* HIGH COURT OF DELHI : NEW DELHI
Date of Order : August 13, 2008
+ RFA No.315/2008 & 316/2008
% National Insurance Company Limited ... Petitioner
Through: Mr.Yogesh Malhotra, advocate
versus
Shri K.L. Juneja & Ors. ... Respondents
Through: Mr. Bharat Bhushan Bhatia and
Ms. Sanjana Vikal, Advocates.
CORAM:
HON’BLE MR. JUSTICE PRADEEP NANDRAJOG
HON’BLE MR. JUSTICE SUNIL GAUR
1. Whether the Reporters of local papers may
be allowed to see the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be reported
in the Digest?
PRADEEP NANDRAJOG, J.(ORAL)
Caveat Petition No.53/2008 in RFA No.315/2008
Since Caveators appear through counsel on advance copy
being served, the caveat stands disposed of.
RFAs 315 & 316/2008
1. ADMIT.
2. Learned Counsel for the respondents who has lodged
a caveat on behalf of respondents accepts notice of admission of
the appeals.
RFA Nos.315/2008 & 316/2008 Page No.1 of 12
3. Since the appellant has filed true copy of the records
of Suit No.143/2005 and Suit No.298/2005, it is agreed between
learned counsel for the parties that the trial court record need
not be summoned and printing of paper book be dispensed with
and matter heard today itself.
4. Heard learned counsel for the parties.
5. RFA No.315/2008 lays a challenge to the decree
passed by the learned trial Judge in Suit No.143/2005. The suit
was filed by the appellant. Prayer made in the suit was to pass a
decree against the respondents in sum of Rs.3,04,224/- with
further prayer that interest be also granted to the appellant @
12% per annum from date of suit till date of realization.
6. By way of RFA No.316/2008 the appellant challenges
the decree passed in Suit No.298/2005 which was filed against
the appellant by the respondents.
7. Both suits i.e. Suit No.143/2005 and 298/2005 have
been disposed of by a common judgment and decree dated 30 th
April, 2008 by the learned trial Judge.
8. As noted above, appellant herein who was the plaintiff
of Suit No.143/2005 has suffered a dismissal of the suit.
Respondents who were the plaintiffs of Suit No.298/2005 have
obtained a decree in sum of Rs.6,78,632/- against the appellant
RFA Nos.315/2008 & 316/2008 Page No.2 of 12
together with interest @6% per annum from the date of suit till
realization.
9. Briefly noted, the relevant facts are that a jural
relationship was created between the appellant and the
respondents when a lease deed dated 18th January, 1999
(Ex.PW1/2) was executed creating a tenancy in favour of the
appellant under the respondents in respect of the subject
property with effect from 23rd February, 1998.
10. The tenancy was for a period of nine years. Obviously,
the tenancy would have expired on 22nd February 2007.
11. By January 2005 the agreed monthly rent payable was
Rs.1,40,408/-.
12. The appellant desired to terminate the tenancy and
accordingly wrote a letter informing the respondents that it
intends to vacate the tenanted premises. Respondents were
informed that by way of security deposit they were holding a sum
of Rs.5,85,040/-. It was informed that possession would be
surrendered by the end of February, 2005. Appellant informed
the respondents that they may appropriate part of the security
deposit towards future rent.
RFA Nos.315/2008 & 316/2008 Page No.3 of 12
13. Respondents reconciled to the premature
determination of the tenancy evidenced vide Ex.PW1/5. The same
is a memo recorded at the tenanted premises on 28th February
2005 when first respondent, Shri K.L. Juneja, who is husband of
second respondent and is the father of the third respondent went
to the site intending to receive possession. But he did not do so.
The reason was certain breakages noticed in the tenanted
premises.
14. After recording in Ex.PW1/5 the breakages in the
tenanted premises, an agreed note was appended at the bottom
of the memo recording as under:-
”Possession shall be handed over/taken over on
completion/rectification and balance security shall be
refunded after adjusting due rent for the month.”
15. In token of execution the memo, Ex.PW1/5, has been
signed by Shri K.L. Juenja, respondent No.1, recording him to be
the owner and Lalit Pandey, the representative of the appellant.
16. Vide Ex.PW1/6, being a letter dated 03.03.2005,
written by the appellant to the respondents, with reference to the
breakages listed in Ex.PW1/5, appellant informed the respondents
that all breakages at site have been rectified. In relation to the
tax deducted at source certificate which was to be issued it was
informed that the same would be ready and handed over to the
RFA Nos.315/2008 & 316/2008 Page No.4 of 12
respondents on 7.3.2005. Said date was notified to the
respondents requiring their presence at site so that they could
receive possession of the tenanted premises, with further request
that after adjusting the rent payable for the month of January and
February 2005 as also for the seven days of the month of the
March 2005 balance security deposit may be refunded to the
appellant.
17. In spite of receipt of Ex.PW1/6, none reached the site
from side of the respondents requiring the appellant to hand
deliver a letter on 8.3.2005, Ex.PW1/7. The letter was delivered to
the respondents informing that the respondents did not visit the
site to receive the possession on 7.3.2005. Respondents were
advised to reach the premises on 11.3.2005 at 14.00 hours so
that possession could be handed over.
18. The respondents did not reach the tenanted premises
on 11.3.2005.
19. On 18.4.2005, since the said position continued till
then, appellant caused to be served on the respondents a legal
notice, Ex.PW1/8. Referring to the lease deed dated 18.1.1999,
Ex.Pw1/2, and the subsequent events relatable to the memo
dated 28.2.2005 (Ex.PW1/5) and subsequent correspondence,
appellant informed the respondents that the appellant would not
RFA Nos.315/2008 & 316/2008 Page No.5 of 12
be liable for any dues post 28.2.2005. A demand in sum of
Rs.3,04,224/- was made informing the respondents that they
were holding security in sum of Rs.5,85,040/- and were entitled to
adjust the rent payable for the months of January and February
2005 @ Rs.1,40,408/- per month, totaling Rs.2,80,816/-. (It be
noted that Rs.3,04,224/- is the remainder after subtracting
Rs.2,80,816/- from Rs.5,85,040/-).
20. The legal notice, Ex.PW1/8, was responded to by the
respondents vide their lawyer’s reply dated 29.4.2005, Ex.PW1/9.
21. The respondents took the plea that the tenancy was
for an agreed period of nine years and hence could not be
terminated prior to 22.2.2007.
22. On the situation aforesaid, the appellant had no option
but to file a suit for recovery of the balance security deposit held
by the respondents after adjusting the rent for 2 months liable to
be adjusted from the security deposit.
23. The suit was filed somewhere in the month of July,
2005. After narrating the afore noted facts, decree in the sum of
Rs.3,04,224/- was prayed for. Interest @ 12% per annum from
the date of suit till date of realization was also prayed for.
RFA Nos.315/2008 & 316/2008 Page No.6 of 12
24. Needless to state the amount claimed in the suit was
Rs.5,85,040/- – Rs.2,80,224/- = Rs.3,04,224/-.
25. Appellant’s suit was met with a counter suit filed by
the respondents.
26. The respondents claimed a decree in the sum of
Rs.12,63,672/- together with interest @ 12% per annum from the
date of the suit till date of realization.
27. Needless to state the claim in the suit was the rent
payable with effect from 1.1.2005 till 30.9.2005 @Rs.1,40,408/-
per month.
28. It be noted that the respondents’ suit was filed on
12.9.2005.
29. After recording evidence, by a common judgment and
decree dated 30.4.2008, learned trial Judge dismissed the suit of
the appellant and decreed the suit filed by the respondents but
restricted the decree to Rs.6,78,632/-, for the reason the learned
trial Judge gave adjustment of Rs.5,85,040/- (the security amount
already held by the respondents) from out of the sum of
Rs.12,63,672/- being the rent held payable by the appellant to
respondents for the months of January 2005 till the end of
September 2005 i.e. nine months.
RFA Nos.315/2008 & 316/2008 Page No.7 of 12
30. The decision of the learned trial Judge is based on a
single reasoning.
31. With reference to the lease agreement, Ex.PW1/2,
learned trial Judge has held that the lease was for a fixed period
of 9 years and that commencing from 23.2.1998 it was expiring
on 22.2.2007. Finding that there was no covenant in the lease
empowering the tenant to determine the lease except on account
of the property being destroyed, noting that the property was not
destroyed, learned trial Judge held that the appellant was liable
to pay rent to the landlord till the lease period expired on
22.2.2007.
32. Learned counsel for the appellant urges that the
learned trial Judge fell in error in completely ignoring Ex.PW1/5,
the memorandum dated 28.2.2005. Counsel urges that the
learned trial Judge failed to appreciate that the law of contract
does not prohibit or prevent parties from novating the contract by
agreed consent. Learned counsel urges that the memorandum
dated 28.2.2005 evidences agreement between the parties that
the tenancy would stand determined when the appellant rectifies
the defect noted in the memorandum Ex.PW1/5.
33. With reference to the letters, Ex.PW1/6, (dated
3.3.2005) and Ex.PW1/7 (8.3.2005), learned Counsel urges that
RFA Nos.315/2008 & 316/2008 Page No.8 of 12
the same reflect that the conditions of the memo Ex.PW1/5 were
fully complied with in as much as the rectification work was
completed and possession offered.
34. Confronted with the aforesaid submissions, except to
urge that the case was never projected as aforesaid before the
learned trial Judge, learned counsel for the respondents has no
submission to make.
35. We note from the pleadings of the appellant in the suit
filed by the appellant that the appellant has made a reference in
para 6 of the plaint to the memorandum drawn between the
parties on 28.2.2005. The appellant has also referred to the
subsequent letters issued by the appellant and served upon the
respondents pointing out that the defects required to be rectified
as per the memorandum dated 28.2.2005 were rectified and in
spite thereof the respondents did not take possession of the
tenanted premises. Thus, the argument urged as herein today,
namely that the appellant did not project its case as it is sought
to be urged before us is not correct.
36. We need hardly write much more. We have noted
herein above the relevant contents of the memorandum dated
28.2.2005, Ex.PW1/5.
RFA Nos.315/2008 & 316/2008 Page No.9 of 12
37. The memorandum clearly records the consent of the
landlord to receive possession of the tenanted premises when the
defects noted in the memorandum stand rectified. We note that
the defects were rectified by 3rd March 2005 and due intimation
thereof was given to the respondents. We also note that it is not
the case of the respondents that defects were not rectified. It
was also not the case of the respondents that appellant had not
vacated the premises and vacant physical possession thereof was
not offered.
38. The novation of the original lease is writ large on the
face of the memorandum recorded on 28.2.2005. The intention of
the parties is clearly reflected. The intention is the agreement
between the parties: for the landlord to take over possession and
for the tenant to hand over possession when defects stood
rectified. It would not be out of place to record that the
memorandum further records that on rectification of the defects
possession shall be handed over/taken over and balance security
amount shall be refunded after adjusting the rent due.
39. Parties could not have reflected their intention with
more clarity.
40. It is unfortunate that the learned trial Judge has
ignored the material documents and relevant evidence which has
RFA Nos.315/2008 & 316/2008 Page No.10 of 12
been noted by us hereinabove. Learned trial Judge has totally
eschewed the principle of novation of a contract. Learned trial
Judge has not kept in mind that nothing prevents the parties to a
contract to, by consent, novate the contract.
41. For the reasons noted hereinabove, the two appeals
stand disposed of as under :-
(a). RFA No.315/2008 is allowed. Impugned judgment and
decree dated 30.4.2008 dismissing Suit No.143/2005 is set
aside. The suit filed by the appellant is decreed in sum of
Rs.2,54,402/-. The said sum has been calculated after
giving credit of rent to the respondents for the months of
January, 2005, February, 2005 and upto 11th of March, 2005
for the reason by said date the appellant had informed the
respondents that the defects being rectified, respondent
should take over possession of the tenanted premises. We
grant interest to the appellant on the said sum @ 6% per
annum from the date of the suit till date of realization.
(b). RFA No.316/2005 is allowed. Impugned judgment and
decree dated 30.4.2008 decreeing Suit No.298/2005 in sum
of Rs.6,78,632/- with pendente lite and future interest is set
aside. Suit No.298/2005 is dismissed.
RFA Nos.315/2008 & 316/2008 Page No.11 of 12
42. We propose not to pass any order pertaining to costs
except directing that proportionate court fee paid by the
appellant in Suit No.143/2005 would be paid by the respondent to
the appellant as also the proportionate court fee paid in RFA
No.315/2008. Full court fee paid by the appellant in RFA
No.316/2008 shall also be paid by the respondents to the
appellant.
PRADEEP NANDRAJOG, J.
SUNIL GAUR, J.
August 12, 2008
DKG
RFA Nos.315/2008 & 316/2008 Page No.12 of 12