2015 Supreme(Del) 2202
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG, MUKTA GUPTA, JJ.
M/S SPREADHEAD DIGITAL STUDIO PVT LTD. - Appellant
Versus
H.K. MITROO - Respondent
RFA(OS) 10/2015
Decided on : 17.08.2015
Mr. Samrat K.Nigam, Ms. Ayshwarya Chandar and Ms. Ankita M.Bahl, Advocates
Mr. P.S. Bindra and Ms. Shweta Priyadarshini, Advocates
The main legal point established in the judgment is the admissibility of oral evidence to prove terms not inconsistent with the written instrument, as provided in Section 92 of the Indian Evidence Act.
Headnote:
specific performance - lease agreement - Indian Evidence Act, Section 92, Limitation Act, Article 54 - The court discussed the existence of an oral agreement to sell the premises, admissibility of oral evidence to prove certain terms not inconsistent with the written instrument, and the limitation period for filing a suit for specific performance.
Fact of the Case:
Spearhead filed a suit for specific performance of an oral agreement to sell a leased property and injunction against the respondent. The respondent disputed the oral agreement and filed a suit for possession, arrears of rent, and damages. The court rejected the plaint, citing limitation and lack of cause of action.
Finding of the Court:
The court found that the suit was barred by limitation as it was filed well beyond the three-year period from the date the cause of action arose. The court also held that no cause of action was made out and the terms of the oral agreement were not clear.
Issues: The issues before the court were whether Spearhead was entitled to prove the existence of an oral agreement and whether the suit was barred by limitation.
Ratio Decidendi: The court discussed the admissibility of oral evidence to prove terms not inconsistent with the written instrument, citing Section 92 of the Indian Evidence Act. The court also applied the limitation period for filing a suit for specific performance under Article 54 of the Limitation Act.
Final Decision: The court dismissed the appeal, finding that the suit was barred by limitation and no cause of action was made out.
MUKTA GUPTA, J.
1. Suit for specific performance of the oral agreement pursuant to the lease agreement dated April 01, 2000 and injunction was filed by M/s. Spearhead Digital Studio Pvt. Ltd. (in short Spearhead) a private limited company against the respondent H.K.Mitroo. Spearhead pleaded that it was running its business from C-161, Okhla Industrial Phase I, which consisted of basement, ground floor, first floor and second floor (in short the suit property) pursuant to a lease agreement dated April 01, 2000 having been inducted by the defendant/respondent. The lease was for a period of 11 months only and it expired on March 31, 2001. However, by virtue of oral agreement to sell Spearhead continued to retain possession and paid a sum of Rs.10,000/- per month as rent and Rs.50,000/- per month as part consideration towards the oral agreement to sell. The said oral agreement to sell was pursuant to the inclination of the respondent to sell off the premises for a sale consideration of Rs.60 lakhs, however since Spearhead was not in a position to arrange the amount in one go, an arrangement was worked out wherein the respondent was to be paid Rs.50,000/- towards part sale consideration in excess of Rs.10,000/- per month being paid as tenancy charges per month. Since Spearhead proposed to pay the total sale consideration in instalments thus the consideration was agreed at Rs.84 lakhs which was far more in excess than the market value of the premises at the relevant point of time. Since March 2008 on the request of the respondent Spearhead increased the monthly instalment from Rs.50,000/- to Rs.65,000/-. Thus, by the time the suit was filed i.e. November 2009 Spearhead paid Rs.67,20,000/- which included rent of Rs.11,60,000/-. Thus, Rs.28,40,000/- only remained to be paid towards the agreement to sell when the respondent refused to accept any further payment of rent or otherwise and started pressurizing Spearhead to vacate the premises.
2. In the plaint Spearhead further stated that it had filed a suit for injunction on February 23, 2010 before the learned Senior Civil Judge wherein respondent in the written statement disputed the oral agreement and sought to usurp the sum of Rs.50,60,000/- paid as part payment towards sale consideration of the premises. It is stated that Spearhead was ready and willing to pay the balance amount of Rs.28,40,000/- for completion of the sale however the respondent on February 28, 2011 filed a suit for possession, arrears of rent, mesne profit and damages being Civil Suit No.311/2011 before the learned District Judge. According to the suit filed by the respondent a major portion of the premises was given under tenancy for Rs.10,000/- per month and much smaller portion for a sum of Rs.50,000/- per month. Further though there was increase in the rate of rent from Rs.50,000/- to Rs.65,000/- for the smaller portion, however for the larger area the rent remained stagnant at Rs.10,000/-. Since in the suit filed by the respondent being Civil Suit No.311/2011 the respondent though admitted the receipt of the amount but not as part payment of the sale consideration, Spearhead was constrained to file the present suit seeking specific performance of the oral agreement to sell and permanent injunction restraining the respondents from interfering in the peaceful possession of Spearhead.
3. In the written statement the respondent denied the claim of Spearhead and pointed out that on every monthly payment Spearhead deducted the TDS and thus it was apparent that the amount being paid to the respondent was on account of rent as no TDS was required to be deducted for sale consideration. The case of the respondent was that it had let out to Spearhead basement, ground floor except an office cabin and a mezzanine floor by virtue of the lease deed dated April 01, 2000 executed between the parties and the respondent retained the entire first floor and office cabin on the ground floor for his personal use and was i