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2025 Supreme(Del) 763

IN THE HIGH COURT OF DELHI AT NEW DELHI
DINESH KUMAR SHARMA, J.
Jai Prakash Aggarwal - Appellant
Versus
Kiran Chawla & Anr - Respondents
RSA 200 of 2015
Decided on :  18-03-2025

Advocates Appeared:
For the Appellant : Mr. Alok Kumar, Sr. Adv. with Ms. Manisha A. Narain, Mr. Amit Kumar Singh, Mr. Varun Maheshwari, Mr. Manan Soni, Mr. Sandeep Singh Somaria, Advs.
For the Respondent: Mr. Siddhant Nath, Standing counsel with Mr. Bhavishya Makhija, Mr. Amaan Khan, Advs.

Destruction of leased property does not terminate the lease rights as long as the land exists; the doctrine of frustration is not applicable.

Headnote:(A) Code of Civil Procedure, 1908 - Sections 100 and Order XLII - Tenancy law - Doctrine of frustration not applicable to lease agreements upon destruction of leased property. Court held that a lease includes both the building and the land; destruction of a building does not extinguish the lease as long as the land exists. (Paras 14, 16, 30-32)

(B) Legal principles - Lessors and lessees must adhere to the provisions of the Transfer of Property Act; the existence of superstructure and site are core to tenancy validity. Tenant’s rights continue until exercised otherwise, ensuring no unjust enrichment to the landlord. (Paras 10, 11, 12)

(C) Dismissal of counterclaim - Court upheld that a tenant cannot compel reconstruction unless specific provisions are proven; automatic lease termination upon destruction must be legally justified and not presumed. (Paras 5, 6, 9)

Facts of the case:
The appellant, a tenant, faced eviction after a fire destroyed the rented shops. The landlords initiated litigation claiming unauthorized construction by the tenant. Key issue revolved around the effect of destruction on tenancy rights.

Findings of Court:
Lower Court findings were inconsistent with the principles outlined in precedent cases, necessitating review. Clarification provided on tenant’s rights post-destruction aligning with Transfer of Property Act.

Issues: Whether existing tenancy rights remained post-destruction of leased property; the necessity of explicit termination of tenancy.

Ratio Decidendi: Destruction of the subject property does not extinguish lease rights, distinguishing between legal principles govern tenancy rights under the Transfer of Property Act.

Result: Appeal allowed, permitting tenant to reconstruct the property subject to regulatory compliance.

Table of Content
1. appeal against previous judgments. (Para 1 , 2)
2. substantial question of law raised. (Para 3 , 4)
3. appellant's claim regarding tenancy. (Para 6 , 7)
4. analysis of lower courts' findings. (Para 9 , 10 , 12)
5. lease includes land despite destruction. (Para 14 , 15)
6. final ruling on tenancy rights. (Para 16)

JUDGMENT :

DINESH KUMAR SHARMA, J.

1. The present regular second appeal filed under Section 100 CPC read with order XLII CPC challenging the judgment and decree dated 28.02.2015 passed by learned ADJ-13 (Central), Tis Hazari Courts, Delhi in RCA No. 3/2011 titled Shri Jai Prakash Aggarwal vs. Ms. Kiran Chawla & Ors. filed by appellant against the judgment dated 29.01.2011 passed by learned Civil Judge, Delhi in Suit No. 795/08/02.

2. The learned First Appellate Court while hearing the civil appeal challenging the judgment and decree dated 29.01.2011 passed by learned Civil Judge, Delhi in Civil Suit No. 795/08/02 dismissed the appeal and upheld the order of the learned Trial Court. Aggrieved of this the appellant filed the present appeal challenging the impugned order on the ground that the same is against the facts of the case and law applicable on it whereby the learned First Appellate Court failed to appreciate that the lease of the building includes the land on which the building stands and the doctrine of frustration cannot be invoked on destruction or demolition of a building under lease where privity of contract and estate is created. The appellant has also challenged the impugned judgment on the ground that learned First Appellate Court failed to appreciate that there was no termination of tenancy by the Respondent and that the rent was regularly being paid to the Respondent which was duly acknowledged by receipts. Lastly, the Appellant raised the ground that the impugned judgment was not in sync with the judgment of the Apex Court passed in T. Lakshmipathi vs. R. Nithyananda Reddy , (2003) 5 SCC 150 , relied by the learned First Appellate Court.

3. In the Memorandum of Appeal the appellant raised the following substantial question of law:

(i) Whether the judgments of the Courts below is per incuriam and is in ignorance of the Law settled by the Hon'ble Supreme Court in Shaha Ratansi Khimji & Sons Vs. Proposed Kumbhar Sons Hotel P. Ltd. & Ors. in Civil Appeal No. 127 of 2007 decided on 10.07.2014

4. Notice was issued to the respondents. The respondent No.1 was proceeded ex-parte as recorded in order dated 02.09.2015. On 02.09.2015 the Court formed the following question of law:

Whether the judgments of the Courts below are per incuriam and are in ignorance of the law settled by the Hon'ble Supreme Court in Shaha Ratansi Khimji & Sons Vs. Proposed Kumbhar Sons Hotel P. Ltd. & Ors. in Civil Appeal No. 127 of 2007 decided on 10.07.2014.

5. Sh. Alok Kumar, learned senior counsel for the appellant states that the impugned order is liable to be set aside as the same is erroneous as having been passed on the basis of judgment in Vannattankandy Ibrayi (Supra). Learned senior counsel submits that in Shaha Ratansi Khimji & Sons (Supra) the Apex Court relied upon T. Lakshmipati (Supra) and inter alia held that the decision rendered in Vannattankandy Ibrayi (Supra) case does not correctly lay down the law.

6. Brief factual matrix of the case is that the appellant is the tenant of Shop No. 27 in Property No. 5863, Swadeshi Market, Sadar Bazar, Delhi 110008, under Smt. Kiran Chawla and Smt. Sumitra Devi. Learned senior counsel submits that Smt. Kiran Chawla had filed a suit against the appellant for permanent and mandatory injunction bearing CS No. 407/2002 alleging therein that the appellant being the tenant in respect of Shop No. 27 in Property No. 5863, Swadeshi Market, Sadar Bazar, Delhi 110008 along with tenant of Shop No.28 are raising unauthorized constructions. It is an admitted fact that on 31.12.2001 fire occurred in the Sadar Bazar area in which Shop No.27 and 28 bearing Property No. 5863, Swadeshi Market, Sa

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