The Delhi High Court decreed a commercial suit for possession in favor of Onkar Infotech Pvt. Ltd., holding that an unregistered lease deed for a term exceeding one year was invalid and creates only a month-to-month tenancy terminable by fifteen days’ notice. The Court established that unregistered lease deeds could not be received as evidence. Justice Subramonium Prasad in a summary judgment under Order XIII-A CPC, held that the defendants had no real prospect of successfully defending the claim.
The commercial dispute centered around Property No. D-17, Pushpanjali Farms, Bijwasan, New Delhi admeasuring 3.8125 acres, of which 2.45 acres consisting of one main dwelling building block having built-up area of 30,000 sq. ft. with lawn was the subject matter of lease. It was stated that on April 1, 2020, the erstwhile owner M/s Indus Sor Urja Pvt. Ltd. and defendants executed an unregistered agreement titled as “Lease Deed” whereby defendants were given the subject premises on lease with rent fixed at Rs. 39,67,500 per month along with applicable GST. The current rent being paid was Rs. 45,62,625 per month including TDS. The lease deed purported to grant lease for a period of five years commencing from April 1, 2020, however, it was contended that since the lease deed sought to grant lease for a term exceeding one year, it could have only been made by way of registered agreement under Section 107 of the Transfer of Property Act, 1882.
On May 20, 2024, the plaintiff purchased the Pushpanjali property from M/s Indus Sor Urja Pvt. Ltd. through registered sale deed after payment of consideration of Rs. 115 crores, whereby the plaintiff became the sole, absolute, and exclusive owner. It was submitted that the plaintiff wrote to defendants on June 29, 2024 stating that the agreement being unregistered was invalid and defendants were month-to-month tenants, offering to continue the lease till March 31, 2025 subject to executing fresh lease, failing which the lease would continue to be month-to-month. The plaintiff exercised its right to terminate the month-to-month lease by issuing notice dated July 7, 2024 giving fifteen days’ notice under Section 106 of the Transfer of Property Act.
The defendants raised preliminary objections contending that the suit was not maintainable as the Pushpanjali property was agricultural land and NOC/permission had not been taken from concerned authorities under the Delhi Lands (Restrictions on Transfer) Act, 1972 read with Delhi Land Reforms Act, 1954 for registration of the lease deed. It was argued that the lease deed was not registered primarily because parties were in active negotiations for purchase of the property and defendants had spent substantial amount for making the property fit for accommodation for their Chief Managing Director for whose residence the property was taken on lease.
Justice Prasad observed that any lease deed of immovable property from year to year, or for any term exceeding one year, or reserving yearly rent, can be made only by registered instrument under Section 107 of the Transfer of Property Act. Relying on Supreme Court precedent in Anthony v. K. C. Ittoop & Sons, (2000) 6 SCC 394 and Paul Rubber Industries Private Limited v. Amit Chand Mitra, 2023 SCC OnLine SC 1216, the Court held that unregistered lease deeds cannot be received as evidence and goes out of consideration. This was a prohibition for the Court to implement and even if the Trial Court had taken it in evidence, the same could not confer legitimacy to that document for being taken as evidence at the appellate stage.’ The Court also rejected the defendants’ contention about collateral purposes, stating that the Court cannot look into the Lease Deed for any of these purposes. It was noted by the Court that defendants admitted the landlord-tenant relationship and had themselves offered to pay rent, establishing that once defendants are month-to-month tenants, they were liable to be evicted on termination which was done by notice dated July 7, 2024.
On the applicability of Delhi Land Reforms Act, the Court held that the term “land” under Section 3(13) of the DLR Act means land held or occupied for purposes connected with agriculture, horticulture or animal husbandry. Citing coordinate bench decisions in NB Singh (HUF) v. Perfexa Solutions Pvt Ltd. 2009 (111) DRJ 106 and Anand J. Datwani v. Geeti Bhagat Datwani, 2013 (137) DRJ 146, the Court observed that once land had been put to complete non-agricultural use, the provisions of DLR Act were not applicable. It was specifically noted by the Court that Defendant No.1, in his Written Statement, had admitted that 2.45 acres of land along with an independent house building block measuring 1.3625 acres within the said land had been taken for the residence of the CMD of Defendant No.1. It was further stated that a substantial amount of money had been spent by the Defendants in developing the land by constructing a swimming pool and other amenities. The land, therefore, was not being used for the purpose of agriculture or horticulture. Hence, it was held by the Court that the issue was no longer res integra, as once land has been put to complete non-agricultural use, the provisions of the DLR Act cease to be applicable.
Conclusively, the Court allowed the summary judgment application under Order XIII-A CPC. While analyzing the requirements of Order XIII-A, it was held by the Court that summary judgment is appropriate where it is considered that the Defendant has no real prospects of successfully defending the claim and no compelling reasons exist as to why the claim cannot be granted before recording of oral evidence. It was further concluded by the Court that, in its opinion, no disputed questions of fact were involved in the present case. The application for rejection of plaint under Order VII Rule 11 CPC was dismissed, finding that none of the ingredients for rejection were attracted.
Cases relied on:
Anthony v. K. C. Ittoop & Sons
Paul Rubber Industries Private Limited v. Amit Chand Mitra
NB Singh (HUF) v. Perfexa Solutions Pvt Ltd.
Anand J. Datwani v. Geeti Bhagat Datwani,
Appearances:
Plaintiff: Mr. P. S. Patwalia, Sr. Advocate & Mr. Dayan Krishnan, Sr. Advocate with Mr. Harpreet Singh, Mr. Karan Luthra, Mr. Shreedhar Kale, Mr. Yogesh Malik, Mr. Rohan Dua,
Defendants: Mr. Raj Shekhar Rao, Sr. Advocate with Mr. Amitabh Chaturvedi, Mr. Ankit Monga, Shourya Tomar, Advocates for D-1; Mr. Manu Krishnan, Mr. Tejasvi Chaudhry and Ms. Rajshree Jaiswal, Advs for D-2 & D-3; Mr. Anirudh Bakhru, Mr. Manu Krishnan, Mr. Tejasvi Chaudhry and Ms. Rajshree Jaiswal, Advs for D-4
