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High Court Of Delhi
VIDYA WATI - Appellant
Versus
HANS RAJ (DECEASED) THROUGH HIS LRS - Respondent
Civil Miscellaneous (Main) 256 of 1993
Decided On : 02/08/1993
LANDLORD-TENANT - LEASE - BUSINESS OR SHOP - INTERPRETATION OF AGREEMENT - DOMINANT INTENTION - FACTUAL FINDINGS - SECOND APPEAL - RES JUDICATA - ESTOPPEL - LIMITATION - MINORITY - ELECTION TO CONTINUE SUIT - RESTRAINT OF TRADE.
Fact of the Case:
The dispute arose from an agreement between Nityanand, the owner of a shop, and Hans Raj, a barber, for the use of the shop and its equipment for running a hairdressing business under the name "Andre Hair Dresser and Cosmetic Store." The agreement was renewed every eleven months, and the terms included payment of Rs. 500 per month, exclusive possession of the shop, and a restriction on the tenant from using the premises for any other purpose. After Nityanand's death, his successor-in-interest filed a suit for possession of the shop, while Hans Raj filed a suit seeking a declaration of tenancy. The trial court dismissed Hans Raj's suit and decreed the suit filed by Nityanand's successor.
Finding of the Court:
The High Court held that the dominant intention of the parties was to create a lease of the business and not of the shop. The court relied on the terms of the agreement, which showed that the focus was on the hairdressing business, including the use of specific tools and equipment, rather than on the shop itself. The court also considered the fact that the tenant was restricted from using the premises for any other purpose.
Issues: 1. Whether the agreement between Nityanand and Hans Raj created a lease of the business or a lease of the shop? 2. Whether the finding of the first appellate court that the tenant had exclusive possession of the shop was a finding of fact and not subject to challenge in a second appeal? 3. Whether the terms of the agreement, including the restriction on the tenant's use of the premises, showed that the dominant intention of the parties was to create a lease of the business? 4. Whether the tenant's failure to furnish a fresh address after becoming a major rendered the appeal liable to be dismissed? 5. Whether the tenant's election to continue the appeal after attaining majority was barred by limitation?
Ratio Decidendi: 1. The dominant intention of the parties in an agreement is to be determined by examining the terms of the agreement and the surrounding circumstances. 2. A finding of fact by a lower court is generally not subject to challenge in a second appeal. 3. The terms of the agreement, including the restriction on the tenant's use of the premises, showed that the dominant intention of the parties was to create a lease of the business and not of the shop. 4. The tenant's failure to furnish a fresh address after becoming a major did not render the appeal liable to be dismissed, as the interests of all appellants were common and they were represented by the same counsel. 5. The tenant's election to continue the appeal after attaining majority was not barred by limitation, as there is no specific limitation period prescribed for such an election.
Final Decision: The High Court allowed both appeals, set aside the judgments and decrees of the first appellate court, and restored the judgments and decrees of the trial court. The appellants were awarded costs in both appeals.
( 1 ). These two appeals arise from common judgment of an Additional District Judge dated March 31, 1983, by which he accepted the appeals RCA No. 14/73 and RCA No. 22173 and the suit filed by Nityanand, predecessor-in-interest of the appellants in RSA No. 248173 was dismissed while Suit No. 492/69 filed by Hans Raj predecessor-in-interest of the respondents in RSA No. 249/73 was decreed. For the purpose of facility I would describe the appellants i. e. successors-in-interest of Nityanand in RSA No. 248173 as "landlord" and the successor-in-interest of Hans Raj as "tenant".
( 2 ). The question which would arise for decision in these appeals is as to whether there was a tenancy created in favour of the tenant in respect of the shop or a tenancy was created in respect of the business being run in the said shop ?
( 3 ). The undisputed facts arc that Nityanand was the owner of the shop in question bearing No. 121/71 Sunder Nagar Market, New Delhi and he had given this shop to one Bahadur who was married to a European lady and he had started the business of cosmetics and hair dressing under the name and style of M/s. Andre Hair Dressing and Cosmetic Store in the said shop somewhere in the year 1958. The shop was well-equipped with all modern tools, machinery fittings fixtures furnitures and a telephone and an air-conditioner for running a sophisticated barbar shop. Bahadur had sold the said equipments for running the barbar shop and also the name under which the said shop was being run to Nityanand and Nityanand for about two years had run the barbar shop under the same name and style but not so successfully. At one point of time his brother was looking after the business. Still it appears that the business was being not run smoothly and Nityanand started looking for some person who could run the said business. It appears that at the relevant time the rent of the similar shop in the said market was about Rs. 125 or so per mensem.
( 4 ). Hans Rajwas at that time running a barbar shop at the Mall, Simla and ultimately he was given a telegram by Nityanand to find out whether he would be interested in taking over this business in this shop and on September 1961, an agreement was entered into between Nityanand and Hans Raj in which all important terms agreed upon between the arties were entered into and interpretation of the said document is the real issue between the parties. It is also admitted fact that initial agreement was executed for a period of eleven months and after expiry of eleven months every time a similarly worded agreement was executed as is Ex. P1 and latest agreement in this connection was executed on March 23, 1967. which is Ex. P1. In the suit filed by Hans Raj all the terms of this agreement have been reproduced. Both the parties are relying on the terms of this agreement in support of their respective pleas. So, it is necessary to reproduce the said agreement:
"this DEED OF AGREEMENT is made on this 23rd day of March, 1967, between Nityanand son of Gopi Ram, resident of 10/11, Bengali Mal Market, New Delhi (hereinafter called the first Party ) of the first part AND HANS RAJ son of Shri Nathu Ram at present resident of Jangpura, New Delhi (hereinafter called the second Party ) of the second part.
WHEREAS the first Party is the owner of the shop at No. 12/171, Sunder Nagar Market, New Delhi and he is running a business of Cosmetics Hair Dressing under the name and style of M/s. Andre Hair Dresser and Cosmetic Stores in the said shop (being run in the ground floor of 12/171 except a portion consisting of one room in possession of Mittal Stores ).
AND WHEREAS the first Party has fully equipped the said shop with all sorts of modern tools, machinery, fans, air conditioners, fittings, fixtures, furniture and a telephone, etc. (the list of which is given in Schedule A hereto) and has invested more than a sum of Rs. 32,000 in the said business.
AND WHEREAS the said shop enjoys a great goodwill and has a f
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