Delhi Development Authority vs Durga Chand Kaushish

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1973 Supreme(SC) 265

SUPREME COURT OF INDIA
K.K. MATHEW AND M.H. BEG, JJ.
Delhi Development Authority, Appellant
Versus
Durga Chand Kaushish, Respondent.
Civil Appeal No 298 of 1972, D/-28-8-1973.

Headnote:
Constitution of India, 1950 - Article 133 (1) (a) and (c) - Delhi Development Act of 1957 - Section 60, 453 (b) (2) and 95 to 98 – Code Of Civil Procedure, 1908 – Section 80 - Indian Evidence Act, 1872 - Sections 90 to 94 - Land - Lease Deed - Enhancement of Rent - Whether interpretation of lease deed between Secretary of State for India and appellant, by learned Judge who tried case and held that rent could be enhanced within period of 90 years, was correct - Whether deed, under which lease commenced, provided for an enhancement of rent - Whether defendants could exercise a right of enhancement within period of 90 years - Whether on construction of paras 9 and 10 of lease deed defendants are entitled to enhancement of rent as claimed by them and if so, whether any such enhancement has been lawfully made by them - Whether a lease granted by Secretary of State for India even before 1950 could be interpreted today by relying upon any special rule of construction applicable to leases by or on behalf of British Sovereign – Held, Plaintiff-respondent had, in paragraph 4 of plaint, laid factual foundation for a plea of estoppel also against defendants who had accepted consideration and an yearly rent at Rs. 365/- per annum without enhancement until after Ex. P-4 was executed - No mention of any liability to pay enhanced rent is found in deed of 1955 – Court do not think that it had really so used it although it had considered conduct of defendants in accepting rent on basis that it was a 90 years lease on a rent of Rs. 365/- per year until after 1955, without mentioning a right of enhancement of rent in deed of 1955 to be circumstances indicating that defendants themselves had put an interpretation upon original lease which Division Bench accepted as correct by finding out meaning of deed of 1931 first – Court have not found it necessary to rely upon anything in agreement either for interpreting terms of lease or as an admission on any question or as providing a basis for an estoppel or as a circumstance supporting Court view - As indicated above, Court have reached our conclusion, quite apart from contents of subsequent agreement or conduct of parties, by intepreting lease deed on its own language and terms – Court think that, on language of lease itself, interpretation adopted by Court is only one which could give effect and meaning to all its parts read as a whole - Appeal dismissed.

Judgement Key Points

Based on the provided legal document, here are the key points:

The Supreme Court of India dismissed the appeal filed by the Delhi Development Authority against a decree granted to Durga Chand Kaushish, holding that the annual rent of Rs. 365/- for a 90-year lease could not be enhanced within the initial term. (!) (!)
The plaintiff-respondent sued for a declaration that the rent, paid for a 90-year lease commencing April 1, 1931, could not be enhanced during the subsistence of the lease, and sought a refund of retrospectively demanded enhanced rent. (!)
The defendants admitted that the lease was for a total period of 90 years but argued that the right to enhance rent under Covenants 9 and 10 operated within that period, claiming the lease was effectively for only 20 years initially subject to renewal and enhancement. (!) (!)
The core legal dispute was whether the enhancement clause in the lease deed dated September 17, 1931, allowed rent enhancement before the expiry of the initial 90-year term or only upon the grant of a fresh lease after that term. (!)
The lease deed explicitly stated the land was demised for a term of 90 years at a yearly rent of Rs. 365/-, with the first part of the deed containing the words of demise. (!)
Covenant 9 stipulated that the lessor would execute a new lease for renewal "at the end of the term hereby granted," specifying durations for the first, second, and third renewals, with a proviso that the aggregate period of the original term and renewals should not exceed 90 years. (!) (!) (!) (!) (!)
Covenant 10 provided that rent could be enhanced on the second renewal by up to 100% of the first renewal rate, and on the third renewal at the prevailing market rate. (!)
The Supreme Court rejected the appellant's argument that the "original term" in the proviso included the renewal periods, noting that such an interpretation would render the explicit grant of 90 years and the condition of renewals "at the end of the term" absurd and inconsistent. (!) (!) (!)
The Court applied the principle of ut res magis valeat quam pereat (that the thing may rather have effect than be destroyed), preferring an interpretation that gives effect to all clauses of the deed over one that renders them nugatory. (!)
The Court held that where a grant is clear but an exception or proviso is ambiguous or uncertain, the clear grant prevails, and the ambiguous words creating the uncertainty should be disregarded. (!) (!)
The Court refused to apply the feudal rule of construction that grants by the Sovereign should be construed strictly in favor of the grantor, stating that such a rule is inapplicable in a democratic republic where the State receives valuable consideration and has experienced draftsmen. (!) (!) (!) (!)
The Court concluded that the only logical interpretation is that the lease is for 90 years at Rs. 365/-, with the right to renewal and enhanced rent accruing only after the expiry of that initial 90-year period. (!) (!) (!)
The subsequent agreement of 1955 (Ex. P-4) and the conduct of the parties in accepting rent without enhancement were not relied upon to interpret the lease deed, as the decision was based solely on the language and terms of the 1931 deed itself. (!) (!)
The appeal was dismissed, affirming the decision of the Division Bench of the Delhi High Court. (!) (!)

Judgment

BEG, J.: This is a defendant s appeal, on a certification of the case, under Article 133 (1) (a) and (c) of the Constitution,granted by the Delhi High Court.

2. The plaintiff-respondent had sued for a declaration that the annual rent of Rs. 365/- payable on a piece of land situated in Basti Ara Kashan, Paharganj, New Delhi, leased to him from 1-4-31 for a period of 90 years on behalf of the Secretary of State for India could not be enhanced during the subsistence of the lease for the grant of which he had paid a premium of Rs. 18,054/-. The plot of land leased was entrusted for management on behalf of the Government of India to the Delhi Improvement Trust, and, thereafter, after the abolition of the Delhi Improvement Trust in 1957, to the Delhi Development Authority under Section 60 of the Delhi Development Act of 1957. The plaintiff also claimed refund of Rs. 5,935.25 ps. which had been retrospectively demanded and realised from him as arrears of enhanced rent from 1-1-52 to 30-6-63 after issuing a warrant of arrest dated 2-6-64 against him. Furthermore, the plaintiff prayed for an injunction to restrain the appellant, acting on behalf of the lessor, from realising an annual rent in excess of Rs. 365/- for the duration of the lease claimed to be for 90 years.

3. The defendant-appellant pleaded, inter alia, that the suit was barred by the provisions of S. 453 (b) (2) of the Delhi Development Act. Want of notice under Section 80 C.P.C., upon the Union of India, a co-defendant, was also pleaded. These questions were decided against the defendants by a learned Judge of the Delhi High Court, who tried the case and dismissed the suit on merits, as well as by the Division Bench which had allowed the plaintiff s appeal and decreed the suit on merits. Questions decided against the defendants at both stages in the Delhi High Court are not before us for decision. The only question argued before us was whether the interpretation of the lease deed (Ex. P2), dated 17-9-31, between the Secretary of State for India and the appellant, by the learned Judge who tried the case and held that rent could be enhanced within the period of 90 years, was correct or the interpretation adopted by the Division Bench, which allowed plaintiff s appeal after holding that the enhancement clause could only operate upon the grant of a fresh lease, after the expiry of the first period of 90 years under the lease, was correct.

4. We think that the most significant feature of the case is that the assertion, in paragraph 1 of the plaint, that the lease commencing on 1-4-31 was for the term of 90 years, is admitted to be correct in paragraph 1 of the replies on merits in the written statement on behalf of both the defendants, namely, the Union of India and the Delhi Development Authority. It was, however, not admitted by the defendants that the yearly ground rent of Rs. 365/- could not be enhanced within a period of 90 years. Paragraph 4 of the joint written statement of the defendants shows that the real dispute between the parties was whether the deed dated 17-9-31, under which the lease commenced from 1- 4-31, provided for an enhancement of the rent within the period of 90 years by reason of covenants numbered 9 and 10 of the lease deed, or, the power of enhancement was to be exercised only on the grant of a fresh lease after the determination of the initial period of 90 years. In paragraph 12 of the plaint the plaintiff asserted:

"12 That according to the terms of the Lease dated 17th September, 1931 the land has been leased to the plaintiff for a term of 90 years at the rate of rent of Rs. 365/- per year. The rent during the said term of the lease cannot be enhanced and has not in fact been enhanced by defendant No. 1 or defendant No. 2."

The Reply in the written statement in paragraph 12 on merits was:

"12. That pare 12 of the amended plaint is not admitted as stated. The lease dated 17th September, 1931, was granted to the plaintiff for a total period of

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1973 Supreme(SC) 265

SUPREME COURT OF INDIAK.K. MATHEW AND M.H. BEG, JJ.Delhi Development Authority, Appellant VersusDurga Chand Kaushish, Respondent.Civil Appeal No 298 of 1972, D/-28-8-1973.

Cases Referred (6)

SUPREME COURT OF INDIA
K.K. MATHEW AND M.H. BEG, JJ.
Delhi Development Authority, Appellant
Versus
Durga Chand Kaushish, Respondent.
Civil Appeal No 298 of 1972, D/-28-8-1973.