Food Corporation of India v. Harindra and Company

Ms.Madhu P. Singh, Advocate for the respondent. *** KANWALJIT SINGH AHLUWALIA, J. It is not disputed that petitioner – Food Corporation of India has delivered vacant possession of the demised premises to the respondent- landlord. An order to this effect was passed by a Co-ordinate Bench of this Court on 20.9.2004, while admitting the present revision petition and the same reads as under:-

Learned counsel for the petitioner states that vacant possession of the premises has been handed over to the landlord-respondent. However, the dispute with regard to payment of rent and the rate of rent is still not finally decided i.e. whether the tenant-petitioner is entitled to pay rent at the increased rate or only an increase of 10% of the rent from CR No.5812 of 2003 [2] September 1997 till 15.7.2004. Admitted.

Thereafter, on an application filed by the petitioner-tenant, another order was passed by a Co-ordinate Bench of this Court on

26.4.2007 which reads as under:- “This is an application for stay of disbursement of disputed rent deposited by the petitioner-FCI in the court of Rent Controller in terms of order of this Court dated

20.9.2004. On behalf of the petitioner, it is stated that the petitioner has vacated the premises. A sum of Rs.1,41,000/- is stated to be lying deposited. Let notice to the opposite party be issued for 15.5.2007. Meanwhile, Rent Controller may release 50% of the awarded amount on filing adequate security.” Therefore, so far as challenge to the eviction of the petitioner- tenant is concerned, the present revision petition has become infructuous because in the present petition, the only prayer made was that ejectment of the petitioner-tenant from the premises in dispute be set aside. Briefly stated, the respondent-landlord filed a petition under Section 13 of the East Punjab Urban Rent Restriction Act, 1949 stating that the petitioner-tenant was inducted as a tenant on a monthly rent of Rs.8019.75 and a lease deed to this effect was executed on 7.6.1991. The premises were taken on rent with effect from 1.9.1988.

The lease deed was for a period of 5 years which was to culminate on 31.8.1993 and after the expiry of that period, the lease was to be renewed for a period, mutually agreed upon, on 10% per annum increase in the rent. The ejectment petition was filed on the ground for non payment of rent at the enhanced rate of rent. The rent was claimed in the following manner:- CR No.5812 of 2003 [3]

......From 1.3.1997 to 31.8.1997 @ Rs.11,741-71 per month totalling Rs.70,450-26; Rent from 1.9.1997 to 30.10.1997 with 10% enhancement of rent on Rs.11,741-71 i.e. Rupees 12,915- 88, totalling Rs.25,831-76 and electricity penalty imposed on the respondent which has been deducted from the applicant amounting to Rs.5700/-. Thus the total amount to be recoverable from the respondent is Rs.101982-02. ....

On the first date of hearing, the petitioner-tenant tendered the rent vide cheque No.0348944 dated 26.2.1998 for Rs.64,158/- towards arrears of rent from 1.3.1997 to 30.10.1997 at the rate of Rs.8019.75 p.m. and another cheque No.348945 dated 26.2.1998 for enhanced rent at the rate of 10% on the actual rent under protest, with a right to recover the same from the respondent-landlord.

The Rent Controller, Hoshiarpur formulated the following issues:- 1) Whether the applicant is entitled to enhance the rent at the rate of 10% per annum as alleged in the application? If so, its effect? OPA 2) Whether the respondent is liable to be evicted as alleged? OPA 3) Whether the applicant is estopped by its act and conduct from filing the present application? OPR 4) Whether the application is not maintainable in the eyes of law? OPR 5) Whether the terms and conditions of the lease-deed are not binding on the parties after the expiry of lease deed dated 7-6-1991? OPR 6) Whether the application is barred under Order 23 Rule 1 CPC? If so, its effect? OPR 7) Relief. The Rent Controller on issues No.1, 2 and 5 has held that earlier also the respondent-landlord had filed an eviction petition, in which CR No.5812 of 2003 [4] order Ex.PA/1 was passed by the Rent Controller, Hoshiarpur and in the earlier eviction petition, the petitioner-tenant tendered the rent with enhancement rate of 10% and they acted upon the lease deed exhibited therein as Ex.A16.

The Rent Controller concluded as under:-

....Hence, once the rent was already tendered by the respondent in the previous ejectment application at the enhanced rate of 10%, now it does not lie in the mouth of the respondent to claim that the respondent is not liable to make payment of arrears of rent at the enhanced rate of 10%. Plea of the respondent that the lease-deed Ex.A16 was never extended after five years by the respondent is also not acceptable, as till date admittedly, respondent is in possession of the premises in dispute. Respondent is still paying the rent to the applicant as tenant. In the present ejectment application as well as in the previous ejectment application, the respondent has tendered the arrears of rent admitting itself to be the tenant of the applicant. Perusal of Ex.A7 which is the correspondence made by the respondent itself shows that it has been mentioned in this very document by the respondent itself that the said lease deed stands automatically extended and there was no need to extend it again. ....

For coming to the above-said conclusion, the Rent Controller has also taken into consideration the legal opinion tendered by the Legal Advisor of the petitioner-tenant (Corporation) and has held that there were circumstances to prove that lease deed Ex.A16 was extended impliedly by the parties.

Thus, it was held by the Rent Controller that by applying 10% enhancement clause, the rent comes to Rs.96,282.02, whereas the arrears of rent were tendered without any enhancement, amounting to Rs.70,574/-. Therefore, the tender being short and invalid, the order of eviction of the petitioner- tenant was passed. CR No.5812 of 2003 [5] The above-said findings of the Rent Controller were assailed by the petitioner-tenant in an appeal. It was urged before the Appellate Authority that lease deed dated 7.6.1991 was unregistered and was not properly stamped, therefore, the same cannot be read in evidence. Reliance was placed upon a judgment of Hon'ble Apex Court in Budh Ram v. Rulia Ram, 1997(1) Civil Court Cases 282. However, it was urged by the respondent-landlord before the Appellate Authority that Ex.A7, inter-se communication between the officials of the petitioner-tenant (Corporation) binds the petitioner-tenant to pay the enhanced rent and it corroborates the contents of the lease deed Ex.A16.

The Appellate Authority also relied upon the previous eviction petition wherein in the written statement Ex.R1, the rent was paid at the enhanced rate and held that in case the parties were not acting in consonance with the enhancement clause, then the petitioner- tenant ought to have filed an application for refund of the amount paid in excess. The Appellate Authority observed as under:- “19.....If there was no agreement with regard to the increase in the rent @ 10% per annum, in that, the appellant would have moved for the recovery of excess amount of rent tendered in the previous ejectment petition by calling in aid the above provisions of Section 8 or would have deducted such excess amount from the amount of arrears of rent tendered in the present petition. There is nothing on the record to show that the appellant has resorted to the above modes, which also gives rise to the presumption that indeed the increase @ 10% on the last paid rent was acceptable to the appellant.

To crown it all, if such increase was unacceptable to the appellant, in that eventuality, the appellant (Corporation) should have surrendered the possession to the landlord. ....” After examining the entire case law, the Appellate Authority rightly came to CR No.5812 of 2003 [6] the conclusion that the judgment rendered in Budh Ram's case (supra) is inapplicable. Mr.Hari Pal Verma, learned counsel for the petitioner-tenant has contended that in pursuance of order dated 11.12.2003 passed by this Court, the petitioner-tenant had deposited the entire arrears of rent at the enhanced rate as per sub-clause (iv) at page 5 of the lease deed Ex.A16 and even though the petitioner-tenant has handed over the possession, it be held that the enhancement clause cannot be read, as the lease deed was not registered and properly stamped, therefore, the amount deposited pursuant to orders of this Court be released.

After hearing counsel for the parties, this Court is of the view that both the Courts below had not only taken into consideration the enhancement clause but various other factors to come to the conclusion that the petitioner-tenant was bound to pay the rent at the enhanced rate. Sub- clause (iv) of the lease deed reads as under:-

The lease is for a period of 5 years. It is hereby explicitly agreed between both the parties that the lease can be subsequently renewed at the expiry of this lease, for a period of mutually agreed upon on 10% increase of rent last paid.

In the earlier eviction petition, the petitioner-tenant had tendered the rent at the enhanced rate and the same was permitted to be withdrawn by the respondent-landlord without any murmur. No counter claim was filed for refund of the amount paid at the enhanced rate. Rather inter-se communication between officials of the petitioner-tenant (Corporation) reveals that they understood and followed the enhancement clause.