Pacific Develcon Pvt. Ltd. vs Indus Renaissance Partners Entertainment Pvt. Ltd. and Another

S. Ravindra Bhat, J.

I.A. 2819/2008 (Order XII Rule 6 CPC)

The plaintiff seeks, through this application, a decree on admissions in terms of Order XII Rule 6 CPC (hereafter ``CPC''`).

According to the suit averments, the plaintiff, owner of a 403.380 sq. mts. plot,(upon which it constructed a building) being Plot No. 11, Local Shopping Centre, Sector C, Pocket 6 and 7, Vasant Kunj, New Delhi (hereafter referred to as ``the premises''`) leased it to the first defendant, through a registered lease deed dated 30.8.2006. According to the plaintiff, the tenancy began on 01.09.2006; rent was to be paid from that day. The lease rent agreed was Rs. 18,51,000/- per month payable in advance by the 7th of each tenancy month, according to the English calendar month. The plaintiff avers that the defendant/lessee secured possession of the property on 30.08.2006 itself. The plaintiff further avers that the defendant was, in terms of Clause 2.2 obliged to pay the rent in a timely manner. Clause 2.2(iv) provided that in case of default the lessee was to pay 18% interest on overdue rent. The plaintiff alleges that defendants fell in arrears of rent for a six months period i.e. September 2006 to February 2007; they promised to pay it. However, the plaintiff received a cheque for rental in respect of the tenancy month April 2007. The plaintiff alleges despite its efforts the defendant did not honour its commitments and consequently on 11.6.2007, it exercised the option to terminate the lease with immediate effect in terms of Clause 4.2(i) of the lease deed. The defendant was asked to hand over the vacant possession of the property on or before 16.6.2007 and pay the arrears of the amounts due to the plaintiff. It is also alleged that the notice was duly received by the first defendant on 13.6.2007.

The plaintiff avers that on 14.6.2007, the defendants replied to the termination notices they did not dispute existence of the registered lease deed, receipt of the termination notice, non-payment of rents for two successive months i.e. May and June 2007 and non-payment of the rent for the period September 2006 to February 2007. It is alleged that the defendants sought to raise certain needless controversies. In this background the plaintiff claims for a decree directing the defendants to remove their goods and belongings from the property and hand over vacant physical possession to it and also for a money decree for various amounts.

In the application under Order XII Rule 6 the plaintiff relies upon an order of this Court dated 2.11.2007 directing the defendants to pay rent/occupation charges for the period 01.09.2006 to 30.01.2007 amounting to Rs. 92,55,000/- within two months from the date of the order and pay other amounts. It avers that the defendants preferred an appeal to the Division Bench being FAO 490/2007. In that appeal, the Division Bench modified the time schedule. The plaintiff avers that the defendant has only partially complied with the original order by depositing occupation charges of October 2007 on 05.12.2007 as against the dead line imposed, namely, 17.11.2007. It is further alleged as per the Division Bench order by 08.01.2008, the defendants were to pay the plaintiff a total amount of Rs. 1,48,08,000/- against which they had only pay Rs. 14,31,563/-. It is claimed that the defendant is carrying on business from the premises and that in the written statement, filed in the suit, has not denied the essential plaint averments. According to the plaintiff, the controversies and defences raised are irrelevant. The defendants'' counter claim also does not in any manner detract or undermine its admission. The plaintiff, Therefore, contends that it is entitled to a partial decree of possession as against the defendants directing them to hand over the premises with fittings and fixtures installed in the property. The plaintiff also seeks a money decree in its favor and against the defendants for the sum of Rs. 2,26,31,437/- along with interest @ 18% per annum.

The defendants'' written statement and reply to the application contains similar averments. It alleges that building work had not been completed till February 2007 and that electricity connection was issued by the BSES Rajdhani Power Limited on 11.1.2007. According to the defendants, the electricity meter was installed on 17.1.2007. Similarly, it relies alleged installation of water meter later. According to the defendants, the plaintiff had received a notice on 3.4.2007 from the building section of the Delhi Development Authority (hereafter ``DDA''`) concerning the property, directing it to appear before the Department. Since the plaintiff did not allegedly take any action, the defendants filed a suit. It is alleged that the defendants have suffered financially due to breach and failure of the agreement, by the plaintiff. According to the defendants, the extent of loss or damage suffered by them are up to Rs. 2,25,00,000/-. The defendant relies on Clause 3.1 of the lease deed to say that the Lesser i.e. the plaintiff had to arrange for installation for water and electricity meters and A/C plant by 30.09.2006.

According to the defendants since these conditions were not complied with, it was not under an obligation to pay the rents till April 2007. The defendants have counter claimed against the plaintiff to the tune of Rs. 3,50,00,000/- on account of the alleged financial losses due to the latter''s careless and negligent attitude and its failure to ensure strict compliance with the terms of the registered lease deed, particularly, Clause 3.1(i).

Mr. Sanjay Jain, learned senior counsel for the plaintiff reiterated the averments in the suit and the application. He additionally relied upon Clause 4.2 of the registered lease deed which provides for termination otherwise then by expiry of the lease deed. Under stipulation Sub-clause (i) the Lesser can terminate the lease deed without any notice if the monthly rental is in arrears of two successive months; under Sub-clause (ii) the Lesser can terminate the lease deed by giving 30 days notice in case the lessee is in breach of any of the conditions of the deed and the breach is not renotified by the lessee within the notice period. Counsel contended that the defendants acted in breach of the stipulation requiring payment of rent. In terms of Clause 2.2(i) the rent was payable effective from 01.09.2006. Accordingly, the defendants could not have continued in the premises without paying rent.

Learned Counsel also submitted that the basic facts requisite for a decree on admissions, namely, averments concerning non-payment of rents; issuance of termination notice, receipt of termination notice were not in dispute. They constituted clear admission. It was further contended that moreover the defendants were aware that the plaintiff had entered into an tripartite agreement with the Punjab National Bank and the defendants. In terms of the said agreement, dated 5.2.2007, the bank lent Rs. 11 crores to the plaintiff. According to the tripartite agreement, the rental amounts payable under the registered lease deed between the parties had to be appropriated by the bank. Therefore, the non-compliance with agreed terms was causing acute financial hardship and constraints to the plaintiff.

Learned Counsel also relied upon the orders of the Court including directions of the Division Bench requiring the deposit of amounts which have been flouted. He submitted that these constituted sufficient materials for the Court to conclude that a decree could be issued against the defendants.

Learned Counsel relied upon the decision reported as Union Bank of India Vs. Sushila Goela and Others, and Uttam Singh Duggal and Co. Ltd. v. United Bank of India and Ors. 2007 SCC 120.

Learned Counsel for the defendants Mr. Asthana relied upon the reply to the application and the written statement as well as the counter claim filed in the case. According to him, the plaintiff acted in breach o the agreement in not replying to the notice of the DDA. Counsel also contended that the defendants were relieved from the obligation to pay rent till electrical connection with meter and water meter were installed in the premises. According to the defendants, this happened much later, consequently rent was paid in April and May 2007. Learned Counsel submitted that the notice issued in this case on 11.06.2007 was not valid and proper and so called exercise of the right to terminate the lease deed was illegal.

Order XII Rule 6 confers discretion upon the Court to decree any suit to the extent of admissions made. The discretion is to be exercised judiciously; the power, however, is wide and encompass not only pleadings but other materials, The Supreme Court has, however, held that it is only an unequivocal and clear admission which can warrant proper exercise of discretion Ref: Balraj Taneja and Another Vs. Sunil Madan and Another, . Equally a fine distinction between a specific admission on the one hand and vague averments, which if proved, could tantamount to admission by the party making it on the other have been made. The Court should consider granting decree on admissions in the first category to never grant a decree in the later category.

In this case, Clauses 2.2 and 4.2 are material for the purpose of deciding this application. They read as follows:

2.2 Rent

(i) The Lessee agrees to pay a sum of Rs. 18,51,000/- (Rs. Eighteen Lakhs Fifty One Thousand only) as the monthly rental for each month of the Lease Period (Monthly Rental), in the manner specified by the Lessor. The tenancy month shall be the English calendar month.

(ii) The Monthly Rental for each English calendar month shall be payable on the 7th day of the respective English calendar month to which the Monthly Rental pertains (Due Date) after deduction of tax at source.

(iii) The rent for the Premises shall commence from September 01, 2006.

(iv) In case the Lessee fails to pay rent, in the manner specified by the Lessor, by the due Date as specified above, the Lessee shall be liable to pay, interest at the rate of 18% per annum, on the rent overdue, to be calculated from the Due Date up to the date of actual payment of the complete amount so due. This obligation of the Lessee to pay interest on delayed payments is without prejudice to the other rights of the Lessor.

4.2 Termination otherwise than by expiry. This Lease Deed may be terminated before the expiry of the Lease Period:

(i) by the Lessor, without any notice, if the Monthly Rental (or part thereof) is in arrears for two successive months.

(ii) by the Lesser after giving notice of 30 days, in case the Lessee is in breach of any of the conditions of this Lease Deed, and such breach is not rectified by the Lessee within the aforesaid notice period of 30 days.

(iii) by either Party by giving two months notice in writing to the other Party, in case a Force Majeure Event subsists for a period of at lease 30 consecutive days.

''Force Majeure Event'' shall mean act of God, natural calamity, war, riot, civil commotion, court order, judgment, any direction of any competent authority, breakdown of any equipment or facility, or any other occurrence beyond the reasonable control of the Party (except commercial hardship).

(iv) In case, for whatever reason, any government authority requires vacation of the Premises.

The pleadings do not reveal any dispute as regards the following aspects:

(i) Execution of the lease deed on 30.08.2006;

(ii) Handing over of possession to the defendants by the plaintiff on the same day;

(iii) The stipulated obligation to pay rent effective from 01.09.2006 (as per Clause 2.2(iii) of the lease deed;

(iv) Withholding of rents for period September 2006 to February 2007;

(v) Non-payment of rents for the months of May and June 2007;

(vi) Issuance of notice dated 11.06.2007 terminating the lease, by the plaintiff and its receipt.

The defendants'' contention appears to be two fold, one that the plaintiff was in breach of Clause 3.1 as regards the availability of amenities like electricity and water. It relies on some unspecified arrangement. Interestingly in its reply dated 16.6.2007 to the legal notice, the defendants contended some understanding whereby it was relieved the obligation of paying rent for the period till February 2007. However, no such case is set up either in the written statement or in the reply or counter claim. In stead it blandly alleges that the breach of Clause 3.1 relieved it of the duty to pay the rent, according to the agreement. The second contention concerns the plaintiff''s fault for which it was threatened action by the DDA. The defendants allegedly filed a suit to secure its interest. No details of such alleged illegality have however been pleaded. Moreover, the defendant has not placed on the record anything suggestive of its defence, relieving it from the liability to pay monthly rent in such contingencies.

By an order dated 2.11.2007 this Court had directed the defendants to pay rent for the months February 2007 and rent for the period from 1st May, 2007 till 30th September 2007 within two months. By an order dated 2.11.2007, the defendants were directed to pay arrears of rent including rent for the month of February 2007 and further rent from May 2007 onwards along with 18% interest per month. That order was appealed against. The Division Bench modified the directions of this Court in the following terms by its order dated 11.12.2007:

It is pointed out by the learned Counsel for the appellant-defendant that the appellant has valid claims against the respondent and in that view of the matter the learned Single Judge should not have directed for payment of alleged arrears from 1st September, 2006 till 31st January, 2007 amounting to Rs. 92,55,000/-. He has also raised certain grievances on rent for the month of February 2007.

However, from the records we find that the appellant had issued a cheque towards rent for the month of February, 2007 but the said cheque on presentation was dishonoured. In these circumstances, the appellant should pay rent for February, 2007 and also for the period after May, 2007 onwards. The aforesaid payment for February, 2007 and for the period thereafter can be made within four weeks from today. For the period from 1st September, 2006 till 31st January, 2007, we grant the appellant three months time from today to deposit Rs. 92,55,000/- in this Court towards alleged arrears of rent. Out of the deposit, 50% of the amount will be released to the respondent-plaintiff and the balance 50% will be kept in a fixed deposit account so as to earn maximum interest. Payment of this 50% with interest will abide by the decision of the suit and the balance 50% to be released to the respondent-plaintiff will also abide by and will be subject to the decision rendered in the suit, counter claim or set of, if any, filed. In fact during the course of arguments, learned Counsel for the parties have agreed to the aforesaid order and the terms mentioned therein.

The plaintiff alleges that as against the total amounts which are in excess of Rs. 1 crore only about Rs. 14 lakhs have been deposited in the Court.

An overall conspectus of the facts show that there is no denial of the plaintiff''s averments on material particulars such as execution of the registered lease deed; rate of rent Rs. 18,51,000/-; non-payment of rent for specified period; issuance and receipt of the notice of termination on 11.6.2007 by the plaintiff to the defendants; the plaintiff''s power under Clause 4.2 to terminate the lease deed and lastly the directions of Court to pay the amounts.

Taking the averments in the written statement (as a whole as this Court undoubtedly has to by virtue of the judgment reported as Dudh Nath Pandey (Dead) by Lrs Vs. Suresh Chandra Bhattasali (Dead) by Lrs, there is nothing which contradicts the arguments on admissions as regards the material facts entitling a direction to the defendants to hand over possession. The defendants can arguably succeed only if they point out to some ambiguity in the admissions concerning essential particulars in that regard. The decision in Uttam Singh Duggal''s case is also an authority on the point that the Court is not constrained only by the pleadings and can well scrutinized by other materials to infer admission. Taken together the pleadings and the conduct of the defendants, which does not dispute non-compliance with the Division Bench''s directions, amount to admissions as regards the material facts necessary for a part decree of the suit. The defendants'' interpretations concerning Clause 3.1 are facially untenable. The registered lease specifically obliges the monthly payment of rent w.e.f. 1.9.2006; failure to comply empowers the lessor, under Clause 4.2 to terminate the lease. For Clause 3.1 is to be read as suggested by the defendants, there should be an explicit of its overbearing other conditions. Such intention is not forthcoming on a plain reading of the document. Therefore, its contention on this score is insubstantial. The Court holds that the defendants'' admissions are sufficient to necessitate the order sought in the application.

In view of the above discussion, the application is entitled to succeed. The defendants are forthwith directed to hand over vacant and peaceful possession of the suit property to the plaintiff. is No. 2819/2008 is, Therefore, allowed.