Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 553

SUPREME COURT OF INDIA
Indira Banerjee, J.K. Maheshwari, JJ.
Karan Kapoor – Appellant
Versus
Madhuri Kumar – Respondent
Civil Appeal No. 4545 of 2022 (Arising Out of SLP (Civil) No.13800 of 2021)
Decided on : 06-07-2022

Advocates appeared:
For the Appellant :Ms. Rupali Sharma, Advocate
For the Respondent:Mr. Vaibhav Joshi, Advocate

IMPORTANT POINTS
(1) Tenant-Landlord relationship cannot come to an end on execution of Agreement to Sell – Even if consideration has been exchanged purchaser does not become owner of property till the time registered Sale Deed is executed in his favour.
(2) Power under Order XII Rule 6 of CPC is discretionary and cannot be claimed as a matter of right – Mere relationship of landlord and tenant cannot be said to be an unequivocal admission to decree suit under Order XII Rule 6 of CPC.

Headnote:
Civil Procedure Code, 1908 – Order XII Rule 6 – Judgment on admission – Suit for possession and mesne profit – Even if consideration has been exchanged purchaser does not become t owner of property till the time registered Sale Deed is executed in his favour – Tenant-Landlord relationship cannot come to an end on execution of Agreement to Sell – To pass a judgment on admission, Court may pass an order at any stage of suit – In case judgment is pronounced by Court a decree be drawn accordingly and parties to case is not required to go for trial – Power under Order XII Rule 6 of CPC is discretionary and cannot be claimed as a matter of right – Mere relationship of landlord and tenant cannot be said to be an unequivocal admission to decree suit under Order XII Rule 6 of CPC – Defence as taken by Appellant/Defendant is plausible or not is a matter of trial which may be appreciated by Court after granting opportunity to lead evidence by respective parties – There may be admission with respect to tenancy as per lease agreements but defence as taken is also required to be looked into by Court and there is need to decide justiciability of defence by full-fledged trial – In a suit based on Landlord-Tenant relationship, amount of rent and arrears thereof ought to be paid in terms of order of Court – Judgment and decree passed by Trial Court, as confirmed by High Court, only on admission of fact without considering defence in exercise of power under Order XII Rule 6 of CPC set aside and matter remitted back to Trial Court to decide suit as expeditiously as possible affording due opportunity to parties to record evidence that shall be appreciated by Court on merit. (Paras 8, 16, 18, 22, 23 and 24)
Facts of the case:
Present appeal arises out of the Judgment dated 08.04.2021, passed by the High Court of Delhi in Regular First Appeal No.218 of 2021 preferred by Appellant, whereby the said RFA was dismissed and the High Court thereby upheld Order dated 01.12.2020 passed in Civil Suit No.867 of 2018 and Review Order dated 17.02.2021 in Civil Suit No.867 of 2018 passed by ADJO7, Saket Court, (South East), New Delhi.
Findings of Court:
In terms of the admitted fact by extended Lease Agreement and the increase in the percentage of rent, Trial Court shall first decide the issue of payment of monthly rent applying the said increase on year to year basis and pass appropriate orders for payment of arrears as well as deposit of regular monthly rent.
Result : Appeal allowed.

JUDGMENT

J.K. Maheshwari, J.

Leave granted.

2. This appeal arises out of the Judgment dated 08.04.2021, passed by the High Court of Delhi in Regular First Appeal No.218 of 2021 (hereinafter referred as RFA No.218 of 2021) preferred by the Appellant, whereby the said RFA was dismissed and the High Court thereby upheld the Order dated 01.12.2020 passed in Civil Suit No.867 of 2018 and Review Order dated 17.02.2021 in Civil Suit No.867 of 2018 passed by ADJ-O7, Saket Court, (South East), New Delhi.

3. The brief facts of the matter are that Appellant was a tenant in the Residential Property owned by Respondent bearing No. B-228, Ground Floor, Greater Kailash-1, New Delhi-110048, including the built-up area in the stilt portion of the building (hereinafter referred as the Suit Property), which comprises of drawing room, dining room, a foyer, four bedrooms with attached bathrooms, kitchen, lounge, service area and a servant quarter with common bathroom and parking for two cars. The Respondent-Landlord entered into a Lease Agreement dated 07.08.2011 with proprietorship concern of the Appellant, namely M/s. Fantasy Lights, at monthly rent of Rs.1,17,000/- for a period of 24 months starting from 07.08.2011 till 07.08.2013 and interest free security deposit of Rs.3,51,000/- (Three Lakhs Fifty One Thousand Only) was paid by the Appellant at the time of the execution of the Lease Agreement. After the expiry of the Lease Agreement, an extended Lease Agreement for subsequent term of 11 months was executed on 07.08.2013 at the rate of Rent of Rs.1,50,000/- per month which was to expire on 06.07.2014. The Security Deposit paid earlier was retained as Interest Free Security Deposit towards Lease Agreement dated 07.08.2013 as well.

4. The Appellant tenant did not pay any rent after the expiry of the extended Lease Agreement dated 06.07.2014 with effect from 07.07.2014 and continued in occupation of the Suit Property. A Legal Notice dated 12.04.2018 was served by the Respondent landlord upon the Appellant calling him to vacate the Suit Property. However, even thereafter, neither the Suit Property was vacated, nor the rent was paid which led the Respondent/Plaintiff to file Civil Suit No.867 of 2018 for recovery of possession, arrears of rent, mesne profit, Pendent Lite, and interest before ADJ-O7, Saket Court, (South East), New Delhi. The Appellant/Defendant filed a Written Statement contending that after the expiry of the Lease Agreement dated 07.08.2013, the Respondent/Plaintiff had approached to him and made the offer to sell the right, title and interest in the Suit Property, in furtherance of which Agreement to Sell dated 22.04.2017 (herein after referred as ATS-I) was executed between the parties for a sum of Rs.3,60,00,000/- (Three Crores and Sixty Lakhs Only) and it was allegedly agreed that the rent accrued for the year 2014- 2017 be adjusted into the said Agreement to Sell. Appellant also contended that in addition to the execution of ATS-I, he also agreed to transfer its right, title and interest of a plot of land situated at Amloh in favor of Respondent for a consideration of Rs.15 Lakhs through Agreement to Sell (ATS-II) which would partially satisfy the obligations of sale consideration of ATS-I. Further, it was averred in the Written Statement that certain adjustments were made to the consideration payable for the subject property consequent to a new Agreement to Sell (ATS-III) was executed.

5. In view of the averments made in Written Statement filed by the Appellant/Defendant in Civil Suit No.867 of 2018, the Respondent/Plaintiff filed an Application under Order XII Rule 6 and another application under Order XXXIX Rule 10 of the Code of Civil Procedure (in short CPC) with a prayer to pass a judgment on admission of facts made in Written Statement and to draw a decree accordingly.

6. The contention of the Respondent/Plaintiff before the Trial Court was that looking to the admissions made with respect to the Landlord-Tenant relationshi