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National Textile Corporation Ltd. & Anr. v. Ashval Vaderaa .

Delhi High Court
Feb 9, 2010
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Structured Summary of the Opinion (Reva Khetrapal, J.)

Factual and Procedural Background

The respondent owned premises (No. E-25, NDSE Part-II, New Delhi) which were let to the appellant initially in May 1975 for 11 months by an unregistered lease. Subsequent agreements (including an unregistered agreement dated 16.8.1978 for a three year period starting from 3.3.1977) expired by efflux of time and the appellant continued to occupy the premises as a month-to-month tenant under varying oral terms. From 1.1.2005 a new oral month-to-month tenancy was said to exist with consolidated rent of Rs. 15,000/- per month.

On 30.8.2006 the respondent served a notice to quit. The respondent filed Civil Suit No. 286/2006 on 4.12.2006 for ejectment and mesne profits. The appellant sought reference to arbitration under Section 8 of the Arbitration Act relying on an arbitration clause in the 16.8.1978 agreement; that application was dismissed by the trial Court on the ground that the terms of tenancy had changed by oral agreement and the arbitration clause could not be relied upon.

The appellant filed Civil Revision Petition No. 166/2007 in this Court challenging refusal to refer to arbitration; this Court rejected that contention and held that the unregistered expired lease and its arbitration clause could not be invoked. A Special Leave Petition (SLP (Civil) No. 5711/2009) to the Supreme Court was dismissed on 23.3.2009.

Separately, on 5.11.2008 the respondent applied under Order 12 Rule 6 read with Orders 14 and 15 and Section 151, CPC for a decree of possession based on admissions in the pleadings and documents. The trial Court, by judgment dated 9.4.2009, decreed the suit for possession under Order 12 Rule 6 (granting six months to vacate). The present appeal challenges that decree.

Legal Issues Presented

  1. Whether the arbitration clause contained in the unregistered and expired 16.8.1978 agreement could be invoked to refer the ejectment dispute to arbitration (i.e., whether arbitration was available when the earlier written lease had expired and the parties occupied on oral month-to-month terms).
  2. Whether a decree for possession in an ejectment suit based on a month-to-month tenancy can be granted under Order 12 Rule 6, CPC on the basis of admissions (including constructive admissions and admissions contained in documents) without a full trial on merits.
  3. Whether the appellant could re-litigate the nature of the relationship (business agreement vs. landlord-tenant) in the present stage after the earlier revision petition and dismissal of SLP had addressed and resolved the nature of the tenancy.

Arguments of the Parties

Appellant's Arguments

  • The agreement dated 16.8.1978 contained an arbitration clause and the dispute ought to be referred to arbitration under Section 8 of the Arbitration Act.
  • The relationship between the parties was not a simple landlord-tenant relationship but a business relationship; the sum of Rs. 15,000/- included sales commission and not purely "rent".
  • There were triable issues and no clear or unequivocal admission in pleadings to justify a decree under Order 12 Rule 6; documents like covering letters and TDS certificates were not admitted and could only be considered after oral evidence.
  • The appellant denied that it was a "tenant per se"; it pleaded that the occupation was in terms of business agreements rather than mere tenancy.

Respondent's Arguments

  • The respondent relied on clear admissions in the appellant's pleadings and replies: (i) landlord-tenant relationship existed; (ii) there was no registered lease (thus tenancy was month-to-month); (iii) rent was Rs. 15,000/- per month (above Rs. 3,500/-); and (iv) notice to quit dated 30.8.2006 had been served and replied to.
  • For a decree for possession against a month-to-month tenant based on admissions the plaintiff must prove: landlord-tenant relationship, rent above Rs. 3,500 per month, and service of notice to quit — which, it was submitted, were satisfied here.
  • Contemporaneous documents (covering letters with cheques using the term "Rent for the month of..." and TDS certificates indicating "Nature of Payment" as "Rent under Section 194-I") supported that payments were rent.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Vardhaman Spinning & General Mills Ltd. v. Veena Kumari Wadhawan, 68 (1997) DLT 761 Illustrates that when a lease is determined by efflux of time the arbitration clause perishes along with the contract. Used to support the proposition that arbitration clause in an expired/unregistered lease cannot be invoked for post-expiry disputes.
ITC Ltd. v. George Joseph Fernandes, (1989) 2 SCC 1 : AIR 1989 SC 839 Where the dispute is that the contract itself does not subsist (substitution, rescission or alteration), such dispute cannot be referred to arbitration because the arbitration clause would perish with the contract. Applied (via Vardhaman quotation) to hold that arbitration jurisdiction depends on existence of an arbitration clause and that clause cannot be invoked if the underlying contract has ceased to subsist.
Union of India v. Smt. Jagdish Kaur, AIR 2007 Allahabad 67 After expiry of term of agreement the agreement is non-existent for arbitration purposes; arbitration clause not applicable post-expiry. Relied upon as a similar authority to hold arbitration clause in an expired lease is inapplicable to post-expiry disputes.
Union of India v. Kishori Lal Gupta and Brothers, AIR 1959 SC 1362 Cited (in Jagdish Kaur) as supporting authority for the position that arbitration clause does not survive expiry of the agreement. Indirectly invoked (through Jagdish Kaur) to support the proposition that arbitration clause is not available after expiry of the agreement.
Ghulan Hassan Dar v. Controller of Aerodrome, AIR 1987 J & K 25 Where licence/agreement period expires nothing survives for arbitration; arbitration clause ceases on lapse. Used as analogous authority to show arbitration clause ceases to be effective after lapse/expiry of the underlying agreement.
Surjit Sachdeva v. Kazakstan Investment, 66 (1997) DLT 54 Authority cited in connection with the proposition that a decree for possession may be granted on admissions leaving mesne profits for trial. Cited among a cluster of authorities to support passing a decree under Order 12 Rule 6 on admitted facts while leaving mesne profits to be decided on evidence.
Samir Mukherjee v. Devinder K. Bajaj, 71 (1998) DLT 477 Support for the principle that decree can be passed on admissions in appropriate cases. Relied upon as part of authorities showing courts may grant decree on admissions under Order 12 Rule 6.
Vikas Theatres & Exhibitors v. Punjab & Sind Bank, 71 (1998) DLT 526 Authority on passing decree based on admissions and related procedural matters. Included among precedents supporting the proposition that admissions can justify a decree under Order 12 Rule 6.
Shukla Malhotra v. Vyasa Bank Limited, 73 (1998) DLT 124 Cited for the same procedural principle regarding decrees on admissions. Used as part of the judicial support for granting decree on admitted facts.
Amur C. Talwar v. Export Promo Council, 77 (1999) DLT 809 Authority cited in the context of passing decrees where admissions are present. Relied upon as supporting authority for application of Order 12 Rule 6 on admissions.
Deenar Builders v. Khoday Distilleries, 82 (1999) DLT 809 Authority cited in the same line of authorities on decrees grounded on admissions. Cited to reinforce the court's approach to decree on admissions.
Zulfiquar Ali Khan v. Straw Products, 2000 VI AD (Delhi) 347 Cited among authorities on decrees being permissible on the basis of admissions. Relied upon as one of the precedents supporting the court's use of admissions to pass a decree for possession.
Jasmer Singh Sarna & Ors. v. Electronics Trade & Technology, (2002) I AD (Delhi) 281 Cited as judicial authority in the context of decrees on admissions/procedure under Order 12 Rule 6. Included among authorities to justify disposing of the suit for possession on admitted facts.
R.K. Aggarwal v. ITDC, 1997 (1) RCR 401 Cited as part of authorities relevant to passing decrees on admissions or related procedural issues. Relied upon as supportive jurisprudence for the court's approach to admissions.
Uttam Singh Dugal v. Union Bank of India (UBI), (2000) 7 SCC 120 Authority for the proposition that admissions (including constructive admissions) may be considered and may justify proceeding under Order 12 Rule 6. Relied upon to support the proposition that admissions outside pleadings and constructive admissions may be acted upon to pass decree.
Delhi Jal Board v. Surendra P. Malik, 104 (2003) DLT 151 Cited among authorities on the use of admissions to pass decrees under procedural provisions. Used as supporting precedent for deciding the instant application on admitted facts.
Shikharchand v. Mst. Bari Bai, AIR 1974 MP 75 Cited for the proposition that admissions de hors pleadings may be considered under Order 12 Rule 6. Relied upon to show that admissions may be drawn from documents or statements recorded in Court and can justify a decree.
K. Kishore v. Allahabad Bank, 1997 (41) DRJ 698 Cited on the law that admissions outside pleadings can be considered for passing decree under Order 12 Rule 6. Used to reinforce that non-pleading admissions can be acted upon by the Court.
Rajiv Srivastava v. Sanjiv Tuli, 119 (2005) DLT 202 Cited among authorities affirming Court's power to act on admissions and dispose suits accordingly. Invoked to support the proposition that courts may pass decrees where admissions are clear.
Rama Ghei v. U.P. State Handloom Corpn., 91 (2001) DLT 386 Cited in the same context of admissions and summary disposal under procedural rules. Included among authorities supporting disposal on admissions.
R.N. Sachdev v. Ram Lal Mahajan Charitable Trust, 1997 (41) DRJ 698 Cited as part of the line of authorities on admissions being sufficient for summary disposal. Mentioned to support the court's reliance on admitted facts to pass decree.
Satyadhyan Mukherjee v. Deorajin Debi, AIR 1960 SC 941 Authority for res judicata principle: an issue once decided cannot be re-agitated in subsequent proceedings. Applied to hold that the earlier findings in Civil Revision Petition No. 166/07 between the same parties were conclusive and binding in the present appeal.
Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993 Cited for the principle that res judicata applies across different stages of proceedings to prevent re-agitation of decided issues. Relied on to support the court's conclusion that the appellant could not re-open the question of the nature of the relationship after the earlier decision.
C.V. Rajendran v. N.M. Muhammed Kunhi, (2002) 7 SCC 447 Cited as authority reinforcing the scope of res judicata and finality of earlier decisions on the same issue. Applied to justify treating prior adjudication on the tenancy issue as binding.
Ishwar Dutt v. Land Acquisition Collector, (2005) 7 SCC 190 Cited as part of precedents on res judicata and finality of prior findings. Used to buttress the court's application of res judicata to bar re-litigation of the tenancy issue.
Barkat Ali v. Badri Narain (Dead) By Lrs., (2008) 4 SCC 615 Cited as authority on the application of res judicata across stages and proceedings. Relied upon as part of the suite of authorities justifying the court's conclusion that earlier adverse findings could not be re-agitated by the appellant.

Court's Reasoning and Analysis

The Court proceeded by addressing the principal strands of contention in sequence:

  1. On arbitration: The Court accepted the reasoning that the 16.8.1978 written agreement had expired (and, being unregistered, had further admissibility problems) and that the parties thereafter occupied under an oral month-to-month tenancy. The Court relied on authorities (including Vardhaman and ITC Ltd.) to state the legal principle that an arbitration clause cannot be invoked where the underlying contract has ceased to subsist — the arbitration clause perishes with the contract. The Court observed that even if the 1978 lease had been registered, on expiry the lease would have ended and a new oral contract had come into existence; the parties could have executed a new written arbitration agreement if they intended to retain arbitration for subsequent tenancy, but they did not. The prior findings of this Court in Civil Revision Petition No. 166/07 — and the dismissal of the SLP by the Supreme Court — were treated as conclusive on this point.
  2. On admissibility of the 1978 agreement: The Court noted the settled law that leases of immovable property for one year or more must be registered; the 1978 document was unregistered and, where a document is inadmissible for non-registration, all its terms (including an arbitration clause) are inadmissible. The Court therefore held that the appellant could not invoke the arbitration clause in that unregistered, exhausted contract.
  3. On decree under Order 12 Rule 6, CPC: The Court analysed the respondent's application under Order 12 Rule 6 read with Orders 14 and 15 and Section 151 CPC which sought a decree of possession on the basis of admissions. The Court identified four clear admissions relied upon by the respondent (landlord-tenant relationship; lack of registered lease leading to month-to-month tenancy; rent Rs. 15,000/-; and service of notice to quit). The appellant contested that those were not clear admissions and relied on triable issues and non-admission of certain documents.
  4. The Court addressed documentary admissions: while the appellant argued that covering letters and TDS certificates were not admitted and could be tested only at trial, the Court observed that even ignoring such documents, the pleadings contained clear admissions sufficient to invoke Order 12 Rule 6. The Court relied on an array of authorities to explain that admissions need not always be express and that constructive admissions, admissions in documents and statements recorded in Court can be the basis for summary disposal under Order 12 Rule 6. The phrase “otherwise” in the provision was referred to support the view that admissions de hors pleadings may be considered.
  5. On the nature of the relationship and res judicata: The Court held that the findings in the earlier Civil Revision Petition (that an oral month-to-month tenancy existed) were binding on the parties and could not be re-litigated by the appellant in the present stages; the principle of res judicata and its application across stages was invoked and supported by cited authorities. Consequently, the appellant could not successfully reframe the relationship as primarily a business arrangement at this stage in the face of earlier adverse findings and the admissions in pleadings.
  6. On statutory definition of "rent": The Court referred to Section 105 of the Transfer of Property Act, 1882 to show that “rent” may include money or other things of value rendered periodically (including commission or share of profits) and therefore a consolidated amount described as including commission can still constitute “rent” for purposes of tenancy law. This supported the Court's conclusion that the admitted consolidated payment of Rs. 15,000/- could properly be characterised as rent.
  7. Conclusion of analysis: Having found that (a) the arbitration plea could not be invoked; (b) earlier findings were res judicata; and (c) admissions in the pleadings established landlord-tenant relationship, rent above Rs. 3,500 and service of notice to quit — the Court concluded there was no impediment to passing a decree for possession under Order 12 Rule 6, leaving mesne profits to be dealt with on evidence.

Holding and Implications

Holding: Appeal dismissed.

Direct consequences and immediate effects:

  • The decree for possession previously granted by the trial Court (dated 9.4.2009) in favour of the respondent and against the appellant is upheld.
  • The trial Court's order granting the appellant six months' time to vacate (until 12.10.2009 in the order) is affirmed by this Court as valid in substance; the appeal against that decree is dismissed with costs.

Broader implications:

  • The Court applied and reaffirmed established principles that an arbitration clause cannot be invoked if the underlying contract has ceased to subsist and that unregistered leases (where registration is required) render the document and its terms inadmissible.
  • The Court reaffirmed that clear admissions (including constructive admissions and admissions in documents or replies) can justify summary disposal under Order 12 Rule 6, CPC; mesne profits may be left to trial while possession can be decreed on admitted facts.
  • The opinion does not purport to lay down a new legal doctrine; it applies existing authorities and the statutory definition of "rent" (Section 105, Transfer of Property Act) to the facts. No broader novel precedent is announced beyond applying established law to the facts of this case.
Appeal dismissed.
Show all summary ...

Reva Khetrapal, J.— This appeal is directed against the judgment of the learned Additional District Judge dated 9.4.2009 decreeing the suit of the plaintiff for possession under the provisions of Order 12 Rule 16 of the Code of Civil Procedure.

2. The facts relevant for the decision of the present appeal are as follows:

The respondent is the owner of property No. E-25, NDSE Part-II, New Delhi measuring a covered area of 68.79 sq. mtrs.(740.44 sq. ft.) on the ground floor with public Verandah in front as part thereof. The premises were let out to the appellant by the respondent in May, 1975 for 11 months by an unregistiered lease deed, which expired on 3.4.1976 No renewal was sought and the appellant continued as a tenant holding over from month-to-month. On 16.8.1978 again an unregistered agreement was executed between the parties for a period of three years with the lease coming into effect from 3.3.1977 The three years term having expired by efflux of time on 3.3.1980, the appellant continued as a month to month tenant by holding over. The terms of the oral tenancy also kept on changing and on 1.1.2005, a new oral month to month tenancy came into existence whereunder the rent of the suit property was increased to Rs. 15,000/- per month.

3. On 30.8.2006, the respondent served upon the appellant a notice to quit to which the appellant replied on 30.10.2006 On 4.12.2006, a civil suit No. 286/2006 was filed by the respondent before the trial Court for ejectment and recovery of mesne profits. The appellant filed an application under Section 8 of the Arbitration Act for referring the matter to a sole Arbitrator on the basis of an arbitration clause contained in the lease agreement dated 16.8.1978 This application was dismissed by the trial Court holding that the terms of tenancy stood changed between the parties by an oral agreement and the defendant, therefore, could not rely upon the agreement dated 16.8.1978 to claim existence of an arbitration clause.

4. Aggrieved by the order of the trial Court dated 31.5.2007 dismissing the application under Section 8 of the Arbitration Act, the appellant filed a revision petition being Civil Revision Petition No. 166/2007 in this Court. Significantly in the said revision petition, the submission of the appellant was that the agreement dated 16.8.1978 was a business agreement executed between the parties, and the respondent in terms of this agreement was entitled to a guaranteed sale commission and it was agreed that the petitioner shall pay a consolidated sum of Rs. 15,000/- per month towards sale commission and rental. It was urged that since this agreement of 1978 contained an arbitration clause, the Court was bound to refer the matter to the Arbitrator for adjudication.

5. Rejecting the aforesaid contention of the Counsel for the appellant, a learned Single Judge of this Court in his judgment and order held as follows:

“4. A perusal of the agreement dated 16th August, 1978 filed by the petitioner would show that the relationship between petitioner and the respondent was that of a lesser and lessee and lease was granted to the petitioner in 1978 for a period of 3 years starting from 3rd March, 1977. An option was given in the agreement to renew the terms and conditions of the lease upon mutually agreed terms. There was a clause for terminating the agreement in case of failure on the part of either of the parties in fulfilling the terms. After this agreement, which expired in 1980, no new agreement was executed.

5. It is settled law that in case of lease of immovable properties, if the lease is a period of one year or more lease deed is required to be compulsorily registered. The agreement relied upon by the petitioner is an unregistered (sic. document). Even otherwise, this agreement exhausted itself in 1980 and after 1980 there was no written agreement between the parties. After 1980 premises remained in occupation of petition (sic. petitioner) on the basis of a lease which was orally created form time-to-time and renewed from time-to-time as a month-to-month tenancy. The Court cannot look into or rely upon an unregistered document which purports to create lease of one year or more that one year. If a document is inadmissible because of its non-registration or because of its not having proper stamp duty, all its terms are inadmissible including the one which provides for an arbitration between the parties. An arbitration agreement can be enforced only along with the contract between the parties and such a contract must be a valid contract, admissible under law. If a contract is not admissible in law, every clause of it is inadmissible in law including arbitration clause.

6. Even if this lease agreement had been a registered lease agreement, on expiry of the lease period fixed in the original lease deed, the lease would have come to an end. Since no written lease deed was executed between the parties a new contract of tenancy had come into existence between the parties created orally. The parties cannot resort to the terms and conditions of the exhausted contract when a new contract had come into existence. If parties wanted that there should have been an arbitration clause between them in respect of further tenancy period, nobody stopped the parties from entering into such an agreement in writing, which is the basic requirement of any arbitration clause. Therefore, the reasoning of the petitioner that there was an arbitration clause in 1978 agreement was rightly rejected. When the written lease deed came to an end and a new oral lease was entered between the parties, the arbitration clause finding place in earlier lease deed cannot be invoked by a tenant. In Vardhaman Spinning & General Mills Ltd. v. Veena Kumari Wadhawan, 68 (1997) DLT 761 a similar contention was put forward by the appellant before this Court and this Court observed as under:

‘One of the arguments advanced by Mr. Bawa Shiv Charan Singh, learned Counsel for the respondent/plaintiff is that the lease created by agreement dated 1.11.1980 was determined by efflux of time and the lease deed dated 1.11.1980 vanished by efflux of time. The unregistered lease deed dated 1.11.1980 having been determined by efflux of time in the year 1984, the arbitration clause perishes along with the determination of original lease deed dated 1.11.1980 and cannot be availed of by the appellant/defendant. In the case of ITC Ltd. v. George Joseph Fernandes, (1989) 2 SCC 1 : AIR 1989 SC p. 839, it has been held that where the dispute between the parties is that the contract itself does not subsist either as a result of its being substituted by a new contract or by rescission or alteration, that dispute cannot be referred to the arbitration as the arbitration clause itself would perish if the averment was found to be valid. As the very jurisdiction of the Arbitration (sic. Arbitrator) is dependent upon the existence of the arbitration clause under which he is appointed, the parties have no right to invoke a clause which perished with the contract….. A dispute as to the binding nature of the contract cannot be determined by resort to arbitration because the arbitration clause itself stands or falls according to the determination of the question in dispute”. As pointed out above in the instant case the agreement dated 1.11.1980 has been determined by efflux of time. There has been no fresh registered lease creating mutual rights and obligations by and between the parties including the arbitration clause and the payments of rents from 1.11.1984 have been under the correspondence referred to above.’

7. Similary in Union of India v. Smt. Jagdish Kaur, AIR 2007 Allahabad 67, Allahabad High Court had considered similar situation and observed as under:

‘On point (B), it appears from Clause 15 of the agreement that it provided for arbitration. The suit was instituted by the landlady on 1.7.2004 after expiry of term of agreement. Courts below have rightly held that after expiry of five years, the agreement was nonexistent and the arbitration clause was not applicable. This view finds support from the law laid down by Hon'ble the Apex Court in Union of India v. Kishori Lal Gupta and Brothers, AIR 1959 SC 1362.’

8. In Ghulan Hassan Dar v. Controller of Aerodrome, AIR 1987 J & K 25, Jammu & Kashmir High Court had considered a similar situation and observed as under:

‘After the expiry of the period of licence and after the expiry of period of agreement nothing survives for arbitration. The arbitration clause was for any dispute or difference of questions having regard to the covenants and conditions of the agreement and in respect of rights, duties and liabilities and duties of the contracting parties. This clause after the lapse of the agreement will cease to be effective because the petitioner's right as licensee has ended with the expiry of period of licence.’

9. … …

10. … …

11. I find that the trial Court rightly dismissed the application of the petitioner. This petition has no force and is hereby dismissed.”

6. A Special Leave Petition filed by the appellant, being SLP (Civil) No. 5711/2009 against the aforesaid order was dismissed by the Supreme Court on 23.3.2009

7. In the meanwhile, on 5.11.2008, the respondent filed an application under Order 12 Rule 6 read with Orders 14 and 15 and Section 151, CPC praying that a decree of possession be passed in favour of the respondent and against the appellant on the basis of the admissions made by the appellant in its pleadings and the documents admitted therein. Paragraph 4 of the said application referred to the following clear admissions made by the appellant:

(1) There was a landlord-tenant relationship between the appellant and the respondent;

(2) There existed no registered lease deed, which meant the tenancy was from month to month only and not for a fixed term;

(3) The ‘rent’ of the premises was Rs. 15,000/- per month, i.e, above Rs. 3,500/- per month; and

(4) Notice to quit dated 30.8.2006 was duly served by the respondent on the appellant.

8. In reply to the aforesaid application, the appellants asserted that the suit involved triable issues between the parties and stated that there was no admission on the part of the appellant with respect to the landlord-tenant relationship between the parties. There was also no admission as to the notice to quit or with respect to payment of any “rent” because the relationship between the parties was, a business relationship. It was submitted that no rent @ Rs. 15,500/- per month was being paid as Rs. 15,000/- included sales commission also. It was denied that the defendant was a “tenant per se”, and asserted that in fact there existed a business relationship between the parties and not simpliciter, a landlord-tenant relationship.

9. On 9.4.2009 the impugned judgment was passed by the learned trial Court disposing of the application of the respondent/plaintiff under Order 12 Rule 6, CPC by decreeing the suit for possession of the premises in question in favour of the respondent and against the appellant, granting six months' time to the appellant to relocate its business and vacate the premises. It was further made clear that in case the premises were not vacated within six months, i.e, till 12.10.2009, the respondent would be entitled to recover the possession of the premises through the process of the Court. The present appeal arises from the aforesaid order.

10. Mr. Sandeep Sethi, the learned Senior Counsel for the appellant and Mr. Arun Mohan, the learned Senior Counsel for the respondent have been heard and the relevant documents adverted to by them have been perused. In the course of his submissions, Mr. Sandeep Sethi referred to the notice to quit dated 30.10.2006 and in particular to paragraph 10 of the said notice, which is reproduced as under:

“10. That the contents of para No. 8 are denied to the extent that the commission on sales have been discontinued, however, it is admitted that the same have been included in the consolidated rent of Rs. 15,000/- per month.”

11. Mr. Sethi also referred to paragraph 12 of the reply to the aforesaid notice, which reads as follows:

“12. That the contents of para No. 10 are denied to the extent that the occupation of the premises by my clients is in terms of the aforesaid two agreements, it is not to be termed as a simple tenancy. However, the consolidated rent including the commission on sales in terms of the agreement is Rs. 15,000/- per month. It is also admitted that the rent stands paid till date.”

12. Referring to the relevant paragraphs of the written statement, Mr. Sethi also contended that there was no clear or unequivocal admission on the part of the appellant so as to justify the passing of a decree under Order 12 Rule 6 and, on the other hand, it had been averred by the appellant in its written statement that the relationship between the appellant and the respondent was not simplicitor that of landlord and tenant, but was a business relationship by virtue of which the profits earned by the showroom being run in the suit property by the appellant were to be shared, as agreed to between the parties.

13. Rebutting the aforesaid contention of Mr. Sandeep Sethi, Mr. Arun Mohan, the learned Counsel for the respondent contended that in a suit for ejectment of a tenant on a month to month lease in order to obtain a decree for possession based on admission, the plaintiff has to prove the following:

(i) landlord-tenant relationship (ii) rent being above Rs. 3,500/- per month and (iii) service of notice to quit. In the instant case, all three pre-conditions had been fulfilled. In the context of landlord-tenant relationship, the admission was contained in the reply dated 30.10.2006 to the notice to quit. The admission that the rent was above Rs. 3,500/- per month and the service of the notice terminating the tenancy also stood proved from the notice to quit and the reply thereto.

14. It was also submitted by the Counsel for the respondent that the covering letters given along with monthly cheques for the period from February, 2005 to 7.8.2006, i.e, before the notice to quit was served, used the words, “Rent for the month of….”. TDS Certificates issued by appellant for the year 2004-2005, 2005-2006 and 2006-2007 also show “Nature of Payment” as “Rent under Section 194-I” of the Income Tax Act.

15. Mr. Sandeep Sethi, the learned Senior Counsel for the appellant in rejoinder contended that the aforesaid documents, i.e, the covering letters given along with the monthly cheques and the TDS certificates could not be looked into by this Court at this stage as the said documents were not admitted documents and their worth could only be ascertained after the parties had adduced their respective evidence and not at the present stage.

16. Even accepting the aforesaid contention of the learned Counsel for the appellant and for the time being, eliminating the said documents, that is, the rent receipts and the TDS certificate from consideration, I am of the view that the appellant in its pleadings having clearly admitted that there was a landlord tenant relationship, that a consolidated rent of Rs. 15,000/- per month was being paid by it to the respondent and also that the respondent had served upon the appellant the notice to quit, which was replied to by the respondent, there was no impediment to the passing of a decree for ejectment on the aforesaid admissions, leaving the question of mesne profits to be tried on the basis of evidence adduced by the parties [see Surjit Sachdeva v. Kazakstan Investment, 66 (1997) DLT 54; Samir Mukherjee v. Devinder K. Bajaj, 71 (1998) DLT 477; Vikas Theatres & Exhibitors v. Punjab & Sind Bank., 71 (1998) DLT 526; Shukla Malhotra v. Vyasa Bank Limited., 73 (1998) DLT 124; Amur C. Talwar v. Export Promo Council, 77 (1999) DLT 809; Deenar Builders v. Khoday Distilleries, 82 (1999) DLT 809; Zulfiquar Ali Khan v. Straw RFA, 274/2009 Page No. 11 of 16 Products, 2000 VI AD (Delhi) 347; Jasmer Singh Sarna & Ors. v. Electronics Trade & Technology., (2002) I AD (Delhi) 281; R.K Aggarwal v. ITDC, 1997 (1) RCR 401; Uttam Singh Dugal v. UBI, (2000) 7 SCC 120; and Delhi Jal Board…Petitioner v. Surendra P. Malik…, 104 (2003) DLT 151].

17. It is settled law that admissions need not be made expressly in the pleadings. Even on the constructive admissions Court can proceed to pass a decree in plaintiff's favour. In order to invoke the provisions of Order 12 Rule 6, CPC, admissions de hors pleadings may also be considered as is evident from the use of the word “otherwise” in the said provision [see Shikharchand v. Mst. Bari Bai, AIR 1974 MP 75; K. Kishore v. Allahabad Bank, 1997 (41) DRJ 698; Uttam Singh Dugal v. UBI, (2000) 7 SCC 120; Rajiv Srivastava v. Sanjiv Tuli, 119 (2005) DLT 202; Rama Ghei v. U.P State Handlom Corpn., 91 (2001) DLT 386 and R.N Sachdevapetitioner v. Ram Lal Mahajan Charitable Trust.S, 1997 (41) DRJ 698]. Such admissions may be contained in documents written or executed between the parties before the action is brought or even from the statements of parties recorded in the Court, including statements recorded under Order 10 Rule 1, CPC. Admissions may also be gleaned from vague and unspecific denials made in the pleadings and documents, which on the face of it appear to have been deliberately made in order to mislead the Court, or gathered from the non-traversal of specific averments made in the pleadings and documents.

18. It is the bane of the judicial system that with a view to protract and drag on the case, a litigant who is a wrong-doer often takes all sorts of false and legally untenable pleas. Such litigants should not be allowed to hijack the judicial process and to subvert the cause of justice. Where it is palpably clear to the Court that the defence is with the sole purpose of protracting the proceedings to the advantage of the wrongdoer and the disadvantage of the aggrieved party, it becomes the bounden duty of the Court to save the latter from going through the rigmarole of a futile and expensive trial. For this, the Court has been invested with sweeping powers by a number of provisions in various statutes, the most potent of which are the provisions of Order 12 Rule 6 read with Order 8 Rules 3 and 4, CPC. Regrettably, the said provisions, though exploited by the Courts to the advantage of the judicial process, have yet to reach the optimum level of exploitation. It thus becomes imperative on this Court to use the powers reposed in it to prevent misuse of the judicial process, to cut short laws' delays and to save the aggrieved party from the travails of a long drawn out litigation, often outliving his life span itself and falling into the lap of his survivors.

19. As regards the plea of the appellant's Counsel that the trial Court has failed to appreciate that, the question whether the agreement dated 16.8.1978 was in fact a business agreement or purely a tenancy agreement was an issue in dispute, I am of the view that the findings of this Court in Civil Revision Petition No. 166/07 on this aspect of the matter are conclusive and binding in the instant appeal as well. This Court in the former case between the same parties having held that an oral tenancy on a month-to-month basis existed between the parties and the said finding having withstood the test of appeal before the Supreme Court, it is no longer open to this Court to hold that there was a business relationship subsisting between the parties and that too in the teeth of the clear admission of landlord-tenant relationship by the appellant. The principle of res judicata, as is well known, would not only apply in different proceedings arising out of the same cause of action but would also apply in different stages of the same proceedings so that if an issue has been decided at an earlier stage against a party it cannot be allowed to be re-agitated by him at a subsequent stage in the same suit or proceedings [see Satyadhyan v. Smt. Deorajin Debi, AIR 1960 SC 941; Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993; C.V Rajendran v. N.M Muhammed Kunhi, (2002) 7 SCC 447; Ishwar Dutt v. Land Acquisition Collector, (2005) 7 SCC 190; and Barkat Ali v. Badri narain Dead By Lrs., (2008) 4 SCC 615].

20. Even otherwise, I am of the view that the respondent is entitled to a decree for possession in view of the definition of “rent”, as set out in Section 105 of the Transfer of Property Act, 1882, which reads as follows:

“105. Lease defined—A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.”

21. A bare glance at the aforesaid section shows that the transfer of right to enjoy immovable property may be made in lieu of money, a share of crops, service rendered or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee; and the money, share, service or other thing to be so rendered is called the rent. A lease is thus a transfer of a right to enjoy immovable property for monetary or other consideration. Thus, it is not difficult to conceive of a lease of an immovable property, with a landlord-tenant relationship between the parties, in lieu of a share of profits or in lieu of commission paid or even in lieu of a service rendered.

22. To conclude, on admitted facts, the respondent is entitled to a decree for possession in his favour and the view taken by the learned trial Judge is manifestly correct. No ground for interference has been made out. The appeal is devoid of merit and deserves to be dismissed.

23. RFA 274/2009 and CM No. 10578/2009 are accordingly dismissed with costs.

Appeal dismissed.