Mere admission of landlord and tenant relationship is not enough to decree the suit under Order XII Rule 6 of CPC

Cause Title : Karan Kapoor v. Madhuri Kumar, Civil Appeal No. 4545 Of 2022, Supreme Court Of India

Date of Judgment/Order : 06-07-2022

Corum : J.K. Maheshwari, J.

Citied: Shrimant Rao Suryavanshi v. Prahlad Bhairoba Suryavanshi - 2002 (3) SCC 676

         Hari Steel and General Industries Limited and Another v. Daljit Singh and Others – (2019) 20 SCC 425

            Himani Alloys Ltd. v. Tata Steel Ltd reported in - 2011 (15) SCC 273

            R. Kanthimathi v. Beatrice Xavier reported in - 2000 (9) SCC 339

            Nagindas Ramdas v. Dalptram Iccharam - 1974 (1) SCC 242

            S.M. Asif v. Virendar Kumar Bajaj – (2015) 9 SCC 287

Background

The Respondent-Landlord entered into a Lease Agreement dated 07.08.2011 with the Appellant, namely M/s. Fantasy Lights, on monthly rental basis  24 months starting from 07.08.2011 till 07.08.2013 and interest free security deposit was paid by the Appellant at the time of the execution of the Lease Agreement. After the expiry of the Lease Agreement, an extended Lease Agreement for subsequent term of 11 months was executed on 07.08.2013 with rent increase which was to expire on 06.07.2014. The Security Deposit paid earlier was retained for the extension. 

The Appellant tenant did not pay any rent after the expiry of the extended Lease Agreement dated 06.07.2014 with effect from 07.07.2014 and continued in occupation of the Suit Property. A Legal Notice was served by the Respondent landlord upon the Appellant calling him to vacate the Suit Property. However, even thereafter, neither the Suit Property was vacated, nor the rent was paid which led the Respondent/Plaintiff to file Civil Suit. The Appellant/Defendant filed a Written Statement contending that after the expiry of the Lease Agreement dated 07.08.2013, the Respondent/Plaintiff had approached to him and made the offer to sell the right, title and interest in the Suit Property, in furtherance of which Agreement to Sell dated 22.04.2017 (herein after referred as ATS-I) was executed between the parties for a sum of Rs.3,60,00,000/- and it was allegedly agreed that the rent accrued for the year 2014- 2017 be adjusted into the said Agreement to Sell. Appellant also contended that in addition to the execution of ATS-I, he also agreed to transfer its right, title and interest of a plot of land situated at Amloh in favor of Respondent for a consideration of Rs.15 Lakhs through Agreement to Sell (ATS-II) which would partially satisfy the obligations of sale consideration of ATS-I. Further, it was averred in the Written Statement that certain adjustments were made to the consideration payable for the subject property consequent to a new Agreement to Sell (ATS-III) was executed.

In view of the averments made in Written Statement filed by the Appellant/Defendant in Civil Suit No.867 of 2018, the Respondent/Plaintiff filed an Application under Order XII Rule 6 and another application under Order XXXIX Rule 10 of the Code of Civil Procedure (in short CPC) with a prayer to pass a judgment on admission of facts made in Written Statement and to draw a decree accordingly.

The contention of the Respondent/Plaintiff before the Trial Court was that looking to the admissions made with respect to the Landlord-Tenant relationship, rate of rent and the defence taken by the Appellant/Defendant in Written Statement is sham, as no consideration was exchanged.

The Trial Court decided that the facts are in favour of the Respondent/Plaintiff and ignored the various settlements as those documents were not registered and no consideration was paid by the Appellant/Defendant. The High Court rejected the appeal filed by the Appellant/Defendant noting that there has been clear admission with regard to relationship of Landlord- Tenant and the rent paid by the Appellant. Hence this appeal.

Judgment

The Supreme Court observed that the scheme of Order XII Rule 1 prescribes that any party to a suit may give notice, by his pleading, or otherwise in writing that he admits the truth of whole or any part of the case to other party while Rule 6 confers discretionary power to a Court who may at any stage of the suit or suits on the application of any party or in its own motion and without waiting for determination of any other question between the parties makes such order or gives such judgment as it may think fit having regard to such admission. 

Thus, legislative intent is clear by using the word may and as it may think fit to the nature of admission. The said provision has been brought with intent that if admission of facts raised by one side is admitted by other, and the Court is satisfied to the nature of admission, then the parties are not compelled for full-fledged trial and the judgment and order can be directed without taking any evidence. Therefore, to save the time and money of the Court and respective parties, the said provision has been brought in the statute.

Referring to a similar issue addressed in  S.M. Asif  (supra), the court noted that in the said case, this Court was of the view that deciding such issues requires appreciation of evidence. Mere relationship of landlord and tenant cannot be said to be an unequivocal admission to decree the suit under Order XII Rule 6 of CPC.

The Supreme Court held that while the tenancy has been admitted, so has the signing of various sale agreements though they are unregistered and  the arguments advanced by both the sides, can be appreciated by the Trial Court by affording opportunity to them to lead evidence. 

The Supreme Court said that in view of the contents of those agreements and terms specified therein, the defence as taken by the Appellant/Defendant is plausible or not is a matter of trial which may be appreciated by the Court after granting opportunity to lead evidence by the respective parties. There may be admission with respect to tenancy as per lease agreements but the defense as taken is also required to be looked into by the Court and there is need to decide justiciability of defense by the full-fledged trial. In our view, for the purpose of Order XII Rule 6, the said admission is not clear and categorical, so as to exercise a discretion by the Court without dealing with the defense as taken by Defendant.