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2020 Supreme(Del) 1275
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M Singh, J.
Arun Kumar Jain & Anr. - Appellant
Versus
Bhagwant Singh Pabla & Anr. - Respondent
Civil Miscellaneous (M) No. 600 of 2019; Civil Miscellaneous Application No. 17972 of 2019, 20292 of 2019, 20409 of 2019
Decided On : 19-02-2020
Keshav Dayal, Advocate, P.P. Ahuja, Advocate, Gaurav Jain, Advocate, Peeush Sharma, Advocate, Bharvi Thakur, Advocate, Kartikey Nayyar, Advocate, Respondent No 1 In Person, Advocate
The main legal point established in the judgment is that findings in a previous judgment may not constitute res judicata if the suit itself was dismissed, but the evidence from the previous judgment can be exhibited in subsequent proceedings. Additionally, the court clarified that subletting can occur even if a company is under the control of the tenants.
Headnote:
res judicata - Eviction Petition - Section 14(1)(b) of DRC Act - [Section 14(1)(b)] - [Summary of Acts and Sections]
Fact of the Case:
The tenants challenged the eviction order primarily on the grounds that the findings in a previous judgment by a Civil Court did not constitute res judicata and that the company using the premises was under their control. The tenants argued that the company's use of the premises did not constitute subletting.
Finding of the Court:
The court found that the findings in the previous judgment did not constitute res judicata as the suit itself was dismissed, and the tenants were not required to challenge the finding. However, the court held that the findings from the previous judgment could be exhibited in subsequent proceedings. The court also found that the tenants' actions constituted subletting, and the eviction decree was upheld.
Issues: The main issues were whether the findings in the previous judgment constituted res judicata and whether the tenants were guilty of subletting.
Ratio Decidendi: The court held that the findings in the previous judgment did not constitute res judicata, but the evidence from the previous judgment could be exhibited in subsequent proceedings. The court also found that the tenants' actions constituted subletting, and the eviction decree was upheld.
Final Decision: The court dismissed the petition and upheld the eviction decree.
JUDGMENT
Prathiba M. Singh, J. - The present petition has been filed challenging the order of the Rent Control Tribunal (hereinafter, ''RCT'') dated 11th March, 2019 as also the order of the Assistant Rent Controller (hereinafter, ''ARC'') dated 21st April, 2018. A petition was filed under Section 14(1)(b) of the DRC Act by the Respondent - Mr. Bhagwant Singh Pabla (hereinafter ''landlord'') against the Petitioners - Sh. Arun Kumar Jain, Smt. Archana Jain (hereinafter ''tenants'') and M/s. Ritika Advertising Pvt. Ltd. The ARC, by the impugned order allowed the eviction petition primarily on two grounds i.e.
(i) that the findings in a judgment rendered by a Civil Court dated 29th March, 2004 in a suit for injunction filed by the Respondent - landlord would be binding between the parties; and
(ii) that the running of a company by the name Ms. Ritika Advertising Pvt. Ltd. and a third party company in the tenanted premises would constitute sub-letting.
2. The said decree was challenged before the RCT by the tenants. The ld. RCT vide the impugned judgement dated 11th March, 2019 has held that the non-challenge to the findings rendered by the Civil Court on the earlier occasion in the suit for injunction, would constitute res-judicata inasmuch as the finding having not been challenged, has attained finality and thus there is no illegality or infirmity in the order of the ARC.
Submissions of the Petitioners
3. On behalf of the Petitioners - tenants, ld. Senior Counsel submits that the finding of the RCT that the order of the Civil Court in which the finding was arrived at in respect of sub-letting, was one which resulted in a dismissal of the suit filed by the Respondent and thus, the same could not constitute res-judicata. The submission is that though there was a finding which was rendered in the said judgment dated 29th March, 2004, the suit filed by the Respondent - landlord was finally dismissed. The tenants were not expected to challenge the said judgment inasmuch as since the decree was in their favour, a mere finding need not be challenged. Reliance is placed on the following three judgements:
State of Andhra Pradesh and Ors. v. B. Ranga Reddy (D) by L.Rs. and Ors., (2019) 10 Scale 671
Thamilarasi v. Selvam, (2011) 5 CTC 430
S. Waryam Singh Duggal v. Savitri Devi, (1984) 1 ILR(Del) 214
4. It is further submitted that the second ground on which the impugned orders are liable to be set aside is that both the forums failed to appreciate that the company - M/s. Ritika Advertising Pvt. Ltd was in fact under the control and management of Sh. Arun Kumar Jain and Smt. Archana Jain. Thus, the fact that the company may be using the premises as a registered office does not by itself mean that the Petitioner Nos. 1 and 2 had lost control of the possession of the property. Heavy reliance is placed on a Local Commissioner''s report wherein the Local Commissioner had come to the conclusion that the Petitioner Nos. 1 and 2 were in possession of the property.
5. Ld. senior counsels further argue that even if the company is in control of a particular property, though the company might by itself be a separate legal entity, in effect, it is the individuals who control the company, who are the image of the company and instead of lifting the corporate veil, the judgment of Madras Bangalore Transport Company v. Inder Singh and Ors., (1986) AIR SC 1564 which uses the concept of ''corporate reflection'' must be considered as applicable in the present case. On this proposition, ld. Sr. counsel relies upon the following judgements:
Santosh Ajit Sachdeva and Ors. v. Anoopi Sahani, (2007) AIR SC 3231
Madras Bangalore Transport Co. v. Inder Singh and Ors., (1986) AIR SC 1564
Vishwa Nath and Anr. v. Chaman Lal Khanna and Anr., (1975) AIR Delhi 117 .
6. Further reliance is also placed upon the findings of the Local Commissioner where the Commissioner concluded that the premises was in the possession of Sh. Arun Kumar Jain. It is submitted that this commissio
