in writing not less than 3 (three) calender
months before the expiration of the term hereby created
conveying/reaffirming or denying/refusing his/its/their consent
for continuing the Lease and executing a Lease Deed therefor.
In view of the aforesaid Clause, our clients deny and refuse their
consent for continuing the Lease.”
5. Thereupon, in supersession of its earlier letter dated 28.04.2008, the
appellant by its letter dated 03.05.2008 wrote to the respondent, stating that in
terms of the provisions contained in the lease deed dated 27.05.2004 for
renewal of the lease, the appellant was exercising its option for renewal of the
lease for a period of five years from 01.09.2008 to 31.08.2013 on the terms and
conditions contained therein.
6. On 09.06.2008 the appellant through its counsel replied to the
respondent’s letter dated 03.05.2008, interpreting Clause 5 of the lease deed
dated 27.05.2004 to mean that the respondent was bound to renew the term of
the said lease deed for a further period of five years from 31.08.2008 by
execution and registration of a fresh lease deed.
7. The respondent through its counsel sent a reminder dated 11.08.2008 to
the appellant again calling upon the appellant to hand over and deliver the
vacant and peaceful possession of the suit premises to the respondent on or
before 31.08.2008. The respondent also informed that if the appellant failed to
vacate the suit premises, the respondent would be constrained to initiate
appropriate legal proceedings for the recovery of the possession of the demised
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premises as also for the recovery of mesne profits at the market rate.
8. The appellant sent a reply dated 25.08.2008 to the aforesaid legal notice,
whereby the appellant reiterated the averments made in its earlier reply dated
09.06.2008. On 31.08.2008, the lease deed dated 27.05.2004 expired by efflux
of time and on 02.09.2008, the respondent filed a civil suit bearing Suit
No.122/2008 for recovery of possession and damages/mesne profits. The
appellant entered its defence by filing a written statement on 04.11.2008. The
respondent thereupon filed an application under Order XII Rule 6 for a decree
of possession against the appellant in view of the admissions made by the
appellant in the said written statement. The said application was contested by
the appellant, inter-alia, on the ground that it had moved a transfer petition
dated 11.09.2008 in the suit for specific performance, being Suit No.512/2008,
filed by it against the respondent, which was pending decision of the District
Judge, with the prayer that both the suits, i.e., the suit filed by the appellant as
well as the suit filed by the respondent be transferred to any one court. On
19.09.2009 the application of the respondent under Order XII Rule 6 read with
Section 151 CPC was allowed and the suit of the plaintiff was decreed for the
relief of possession. Aggrieved by the said order, the present appeal has been
preferred.
9. The arguments at the bar were advanced by Mr.Adarsh B.Dial, the
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learned senior counsel for the appellant and Mr.Rajat Aneja, the learned
counsel for the respondent. The counsel for both the parties did not dispute
that Clause 5 of the lease deed was crucial for the decision of the present
appeal. For ready reference therefore, the said clause is reproduced below:-
“Provided always and it is hereby agreed and declared hat the
Lessor will, on the written request of the Lessee made not less
than 3(Three) calender months before the expiration of the term
hereby created, if there shall not at the time of such request be
any existing breach or non-observance of any of the covenants
on the part of the Lessee herein contained, grant to the Lessee
renewal of the lease of the demised Premises for a further
period of 5 years at the discretion of the Lessee, from the
expiration of the term hereby granted at the rent increased by
25% of the rent hereby fixed in respect of such further period
and containing of the covenants and provisions as are herein
contained excluding/including (delete the inapplicable) this
present covenant for renewal. The Lessor shall be liable to give
the Lessee a notice in writing not less than 3 (Three) calendar
months before the expiration of the term hereby created
conveying/reaffirming or denying/refusing his/its/their consent
for continuing the Lease and executing a lease deed therefor.”
10. Mr.Adarsh Dial, the learned Senior counsel for the appellant assailed
the judgment of the learned trial court on the ground that the suit had been
decreed on an entirely erroneous reading of the aforesaid Clause 5 of the lease
deed. He contended that a plain reading of Clause 5 makes it abundantly clear
that the appellant-lessee had an unconditional right to the renewal of the lease
deed dated 27.05.2004. He contended that the first part of Clause 5 was the
operative part, whereby it was agreed and declared between the parties that on
RFA 421/2009 Page No. 5 of 14
the written request of the lessee, made not less than three calender months
before the expiration of the term of the lease, the lessor shall grant to the
lessee renewal of the lease of the demised premises for a further period of five
years. The caveat, the learned counsel contended, was that at the time of
making such request, there shall not be any existing breach or non-observance
of any of the covenants of the lease on the part of the lessee; and it was no
one’s case that the appellant had committed any such breach. The second part
of Clause 5, the learned counsel contended, was complementary to the first
part and was by way of a supplement or adjunct. A supplement or adjunct
could not be allowed to supersede the main part and, in any case, no authority
was required for the proposition that effect must be given to every part of the
document, which has to be construed as a whole.
11. Alternatively Mr.Dayal contended that assuming Clause 5 to be capable
of two interpretations, it was incumbent upon the trial court to have allowed
the case to proceed to trial so as to enable the parties to bring on record explicit
evidence to show the intent of the parties. A decree under the provisions of
Order XII Rule 6 ought not to have been passed at the initial stage of the suit.
12. Mr.Dial on behalf of the appellant relied upon the following decisions:-
(i) Mahadev Leasing Finance (P) Ltd. & Another Vs. Erose
Educational Infotech Pvt.Ltd., 68(1997) DLT 846, wherein it
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was held that a decree under Order XII Rule 6 can be passedonly where the admission made is clear and unambiguous, in
support of his contention that this was not the stage to go into the
merits of the pleas taken in the written statement, which
necessitated adducing of evidence by both the parties.
(ii) Smt.Sneh Vasih & Another Vs. Filatex India Ltd., 95(2002)
DLT 373, wherein it was held that it would not be appropriate to
pass a judgment under Order XII Rule 6 in the peculiar facts of
the case and in view of the terms of the lease agreement.
(iii) Bhanu Mehra Vs. Dato Brij Kishore & Others, 2001(60) DRJ
1(DB) wherein, in paragraph-15 it was held that in view of the
disputed questions of fact and law, it was necessary for the trial
court to have framed issues thereon and then proceeded with the
trial of the suit on merits in accordance with law, instead of
making its own observations that the plaintiff was entitled to a
decree for possession on the alleged implied admission.
(iv) Puran Chand Packaging Industrial P.Ltd. Vs. Sona Devi &
Another, 154(2008) DLT 111(DB), where a judgment on
admissions passed by a learned Single Judge of this Court was
set aside by the Division Bench on the ground that various
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objections, which go to the root of the matter, which if permitted
to be proved would disentitle the respondents to a decree of
possession had been urged by the appellant.
13. Highlighting the second part of Clause 5, Mr.Rajat Aneja, the learned
counsel, on the other hand, contended that the last few lines of Clause 5 qualify
the first part of Clause 5. He further contended that there would have been no
need to incorporate the last four lines unless it was intended to vest in the
lessor the right of denying/refusing his consent for continuing the lease and
executing a lease deed therefor. The second part of Clause 5, which was
heavily relied upon by the respondent/plaintiff, at the risk of repetition, is again
reproduced hereunder:-
“The Lessor shall be liable to give the Lessee a notice in
writing not less than 3 (Three) calendar months before the
expiration of the term hereby created conveying/reaffirming or
denying/refusing his/its/their consent for continuing the Lease
and executing a lease deed therefor.”
14. Mr.Aneja contended that it is a cardinal rule of interpretation of
documents that no clause or part of a clause of a document should be rendered
otiose, and that as far as possible all the clauses and each and every part of
each clause must be harmoniously read. According to him, such a reading of
the first part and the second part of Clause 5 of the lease deed dated
27.05.2004 seems to suggest that a renewal of the lease deed in the instant case
RFA 421/2009 Page No. 8 of 14
was envisaged only when the lessee as well as the lessor were interested, on
expiration of the term of the lease, in executing a fresh lease deed for a further
period of five years. The right given to the lessor of denying or refusing his
consent to continuing the lease in the latter part of the Clause 5 could not be
brushed aside or ignored, given the fact that ultimately it was for the lessor to
decide whether or not he wants to give his premises on lease for a further
period of five years to the lessee.
15. Mr.Aneja also contended that the first para of Section 107 of the
Transfer of Property Act makes it very clear that a lease of immovable
property exceeding one year can never be made by an unregistered instrument.
In the present case, admittedly, the registered lease deed dated 27.05.2004 had
expired by efflux of time on 31.08.2008, and the lessor having refused to
accede to the request of the lessee for renewal of the lease deed, the tenancy
must be regarded as a month-to-month tenancy, which could be and was in fact
terminated in accordance with the provisions of Section 106 of the Act. In
this context, reliance was placed by the learned counsel for the respondent on
the following decisions of this court:-
(i) Burmah Shell Oil Distributing, now known as Bharat
Petroleum Corporation Ltd. Vs. Khaja Midhat Noor
and Others, AIR 1988 SC 1470,
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(ii) Uptron Powertronics Ltd. Vs. Shri G.L.Rawal, 1999 IV
AD (Delhi) 861,
(iii)Modern Food Industries (India) Limited Vs. I.K.Malik
and Others, 2002 VIII AD (Delhi) 88, and
(iv)Kidarsons Industries Pvt. Ltd. Vs. Allahabad Bank,
1999 IV AD (Delhi) 822.
16. Having considered the rival submissions of the counsel for the parties
and gone through the precedents cited at the bar, I have not the least bit of
hesitation in holding that the construction sought to be placed by the appellant
on Clause 5 of the lease deed is wholly untenable. The learned trial court has
rightly construed the said clause to mean that by virtue of the lease deed itself,
the respondent/plaintiff had the right to affirm or deny consent for the
continuation of the lease or to execute or refuse to execute a fresh lease deed,
and that no right exists in favour of the appellant/lessee unless the
respondent/lessor in categorical terms conveys its consent regarding the
continuation of the lease and agrees to execute a fresh lease deed. This is not a
case where any exclusive right has been given to the appellant-lessee to opt for
renewal of the lease deed even in the absence of the concurrence of the lessor.
Rather, it is case where renewal of the lease has been viewed as matter of
consensus to be arrived at between the parties. Clause 5 of the lease deed in
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the present case, in my opinion, secures the right of the lessee as well as the
lessor, by giving to the lessee the right to opt for the renewal of the lease deed,
and to the lessor the right to refuse consent to the aforesaid renewal. Any other
construction placed upon the said clause can only lead to absurdity and would
in fact amount to distortion of the clause itself.
17. It also cannot be lost sight of that the words ‘renewal of the lease’ are a
misnomer. Viewed from any angle, the renewal is in fact really execution of a
fresh lease and that too a registered one in terms of para-1 of Section 107 of
the Transfer of Property Act. The Supreme Court in DDA Vs. Durga Chand
Kaushish , AIR 1973 SC 2609 elucidated as under:-
“A renewal of lease is really grant of a fresh lease. It is called
‘renewal’ simply because it postulates the existence of a prior
lease, which generally provides for renewal as of right. In all
other aspects, it is really a fresh lease.”
18. The renewal of the lease having been equated to a fresh lease deed, even
otherwise, in my opinion, consensus ad item would be a sine qua non for
renewal of the lease agreement between the parties. Thus, without the consent
of the lessor, the lessee cannot be said to have opted for and obtained the
renewal of the lease deed after it has expired by efflux of time, merely on
account of renewal clause inserted in the lease deed providing for option of the
lessee to renew the lease deed on an enhanced rate of rent.
19. The lease in the present case was for a period of five years and, as held
RFA 421/2009 Page No. 11 of 14
by the Supreme Court in the Burma Shell Oil Distributing case (supra), on a
harmonious construction of Section 107 read with Section 116 of the Transfer
of Property Act, on the expiry of the lease period, which in the instant case
expired on 31.08.2008, in the absence of a registered instrument, it must be
held that it was a case of holding over from month-to-month and that the lease
stood terminated by the giving of a valid notice. Such notice was given to the
lessee on 03.05.2008, asking the lessee to quit the demised premises and to
hand over and deliver the vacant and peaceful possession of the demised
premises, on the expiration of the lease ending on 31.08.2008.
20. As regards the precedents relied upon by the learned counsel for the
appellant to contend that the learned trial court ought not to have passed the
decree under Order XII Rule 6 without granting to the parties an opportunity of
adducing their evidence, the said cases, in my view, are clearly distinguishable
on facts. No hard and fast rule can be laid down as to when the trial court
should exercise its discretion to pass a decree under Order XII Rule 6 of the
Code of Civil Procedure as this is a matter which depends wholly upon the
facts of each particular case. Thus in the case of Mahadev Leasing Finance
(P) Ltd. (supra), the lease deed was liable to be renewed “for a maximum
period of an additional two years only at the option of the Lessee” and no right
was given to the lessor to refuse the aforesaid renewal for an additional period
RFA 421/2009 Page No. 12 of 14
of two years only. So also in Sneh Vasih (supra), the relevant clause of the
lease agreement specifically provided that the lessors would be disentitled to
recover possession where renewal notice was served upon them coupled with
increase in rent within the stipulated time. In Bhanu Mehra (supra), it was
held that the right of renewal arises only when notice is given to the lessor by
the lessee in terms of the renewal clause and the lessee has performed all the
conditions precedent as provided in the renewal clause, and further held that it
was also a question of fact as to whether or not the lessee had violated the
covenants of the registered lease deed. In the present case, as rightly
contended, no such disputed questions of fact and law arise and, therefore, the
judgment rendered by the Division Bench in Bhanu Mehra (supra) is wholly
inapplicable to the facts of the present case. Likewise the judgment in Puran
Chand Packaging(supra) has no bearing on the present case. In the said case
the plea of lessor was that notice of termination had been waived by the
respondent/lessee and the Court held that this being a question of fact, it had to
be decided after the parties had been given time to adduce their evidence.
21. To conclude, there is no dispute in the instant case as regards the facts
which are cut and dried. As rightly contended by the learned counsel for the
appellant, the case turns upon the interpretation of Clause 5 of the lease deed
and, in such circumstances, to my mind, there is no illegality or perversity in
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the impugned judgment and decree. The judgment in fact is a well considered
one in which the learned trial court has considered a catena of legal precedents
to arrive at the conclusion that the respondent/plaintiff is entitled for judgment
on admission against the appellant/defendant. No ground for interference is
made out. The impugned judgment and decree are accordingly affirmed.
Resultantly, the appeal is dismissed as being without merit.
REVA KHETRAPAL, J.
May 25, 2010
aks
RFA 421/2009 Page No. 14 of 14