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Hyundai Motor India Limited Vs. Opal Metal Engineering Pvt. Ltd.

LegalCrystal Citation : legalcrystal.com/705355

Court : Delhi

Decided On : Aug-22-2008

Reported in : AIR2009Delhi1; 2008(106)DRJ365

Judge : Hima Kohli, J.

Acts : Indian Stamp Act, 1899 - Sections 35; Delhi Rent Control Act; Transfer of
Property Act, 1882 - Sections 106, 108 and 116; Code of Civil Procedure (CPC) -
Order 7, Rules 9 and 11

Appeal No. : IA 1262/2007 in CS(OS) 2379/2006

Appellant : Hyundai Motor India Limited

Respondent : Opal Metal Engineering Pvt. Ltd.

Advocate for Def. : Rohit Choudhry, Adv.

Advocate for Pet/Ap. : A.S. Chadha, Sr. Adv.,; Vipin Nair,; Kunal Sinha,;

Disposition : Application dismissed

Judgement :

Hima Kohli, J.

1. By this order the Court proposes to dispose of an application filed by the defendant
under Order 7 Rule 11 CPC, whereunder the defendant has sought rejection of the
plaint on the ground that the plaintiff cannot file any proceedings seeking to hold the
suit property after expiry of the lease period i.e. after 31.12.2006 and that as the
lease agreement is an unregistered document, and is hit by the provisions of Section
35 of the Indian Stamp Act, 1899 (in short `the Stamp Act'), the suit is barred by law.

2. A brief reference to the facts of the case is necessary before dealing with the
present application. The plaintiff has instituted the present suit against the defendant
praying inter alia for the following reliefs:

(a) for a permanent injunction restraining the defendant, its men or agents, and all
other persons acting on its behalf from preventing and/ or interfering with the
plaintiff's peaceful enjoyment and possession of the suit schedule property situated at
Plot No. H-4, Block B-1, Mohan Co-operative Industrial Estate, Mathura Road, New
Delhi-110044.

(b) For a declaration that the plaintiff cannot be evicted from the aforesaid suit
schedule property except by the due process of law.

(c) direct the defendant for specific performance of the Agreement/ Lease Deed dated
15.12.2003 by extending the Lease period of the suit schedule property till
31.12.2009, as sought for in letter dated 29.9.2006.

(d) any other order or relief in favour of the plaintiff and against the defendant which
this Hon'ble Court deems fit and proper in the circumstances of the case.

3. It is the case of the plaintiff that the plaintiff approached the defendant who is the
owner of a property situated at Plot No. H-4, Block B-1, Mohan Co-operative
Industrial Estate, Mathura Road, New Delhi-110044, for taking on lease, an area
measuring 22,950 sq.ft. A lease deed dated 15.12.2003, was executed between the
parties in respect of the suit property. Article 1.1 of the lease deed stipulated the
term of the lease for a period of three years w.e.f. 1.1.2004. Article 1.3 provided for
renewal of the lease deed with escalation of the rent @ 15% over the last paid rent
while the other terms and conditions of the renewal were agreed to be mutually
decided by the parties. By letter dated 29.9.2006, the plaintiff approached the
defendant for renewal of the lease for a further period of three years and agreed to
increase the rent by 15% per annum, over the last paid rent. The said letter was
replied to by the defendant vide letter dated 20.10.2006, stating inter alia that the
defendant was willing to renew the lease for a further period of three years only on
the prevailing market rent. The plaintiff rejoined to the aforesaid reply of the
defendant vide letter dated 14.11.2006, reiterating its offer for renewal of the lease at
the increased rent of 15% p.a. but not at the prevailing market rent. It is averred in
the plaint that as the plaintiff apprehended that the defendant might take coercive
steps to dispossess it from the suit property, it approached this Court by way of the
present suit stating inter alia that the action of the defendant in insisting upon
demanding the prevailing market rate as the rent for the suit property is contrary to
the lease agreement dated 15.12.2003, entered into between the parties.

4. Notice was issued in the aforesaid suit on 20.12.2006. While appearance was
entered on behalf of the defendant on 6.2.2007, the present application came to be
filed prior thereto, on 3.2.2007. The stand of the defendant in its application is that
the entire case of the plaintiff is based on an unregistered lease agreement dated
15.12.2003, which was for a limited period of three years, which period expired on
31.12.2006. Counsel for the defendant states that the suit property does not enjoy
any protection under the tenancy laws or the Delhi Rent Control Act and the plaintiff
is bound to hand over the physical possession thereof to the defendant, immediately
after expiry of the period of lease. He contends that the entire cause of action stated
in the plaint is of no legal consequence as the renewal sought by the plaintiff cannot
be granted. Hence it is stated that the suit is barred under the provisions of Order 7
Rule 11 CPC.

5. Counsel for the defendant further urges that the relief of specific performance
sought by the plaintiff is barred by law, as the lease deed was not only an
unregistered document but also an unstamped document, and therefore is hit by the
provisions of Section 35 of the Stamp Act. He further states that the lease deed being
an unregistered document, the effect thereof was that the tenancy of the plaintiff was
on a month to month basis even during the period of validity of the lease deed. In
support of his submission that a document which is neither registered nor written on
a stamp paper cannot be looked into or admitted for evidence for any purpose in view
of the provisions of Section 35 of the Stamp Act, reliance is placed on the judgment
entitled Ram Rattan v. Parma Nand reported as and Smt. Jamna Bai v. Tulsi Ram
reported as .

6. It is also submitted by counsel for the defendant that Section 108 of the Transfer of
Property Act, 1882 (in short `the Act') defines the rights and liabilities of a lessor and
a lessee and in the present case, in view of Section 108(q) of the Act, the plaintiff
lessee is bound to put the defendant lessor into possession of the property.

7. Per contra, counsel for the plaintiff opposes the present application and states that
the same is not maintainable. He submits that the present suit instituted by the
plaintiff is not liable to be rejected under the provisions of Order 7 Rule 11 CPC. In
support of his contention that the entire plaint has to be read as a whole and part of
the plaint cannot be rejected, he relies on the following judgments:

(i) Roop Lal Sathi v. Nachhattar Singh Gill (1982) 3 SCC 487

(ii) Sopan Sukhdeo Sable and Ors. v. Asst.Charity Commissioner : AIR2004SC1801

(iii) Popat and Kotecha Property v. SBI Staff Association : (2005)7SCC510

8. It is stated by counsel for the plaintiff that assuming that the relief prayed for in
the prayer `c' of the prayer clause in respect of specific performance of the lease
deed is not available to the plaintiff in view of the bar of the provisions of Section 35
of the Stamp Act, even then, under the provisions of Order 7, Rule 11, CPC, a part of
the suit cannot be rejected as the entire plaint has to be rejected. He states that in
the present proceedings, the Court shall have to decide on merits as to what is the
status of the plaintiff who came into possession of the suit property by virtue of an
unregistered lease. In other words, would its status be that of a tenant or a
trespasser, which issue shall have to be decided after evidence is led in the matter
and the pleadings and the documents are considered in the said context.

9. In support of his submission that at best the plaintiff is a 'tenant holding over' the
property, counsel for the plaintiff refers to Section 116 of the Act and states that
assuming without admitting that the plaintiff is a tenant on a month to month basis,
even then the suit instituted by it cannot be held to be barred by law, as nothing
precludes the plaintiff from seeking the reliefs as enumerated in prayers `a' and `b' of
the plaint. He asserts that as the plaintiff is continuing to pay the defendant rent on a
month to month basis @ Rs. 5,17,500/- per month by increasing the rate of rent by
15% over the last paid rent, the plaintiff is not a trespasser and there exists a juridical
relationship of landlord and tenant between the parties which the plaintiff has to
establish ultimately in the suit. In support of the aforesaid submission and the effect
of non-registration of a document, such as a lease deed, he refers to the judgment
rendered by the Supreme Court in the case of Anthony v. K.C. Ittoop & Sons and Ors.
reported at : (2000)6SCC394 .

10. In rejoinder, counsel for the defendant states that the plaintiff cannot claim the
benefit of being a tenant merely on the ground that he is making payments to the
defendant on a month to month basis. He emphasises the fact that the said payments
are not accepted by the defendant as rent, but towards usage and occupation charges
of the premises. He also states that as the reliefs sought in prayers `a' and `b' are not
independent of the relief sought in prayer `c', but a consequence thereof, and if it is
held that the prayer `c' is barred by the provisions of Section 35 of the Stamp Act, an
automatic corollary thereof shall be that the reliefs sought by the plaintiff in prayers
`a' and `b' shall not be available to it. It is also stated on behalf of the defendant that
the judgment in the case of Anthony (supra) is not applicable to the facts of the
present case as the same deals with the case of statutory tenants which is not so in
the case in hand.

11. I have heard the learned Counsels for the parties and have perused the
application as also the judgments referred to by the parties. For the purposes of
examining the present application, a perusal of the provisions of Order 7 Rule 11 CPC
is necessary.

Order 7 Rule 11: Rejection of plaint.- The plaint shall be rejected in the following
cases:

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the
Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint is written upon paper
insufficiently stamped, and the plaintiff, on being required by the Court to supply the
requisite stamp-paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

(e) where it is not filed in duplicate;

(f) where the plaintiff fails to comply with the provisions of Rule 9.

12. In the present case, the defendant invokes Clause (d) of Rule 11 of Order 7, CPC,
which mandates that a plaint shall be rejected where the suit appears from the
statement in the plaint to be barred by any law. The law as to the exercise of powers
under Order 7 Rule 11 CPC is well settled. It has been held that there cannot be any
segregation and dissection of the cause of action or of the various paragraphs in the
plaint and that the entire plaint as exists on the record has to be considered and not
any particular plea taken therein. Refer Roop Lal Sathi v. Nachhattar Singh Gill
(1982) 3 SCC 487. It is not permissible to cull out a sentence and to read it out of the
context in isolation Refer Raptakos Brett & Co. Ltd. v. Yanesh Property :
AIR1998SC3085 and Popat and Kotecha Property v. SBI Staff Association :
(2005)7SCC510 . It has also been held that while dealing with the application under
Order 7 Rule 11 CPC, the question which is to be decided is whether a real cause of
action has been set out in the plaint or something illusionary has been stated I.T.C
Ltd. v. Debts Recovery Appellate Tribunal : AIR1998SC634 .

13. In the present case, while examining the averments in the plaint in the
background of principles as laid down above, it has to be seen whether the suit
instituted by the plaintiff is barred by any law. There is no quarrel with the
proposition that the provision of Section 35 of the Stamp Act mandates that no
instrument chargeable with duty shall be admitted in evidence for any purpose or
shall be acted upon, unless the same is duly stamped. Counsel for the defendant is
justified in stating that the lease deed in the present case being an unstamped and
unregistered document, cannot be looked into 'for any purpose' and particularly, for
the relief prayed for by the plaintiff in prayer `c' of the plaint. However, the matter
does not rest there as the plaintiff has sought two other reliefs for permanent
injunction and declaration which have also to be examined.

14. The averments in the plaint show that on the date of the institution of the plaint,
the plaintiff had a legal and valid cause of action in its favour, as is apparent from a
perusal of para 15 of the plaint. The tenure of the lease deed dated 15.12.2003,
having expired, even if it is assumed that the plaintiff is a 'tenant at sufferance' or a
'tenant holding over', as provided for under Section 116 of the Act, it cannot be said
that the suit instituted by the plaintiff is barred by law merely because of the
provisions of Section 108(q) of the Act. As held in M.A. Irani and Anr. v. Manekji
Edulji Mistry and Ors. : [1975]2SCR341 if a lessee remains in possession after
determination of the term, he is under the common law, a tenant at sufferance. The
expression `holding over' is used in the sense of retaining possession. If a tenant after
the termination of the lease is in possession without the consent of the landlord, he is
a tenant by sufferance. It is only where a tenant will continue in possession with the
consent of the landlord, that he can be called `a tenant holding over' or `a tenant at
will'.

15. In Satish Chand Makhan and Ors. v. Govardhan Das Byas and Ors. :
AIR1984SC143 it was held that the defendants therein were tenants holding over
under Section 116 of the Act and therefore, it was necessary for the plaintiff landlord
therein to serve a notice under Section 106 of the Act. While reiterating that a person
who holds over under an unregistered lease and continues in possession by paying
monthly rent, the holding over must be held as a tenancy from month to month, the
Supreme Court observed that the defendants therein were tenants at sufferance. In
R.C. Bhupal Prasad v. State of AP : AIR1996SC140 the Supreme Court held that the
lessee holding over with the consent of the lessor is in a better position and the
tenancy on sufferance is converted into a tenancy at will by the assent of the landlord,
but the relationship of the landlord and tenant is not established until the rent was
paid and accepted. It was also observed that the possession of a tenant who has
ceased to be a tenant is protected by law. Although he may not have a right to
continue in possession after the termination of the tenancy, his possession is juridical.

16. The averments in the plaint when taken note of as indicated above, clearly
disclose a cause of action entitling the plaintiff to maintain the present suit. It cannot
be held that merely because the provisions of Section 108(q) of the Act require a
lessee of an immovable property to put the lessor in possession of the property on
determination of the lease, the present suit is not maintainable. It is a different
matter as to whether or not the plaintiff will be able to sustain the action, as
sustainability of the action shall depend on the evidence led in the case. Whether the
plaintiff shall be in a position to establish that it is entitled to the reliefs sought in
prayers `a' and `b' of the plaint, irrespective of the relief sought in prayer `c', shall be
for it to establish at the time of leading evidence. However, this is not the stage to
examine the said aspect, as the suit is not hit by the infirmities provided for in any of
the four clauses of Rule 11 of Order 7, CPC.

17. It may be emphasized that the object of the said provision is to keep out
irresponsible law suits. In a way, it is to be used as a handy tool by the courts to
segregate the grain from the chaff, on a purely prima facie examination of the
statements made in the plaint. Hence, the effect of Section 35 of the Stamp Act shall
have to be examined after the suit is put to trial to decide if the relief sought by the
plaintiff in prayer `c' can be granted. The said plea directed against the relief sought
in prayer `c' in itself is however insufficient to oust the plaintiff at this stage, insofar
as reliefs sought in prayers `a' and `b' are concerned, as the said reliefs cannot be
held to be consequential to the relief sought in prayer `c'. Hence, even if it is held
that no relief can be granted to the plaintiff under prayer `c', in view of the bar of
Section 35 of the Stamp Act, the suit cannot be rejected for the reason that only a
part of the plaint cannot be rejected and it is obligatory for the Court to reject the
plaint as a whole, while examining the same under Order 7 Rule 11, C.P.C.

18. In the aforesaid circumstances, reading the entire plaint as a whole, it cannot be
held that the suit, as filed by the plaintiff, is barred by any law and is liable to be
rejected, lock, stock and barrel. The statutory inhibitions imposed by the provisions of
Section 35 of the Stamp Act cannot be held to have such fatal consequences as to
lead to rejection of the plaint, under Order 7, Rule 11, C.P.C. For the aforesaid
reasons, the application filed by the defendant is rejected.

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