I have perused the judgment of the Trial Court. Trial Court has
decreed the suit on the ground that in the written statement the Appellant admitted payment of rental amount from time to time and did not claim that the status of the Appellant was severed as a tenant completely. Even assuming that the Appellant had entered into an agreement to sell for purchasing the suit property from the Respondent and had paid part consideration, at best, the Appellant could rely on the agreement for two purposes i.e. (i) file a suit for specific performance seeking execution of
the sale deed; and (ii) claim protection under Section 53A of the Act. It was also an admitted case that there was no written Agreement to Sell ever executed between the parties and the defence of the Appellant was based on an oral agreement. Based on the amendment to Section 17 of the Registration Act, whereby the Registration of an Agreement to Sell has been made compulsory as well as amendment to Section 53A of the Act
and the Indian Stamp Act, 1899, the Trial Court concluded that in the absence of a registered Agreement to Sell the Appellant could not claim protection under Section 53A of the Act. Based on the proposition of law laid down in Sudhir Sabharwal vs. Rajesh Pruthi 2014 AIR CC 2850 by this Court that mere Agreement to Sell of immovable property will not terminate the landlord-tenant relationship, the Trial Court was of the view
that no purpose would be served to put the matter to trial and passed the judgment, noting that while there was no admission, however, if thedefendant has no legal defence, then under Order XIV Rule 1(6) CPC, judgment can be straightaway passed.{Para 12}
14. Appellant in the written statement admitted that he was inducted as a tenant in the year 2013 vide a registered lease deed dated 09.09.2013 and also admitted the renewal of the lease till 2015. Appellant, however, set up an oral agreement to sell and also pleaded payment of Rs.30 Lakhs towards part consideration of the sale price.
15. The issue that arises before this Court is as to whether the
Appellant could claim retention of the suit property on the plea of an oral Agreement to Sell.
16. The answer to the above question in my view can only be against the Appellant. The legal position on this aspect is no longer res integra. Section 17 of the Registration Act was amended by the Registration and Other Related Laws (Amendment) Act, 2001, Act No.48 of 2001, by insertion of Section 1(A) therein and by virtue of the Amendment, registration of an Agreement to Sell has been made compulsory with effect from 24.09.2001. Section 17(1-A) reads as follows:-
“Section (1A). The documents containing contracts
to transfer for consideration, any immovable
property for the purpose of Section 53A of the
Transfer of Property Act, 1882 (4 of 1882) shall be
registered if they have been executed on or after the
commencement of the Registration and other
Related Laws (Amendment) Act, 2001 and if such
documents are not registered on or after such
commencement (i.e. w.e.f. 24.09.2001), then, they
shall have no effect for the purposes of the said
Section 53A.”
17. Therefore, a buyer cannot avail the benefit of Section 53A of the Act if the agreement to sell is not registered. When a tenant enters into an agreement to sell for buying the tenanted premises but the agreement to sell is not in conformity with law, the relationship continues as landlord tenant and while the tenant can seek specific performance, but he acquires no right to retain possession, till a sale deed is registered in his favour.
In view of the legal position that “mere agreement
to sell of immovable property does not create any
right in the property save the right to enforce the
said agreement” and in view of the preceding
discussion that “mere agreement of sale will not
terminate landlord- tenant relationship unless there
is specification to that effect in agreement itself”,
this Court is of the view defendant has not right to
occupy the said property.”
18. In Shiv Kumar vs. Sumit Gulati, RSA No.417/2015, decided on 04.12.2015, the Court held that when the defendant claims possession on the basis of an oral agreement to sell, the same cannot be recognized in view of the amended Section 53A of the Act.
19. Significantly in the present case the relationship between the
parties as landlord-tenant is an admitted position. It is also admitted that the rent of the premises was over Rs.3,500/- as also that the Respondent terminated the lease by sending a notice under Section 106 of the Act. In view of the said position and in the absence of the alleged oral agreement being registered, the Trial Court has rightly passed a decree for recovery of the suit property and no infirmity can be found. The suit is pending on
other reliefs and shall be continued and adjudicated in accordance with law.
IN THE HIGH COURT OF DELHI AT NEW DELHI
RFA 272/2020 and CM 28819/2020, 28820/2020 and 28818/2020
PRASHANT GOYAL Vs INDRANIL WADHWA .
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
Date of decision: 11.11.2020
1. Present Appeal has been filed against the judgment dated
07.10.2020 passed by the Trial Court in Suit No.308/2020 whereby the
Trial Court has partly decreed the suit and passed a decree of possession
in favour of the Plaintiff/Respondent and against the Defendant/Appellant
herein with respect to property bearing No.A-75, Ground Floor,
Chittranjan Park, New Delhi.
2. Short but relevant facts are that the Plaintiff/Respondent herein
claiming to be the owner/landlord of the suit property filed a suit for
possession and recovery of arrears of rent and charges for amenities
alongwith mesne profit and damages with future and pendente lite
interest. The Plaintiff/Respondent alleged that the Defendant/Appellant
entered into a lease agreement for the property for a period of 12 months
at a rent of Rs.40,000/- per month in addition to the utility charges and
the lease deed was registered on 11.09.2013. The lease was extended by
fresh lease deeds in 2014 and 2015 whereby the rent was increased to
Rs.42,000/- per month.
3. As per the Respondent, the lease deed ended by efflux of time on
31.08.2016 and the tenancy continued on month to month basis.
Respondent alleged that the Appellant began defaulting in payment of
rent from July, 2016 and eventually stopped paying the rent with effect
from June, 2019.
4. The Respondent terminated the lease by serving on the Appellant a
legal notice dated 24.06.2020 under Section 106 of the Transfer of
Property Act, 1882 (hereinafter referred to as ‘the Act’). The arrears of
rent as per the Respondent amounted to Rs.11,43,000/- uptil 30.06.2020
upon which interest at the rate of 18% p.a. accrued to the Respondent
alongwith holding charges of Rs.3,000/- per day, calculated from
11.07.2020 till the date the suit was filed.
5. Appellant entered appearance in the suit and filed a written
statement alongwith reply to the application under Order XVA of the
CPC taking a defence that the Respondent had not approached the Court
with clean hands. The Appellant disputed the landlord-tenant relationship
as it was a practice between the parties to register a lease deed as was
done for the deeds executed for the years 2013-2015. Post 2015 no lease
deed was executed as the Respondent had offered to sell the property and
had acted on this offer by handing over possession to the Appellant.
Appellant agreed to purchase the property for a total sale consideration of
Rs.1.3 Crores. It was orally agreed that the Appellant will initially pay
Rs.30 Lakhs and the remaining shall be paid at the time of executing the
sale deed. Between August 2015 and July 2019 Respondent had been
accepting the alleged rent in his account as well as in cash which is
reflected in bank statement and calculation sheet placed on record before
the Trial Court.
6. As per the chronology of dates, matter was listed for arguments on
28.09.2020 before the Trial Court on the Application under Order XVA
Rule 1 CPC and the Court also heard arguments on the issue of passing
judgement without holding a trial as per Order XII Rule 6 read with
Order XIV Rule 1(6) CPC. On 07.10.2020 the Trial Court partly decreed
the suit for recovery of possession of the property and the Appellant was
directed to hand over vacant possession to the Respondent within 30
days.
7. Learned counsel for the Appellant contends that mere admission of
landlord-tenant relationship by the Appellant cannot take away the right
of the Appellant to contest the suit and the Trial Court ought to have
proceeded with the trial on the defence set up by the Appellant. It is also
argued that the Trial Court failed to appreciate that the Appellant had
disputed the landlord-tenant relationship, as after 2015 no lease deeds
were executed owing to the fact that the Respondent had offered to sell
the property and this is substantiated by the handing over of possession to
the Appellant.
8. Learned counsel further contends that the defence of the Appellant
was supported by the contents of the plaint itself as the Appellant had
regularly paid the agreed rent till the last month of the registered lease
deed i.e August 2016, as per calculation sheet placed on record with the
plaint. Respondent had himself admitted in the legal notice dated
24.06.2020 as well as the plaint that he had to relocate to Maharashtra
and therefore it was a natural presumption that he was intending to
dispose of his property. Trial Court also failed to appreciate that between
August 2016 to July 2019 Respondent accepted the rent in his account as
well as cash, which is reflected in the bank statement and the calculation
sheet placed on record. Onus to prove that the Appellant was allowed to
occupy the property as a tenant was squarely on the Respondent, which
he failed to discharge. Respondent did not even prove why after August
2016 he did not enter into a registered lease deed as per past practice and
why no objections were raised on late payment of the alleged rent until
March, 2019.
9. Learned counsel contends that it is a settled law that in a case
where a defendant raises objections which go to the root of the case, it
would not be appropriate to exercise discretion under Order XII Rule 6
CPC and more importantly there were no clear admissions on the part of
the Appellant. Reliance is placed on the judgment of the Supreme Court
in Satish Chander Ahuja vs. Sneha Ahuja 2020 SCC OnLine SC 841
where the Court has held that it is discretionary for a Court to pass
judgment on admission and the discretion has to be exercised keeping in
mind that a judgment without trial permanently denies any remedy to the
Defendant by way of an appeal on merits and unless the admission is
clear, unambiguous and unconditional the discretion should not be
exercised.
10. Learned counsel for the Respondent has defended the judgment by
reiterating the arguments made before the Trial Court and submits that
the Trial Court has rightly passed the decree as the landlord-tenant
relationship was admitted, the rent of the property was admittedly over
Rs.3,500/- and a legal notice dated 24.06.2020 had been issued by the
Respondent under Section 106 of the Act terminating the month to month
tenancy.
11. I have heard learned counsel for the Appellant and learned counsel
for the Respondent.
12. I have perused the judgment of the Trial Court. Trial Court has
decreed the suit on the ground that in the written statement the Appellant
admitted payment of rental amount from time to time and did not claim
that the status of the Appellant was severed as a tenant completely. Even
assuming that the Appellant had entered into an agreement to sell for
purchasing the suit property from the Respondent and had paid part
consideration, at best, the Appellant could rely on the agreement for two
purposes i.e. (i) file a suit for specific performance seeking execution of
the sale deed; and (ii) claim protection under Section 53A of the Act. It
was also an admitted case that there was no written Agreement to Sell
ever executed between the parties and the defence of the Appellant was
based on an oral agreement. Based on the amendment to Section 17 of the
Registration Act, whereby the Registration of an Agreement to Sell has been made compulsory as well as amendment to Section 53A of the Act
and the Indian Stamp Act, 1899, the Trial Court concluded that in the
absence of a registered Agreement to Sell the Appellant could not claim
protection under Section 53A of the Act. Based on the proposition of law
laid down in Sudhir Sabharwal vs. Rajesh Pruthi 2014 AIR CC 2850 by
this Court that mere Agreement to Sell of immovable property will not
terminate the landlord-tenant relationship, the Trial Court was of the view
that no purpose would be served to put the matter to trial and passed the
judgment, noting that while there was no admission, however, if the
defendant has no legal defence, then under Order XIV Rule 1(6) CPC,
judgment can be straightaway passed.
13. For the sake of completeness I may note that Respondent herein
being the Plaintiff filed a suit before the Trial Court seeking the following
reliefs :
“A. a decree for recovery of peaceful and vacant
possession of House No. A-75, Ground Floor,
Chittranjan Park, New Delhi – 110019 kindly be
passed in favour of the plaintiff and against the
defendant.
B. a decree for recovery of utility charges such as
electricity, water charges and RWA charges as may
be pending till the date of handing over of peaceful
vacant possession of House No. A-75, Ground
Floor, Chittranjan Park, New Delhi – 110019 kindly
be passed in favour of the plaintiff and against the
defendant.
C. Recovery of Rs. 11,84,,000/- amounting to rental
till 31/07/2020, along with interests accruing due to
no payment of the rentals till date of filing of the
RFA 272/2020 Page 7 of 11
plaint, along with future interest be passed in favour
of the plaintiff and against the defendant.
D. Recovery of Rs. 60,000/- amounting as mesne
profit @ Rs. 3,000/- per day from 10/07/2020 for
unauthorized use of the said property till the
peacefull vacant possession is handed over to the
plaintiff, along with interests accruing due to nonpayment
of the mesne profits till date of handing
over of physical vacant possession of House No. A-
75, Ground Floor, Chittranjan Park, New Delhi –
110019 be passed in favour of the plaintiff and
against the defendant.
E. Costs of the suit may be awarded in favour of the
plaintiff and against the defendant.”
14. Appellant in the written statement admitted that he was inducted
as a tenant in the year 2013 vide a registered lease deed dated 09.09.2013
and also admitted the renewal of the lease till 2015. Appellant, however,
set up an oral agreement to sell and also pleaded payment of Rs.30 Lakhs
towards part consideration of the sale price.
15. The issue that arises before this Court is as to whether the
Appellant could claim retention of the suit property on the plea of an oral
Agreement to Sell.
16. The answer to the above question in my view can only be against
the Appellant. The legal position on this aspect is no longer res integra.
Section 17 of the Registration Act was amended by the Registration and
Other Related Laws (Amendment) Act, 2001, Act No.48 of 2001, by
insertion of Section 1(A) therein and by virtue of the Amendment, registration of an Agreement to Sell has been made compulsory with effect from 24.09.2001. Section 17(1-A) reads as follows:-
“Section (1A). The documents containing contracts
to transfer for consideration, any immovable
property for the purpose of Section 53A of the
Transfer of Property Act, 1882 (4 of 1882) shall be
registered if they have been executed on or after the
commencement of the Registration and other
Related Laws (Amendment) Act, 2001 and if such
documents are not registered on or after such
commencement (i.e. w.e.f. 24.09.2001), then, they
shall have no effect for the purposes of the said
Section 53A.”
17. Therefore, a buyer cannot avail the benefit of Section 53A of the
Act if the agreement to sell is not registered. When a tenant enters into an
agreement to sell for buying the tenanted premises but the agreement to
sell is not in conformity with law, the relationship continues as landlordtenant
and while the tenant can seek specific performance, but he acquires
no right to retain possession, till a sale deed is registered in his favour.
This has been clearly held by this Court in Sudhir Sabharwal (supra).
The relevant portion of which is as follows :-
“The plaintiff had filed a suit seeking decree of
possession against the defendant in respect of the
premises in dispute. The application sought decree
on the basis of admissions made by the defendant in
his written statement. The plaintiff is a landlord of
property No. G-27/4, Rajouri Garden, New Delhi
and its ground floor was let out to the defendant at
the rent of Rs. 25,000/- per month. The plaintiff
issued notice to the tenant on 29.6.2011 followed by
a reminder on 11.1.2012 asking them to vacate the
premises. But there was no compliance of the
plaintiff’s request therefore the suit was filed to seek
possession as well as damages. The defendant had
admitted the enhanced rent of Rs. 27.500/- from
1.7.2011 and that the tenancy period had been
extended by another seven months by the plaintiff.
But he also claimed in the written statement that the
plaintiff had agreed to sell the rental premises to the
defendant for a total consideration of Rs.
2,10,00,000/- for which the defendant had paid
bayana/advance payment of Rs. 21,20,000/- i.e.
10% of the total sale consideration and that the
plaintiff had duly executed receipt in this regard.
What follows is that even if the /defendant were to
succeed in his suit for specific performance of
agreement to sell, till the execution of a conveyance
deed in pursuance to the decree, if any, in favour of
the defendant, the defendant has no ground in law to
save his possession of the premises. The status of the
defendant would continue to be as before i.e. of a
tenant whose tenancy has been determined.
In view of the legal position that “mere agreement
to sell of immovable property does not create any
right in the property save the right to enforce the
said agreement” and in view of the preceding
discussion that “mere agreement of sale will not
terminate landlord- tenant relationship unless there
is specification to that effect in agreement itself”,
this Court is of the view defendant has not right to
occupy the said property.”
18. In Shiv Kumar vs. Sumit Gulati, RSA No.417/2015, decided on
04.12.2015, the Court held that when the defendant claims possession on
the basis of an oral agreement to sell, the same cannot be recognized in
view of the amended Section 53A of the Act. The same view has been
taken by the Courts in other judgments in Babita Joshi vs. Dilip Rawat, (2015) 219 DLT 697 and Kaushal Aggarwal vs. Ashok Malhotra, CS(OS) 165/2009 decided on 17.02.2009.
19. Significantly in the present case the relationship between the
parties as landlord-tenant is an admitted position. It is also admitted that
the rent of the premises was over Rs.3,500/- as also that the Respondent
terminated the lease by sending a notice under Section 106 of the Act. In
view of the said position and in the absence of the alleged oral agreement
being registered, the Trial Court has rightly passed a decree for recovery
of the suit property and no infirmity can be found. The suit is pending on
other reliefs and shall be continued and adjudicated in accordance with
law.
20. The appeal is accordingly dismissed. Pending applications are also
dismissed.
21. At this stage Mr. Bajaj submits that the Appellant may be
permitted some time to vacate the premises as it would be impossible for
the Appellant to vacate immediately and find another premises on
account of the prevailing circumstances due to Pandemic Covid-19.
22. Mr. Indranil Wadhwa, Respondent is present in Court. Mr.
Wadhwa consents to the Appellant vacating the premises within a period
of two months from today.
23. Accordingly, it is directed that the Appellant shall vacate the
property bearing No.A-75, Ground Floor, Chittranjan Park, New Delhi-
110 019 within a period of sixty days from today and hand over the
vacant and peaceful possession to the Respondent. Respondent shall pay
RFA 272/2020 Page 11 of 11
the user charges at the agreed rate of Rs.42,000/- per month for the two
months that he would occupy the premises.
24. Appellant shall give an undertaking to this effect on an affidavit
within a period of seven working days from today. Needless to add that
the Appellant shall be bound by the undertaking.
(JYOTI SINGH)
JUDGE
NOVEMBER 11, 2020
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