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2013 Supreme(Del) 173

IN THE HIGH COURT OF DELHI AT NEW DELHI
A.K. PATHAK, J.
EARTHTECH ENTERPRISES LTD. - Appellant
Versus
KULJIT SINGH BUTALIA - Respondent
RFA 184/2012
Decided On : 6th February, 2013.

Advocates:
Advocate Appeared:
Mr. Anil Ghera and Ms. Parvinder Khatra, Advs.
Mr. Daljit Singh, Sr. Adv. with Mr. Saurabh Shandilya, Adv.

The main legal point established in the judgment is that protection under Section 53-A of the Transfer of Property Act is not available without a registered document, and an admission of being a tenant through unregistered lease agreements and TDS certificates is categorical and unequivocal.

Headnote:

Code of Civil Procedure - Possession - Order 12 Rule 6 - Income Tax Act, 1961 - Section 194-I - Transfer of Property Act, 1882 - Section 53-A

Fact of the Case:

The respondent leased out a property to the appellant, a company, which was later terminated. The appellant claimed to have entered into an oral agreement to sell the property and made part payments towards the sale consideration. The trial court passed a decree of possession in favor of the respondent.

Finding of the Court:

The court found that the appellant had admitted to being a tenant through unregistered lease agreements and TDS certificates. The court rejected the appellant's defense of an oral agreement to sell, stating that protection under Section 53-A of the Transfer of Property Act was not available without a registered document.

Issues: The issues included the nature of the appellant's possession, the validity of the termination of tenancy, and the applicability of Section 53-A of the Transfer of Property Act.

Ratio Decidendi: The court held that the appellant's admission of being a tenant through unregistered lease agreements and TDS certificates was categorical and unequivocal, leading to the dismissal of the appeal.

Final Decision: The appeal was dismissed as the court found that the appellant's possession as a tenant was admitted, and the protection under Section 53-A of the Transfer of Property Act was not available without a registered document.

JUDGMENT

A.K. PATHAK, J.

1. Vide judgment and decree dated 21st March, 2012 trial court has passed a decree of possession against the appellant-defendant, on an application under Order 12 Rule 6 of the Code of Civil Procedure, 1908 (for short, hereinafter referred to as “the Code”), which is under challenge in this appeal.

2. Case of the respondent, as emerges from the records, is that respondent was owner of property bearing no. 39, Sadhna Enclave, New Delhi. He leased out second floor of the said property (hereinafter referred to as the “suit property”) to appellant, a company registered under the Companies Act, 1956 with effect from 1st October, 2002 on a monthly rent of Rs.20,000/-. Subsequently, rent was increased to Rs.30,000/-with effect from 1st April, 2003 pursuant to a fresh lease deed. Thereafter, rent was again increased to Rs.35,000/-with effect from 31st October, 2006. Since the lease agreements were unregistered, tenancy was on month to month basis commencing from 1st day of each calendar month and ending on the last day of same month. Shri O.P. Aggarwal was controlling the appellant-company through dummy directors and it is he who was living in the suit property. Shri O.P. Aggarwal and appellant engaged themselves in fraudulent deals wherein huge amounts belonging to National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) were used for importing petroleum products instead of utilising the same for agricultural purposes. Several criminal and civil proceedings were initiated against them. Respondent asked the appellant to vacate the suit property but to no avail. On 7th August, 2008 respondent terminated the lease by serving a notice under Section 106 of the Transfer of Property Act, 1982 on the appellant. Appellant was called upon to vacate the suit property on or before st August, 2008. Instead of vacating the suit property, appellant filed a false and frivolous suit for specific performance. Appellant used to deduct TDS from the rent paid during the pre-notice period which was evident from the TDS certificates. Since appellant failed to vacate the suit property suit for ejectment was filed.

3. Respondent also claimed damages/mesne profit @ Rs.1 lac per month and the suit in this regard is still pending.

4. In the written statement, appellant denied that suit property was let out only for residential purpose. It was alleged that physical and actual possession of the suit property was handed over to appellant on 3rd September, 2002 on the basis of oral understanding to lease out the premises. On the same day appellant paid Rs.20,000/-in cash towards rent along with a cheque bearing no. 737198 dated 3rd September, 2002 drawn on Indian Overseas Bank, Greater Kailash – II Branch, New Delhi for Rs.3 lacs as security deposit. A formal lease agreement was executed on 18th September, 2002 though physical possession of the suit property had been handed over to appellant on 3rd September, 2002. Lease was for a period of two years. Appellant objected to the contents of lease agreement as it was not properly worded, inasmuch as, it was not mentioned therein that the lease was for commercial purpose. Respondent impressed upon the appellant that the lease was a sham document executed for income-tax purposes and the Municipal Corporation of Delhi and appellant can use the suit property for commercial purposes. Sometime in the last week of March, 2003 respondent represented that he would execute a comprehensive lease agreement which will be self contained if appellant increases the rent from Rs.20,000/-to Rs.30,000/-per month with effect from 1st April, 2003. Appellant agreed to this proposal, accordingly, in supersession of earlier lease agreement dated 18th September, 2002 fresh lease deed dated 31st March, 2003 was executed even though earlier lease agreement was for a period of two years and was continuing as on that date. Respondent also got some undated blank stamp papers signed from the authorised


















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