Mr. Jaspreet Singh Anand and Another vs Mr. Gurdev Singh Anand and Others

V.K. Shali, J.

IA No. 16142/2010

This order shall dispose of IA No. 16142/2010 filed by the Defendants for letting out the ground floor of the property bearing No. 7/20, Kirti Nagar Industrial Area, New Delhi.

The learned Counsel for the Plaintiff was heard at length on 22.3.2011 with regard to the objections raised regarding various clauses of the proposed lease deed to be executed between the Defendants and the prospective tenant. These objections have been dealt with in the order dated 22.3.2011 in detail. These objections pertain to the total period of lease, repairing on the ground floor and the mezzanine floor, obtaining of licence, depositing the security amount with the Registrar General, as well as a restraint on the part of the lessor from creating any third party interest in respect of the suit property.

All the clauses were considered by the Court and the Defendants were directed to file a rectified proposed lease deed along with the site plan demarcating the portion which is purported to be let out by them.

After the order was passed, the learned Counsel for the parties expressed their desire to make a fresh attempt to arrive at a settlement in respect of their outstanding issues and accordingly at the request of the learned Counsel for the parties, Mr. J.P. Sengh, learned senior counsel of this Court, an experienced mediator, was requested to intervene in the matter and try to bring about reconciliation between the parties. The matter was adjourned to 07.4.2011. On 07.4.2011, the parties informed that the mediation between them could not succeed.

The learned Counsel for the parties have brought the revised lease deed to be executed between the Defendants and the prospective tenant. However, as the site plan was not attached with the proposed lease deed, the matter was adjourned for today.

Today again, the learned Counsel for the parties have been heard. I have also perused the record.

The learned Counsel for the Plaintiffs had very vehemently contested the letting out of the property itself and drew the attention of the Court to various objections which have been taken in the reply to the said application.

These preliminary objections were raised firstly on the ground that the property is a lease hold property given on perpetual lease by the L&DO and therefore, the property cannot be let out without the permission of the L&DO and, if it is done, it will unnecessarily put the interest of the Petitioners as well as that of the Defendants in peril.

The second objection, which was taken was that the Defendants have not come to Court with clean hands inasmuch as while letting out the ground floor of the suit property along with the inner mezzanine, the front portion of the mezzanine floor of the suit property measuring around 2000 sq. ft. which is under exclusive occupation of the Defendant No. 2, is not being let out. Accordingly, it was urged that this is conferring an unfair advantage on the Defendant No. 2, inasmuch as he himself is retaining a part of the mezzanine on the first floor of the suit property, yet he is depriving the Plaintiff from retaining a part of the ground floor of the suit property, wherefrom the Plaintiffs intend to run their business. It was contended by the learned Counsel for the Plaintiffs that the Plaintiffs have no objection to the letting out of the suit property in case they are given 1/6th share on the ground floor of the suit property which will enable them to run their own business. It was further urged that the owner of the prospective tenant, M/s. Samara India Pvt. Ltd. (Hyundai Motors) is a good friend of Mr. G.S. Chandhok, husband of Defendant No. 5 and therefore, the whole purpose of Defendants was to defeat the rights of the Plaintiffs.

So far as the other objections to the various terms and conditions of the proposed lease deed are concerned, it was contended that despite the fact that certain clauses have been rectified, still there are some clauses which are the cause of concern for the Plaintiffs inasmuch as the insertion of these clauses in the proposed lease deed may be detrimental to the interest of the Plaintiffs.

It was contended that clause No. (1), pertains to the payment of service tax and if read as framed it may cast an obligation on the Plaintiffs and the Defendants to pay the service tax while as this is essentially a liability of the tenant.

It was contended that clause Nos. 2 and 3, in the revised lease deed did not mention the time of payment of advance rentals, security deposit in terms of the proposed lease deed. Clause 5 was pertaining to renewal clause and it was alleged that the prospective tenant was given unfettered right to renew the lease deed. Clause 7, was stated to be permitting the prospective tenant to install a generator set on the terrace floor which will cause vibrations and consequently damage the structure of the building. In addition to this, the learned Counsel for the Plaintiffs had also contended that the purpose for which the ground floor of the suit property is being let out is for running a service centre and motor work shop, which is bound to cause spill over of grease and Mobil oil, which will spoil the floor of the suit premises and which will ultimately entail the expenditure to be incurred by the Plaintiffs at the time of vacation.

Mr. Tiku, the learned senior counsel for the Defendants has very fairly sated that so far as the objections with regard to various terms and conditions of the proposed lease deed are concerned, they may be suitably modified by the Court so as to protect the interest of the Plaintiffs and the Defendants have no objection to the same. It was also contended by him that in order to ensure that there is smooth passage so far as the execution of the lease deed is concerned, instead of directing all the parties or only the Defendants to sign the lease deed, it would be better in case an Advocate is appointed as a Court Commissioner who may not only modify the terms and conditions of the final proposed lease deed to be executed between the Defendants on the one hand and the prospective tenant on the other but would also get the said lease deed duly registered with the Sub-Registrar as it is for more than 11 months. Further, it was urged that he would ensure that all the requisite formalities are completed. It was stated that since some of the parties are adopting a non-cooperating attitude, it would be better in case one person for and on behalf of all the parties and the Court is authorized to deal with the prospective tenant.

So far as the preliminary objections with regard to the restriction being imposed by the L&DO and other objections are concerned, it was contended that notwithstanding the fact that the L&DO is the lessor of the suit property, in all cases of perpetual lease or sub-lease, the owner or the perpetual lessee or the sub lessee is permitted to let out a part of the suit property so as to earn rentals. It was contended in the instant case that there is absolutely no violation of any terms and conditions of the perpetual lease or the sub lease as the case maybe by executing a lease agreement between the prospective tenant and the Defendants herein through Court Commissioner. As regards the mezzanine on the first floor is concerned, it was urged that it is an independent unit and does not form part of the ground floor.

I have thoughtfully considered the submissions made by the respective sides. I have also perused the record.

At the outset, I cannot refrain myself from saying that no doubt this is a suit for partition in respect of various properties out of which the property bearing No. 7/20, Kirti Nagar Industrial Area, New Delhi is one of the valuable properties, but the attitude of the Plaintiffs in restraining the Defendants from letting out the suit property is actuated by only an obstructionist attitude. It is with this state of mind that all objections, both preliminary as well as objections on merits have been taken by the Plaintiffs, so as to ensure that the property is not permitted to be let out to any prospective tenant and thus gainfully utilized to everybody''s benefit.

It may be pertinent here to mention that it is not disputed that the property belongs to all the parties to the suit though the shares in respect of the said property are yet to be apportioned and thereafter given effect to by metes and bounds.

The suit property as on date is admittedly lying vacant and is not being gainfully utilized by any of the parties, therefore, to permit the Defendants to keep the property vacant and not let it out to any party, including the present prospective tenant is not only causing financial loss to all the parties but will also result in quick decay of the property on account of lack of maintenance and non-occupation. Therefore, I feel that the preliminary objections which have been raised by the Plaintiffs that the property cannot be let out in terms of the proposed lease deed or that it is causing undue enrichment to the Defendants on account of the fact that he is in occupation of the portion of the mezzanine for does not convince me. It is the common knowledge that even the properties which have been perpetually subleased or perpetually leased by the lessor namely the President of India through L&DO or the DDA, the properties have been let out to different tenants for rentals subject to certain conditions. As and when if any objection is raised by the lessor, the parties will be well within their rights to rectify such deficiency or to contest the same. However, this objection, which is being raised in anticipation, is only being used as a pre-emptive strike to prevent the letting out of the property by the Plaintiff. I do not agree with this objection.

So far as the allegation that the Defendants have not come to Court with clean hands inasmuch as they are occupying mezzanine on the first floor ad measuring 2000 sq. ft. and yet letting out the remaining portion of the mezzanine and the ground floor and thereby making unjust enrichment at the instance of the Plaintiffs is totally incorrect.

It may be pertinent here to mention that the learned Counsel for the Defendants has shown the lay out plan duly sanctioned by the appropriate authority which clearly demarcates the mezzanine floor under the occupation of the Defendants while as the remaining portion which is the ground floor and the inner mezzanine on the first floor with separate entrance is lying vacant and therefore, is altogether a separate unit which is proposed to be let out. Accordingly, I do not find any merit with regard to these preliminary objections.

So far as the other objections of the learned Counsel for the Plaintiffs with regard to various terms and conditions are concerned, the Court had practically read each and every clause with the assistance of the learned Counsel for the parties and came to the conclusion that certain minor modifications in certain clauses should be enough to take care of the objections which are being raised by the Plaintiffs.

These objections are being attended to hereinafter.

Clause No. 1: So far as the payment of service tax is concerned, there is no dispute about the fact that the service tax is payable by the prospective tenant. It was contended by the learned Counsel for the Defendants that as on date, the service tax is not payable by the prospective tenant on the tenanted premises on account of Division Bench judgment of this Court in case titled Home Solution Retail India Ltd., Lifestyle International P. Ltd., Shoppers''s Stop Ltd., Fun Multiplex P. Ltd.,Wadhawan Lifestyle Retail P. Ltd., Devyani International Ltd. , Mahtani Fashion Pvt. Ltd. Barista Coffee Company Ltd., M/s GKB Opt lab (Pvt.) Ltd. Bardez,Goa Biba Apparels P. Ltd., Ashok Kumar Jain, Vardhaman Properties Ltd. Wadhawan Lifestyle Retail P. Ltd., Ashok Jain, Vatika Ltd., Vatika Hospitality Pvt. Ltd., M/s Food Plaza Express Kitchen, SSIPL, Retail Ltd., Genesis Colors Pvt. Ltd. M/s BATA India Ltd., Vinnamr Hospitalit P. Ltd., M/s BPTP Ltd. v. Union of India. It has been further stated that the said judgment was not challenged before the Supreme Court and there is no stay and therefore, no service tax as on date is leviable or payable by the tenant. In any case, it has been stated that if the said liability comes to fall on the prospective tenant, the same shall be paid by them.

In view of the submissions made by the learned Counsel for the Defendants, the Court hopes and trust that the Defendants will sufficiently modify Clause 1 of the lease deed so as to ensure that the service tax is paid by the tenant in the first instance and he will make a sufficient provision for the same and if ultimately it is payable, the same shall be deposited with the appropriate competent authority and in case the Apex Court puts its seal on the judgment passed by the Division Bench and states that the service tax is not payable by the tenant, in that event, the said amount shall be refunded or taken back by the tenants.

With regard to clause Nos. 2 and 3, it is clarified that the initial advance payments and the security deposit shall be made by the lessee at the time of registration and thereafter the payment of monthly rent shall be made on or before 7th of each succeeding calendar month.

Clause 5 makes it clear that after expiry of six years, the proposed lease deed may be extended on such terms and conditions as may be settled with the permission of the Court and with such enhancement of rent as may be deemed necessary.

Clause 7, deals with the installation of the generator. The learned Counsel for the Plaintiffs had vehemently opposed the installation of the generator on the terrace floor. It was contended by the learned Counsel for the Plaintiffs that the running of generator is bound to cause vibrations in the building and thereby it will impair the strength of the structure to the detriment of the Plaintiffs. It was contended by them that the generator could be put on the ground floor so as to avoid any such possibility of damage to the structure.

As against this, the learned senior counsel for the Defendant has pointed out that the design of the ground floor of the suit premises is such that it is fully detached building having two gates, one of which is likely to be used for entry while as the other is being used as an exit gate and if the generator is put on the ground floor of the suit property, it is going to block the circulation path of the vehicles and consequently, make the functioning of the workshop or the service centre from the suit premises practically impossible and therefore, it was suggested that the generator set is being put on the terrace with all necessary precautions including the shock absorbers so as to prevent the building from shock on account of vibrations.

I fully agree with the contention of the learned senior counsel for Defendants, I am of the view that in case the generator is put on the ground floor at the back portion, it is going to create obstruction in the circulation and consequently, the vehicles cannot have free movement and thereby the entire purpose of taking premises on rent by the prospective tenant would get defeated. I therefore, feel that the generator has to be necessarily put on the terrace floor of the suit property. The only thing, of which the care is to be taken, by the Defendants is that necessary shock absorbers/shock absorbing methods which make the functioning of the generator as silent as possible must be adhered to according to the BIS standards, so as to prevent any damage to the structure.

I, therefore, do not find that there is any merit in the case except that the objections which have been pointed out by the learned Counsel for the Plaintiffs have been sufficiently attended to and accordingly, the Plaintiffs should have no cause for concern.

For the above mentioned reasons, I allow the application of the Plaintiffs bearing IA No. 16142/2010 permitting them to let out the ground floor and the inner mezzanine floor of the suit property to the prospective tenant w.e.f. 1.5.2006 initially for a period of three years and renewable by another three years on such terms and conditions as may be fixed herein subject to the supervision of the Local Commissioner to be appointed by the Court.

So far as the appointment of the Local Commissioner is concerned, I feel that somebody who is conversant with the local conditions prevailing in Delhi should be appointed as the Local Commissioner so as to not only go through the proposed lease deed and suggest changes to the parties to their satisfaction but also ensure that all the documents which are to be signed by the parties must be signed.

The Local Commissioner shall also take steps to sign such other documents as may be required by the prospective tenant for the purpose of obtaining requisite licence from the local authorities. After signing the proposed lease deed along with the lay out plan demarcating the portion which has to be let out, shall be filed in Court.

Mr. Naveen Chawla, Advocate who is incidentally present in Court, is appointed as the Local Commissioner for the purpose of not only signing the proposed lease deed but also to complete all formalities as may be found by him to be necessary. He can make suitable amendments in the lease conditions to allay the fear of the Plaintiffs if he feels so.

The fee of the Local Commissioner is fixed at `75,000/- apart from other expenses.

With these observations, the application is allowed. Dasti under the signatures of the Court Master.

CS (OS) No. 966/2008

List on 12.8.2011.