TaxTMI 
TaxTMI 
2014 (8) TMI 1167
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....strial Estate, G.T. Karnal Road, Delhi. In such capacity the appellants negotiated with the Life Insurance Corporation (respondent herein) and entered into a Lease Agreement which was executed by the appellants as lessor and the respondent as lessee on 9th May, 2008 and registered on the same date. The material terms of this lease read as follows:- "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, G.T. 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. XXXX Hereinafter referred to as the „demised premises‟ to hold the demised premises unto the Corporation and from 1.5.2008 for the term of three years yielding and paying therefore during the said terms and the monthly rent Rs. 3,18,750/- (Rs. Three lacs eighteen thousand seven hundred fifty) + service tax as applicable....
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....it received copy of a plaint in Suit No. 436/2008 filed by Smt. Arvinder Kaur Sethi claiming to be the owner of the tenanted premises against the appellant Krishan Kumar Aggarwal (impleaded as defendant No.1 in Suit No.436/2008) as well as respondent- LIC (as defendant No.2 therein). It was pleaded by Smt. Arvinder Kaur Sethi that the present appellant was her licensee in the subject premises. This suit rested on her claims detailed in paragraphs No. 5 & 6 of her plaint (Suit No. 436/2008) which may be usefully extracted and read as follows:- "5. That the defendant No.1 is going to create third party interest in the property in question by letting out to the defendant No.2 because from the display of the Board at the office of the defendant No.2. It is apparent that its office is to be transferred on 23-6-2008 to the Ground Floor 1,2,3 4, Dilkhush Estate, G.T.Karnal Road, Azadpur, Delhi. 6. That on 27-9-2007 while personnel of the plaintiff were discharging their duties at the gate, they were obstructed by other occupants of the premises with the help of some unsocial elements threatened them that they would not allow them to stand there as security personnel and ....
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....fendant No.2 vide registered Lease Deed dated 9th May, 2008 i.e. prior to the filing of this suit. It was pointed out that no relief was claimed against the LIC. It is noteworthy that the present appellant No.1 had also filed a counter claim therein against Smt. Arvinder Kaur Sethi. 10) In the above circumstances on 11th September, 2008, Smt. Arvinder Kaur Sethi moved an application for withdrawal of the suit for the reason that the defendant had already created third party interest in the suit property before its filing and the suit was therefore infructuous. The suit was disposed of as withdrawn with liberty to file the same afresh. 11) At this stage, the present respondent addressed a letter dated 22nd July, 2008 to the appellant No.1 stating that Harvinder Kaur had filed a suit regarding the tenanted premises against appellant No.1 as well as LIC. It was informed that:- "We have taken the above mentioned premises on lease for our branch office 12T w.e.f. 01.05.2008. And you are aware that Smt. Harvinder Kuar has filed a suit regarding the same premises against you and LIC. Due to litigation we are not interested to shift into this premises. Please refer ....
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....reed 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 you 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 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." (Underlining by us) 14) As the respondent failed to comply with the demands for rent etc., ....
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....ult 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." (Emphasis by us) 15) After waiting for a reasonable time, on 6th January, 2009, the plaintiff filed CS(OS) No. 57/2009 seeking the following decree:- "a. a decree of recovery of money amounting to `19,02,500/- towards arrears of rent w.e.f. 01.06.2008 till 01.12.2008 against the defendant and in favour of plaintiffs may kindly be passed. b. defendant be further directed to pay agreed rent @ `3,18,750/- per month w.e.f. 01.12.2008 till the continuation of the tenancy. c. a decree for arrears of maintenance and power back up/ generator charged amount to `1,83,484/- as on the date of filing o....
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....yment for the initial month of May, 2008, no further rental has been paid by defendant corporation to the plaintiffs. Thus defendant corporation has been in arrears of rent w.e.f. 01.06.2008 @ Rs. 3,18,750/- per month together with payment of maintenance and service charges @ 90 paisa per sq. ft. and Rs. 6/- per sq. ft. for power back up arrangement. In this manner the defendant corporation has been in arrears of rent amounting to Rs. 19,02,500/- as on 01.12.2008 and a total sum of Rs. 1,83,484/- towards maintenance and power back up/ Generator charges. 17. That vide notice dated 08.11.2008 sent on behalf of the plaintiffs, the defendant corporation was called upon to pay the arrears of rent and discharge its contractual obligation under the registered lease deed. It seems that some of the officer of defendant corporation have colluded and connived with said Smt. Arvinder Kaur, who has initiated a suit bearing CS (OS) Nos.436/08 & 2104/08 with an intention to grab the property of the plaintiffs and deprive the plaintiffs of their legal right about the ownership of the suit property. 18. That inspite of letter dated 23.08.2008 and notice dated 08.11.2008, there has....
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....ance of these directions. 21) We may set out the order recorded by the Court on 19th February, 2010 in extenso, when for the first time, a statement was made on behalf of the defendant that it wished to hand over the vacant possession of the premises. The Court appointed a Local Commissioner for the purpose. The order which was recorded reads as under:- "Mr. Kamal Mehta, learned counsel submits, on instructions, from the defendant that vacant possession of the premises would be handed over and requests for some time to do so. He also submits that in view of the pendency of the other suit - CS(OS) 2104/2008 where the plaintiff (in that case) has sought for injunction against the present plaintiff; there is the apprehension of obstruction, the Court should make an appropriate order for deposit of the keys and also ensure that any apprehension of obstruction should be dealt with suitably. In the circumstances, Mr. M.Dutta, Advocate (Mobile No.9810062932) who is present in Court is appointed as Local Commissioner to be present at the suit premises i.e. C.G.F. 1, 2, 3 & 4, Ground Floor, Block-C, Dilkhush Industrial Estate, G.T.Karnal Road, Delhi, on 27.02.2010. The ....
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.... was no further duty upon respondent No.1 other than intimating the plaintiff to hand over the possession and that it was not required to approach the court or take other steps (vi) that the appellants as a reasonable lessor ought to have taken back the premises without prejudice to his rights to recover the amounts or such part of as was recoverable (vii) the evasion in this regard caste a doubt upon the real intention of the appellants 24) Our attention is also drawn by Mr. Vijay Gupta, learned counsel for the appellants to the fact that despite the opportunity granted by the Court on 19th February, 2010, nothing was filed by either of the parties on record of the learned Single Judge. The written statement of the defendant has not been taken on record and its defence could not have been looked in the proceedings before the learned Single Judge. The challenge by the appellants has to be tested against this background. Whether the lease between the parties stood validly determined? 25) It has been argued on behalf of the respondents that the lease between the parties stood terminated by the letters dated 22 nd July, 2008; 23rd August, 2008 or 20th Sep....
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....s the mid night of 31st October, 1962 and therefore, the first requirement of Section 106 of the Transfer to Property Act stood satisfied. 27) Mr. Kamal Mehta, learned counsel for respondent-LIC, pointed out that this principle stands statutorily recognized in the amendment effected to the Transfer of Property Act in the year 2002 when Section 106 (3) of the aforesaid Act was amended, which reads as follows: "106 (3). A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.‟ 28) There can be no dispute with the legal principles laid down in Bhagbandas Agarwalla (Supra) which have to be considered and applied in the facts of the present case. 29) In this regard we may also advert to Section 111 (h) of the Transfer of Property Act. As per this statutory provision, intention to quit the premises has to be treated as a determination of the lease. This position is not disputed by Mr. Vijay Gupta, learned counsel for appellants. The learned Single Judge has ....
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...., a tenant of immovable property, during the continuance of the tenancy, is estopped from contending that the landlord of such tenant had, at the beginning of the tenancy, no title to such immovable property. Section 116 also precludes a person who came upon any immovable property by the licence of the person in possession thereof from denying that such person had a title to such possession at the time when such license was given. It was not open to the respondent to challenge or make an objection to the title of the property. 34) The reasons propounded by the respondent for termination of the lease were therefore inconsequential for the purposes of enjoyment of the leased premises. They, in any event, did not impact user of the premises by the respondent in any manner. Of course the mere fact that LIC got embroiled in the litigation by a third party has been considered as a valid reason for not to wanting to continue with the lease. Could the mere termination of the lease, without handing over the possession to the landlord, absolve LIC from payment of the rent? 35) Mr. Vijay Gupta, learned counsel has urged with some vehemence that the action of the respondent in merely ....
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.... particular date and time. 39) So far as liability of a lessee to hand over possession is concerned, our attention has also been drawn to the provisions of Section 108 (q) of the Transfer of Property Act, which reads as follows: "108 (q). on the determination of the lease, the lessee is bound to put the lessor into possession of the property. 40) If the written statement could be taken into consideration, the LIC has claimed therein that after being put into possession, the infrastructure created by the LIC in the premises included embedded fixtures and fittings in the nature of cash counters, Branch Manager chamber, Development Officer chamber, I.T. room, electric fittings and other necessary infrastructure required for the functioning of the office. 41) We may also note the proceedings recorded by the Local Commissioner pursuant to the order dated 19th February, 2010. The report of the Local Commissioner dated 19th February, 2010 and 15th April, 2010 show that the Local Commissioner informed the parties of his proposed visit to the tenanted premises on 6th March, 2010 at 11:00 a.m. After taking police assistance, the Local Commissioner reached the subject premis....
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....f of respondent before the Court on 10th May, 2010 when the case was adjourned to 26th May, 2010. 44) As per notings of the Registry, keys were deposited in the court by the lessee only on 15th April, 2010. 45) Thus, the embedded installations of the LIC thus had not been removed prior to or even after sending the letter dated 22nd July, 2008. They were still in place almost two years thereafter on the 6 th of March, 2010, when the Local Commissioner visited the leased premises and the LIC sought time from the Local Commissioner for vacating the premises. 46) The letter dated 22nd July, 2008 of the respondent also merely stated that LIC was 'not interested to shift into the premises'. The letter refers to telephonic conversations to take the possession back. However, the respondent took no steps for vacation. The above narration also shows that the premises was not vacated by the lessee pursuant to its letters written by the lessee on 22nd July, 2008; 23rd August, 2008 or 20th September, 2008. 47) It is also evident that neither the filing of CS (OS) No. 2104/2008 by Smt. Arvinder Kaur nor CS (OS) No. 67/2009 motivated the respondent-lessee to vacate the premise....
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....he visit of Local Commissioner on 6th March, 2010. As such the landlord is within his rights to seek recovery of rent. Therefore, it has to be held that the three letters written by the lessee though terminated the lease, therefore, did not express intention to hand over vacant and peaceful possession of the premises. These communications therefore do not absolve LIC from its liability to pay rent. 52) We accordingly held that the respondent's letter dated 22nd July, 2008 could be deemed to be notice of termination of the lease but it certainly does not invite the plaintiff as to when the vacant possession should be taken in terms of Clause-1(d) of the Lease Deed dated 9th May, 2008. The other two letters are of identical tenor and effect. In the instant case, the lessee was bound by virtue of Clause-1 (d) of the Lease Deed dated 9th May, 2008 to put the landlord in vacant possession of tenanted premises and the provisions of Section 108 (q) of Transfer of Property Act. The finding of the learned Single Judge that the LIC wanted to hand over the vacant possession and the appellants have not been able to take it back, are therefore, set aside. Direction to deposit the keys....
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....f any interference by them. There is nothing to support the oral assertion made before us that LIC was obstructed from user of the subject premises. No such statement is found in the three letters written by the respondent to the appellant. There is no record at all of date or time of any such obstruction on record. No name or particulars of the persons, who caused the obstruction, are mentioned. It is noteworthy that the respondent does not attribute a single incident to the lessor when he had obstructed or prevented it to use the tenanted premises. Thus, the oral submission of obstruction before us is not supported by any correspondence which emanated from the present respondent, either to the appellants or by a document in the nature of a complaint to the police or any other authority. 59) We find that in the legal notice the appellant had explained to the respondent the nature of its agreement with Smt. Arvinder Kaur Sethi and her husband which was for the purpose of maintenance and the alleged fraud on their part. The respondent rightly did not dispute the appellants' claim of ownership of the property; execution of the lease deed; as well as peaceful possession of the ....
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....cked over which appellants had no control; that it was in breach of the contractual terms and despite being called upon to pay the monthly rental of `3,18,750/- with service tax, which was payable in advance by 5th of each English calendar month; that no rent had been paid w.e.f. June, 2008 onwards and that such unilateral decision of the LIC to get the premised locked, would not absolve it from the liability of payment of rent. 64) So far as the reference in the legal notice dated 8 th November, 2008 to letter dated 12th August, 2008 (wrongfully typed as 12th September, 2008) is concerned, the same appears to be a typing mistake inasmuch as the defendant does not dispute receipt of the letter dated 23 rd August, 2008 from the plaintiff. 65) No explanation has been rendered by the respondent as to why letter dated 23rd August, 2008 and the legal notice sent by the appellant were not repudiated or even replied. Despite due receipt, the respondent did not bother to even send any response to the letter dated 23 rd August, 2008 or the legal notice, the contents whereof would be deemed to have been admitted. In the judicial precedents reported in Rakesh Kumar Vs. Hindustan Everest....
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....acate the premises. No date or time was fixed calling upon the lessor to take back the possession. No legal steps whatsoever were taken for seeking directions to the lessor to take possession. Even after filing of the suit CS(OS) No. 57/2009 by the appellant on 6th January, 2009, the respondent-lessee did not file any application informing the court that it had vacated the premises and seeking directions to the appellant to take over possession of the same or permitting it to deposit the keys of the premises in court. No offer to hand over possession or prayer for appointment of the Local Commissioner was made for over an year till such submission was made on 19th December, 2010. Then too the respondent sought permission to deposit the keys in court, not to give them to the lessor. There is no written statement challenging the averments in the suit on record. 70) Mr. Vijay Gupta, learned counsel for appellant has placed reliance on a Division Bench decision of Punjab & Haryana High Court in Jatinder Kumar Vs. Harmohinder Singh & ors. AIR 1994 Punjab & Haryana 60 which, relying upon the judicial precedent in 'Balasubramania Iyer Vs. Subbiah Thevar' AIR 1965 Mad 417 has....
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....y that it was surrendering the lease and that the lessor should take back the possession appointing a particular date and time for the purpose. In this background, the liability of respondent to pay rent would continue till such date vacant possession is handed over to the landlord. 72) On 19th February, 2010, the learned Single Judge directed that the keys of the premises be handed over to the Local Commissioner who should deposit them in this Court and keys should be retained in the record of CS(OS) No. 2104/2010. We have held that this direction in the plaintiff's suit for recovery of rent was not legally permissible as it would certainly not tantamount to legal requirement of handing over the possession of premises to the lessor under Section 106 of the Transfer of Property Act. 73) The LIC at no point of time repudiated any of the assertions by the landlord in his letters. It did not dispute that the lease deed was in subsistence or the liability of the LIC to pay the rent with service tax, etc. in advance; or that the decision to keep the premises locked under the control of the LIC was unilateral. The LIC did not dispute that it had a contractual obligation to m....