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M/S Espire Infolabs Pvt Ltd vs Sadhana Foundation

Supreme Court9 December 2019Deepak Gupta · S. Abdul Nazeer

Ratio decidendi

The rule this decision rests on

An unregistered lease deed is inadmissible in evidence in a rent dispute and cannot be relied upon to establish the landlord's claim for rent where its proper stamping is uncertain. Where multiple contentious issues exist between landlord and tenant regarding which lease governs their rights, whether the lessor's agent was properly authorized to execute a subsequent lease, and the quantum of monies spent by the tenant against lease obligations, these matters cannot be finally decided in an interim proceeding but require evidence to be led by the parties at trial. In balancing the equities between parties in an interim order, where a tenant claims entitlement to adjust monies spent on infrastructure development against rent dues and the landlord's authorization to contract may be contested, the court may fix an interim rent at a reduced amount pending final adjudication, in order to avoid putting either party to irretrievable loss before the substantive case is decided.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

NON­REPORTABLE
IN THE SUPREME COURT OF INDIACIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 9265 OF 2019(@ SPECIAL LEAVE PETITION (CIVIL) NO. 3885 OF 2018)

M/S ESPIRE INFOLABS PVT LTD …APPELLANT(S)

Versus

SADHANA FOUNDATION …RESPONDENT(S)

JUDGMENT

Deepak Gupta, J.

Leave granted.

2. The present appeal arises from a claim of the landlord –

respondent herein, claiming rent for the period 01.11.2015 to

31.01.2017. We may point out that another petition was filed by

the landlord claiming rent for the period 01.01.2013 to

30.10.2015. The landlord claimed rent @ Rs.18,43,900/­ per

month relying upon the lease deed dated 01.01.2013. The stand

1 of the tenant – appellant herein, is that, in fact, there was a

subsequent registered lease deed dated 01.09.2015 which is

effective from 01.03.2015 in which the rent is @ Rs.7,50,000/­

per month. In addition thereto, it is claimed that as per Clause

1(c) of the registered lease deed dated 01.09.2015, the tenant was

entitled to spend an amount of Rs.9 crores for developing the

infrastructure in the tenanted premises and was entitled to

adjust the same against the rent.

3. In the eviction petition the Rent Controller determined the

provisional rent @ Rs.7,50,000/­ per month. The Punjab and

Haryana High Court confirmed the order of the Rent Controller

and the SLP filed against the same was dismissed by this Court.

As far as the registered lease deed of 2015 is concerned, Clause

1(c) of the same reads as follows:­

“1(c) In order to avoid any dispute it is hereby agreed by and between the parties to these presents, that as mentioned hereinabove, the Lessor had handed over the said premises to the Lessee or bareshell basis and THE LESSEE has agreed to do all the internal work in the Demised Premises including furnitures and fixtures, air conditioning, lighting, flooring, false ceiling, bathroom etc. so as to bring it to the standard of and International Class IT Office. It has been agreed between the Lessor and the Lessee that the Lessee shall bear the cost of the same which shall be approximately 9 Crores. This amount will be payable by the Lessor to the Lessee and the Lessee shall adjust the same from the rent due to the Lessor till the entire amount is paid. Hence the Lessee will not be liable to pay any rent to the Lessor unless it

2 has recovered the entire amount of approximately 9 Crores from the rent due to Lessor.”

After the first petition was decided, the second petition was filed

claiming rent for the period, 01.11.2015 to 31.01.2017. The Rent

Controller again fixed the provisional rent @ Rs.7.50 lakhs per

month and the High Court relying upon the earlier orders has

upheld the same. This order is in challenge before us.

4. Mr. Maninder Singh, learned senior counsel for the

appellant submits that as per Clause 1(c), the tenant is entitled to

adjust the amount payable to the landlord and that by now more

than Rs. 3 crores have been paid, and in case the entire amount

is paid, the appellant will have no way of recovering this amount,

if it is finally held that the tenant is entitled to adjust the rent

against the amount spent. He also urged that in the earlier

petition the tenant had not placed on record any material to show

the amount of money spent for developing the infrastructure but

in this petition such material has been placed on record. He also

made various other submissions with regard to the relationship

between the parties but we are not going into the same. On the

other hand, Mr. Prashant Bhushan, learned counsel appearing

for the respondent submits that the lease deed of 2013 should be

3 relied upon and cannot be ignored at this stage. He further

submits that even if rent of Rs.7.50 lakhs has to be paid, the

respondent Trust cannot be deprived of this rent. He also

submits that the second lease deed was executed on behalf of the

Trust by one Shri Ajay Sharma. According to him, Ajay Sharma

is the same person who had signed the lease deed of 2013 and

Ajay Sharma was removed as the Trustee of the Trust much

before the lease deed of 2015 was executed and registered. On

the other hand, Mr. Maninder Singh contends that, in fact, Ajay

Sharma’s removal is not proper and he is fully empowered to

execute and register the sale deed.

5. There are various disputed issues involved. At the outset,

we may note that the lease deed of 2013 relied upon by the

landlord is an un­registered one, and we are not sure if it is

properly stamped and, therefore, at this stage the said lease deed

cannot be relied upon, being inadmissible in evidence. The first

issue is whether the lease deed of 2013 or the lease deed of 2015

will govern the rights of the parties. The second issue is whether

Shri Ajay Sharma was a trustee and entitled to execute the lease

deed of 2015. The third issue would be that even if the lease deed

of 2015 governs the rights of the parties, what amount has been

4 spent by the appellant. Here, it would be pertinent to add that

whereas in the first petition the appellant had led no evidence to

show that he had spent any amount, in this petition some

material has been placed on record. However, all this will have to

be tested by leading evidence. We are of the view that all these

contentious issues cannot be decided at this stage. Evidence will

have to be led by the parties to prove their case. Equities must be

balanced at this stage, and we feel that the equities must be

balanced in such a manner that when the final petition is decided

both the parties should not be put to loss.

6. In view of the above, we dispose of this appeal with the

following directions :­

(i) That after the period of the first eviction petition in

which it has been held that Rs.7.50 lakhs per month should be

paid by the tenant as provisional rent, we direct that w.e.f.

01.11.2015, the tenant shall be liable to pay rent @ Rs.3.75

lakhs per month;

(ii) This order shall be complied with till the proceedings

are finally disposed of by the Rent Controller and the landlord

shall not be required to file any separate eviction petition for the

subsequent periods;

5

(iii) We direct that the tenant shall deposit rent @ Rs.3.75

lakhs per month from 01.11.2015 till 30.11.2019, after

adjusting any payment which may have been made by

31.01.2020.

(v) The tenant shall also furnish tangible surety in a sum

of Rs.3 crores to the Rent Controller so that if the case is decided

against the tenant, the landlord does not have to run after him

to collect the money.

(vi) The Rent Controller is directed to take up the matter

on an urgent basis and, if necessary, try the same on day­to­day

basis and dispose of the same within 6 months from today.

7. With the above directions, the Civil Appeal stands disposed

of. Pending application(s) if any, shall also stand disposed of.

…………………………….J. (S. ABDUL NAZEER)

……………………………..J. (DEEPAK GUPTA)

New Delhi December 09, 2019

6

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