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  • clauses (b), (h) & (j) of sub-section (1) of Section 14 of the Delhi Rent Control Act.
  • Section 39(2) of the Delhi Rent Control Act
  • Indian Companies Act
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  • clauses (b), (h) & (j) of sub-section (1) of Section 14 of the Delhi Rent Control Act.
  • Section 39(2) of the Delhi Rent Control Act
  • Indian Companies Act
Smart Summary

Factual and Procedural Background

This appeal was filed under Section 39(2) of the Delhi Rent Control Act against the Rent Control Tribunal's judgment dated April 23, 1987, which dismissed an appeal against the Additional Rent Controller's order dated April 4, 1987. The Controller had dismissed the appellant's application to amend his written statement to add a new plea that, initially, the tenancy of the disputed premises had been in the name of a partnership firm M/s D.P. Gupta & Company rather than in the appellant's individual name.

The landlady, Smt. Nirmal Nanda (respondent No. 1), filed an eviction petition on August 14, 1984, alleging the premises (part of House No. C-11, N.D.S.E. Part II, New Delhi) had been let to the appellant with effect from July 1, 1963 at a monthly rent of Rs. 450 for residential purposes and that the appellant had, without written consent, sublet/assigned and parted with possession in favour of M/s D.P. Gupta & Company (P) Limited in July 1984. The landlady also pleaded that the tenant had acquired another residence and caused substantial damage; the grounds relied on included clauses (b), (h) and (j) of Section 14(1) of the Delhi Rent Control Act.

In his written statement the appellant admitted that he initially took the premises on rent but asserted that he became a partner in M/s D.P. Gupta & Company in 1976 and that the company (a private limited company incorporated later) took over the partnership's assets and liabilities and was accepted by the landlady as tenant, so that the appellant ceased to be the tenant. The landlady controverted that any tenancy had been created in favour of the company.

During the proceedings the company was added as respondent No. 2. The landlady completed her evidence on August 12, 1986; the appellant gave evidence as RW1; the company examined two witnesses. At the stage of final arguments the appellant applied to amend his written statement to assert that, contrary to his prior admissions, the tenancy had been originally created in the name of the partnership firm (three partners including the appellant). The appellant relied on two letters dated 1 July 1963 (one written by him on behalf of the partnership and a purported reply from the landlady) as newly discovered documents to support the amended plea.

The Controller and thereafter the Rent Control Tribunal refused to allow the amendment. The present appeal challenges those refusals. The High Court (P.K. Bahri, J.) dismissed the appeal and awarded costs (counsel fee Rs. 700).

Legal Issues Presented

  1. Whether the appellant may be permitted to amend his written statement at the stage of final arguments to withdraw prior admissions and assert that the tenancy was originally in the name of a partnership firm (M/s D.P. Gupta & Company).
  2. Whether an amendment which effectively withdraws vital admissions and would displace or materially alter the case of the landlord can be allowed.
  3. Whether the discovery, at a late stage, of documents said to show a different state of facts (two letters dated 1 July 1963) justifies allowing such an amendment.
  4. Whether the lower courts' exercise of discretion in refusing the amendment was vitiated by any illegality.

Arguments of the Parties

Appellant's Arguments

  • The appellant sought to withdraw his earlier admission that he alone was the tenant: he claimed that this admission was erroneous and made under a wrong impression.
  • He relied on two documents (a letter dated 1 July 1963 written by him on behalf of M/s D.P. Gupta & Company and the landlady's reply of the same date) which, he argued, showed that the partnership firm originally took the premises on rent.
  • Counsel for the appellant cited Vishwa Nath v. Chaman Lal Khanna (AIR 1975 Del 117) as authority where amendment to withdraw an admission was allowed.

Respondent (Landlady)'s Arguments

  • The landlady relied on the appellant's clear admissions in the pleadings and in his sworn testimony that he alone was the tenant; she pointed to evidence that rent, although paid from a partnership account, was charged to the appellant, indicating the partnership did not claim tenancy.
  • She argued the two newly produced letters are controverted and may be forged; their late discovery is implausible.
  • Allowing the amendment would materially prejudice the landlady by removing or weakening grounds of eviction (notably clause (h) — acquisition of another residence), would displace her case and would cause delay and complication (including possible joinder of other partners and fresh pleadings/evidence).
  • Counsel cited authorities (Neera Grover v. Narinder Jaggi; Indo‑American Electricals Ltd. v. M.L. Sharma) and the Full Bench decision Doors & Boards Agencies v. Goel Bros to support the proposition that a tenant cannot be permitted to withdraw vital admissions by amendment at a late stage.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Panchdeo Narain Srivastava v. Km. Jyoti Sahay, 1984 Supp SCC 594 : AIR 1983 SC 462 The settled principle that a party cannot be allowed to withdraw admissions made in pleadings without sufficient reasons. Cited as authoritative support for the proposition that withdrawing admissions requires sufficient justification; used to underpin refusal to allow amendment.
Vishwa Nath v. Chaman Lal Khanna, AIR 1975 Del 117 An instance where amendment to withdraw an admission was allowed where it brought the party's case into conformity with facts/findings and the landlord's case. Relied on by appellant's counsel; Court distinguished the facts of that case from the present facts and found it inapplicable.
Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Company, (1976) 4 SCC 320 : AIR 1977 SC 680 Amendment which displaces the plaintiff's case completely or withdraws admissions to the prejudice of the plaintiff cannot be allowed. Applied by the Court to hold that the proposed amendment would displace the landlady's case and therefore could not be permitted.
Haji Mohammed Ishaq Wd. S.K Mohammed v. Mohammed Iqbal and Mohammed Ali & Co., (1978) 2 SCC 493 : AIR 1978 SC 798 An amendment of the written statement cannot be allowed if it introduces a new case. Relied upon to support refusal because the proposed amendment would introduce a new case (partnership tenancy) at a late stage.
Neera Grover v. Narinder Jaggi, (1982) 21 DLT 33 The tenant cannot be allowed to amend the written statement so as to withdraw vital admissions of fact. Cited by respondent and accepted by the Court as a supporting authority for refusing the amendment.
Indo-American Electricals Ltd. v. M.L. Sharma, (1982) 21 DLT 102 Similar proposition: refusal to allow amendment which withdraws vital admissions. Relied upon by the respondent and treated as persuasive by the Court in upholding the lower courts' discretion.
Doors & Boards Agencies v. Goel Bros (Full Bench, decided May 25, 1984) Approval (by Full Bench) of the principle that amendments withdrawing vital admissions should not be permitted in similar circumstances. Referenced as an approving authority for the approach adopted by the respondent and relied upon by the Court in support of refusing the amendment.

Court's Reasoning and Analysis

The Court proceeded by examining the sequence of pleadings and evidence and applying the cited legal principles regarding amendments that withdraw admissions. The key elements of the Court's reasoning, as stated in the opinion, are:

  • The appellant had made a clear admission in his written statement that he alone took the premises on rent and reiterated that position in his sworn testimony before the Controller and during cross-examination of the landlady. Such admissions are significant and central to the case.
  • Evidence showed that although rent was paid from a partnership account, the appellant alone had been debited with the rent, which the Court took as indicating the partnership consistently did not claim tenancy rights; the uniform case throughout was that the appellant was tenant in his individual capacity.
  • The appellant had earlier made admissions in related civil proceedings (an injunction suit) that corroborated the position that he alone was tenant. These facts were placed before the Court in the landlady's replies and were not disputed.
  • The new documents relied on by the appellant (two letters dated 1 July 1963) were controverted by the landlady. The Court noted the possibility of forgery and the implausibility of the appellant having remained ignorant of such documents for many years but discovering them only at the final stage; while the Court did not adjudicate on the genuineness of the documents, it regarded their late production and the possibility of forgery as relevant to the discretion whether to allow amendment.
  • The Court applied established authorities: it distinguished Vishwa Nath (where amendment harmonised with the landlord's case and the Controller's finding) and relied upon higher authority (Modi Spinning, Haji Mohammed Ishaq) and local decisions (Neera Grover; Indo‑American) for the principle that amendments which withdraw vital admissions or introduce a new case that displaces the other party's position should not be permitted.
  • The Court found that allowing the amendment would not only withdraw a vital admission but would also displace the landlady's case and cause delay and complication (potential joinder of other partners, fresh pleadings and evidence). The lower courts had exercised their discretion to refuse the amendment for good reasons and that exercise of discretion was not shown to be tainted by illegality.
  • Given these considerations, the Court concluded the appellant's application to amend was made with mala fide motives to complicate and delay the proceedings and that there was no satisfactory evidence that the original admissions were erroneous.

Holding and Implications

Holding: The appeal is DISMISSED.

Direct consequences for the parties:

  • The appellant's request to amend the written statement to assert an original partnership tenancy is refused; the prior admissions by the appellant remain effective for the purposes of the eviction proceedings.
  • The appeal against the Tribunal's dismissal of the application to amend is dismissed with costs; the Court awarded counsel fee of Rs. 700.

Wider implications: The Court applied and reaffirmed existing principles (as cited) that amendments withdrawing vital admissions or introducing a new case at a late stage are not to be permitted absent sufficient justification. The opinion does not purport to create a new precedent; it upholds the established approach and the exercise of discretion by the lower fora in the facts of this case.

Appeal dismissed

    R. Gupta Alias Raj Gupta v. Nirmal Nanda And Another

    P.K Bahri, J.—This appeal has been filed under Section 39(2) of the Delhi Rent Control Act against the judgment dated April 23, 1987, of Mr. M.A Khan, Rent Control Tribunal, by which he dismissed the appeal brought against the order dated April 4, 1987, of Mr. Ajit Bharihoke, Additional Rent Controller, dismissing the application of the appellant seeking amendment of the written statement in order to take a new plea that initially the appellant alone was not the tenant in the premises in question but a partnership firm under the name and style of M/s. D.P Gupta & Company was the tenant.

    2. Nirmal Nanda-respondent No. 1 in this appeal is the landlady of the premises in question and she brought the eviction petition on August 14, 1984, pleading that the premises in question part of house No. C-11, N.D.S.E Part II, New Delhi, had been let out to the appellant with effect from 1st July 1963 at the rental of Rs. 450/- per mensem for residential purposes and he has without the written consent of the landlady sublet, assigned and parted with possession of the said premises in favour of M/s. D.P Gupta & Company (P) Limited in July 1984 and the tenant himself has built/acquired vacant possession of the premises at C-729 New Friends Colony, and that the respondent-tenant has caused substantial damage to the premises. These grounds are covered by clauses (b), (h) & (j) of sub-section (1) of section 14 of the delhi rent control act. The appellant filed the written statement in which he made an admission that he had initiallly taken the premises in question on rent but he took the plea that he was a partner of M/s. D.P Gupta & Company which comprised of three partners, namely, the appellant, Raj Gupta and D.P Gupta in 1976 and M/s. D.P Gupta & Co. Private Limited was incorporated under the Indian Companies Act and the said Company took over all the assets and liabilities of the said partnership firm and on the request of the appellant the landlady accepted the said Company as a tenant in the premises in dispute in place of the appellant. So, according to the case set up in the written statement, the appellant ceased to be the tenant as he surrendered the tenancy rights and the landlady created the tenancy in favour of the Private Limited Company. It was admitted fact that the premises had been let out for residential purposes and that the appellant had constructed his own new residential house where he has shifted. In replication the landlady controverted the avernments of the appellant that any tenancy had been created in favour of the said Company.

    3. During the pendency of the case, on application being moved by the appellant, the said Company was also added as respondent No. 2 in the eviction case. The landlady completed her evidence on Augnst 12, 1986. The appellant appeared as RW1 and completed his evidence. The Company examined two witnesses and also completed the evidence. The case was fixed for final arguments and then the appellant moved the application seeking amendment of the written statement in order to take the plea that in fact, he had not taken the premises in question as a tenant in individual capacity and initially the said partnership firm comprising of three partners including the appellant had taken the premises on rent. It was pleaded by the appellant that he made a wrong and erroneous admission of fact and he was under the wrong impression throughout that he alone is the tenant in the premises in question and while he was searching some old record, he came across two letters, one copy of the letter dated 1st July 1963 written by him on behalf of M/s. D.P Gupta & Company mentioning about taking of the premises on rent and the other is the reply given by the landlady of the same date accepting the terms and conditions of the tenancy given in the aforesaid letter. So, it was sought to be pleaded that in fact, the premises were taken on rent by the partnership firm and by mistake for all these years the appellant had been considering himself to be the sole tenant in the premises in question and so he prayed that the appellant may be allowed to amend the written statement to take the correct plea in the written statement. This amendment is not sought without some purpose. It is obvious that if on merits a finding is given that the appellant never surrendered the tenancy and the landlady never accepted the Company as tenant, the appellant has no case and the eviction order was bound to follow but if the appellant now is allowed to amend the written statement the effect would be that not only the appellant alone but his other two erstwhile partners would be also deemed to be tenants in the premises in question and thus the ground covered by clause (h) that the tenant has acquired another residence may not be available to the landlady and it may also result in sufficient delay in the disposal of the case because then the whole case will have to be tried again on new pleas which may be raised not only by the appellant by seeking amendment of the written statement but by his other two partners by filing a new written statement after the partnership firm is joined as a respondent. As far as the law is concerned, it is almost settled that no party can be allowed, to withdraw admission made in the pleadings without any sufficient reasons. (See Panchdeo Narain Srivastava v. Km. Jyoti Sahay, 1984 Supp SCC 594 : AIR 1983 SC 462). In the present case this particular appellant has not only made an admission in the pleadings that he alone took the premises on rent initially but he reiterated his plea when he appeared in the witness box and same plea remained intact while cross-examining Smt. Nirmal Nanda and it also came out in the evidence that although the rent was being paid to the landlady from the partnership account yet it was the appellant alone who was being debited with that rent in his account in the partnership meaning thereby that at no point of time the partnership claimed any tenancy rights in the premises and it has been the uniform case of the appellant and his partnership firm that appellant is tenant in his individual capacity in the premises in dispute. It is also significant to mention that in 1984 a civil suit was brought seeking injunction restraining the appellant from subletting or parting with possession of the premises in question to anyone when appellant was in the process of shifting to his new house. An injunction was also granted ex-parte but the appellant took the plea when he appeared in that suit that in fact, he had given the premises in question to his own brother as a licensee and that possession has been delivered even before service of the ex-parte injunction order. Again in that case, it is brought to my notice by the learned counsel for the respondent, the appellant admitted that he alone is the tenant in the premises in question. All these facts have been mentioned in the reply to the show cause notice by the respondent-landlady which are not in dispute before me.

    4. Counsel for the appellant has cited Vishwa Nath v. Chaman Lal Khanna, AIR 1975 Del 117, where this Court has upheld the allowing of amendment by the tenant to withdraw an admission. In the cited case, the case of the landlord was that Vishwa Nath was the tenant whereas Vishwa Nath took plea that the Company was the tenant. The finding was given by the Controller that Vishwa Nath was the tenant. Visha Nath then filed an application seeking amendment in order to plead that he was the tenant and not the Company and that was in consonance with the finding of the Controller and was also the case of the landlord. In such circumstances, the Court held that amendment could be allowed as tenant can be allowed to withdraw erroneous admission made by him. The facts are totally different. In the cited case, it was the case of the landlord also that Vishwa Nath was the tenant. So, in order to bring his case in consonance with the case of the landlord that the tenant was allowed to amend the written statement. In Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Company, (1976) 4 SCC 320 : AIR 1977 SC 680, the Supreme Court clearly laid down the law that the amendment which has the effect of displacing the case of the plaintiff completely and also amount to withdrawal of admission made in the pleading cannot be allowed. In the cited case, the plaintiffs filed a suit for recovery of money. The defendant filed a written statement taking the plea that agreement dated April 7, 1967, was not applicable to the transaction in which the plaintiff works as a stockist-cum-distributor and the agreement is not applicable to the transaction in which the plaintiff acted as a principal. In para 26 of the written statement, the plea taken was that even if the said agreement was applicable to the transactions in suit the plaintiff's position was merely of an agent of the defendant and as such the plaintiff is not entitled to claim any damages for non-supply of the goods. After three years the defendant wanted to delete both paras 25 & 26 and substitute two new paras to take the plea that by virtue of an agreement the plaintiff was appointed a mercantile agent and the plaintiff acted in that capacity in placing the orders on defendants. They also denied the allegation of the plaintiff that the parintiff placed the orders with the defendant in the plaintiff's capacity as an agent of the defendants. They sought to take the plea that the plaintiff throughout acted as an agent of the defendants. This application was rejected by the trial Court on the ground that it amounts to repudiation of the clear admission which is a motivated one in order to deprive the plaintiff of his valuable rights. The High Court also affirmed the order. The Supreme Court held that such an amendment cannot be allowed which had the effect of not only withdrawing of admissions already made by the defendants but also of displacing the case of the plaintiff completely. In the present case, it must be remembered that the appellant has not only made a vital admission in the written statement that he alone took the premises on rent but he also gave sworn testimony before the Controller that he alone had been the tenant in the premises in question. It is also pertinent to mention that the landlady in para 14 of the eviction petition did not say that any written agreement was executed or any documents were exchanged while creating the tenancy in favour of the appellant. In the written statement the appellant did not controvert this fact. It is impossible to believe that in case tenancy had been created in the name of partnership initially the appellant would have forgotten this material fact while drafting the written statement and giving the statement in Court. It is not out of place to mention that two letters now being sought to be brought on record are controverted by the landlady. The possibility of such documents being forged cannot be completely over-ruled. It is true that this is not the stage for this Court to give any finding with regard to the genuineness or otherwise of the said two documents but while deciding the application seeking amendment of the written statement which has the effect of withdrawing not only the admission made by the appellant but of displacing the case of the landlady completely, this fact cannot be lost sight of that such a document can be forged. It is not possible to believe that the appellant remained ignorant of these documents for all these years and one fine morning he discovered those documents so as to come forward with a new plea. In Haji Mohammed Ishaq Wd. S.K Mohammed v. Mohammed Iqbal and Mohammed Ali & Co. (1978) 2 SCC 493 : AIR 1978 SC 798, it was laid down that an amendment of the written statement cannot be allowed if it introduces a new case.

    5. Counsel for the respondent-landlady has cited Neera Grover v. Narinder Jaggi, (1982) 21 DLT 33 and Indo-American Electricals Ltd.… v. M.L Sharma…., (1982) 21 DLT 102, where Yogeshwar Dayal, J (as His Lordship then was) laid down that the tenant cannot be allowed to seek amendment of the written statement which had the effect of withdrawing the vital admission of facts made therein. These two judgments were approved by the Full Bench in Suit No. 420/79. Doors & Boards Agencies v. Goel Bros, decided on May 25, 1984.

    6. Lower Courts have exercised their discretion in declining the prayer of the appellant seeking amendment of the written statement for good reasons. It is not proper for this Court to intervene with the said discretion exercised by the two courts below which is not shown to be vitiated by any illegality in any manner.

    7. Keeping in view all the facts and circumstances, lam of the firm view that the appellant has come forward with this application seeking amendment of the written statement with a malafide motive of complicating the case and delaying the disposal of the case as far as possible. It is not a fit case where the appellant should be allowed to withdraw his vital admission of facts made in the written statement as well as in evidence, I am not at all satisfied that the appellant has made any such erroneous admission of facts. I find no merit in this appeal which I, hereby, dismiss with costs. Counsel fee Rs. 700/-.

    Appeal dismissed
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    Comments

    R. Gupta Alias Raj Gupta v. Nirmal Nanda And Another
    (Apr 25, 1988)