Citation Codes

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Case Number

FAO No. 262/2009 & CM No. 11910/2009

Attorney(S)

Through: Mr. Virender Goswami and Ms. Soni Singh, Advocates.
NEMO

Judges

V.B Gupta, J.

Acts

Order XXXIX Rule 10 read with Section 151 of the Code of Civil Procedure (for short as Code)
referred.13. Section 91 of the Indian Evidence Act,
consideration.7. Order XXXIX Rule 10 of the Code
Sections 33 and 35 of the Indian Stamp Act.3.
provisions of Order XXXIX Rule 10 of theCode
SECTION 138 NEGOTIABLE INSTRUMENTS ACT

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Smart Summary

Structured Summary of the Opinion — V.B. Gupta, J. (October 14, 2009)

Factual and Procedural Background

The opinion concerns an appeal against an order dated 28.3.2009 passed by the Additional District Judge, Delhi, which had allowed an application made by the respondent under Order XXXIX Rule 10 read with Section 151 of the Code of Civil Procedure. The respondent is the owner/landlord of the suit property. The appellant was inducted as a tenant after executing a lease dated 19.7.2006; rent was agreed at Rs. 20,000 per month effective from June 2006. The appellant allegedly paid rent only up to September 2006. Three cheques issued by the appellant for October–December 2006 were dishonoured and a complaint under Section 138 of the Negotiable Instruments Act is pending. The respondent alleged that the appellant did not pay rent from October 2006 to April 2007 and thus is an unauthorised occupant. It was also alleged that the appellant filed forged receipts which, according to the respondent, are inadmissible under Sections 33 and 35 of the Indian Stamp Act.

In his written statement, the appellant admitted execution of the lease deed but asserted that the lease was executed in good faith at the respondent's request for tax rebate and that the parties never intended a landlord-tenant relationship. The appellant claimed there was an agreement to sell the property for Rs. 45 lakh (later allegedly increased to Rs. 50 lakh) and that he paid advances totalling Rs. 10,30,000. He stated original receipts were lost and reported the loss. The appellant also filed a separate suit for specific performance in the High Court.

The trial court granted the respondent's application under Order XXXIX Rule 10. The present appeal challenges that order. The appellate court heard submissions, reviewed the written statement and trial court findings, and delivered the judgment dismissing the appeal and awarding costs.

Legal Issues Presented

Whether Order XXXIX Rule 10 of the Code applies so as to permit the court to order deposit of rent arrears when the defendant/admitted party has executed a lease deed and, by their own pleadings, effectively admitted the document's execution.
Whether the appellant's contention that there was an agreement to sell (and not a landlord-tenant relationship) can negate the admitted execution of lease deeds and thereby prevent the application of Order XXXIX Rule 10.
Whether oral evidence can be admitted to contradict or override the admitted written lease deed, given Section 91 of the Indian Evidence Act.
Whether documents alleged to be receipts (originals said to be lost) and alleged to be forged affect the trial court's ability to act under Order XXXIX Rule 10.

Arguments of the Parties

Appellant's Arguments

The appellant contended that Order XXXIX Rule 10 applies only where a party admits holding money or a thing as a trustee for another or admits it belongs or is due to another; he argued he has not made such an admission.
The appellant asserted that the parties had an agreement to sell the property and therefore there was no landlord-tenant relationship; under that agreement the appellant paid advances and claimed ownership rights, denying liability to pay rent at Rs. 20,000 per month.
The appellant stated that some original receipts showing payments were lost and a report had been lodged; he relied on photocopies of those receipts.
The appellant (through counsel) referred to judicial decisions — Gujarat Cooperative Milk Marketing v. M/s Jawahar Mal and Sons and Smt. Lalbiakthangi v. Shri H. Duna — to support his position on the applicability of Order XXXIX Rule 10.
The appellant argued that the lease documents were instruments that were insufficiently stamped and hence should be impounded (as urged in his pleadings).

Respondent's Arguments

The respondent maintained that the appellant was a lessee under the admitted lease deed(s) and had defaulted in payment of rent from October 2006 onwards.
The respondent relied on the lease deed(s) fixing rent (Rs. 18,500 per month under the 1.7.2005 lease and Rs. 20,000 per month under the 19.7.2006 lease) and on the appellant's possession and enjoyment of the property without paying rent.
The respondent alleged that the photocopies of receipts produced by the appellant were forged and inadmissible; the respondent sought relief under Order XXXIX Rule 10 for deposit/delivery of money due.
The respondent pointed to dishonour of cheques and the pending Section 138 complaint as evidence of non-payment and default.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gujarat Cooperative Milk Marketing v. M/s Jawahar Mal and Sons and others, AIR 2003 Delhi 208	Cited by appellant's counsel regarding the scope/application of Order XXXIX Rule 10 of the Code.	The court held this judgment was not applicable to the present facts because there was a clear admission by the appellant of execution of the lease deed, making the cited authority inapposite.
Smt. Lalbiakthangi v. Shri H. Duna, AIR 1995 Gauhati 12	Cited by appellant's counsel regarding the scope/application of Order XXXIX Rule 10 of the Code.	The court found this judgment not applicable on the facts because of the admission of execution of lease deed by the appellant; therefore the authority did not assist the appellant.

Court's Reasoning and Analysis

The court's analysis proceeded in several steps, based exclusively on the record and pleadings:

The court observed that the appellant admitted execution of the lease deed(s) in the written statement. The written statement's preliminary objections included paragraphs that stated the respondent was the owner and the appellant was in occupation and possession since June 2005, while also claiming an alleged agreement to sell. The court noted the written statement did not clearly set out the appellant's legal status (lessee, tenant or owner) but admitted execution of lease documents.
The court set out the text of Order XXXIX Rule 10, which permits the court to order deposit in Court or delivery where the subject-matter is money or a thing capable of delivery and a party admits holding it as trustee or admits it belongs or is due to another.
Applying that provision, the court found that where rent is payable and liability to pay is admitted, the court can order deposit of arrears of rent. The court concluded that the appellant's admitted execution of the lease deed amounted to an admission sufficient to invoke Order XXXIX Rule 10.
The court considered the appellant's claim that there was an agreement to sell and that payments made were part-payment of sale. The court found this claim inconsistent and unsupported by documentary evidence: the appellant had not produced original receipts to substantiate the alleged payments (the appellant said originals were lost), and the trial court had found photocopies suspect and alleged forgeries.
The court invoked Section 91 of the Indian Evidence Act to emphasize that when terms of a contract are set out in writing by agreement of the parties, oral evidence to contradict the document is excluded. Thus, because the lease deed had been admitted, oral assertions to the contrary (that the lease was only a formality and the true relation was one of sale) could not be given effect to in place of the written instrument.
The court endorsed the trial court's more detailed factual findings: the lease deed(s) were admitted, the appellant was in possession and enjoying the property without paying rent, the appellant failed to produce original receipts for the alleged payments towards sale consideration, and the contention that payment of Rs. 10,30,000 out of an alleged Rs. 50 lakh sale consideration entitled the appellant to possession without paying rent was not believable.
The court concluded that the judgments cited by the appellant were factually distinguishable and therefore inapplicable because of the admitted execution of the lease deed in the present case.
Finally, the court characterized the appeal as frivolous and an abuse of process, noting the appellant's conduct in litigating repeatedly and thereby frustrating the respondent's efforts to obtain rent or possession.

Holding and Implications

Holding: The appeal is dismissed. The appellate court affirmed the trial court's allowance of the respondent's application under Order XXXIX Rule 10 read with Section 151 of the Code and found no reason to interfere with the trial court's findings.

Direct consequences ordered by the court:

The appellant was ordered to pay costs of Rs. 50,000 (Rupees Fifty Thousand) to the respondent. The appellant was directed to deposit this amount with the trial court within one month from the date of the order; failing which the trial court was to recover the same in accordance with law.
The order in CM No. 11910/2009 was dismissed (notation in the judgment: "CM NO. 11910/2009 — Dismissed").
A copy of the judgment was directed to be sent to the trial court.

Broader implications: The opinion does not purport to lay down a new legal principle. The court applied existing provisions (Order XXXIX Rule 10 CPC and Section 91 Indian Evidence Act) to the admitted facts and held that the admitted execution of lease deeds justified the trial court's order. The judgment emphasizes that admitted written instruments cannot be undermined by contradictory oral assertions, but the opinion does not state that it establishes a novel legal precedent beyond its application to the facts before the court.

Judge: V.B. Gupta, J.

Date of Judgment: October 14, 2009

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Madhu Sudan v. Valsala Jayamani

V.B Gupta, J.

1. This appeal has been filed by appellant against order dated 28.3.2009 passed by Additional District Judge, Delhi. Vide impugned order application of respondent under Order XXXIX Rule 10 read with Section 151 of the Code of Civil Procedure (for short as Code) was allowed.

2. Brief facts of this case are that respondent is the owner/landlord of suit property. Appellant was inducted as tenant in this property after having executed lease dated 19.7.2006 The rent payable was Rs. 20,000/- per month with effect from June, 2006. It is alleged that appellant paid rent only upto September, 2006. Three cheques issued by appellant with effect from October, 2006 to December, 2006 have been dishonoured and complaint under Section 138 of Negotiable Instruments Act against appellant is pending in the court. Appellant has not paid rent with effect from October, 2006 till April, 2007 and is thus an

unauthorised occupant of the property. It has also been alleged that appellant filed forged receipts which are inadmissible in evidence in terms of Sections 33 and 35 of the Indian Stamp Act.

3. In written statement, appellant admitted execution of lease deed. However, it is stated that appellant executed the agreement in good faith at the request of respondent, as respondent wanted to have certain rebate in tax though parties never intended to have any landlord/tenant relationship. In fact, respondent had agreed to sell the property for sale consideration of Rs. 45 lakhs, which was later on increased to Rs. 50 lakhs. Appellant also paid advance of Rs. 10,30,000/-. Original copies of receipts, however, have been lost and in this regard a report has been lodged. Appellant never admitted the liability to pay rent @ Rs. 20,000/- per month.

4. It is contended by learned counsel for the appellant that provisions of Order XXXIX Rule 10 of the

Code are applicable only when a party admits that he holds money or other thing capable of delivery as a trustee for another party. Appellant has not made any such admission. On this point, learned counsel referred a decision of this Court, Gujarat Cooperative Milk Marketing v. M/s Jawahar Mal and Sons and others. AIR 2003 Delhi 208 and Smt. Lalbiakthangi v. Shri H. Duna, AIR 1995 Gauhati

12.

5. Other contention is that respondent had entered into an agreement to sell the suit property to the appellant. Under these circumstances, there can be no such admission on the part of appellant towards amount payable to the respondent. There is no relationship of landlord and tenant between the parties, so there can be no question of admitted rent. Moreover, appellant has filed a separate suit for specific performance in this Court. Lastly, lease documents being instruments and being insufficient stamped, are liable to be impounded.

6. As per appellant's own averments, he is taking contradictory stand. On the one hand, he admits the execution of lease agreement while, on the other hand, he denies its execution and claims that there was an agreement to sell the property in question. Appellant himself is not sure in his mind as to whether he is a tenant or lessee or owner of the property in question, possession of which he claims by virtue of making part payment towards the sale consideration.

7. Order XXXIX Rule 10 of the Code read as under:

“10. Deposit of money, etc., in Court. Where the subject-matter of a suit is money or some other thing capable of delivery and any party thereto admits that he holds such money or other thing as a trustee for another party, or that it belongs or is due to another party, the Court may order the same to be deposited in Court or delivered to such last-named party, with or without security, subject to the further direction of the Court.”

8. According to this provision, where rent is payable and liability to pay is admitted, the court can order deposit of arrears of rent in the court.

9. As stated above, appellant is blowing hot and cold in the same breath. Appellant has not placed on record any agreement to sell, to show that by virtue of which, he paid advance of Rs. 80,000/- as well as Rs. 50,000/- as alleged.

10. Written statement filed by appellant in the trial court makes an interesting reading which clearly shows admission made by him, that he is a lessee in the property in question. Extract of para 4, 5 and 8 of preliminary objections of written statement filed by appellant herein, read as under:

“4. That admittedly the Plaintiff is the Owner of the said flat and the Defendant is in occupation and in possession of the said Flat since June 2005. It is submitted that the Plaintiff alongwit

h her husband Shri A. Jayamani had approached the Defendant to sell the said flat sometime in June 2005. That after much discussion and negotiations, it was decided that the Plaintiff would sell the said flat for total sale consideration of Rs. 45,00,000/- (Rupees Forty Five Lacs only) to the

Defendant. However, as the defendant did not have the entire Sale Consideration at that point of time, it was agreed that the Defendant would pay Rs. 5,00,000/- (Rupees Five Lacs only) immediately and the balance amount within 18-20 months. It was also agreed that in the meanwhile the Defendant would pay interest @ Rs. 18,500/- per month to the Plaintiff, till the entire aforesaid sale consideration is paid and the Sale Deed is executed in favour of the Defendant. That the Defendant accordingly paid a sum of Rs. 5,00,000/- (Rupees Five Lacs only) to the Plaintiff in June, 2005 as earnest/advance money in the presence of witnesses.

5. It is submitted that the Defendant executed certain agreements in good faith at the request of the Plaintiff, as the Plaintiff wanted certain rebate in tax and also to show to her bankers some papers, though the parties never intended to have any LANDLORD-TENANT relationship. The aforesaid fact is evidence from the fact that none of these documents were registered. The Lease Agreements were executed not only for tax purposes in good faith but also to protect the possession of the said property till such time the Defendant get a sale deed executed in his favour. It is therefore evident that

there was never any intention of the parties to enter into any Lease Agreement with regard to the said flat.

8. It is pertinent to mention herein that apart from the above fact the Plaintiff

had to complete certain formalities which were also never intimated to the Defendant having been done till date. It

has come to the knowledge of the Defendant that the Plaintiff till date has

not transferred the electricity connection in her name, neither has the Plaintiff obtained any completion certificate from the Competent authority which was required to be obtained by the Plaintiff. In fact the Plaintiff only kept on demanding money

from the Defendant and kept on taking interest with an assurance that all the formalities would be completed by the Plaintiff at the earliest.”

11. Appellant mischievously and very cleverly in entire written statement, no where mentioned as to on which date, respondent approached him to sell the flat. As per appellant's own admissions made in the written statement, respondent is the owner of flat in question and appellant is in occupation and possession of flat since June 2005. But written statement is silent about the legal status of the appellant, as to whether he is lessee, tenant or owner. Appellant wants the Court to

believe that out of sale consideration of Rs. 50 Lakhs as alleged by him and by paying just a sum of Rs. 1.30 lakh, appellant claims himself to be owner of the flat in question.

12. As stated above, execution of lease deed has been admitted by the appellant. Once execution of document has been admitted, no oral evidence contrary to that can be referred.

13. Section 91 of the Indian Evidence Act, deal with the exclusion of oral by documentary evidence. This Section, therefore, lays down that when the terms and conditions of a contract have been set out in writing by agreement of parties, the document is intended to be a record of the transaction and therefore, no other evidence shall be given to prove the transaction, except the document itself. Oral evidence is excluded equally when a document does exist.

14. Trial court in the impugned order observed;

“The defendant in the Written Statement has denied all these facts and has claimed that there was no intention of the parties to enter into any lease agreement and parties did not have any landlord-tenant relationship which implies that the lease deed dated

1.7.2005 and 19.7.2006 between the parties are not categorically denied by the defendant rather he has admitted the execution of these lease deeds but has taken the plea that the plaintiff had agreed to sell the said property to the defendant and has also filed the suit for specific performance and permanent injunction in Hon'ble High Court. The defendant has claimed that he has paid about Rs. 10,30,000/- out of the total consideration of Rs. 50 lacs but in reply to the application, he has pleaded that original copies of the receipts have been lost whereas on behalf of plaintiff, it has been alleged that these receipts have been forged by the defendant and a false plea has been taken by the defendant that the original have been lost and the photocopies relied by the defendant cannot be considered as evidence. The defendant has also taken the plea that lease agreement was signed at the request of the plaintiff that the same was to be used in good faith for tax purpose and also for protection of the property. The lease deed dated 1.7.2005 commenced for a period of 11 months wherein monthly rent was fixed at Rs. 18,500/- and the lease deed dated 19.7.2006 is also for 11 months commencing from 1.6.2006

wherein the rent of the premises has been agreed to be Rs. 20,000/- per month. There is a mention of the security deposit of Rs. 37,000/- and the defendant is admittedly in possession of the suit property and enjoying the same without paying any rent. He claims to have paid Rs. 10,30,000/- to the plaintiff but has failed to produce the original receipts and admittedly the suit property has not been sold so far by the plaintiff in his favour. Therefore, the contention of the defendant cannot be believed that only by payment of Rs. 10,30,000/- out of a total sale consideration of Rs. 50 lacs, the plaintiff could have allowed him to take over the possession of the suit property unless there was lease agreement between the parties and the defendant had agreed to pay the rent accordingly. Since the defendant is enjoying the property without paying any rent, the plea of the defendant that he had paid a sum of Rs. 10,30,000/- to the plaintiff as part consideration for sale of property and that he was entitled to use the property without any payment cannot be sustained. Since the defendant is in possession, he is presumed to be lessee and therefore, is bound to pay the agreed rent @ Rs. 20,000/- per month to the plaintiff upto the lease period and thereafter on termination of lease, is bound to pay the damages/mesne profits.”

15. There is no reason to disagree with above findings of the trial court.

16. Judgments referred by learned counsel are not applicable to the facts of the present case, as in the present case there is clear cut admission on the part of appellant that he has executed the lease deed. Since execution of lease deed has not been denied, relationship of landlord and tenant is admittedly there. In the garb of alleged sale agreement, lease deed executed between the parties, cannot be overlooked or given a go bye.

17. Present appeal filed by appellant is most bogus and frivolous one. Appellant is enjoying the property, without paying any rent/occupation charges, since October, 2006 and has also no intention to pay the same. Such unscrupulous person who take property on lease and later on claims ownership of the same and then invent a cock and bull story, just to retain possession of the property, should be dealt with heavy hands. Strong message is required to be sent to such unscrupulous persons who wants to enjoy property of others, without paying even a single penny and deprive

the lawful owner, who had built the same with their hard earned money. Such persons make the legal and rightful owner to run from pillar to post i.e from one court to another to seek justice that is, to get their legal dues, such as monthly rent and possession. Appellant to a great extent has been successful in frustrating respondent-owner efforts to get her legal due that is, either the rent or possession. Appellant has been taking re-course to one litigation after the other, just to harass the respondent-owner

18. This appeal is nothing but is gross abuse of the process of law. Appellant has no intention either to pay agreed rent or to vacate the premises. Appellant's intention is just to grab the property by any means whatsoever.

19. So, keeping in view the unscrupulous conduct of the appellant, since he wants to hold on to the property, without paying for it, the present appeal is

dismissed with costs of Rs. 50,000/- (Rupees Fifty Thousand).

20. Appellant is directed to deposit the cost with trial court, within one month from today, failing which trial court shall recover the same in accordance with law.

CM NO. 11910/2009

21. Dismissed.

22. Copy of this judgment be sent to the trial court.

October 14 , 2009 V.B.GUPTA Ag/bhatti

Madhu Sudan v. Valsala Jayamani

Structured Summary of the Opinion — V.B. Gupta, J. (October 14, 2009)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Madhu Sudan v. Valsala Jayamani

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