Gurdial
Singh & Ors Vs. Raj Kumar Aneja & Ors [2002] Insc 58 (4 February 2002)
R.C.
Lahoti & Brijesh Kumar R.C. Lahoti, J.
There
is a property described as 'Gurdial Complex' situated at SCO 1108-1109, Sector
22-B, Chandigarh. Admittedly, the property is owned
by Sqn. Ldr. Gurdial Singh (Retd), Mrs. Jasmer Kaur, Mrs. Jagjit Kaur, Miss
Sonia Bal and Vikram Singh Bal. Gurdial Singh holds general power of attorney
on behalf of other four co-owners.
Collectively
they will be referred to as 'Owners' for the sake of brevity.
Kashmiri
Lal Goyal, Advocate, defendant No.1 before the Rent Controller (respondent No.3
herein) claims to be a tenant, also alleged to be so by owners and will be
referred to as 'Goyal'. Out of the persons inducted in possession of the premises
by Goyal, only two, namely Raj Kumar Aneja and Rakesh Sharma, Advocate were
revision petitioners before the High Court and are respondents Nos. 1 and 2
before us. There is a dispute as to the character of occupation and the status
of these two __ whether they are sub-tenants or tenants under the owners. They
will be collectively referred to as 'occupants'.
On 6th
January, 1988, a registered Deed of Lease was executed between owners and Goyal
whereby 750 sq. ft. area on the first floor of Gurdial Complex was taken on
lease by Goyal on a monthly rent of Rs.5,000/-. The duration of lease was to
expire on 31st
December, 1990.
However, on 26th April,
1990, there was a
fresh Deed of Lease executed between owners and Goyal whereby a portion of the
first floor of Gurdial Complex, shown in green lines annexed with the Deed of
Lease, was taken on rent at the rate of Rs.16,000/- p.m. by Goyal. The lease
commenced w.e.f. 1st
May, 1990. Duration of
lease was three years, terminable even in between by three months' notice on
either side. The relevant terms of the lease may briefly be noticed.
The
lease rent of Rs.16,000/- p.m. was payable in advance by seventh day of the
current calendar month and if that was so done, Goyal was entitled to a rebate
of Rs.3,000/-. An amount of Rs.26,000/- was deposited as interest free security
with the owners to be retained during the currency of the lease and till Goyal
remained in occupation of the premises as lessee. In specified cases of delay
in payment of lease rent, interest @ 18% was leviable for the period of delay. Goyal
was to vacate the leased premises on or before 30th April, 1993.
However,
the lease agreement could be renewed for another period of three years by
mutual consent and agreement in writing in which case lease rent was to be
revised with an increase in rate of rent by 15%.
There
could be yet another renewal of three years expiring with 30th April, 1999 subject to another upwards revision
in rate of rent at 15%.
However,
the incentive of Rs.3,000/- for advance payment of rent before seventh day of
current month was to remain the same in spite of first and second renewals. It
was expressly stipulated that Goyal would not sublet any portion of the leased
premises, partially or in full, to anyone under any condition and
circumstances. In the event of subletting, apart from legal consequences
flowing from subletting, Goyal was to lose the privilege of earning rebate of
Rs.3,000/- p.m. and also to become liable to pay a penalty @ Rs.5,000/- p.m.
for the entire period till the premises were got vacated from the sub-tenants
and possession handed back to owners.
On
16.10.1993, owners filed a petition under Section 13 of East Punjab Urban Rent
Restriction Act, 1949 impleading Goyal and other alleged sub-lessees including
the two occupants, namely, respondents Nos. 1 and 2 herein. It was alleged that
defendants Nos. 2 to 8 were inducted as sub-lessees by Goyal, the defendant
No.1, and let in exclusive possession of different parts of the tenancy
premises by allowing cabins to be constructed without the written consent of
owners; that drastic additions and alterations made in the premises have
materially impaired the value and utility of the premises and that Goyal had
failed to pay or tender the monthly rent of the premises from 1.5.1993 and was
running into arrears. Goyal, in his written statement, admitted that he was a
tenant under the Deed of Lease dated 26.4.1990 but pleaded that rent upto
30.4.1993 was paid to owners whereafter payment was discontinued as the lease
was not renewed. He also pleaded that the cabins were fabricated and sublet on
the oral request of Gurdial Singh himself. At the end of the written statement,
Goyal submitted that he was ready to vacate the premises and he had no
objection if necessary orders of eviction were passed against the sub-tenants.
The
occupants filed separate written statements. In substance the plea taken by
them was that there did not exist any relationship of landlord and tenant
between Goyal and them. The appellants (i.e. the petitioners thereat) were put
to strict proof of their ownership and existence of landlord-tenant
relationship between them and Goyal under the Lease Deed said to have been
executed and registered between them. They pleaded that they were inducted into
possession of the premises as licensees under agreements duly executed between Goyal
and themselves and, therefore, they were not tenants under Goyal so as to be
held sub-tenants and expose themselves to the risk of eviction under Section
13(2)(ii)(a).
Replications
were filed. On 7.7.1994, the occupants sought for amendment in their written
statements. It was stated in the applications seeking amendment that subsequent
to the filing of the written statement it had come to the knowledge of the
occupants that Goyal was not a tenant under owners but on the contrary he was
simply an agent appointed for collecting the rent and this arrangement
appointing Goyal as rent collecting agent, but outwardly as a tenant, and the
tenant i.e. Goyal inducting the occupants as licensees, was a fraud on Rent
Restriction Act by devising means for short circuiting the beneficial
provisions intended to protect tenants. Each of the applications for amendment
was accompanied by a new written statement sought to be placed on record. This
written statement was completely a new written statement substantially in
departure from the pleadings contained in the original or first written
statement filed by the occupants.
The
Rent Controller, by order dated 24.2.1995, rejected the prayer for amendment.
The occupants preferred a revision. By order dated 16.8.1995, the civil
revision was allowed. A perusal of the order of the High Court shows that there
was no indepth comparative examination of the first written statement and the
second written statement which was proposed to be filed as amended written
statement. The High Court passed a brief order wherein a learned single Judge
of the High Court expressed __ "Without going into the merit of the
controversy I am of the view that amendment sought is just and proper in the
circumstances of the case and will help the Court in finally adjudicating the
contentious issues raised by the parties. Accordingly, I accept the revision
petition, set aside the order of the Rent Controller and allow the petitioners'
application for amendment of the written statement. Amended written statement be
filed within a fortnight from today". The principal plea now urged by the
occupants through their amended written statements is that Goyal, defendant
No.1, was an agent of the owners for collecting the rent from the defendants
Nos. 2 to 8 and the entire arrangement between the petitioners and their agent,
the defendant No.1, was designed for circumventing the law and amounted to
playing fraud on the defendants. Goyal, the defendant No.1, is a practicing
advocate and by no stretch of imagination can be said to be in need of an
accommodation at a monthly rent of Rs.16,000/- p.m. Goyal simply collected the
rent and handed over the same to the petitioner Gurdial Singh. This arrangement
was a brain wave of the petitioner Gurdial Singh and the defendant Goyal to
overcome the chilling effects of East Punjab Rent Restriction Act, 1949. The
tenancy between owners and Goyal was a sham transaction. The arrangement, which
outwardly appears to be a tenancy between owners and Goyal and licensing by Goyal
in favour of the occupants, was in effect the occupants being inducted as
tenant of owners. Gurdial Singh was himself running his business in the same
complex and was well aware from the very beginning of cabins having been
constructed and then let out to the occupants by inserting advertisement in the
newspapers.
The
rebate of Rs.3,000/- provided in the Deed of Lease between owners and Goyal is
a mode of paying commission for collection of rent by Goyal. It was prayed that
a court of law should not uphold such an arrangement which circumvented the law
and amounted to playing fraud.
In the
oral evidence, Gurdial Singh examined himself and proved the Deed of Lease
executed between Goyal and himself. On behalf of the occupants, the two
occupants (respondents Nos. 1 and 2 herein) examined themselves. Narinder Pal
Singh, RW3 who had at one point of time occupied a cabin in the suit premises
but had subsequently vacated and Jagdish Singh, RW4, who was still occupying a
cabin stated that Goyal was merely a collecting agent for Gurdial Singh. The
statement of Narinder Pal Singh does not give any facts but is merely his ipse dixit
that Goyal was a collecting agent. Jagdish Singh is in litigation with Goyal. Anup
Singh, RW5 is a tenant on the second floor who deposes to a similar arrangement
having been devised by Gurdial Singh and Goyal in respect of the second floor.
He too is having criminal litigation with Goyal.
On an
evaluation of evidence, the Rent Controller upheld the pleas raised in the
written statements and directed the eviction petition to be dismissed. Owners
preferred an appeal which was allowed. The Appellate Authority held that there
were no weighty and material circumstances enabling drawing of an inference
contrary to the apparent tenor of the transaction and relationship created by
documents in writing. The Appellate Authority found the averments made in the
eviction petition proved and hence directed the tenant- Goyal and
sub-tenants-the occupants to be evicted. The occupants preferred a revision
petition before the High Court. The High Court has entered into re-evaluation
of the entire evidence, drawn factual inferences and, based thereon, held that
the Lease Deed incorporated a sham transaction intended to get over the
restrictions of the Rent Act.
The
High Court also held that subletting and changes in the suit premises were with
the oral consent of Gurdial Singh. In the result, the High Court has directed
the eviction petition to be dismissed. The owners, petitioners before the Rent
Controller, have preferred this appeal by special leave.
Having
heard the learned counsel for the parties we are of the opinion that the appeal
deserves to be allowed and judgment of the High Court deserves to be set aside.
It is
true that in spite of the availability of a registered Deed of Lease executed
between owners and Goyal, the occupants are not debarred from taking a plea
that the transaction between owners and Goyal was not what it apparently
appears to be just by reading of the Lease Deed. The occupants, by raising a
plea which they have taken in the written statements, are not proposing to put
in issue and let in oral evidence of the terms of the Lease Deed. They are also
not raising a plea or adducing oral evidence for the purpose of contradicting
varying, adding to or subtracting from the terms of the Lease Deed. They are
not parties to the Lease Deed. Therefore, Sections 91 and 92 of the Evidence
Act, 1872 are not attracted. The occupants are impeaching the outward validity
of Lease Deed by submitting that what has been described on paper is not the
real intention of the parties to do; the Lease Deed and the transaction spelled
out by it was a sham or fictitious transaction not intended to be acted upon rather
intended to overcome or avoid the effect of Rent Control Legislation. It is
permissible to take such a plea and adduce evidence to substantiate the same.
The plea can be taken though the onus would lay on the shoulders of the party
taking such a plea. To discharge the onus, direct evidence may or may not be
available and it would be permissible to draw an inference from tell-tale
circumstances. However, the inference to be drawn from the circumstances should
be an irresistible one and not merely a matter of conjectures and surmises.
In the
present case, the testimony of two independent witnesses, namely Narinder Pal
Singh and Jagdish Singh (RW3 and 4), does not lead us anywhere. Anup Singh, RW5
does not depose to anything about first floor which is the suit accommodation.
The rest is oath against oath __ Gurdial Singh on one side and the occupants on
the other side. We do not have the benefit of testimony of the star witness, Goyal,
who has conveniently chosen to keep himself away from the witness box except
for admitting in part the claim of owners as contained in his pleadings. In
such a case, we do not think the High Court could have, in exercise of its
limited revisional jurisdiction, reversed the finding of fact arrived at by the
Appellate Authority. The High Court has also erred in holding "oral
consent for subletting and making the changes" and finding availability of
grounds for eviction under Section 13(2)(ii)(a) and Section 13(2)(iii) of the
Act. Section 13(2)(ii) contemplates a ground for eviction where the tenant has
transferred his rights under the Lease or sublet the building or any portion
thereof without the written consent of the landlord. When the law speaks of
written consent, the High Court could not have substituted 'oral consent' in place
thereof. Between owners and Goyal there is a registered Deed of Lease bringing
into existence landlord-tenant relationship which, the oral evidence as adduced
by the parties and available on record, is not enough to show that the
transaction was sham or fictitious. Between the occupants and Goyal there are
again deeds in writing showing nature and character of occupation of the
occupants. The occupants have been placed in possession of cabins and given
right to use the same. Agreements executed between the occupants and Goyal
appoint licence fee for the use of the cabin premises, payable month by month
and in advance on or before third day of each month. Electricity charges are to
be borne by the licensees. The cabins are to be used for office purpose. The licence
is for a period of eleven months and renewable by mutual consent subject to
escalation of licence fee at a minimum of 5%.
Either
party seeking eviction of the licensee can do so by serving a three months'
notice. The minimum period of licence is eleven months before which the
licensees cannot vacate the premises.
Licensee
has to arrange for fire insurance of the cabins/premises and has to bear the
loss, if any, caused by fire and so on. The Lease Deed executed between owners
and Goyal does not permit licensees being inducted by Goyal and on the contrary
contains specific prohibition against subletting. A clear case for eviction
under Section 13(2)(ii)(a) was made out. So also constructing several cabins in
the hall enabling use of several cabins as independent office premises
certainly impairs materially the value or utility of the building which was a
hall and, therefore, attracts applicability of Section 13(2)(iii). The High
Court was not justified in holding that availability of the said two grounds
was not made out. We are, therefore, of the opinion that the order of the High
Court cannot be sustained. However, by way of abundant caution, we would like
to make it clear that we have held the arrangement between the owners and Goyal
to be real as evidenced by the Deed of Lease and not a sham transaction on the
evidence adduced and material placed on the record of this case. This factual
finding would not preclude a different finding being arrived at in any other
appropriate case based on adequate pleadings and evidence of that case.
Before
parting we feel inclined to make certain observations about the loose practice
prevalent in subordinate Courts in entertaining and dealing with applications
for amendment of pleadings. It is a disturbing feature and, if such practice
continues, it is likely to thwart the course of justice. The application moved
by the occupants for amendment in their written statements filed earlier did
not specifically set out which portions of the original pleadings were sought to
be deleted and what were the averments which were sought to be added or
substituted in the original pleadings. What the amendment applicants did was to
give in their applications a vague idea of the nature of the intended amendment
and then annex a new written statement with the application to be substituted
in place of the original written statement. Such a course is strange and
unknown to the procedure of amendment of pleadings. A pleading, once filed, is
a part of the record of the Court and cannot be touched, modified, substituted,
amended or withdrawn except by the leave of the Court.
Order
8 Rule 9 of CPC prohibits any pleadings subsequent to the written statement of
a defendant being filed other than by way of defence to a set-off or
counter-claim except by the leave of the Court and upon such terms as the Court
thinks fit. Section 153 of CPC entitled "General power to amend"
provides that the Court may at any time, and on such terms as to costs or
otherwise as it may think fit, amend any defect or error in any proceeding in a
suit; and all necessary amendments shall be made for the purpose of determining
the real question or issue raised by or depending on such proceeding.
Order
6 Rule 17 of the CPC confers a discretionary jurisdiction on the Court exercisable
at any stage of the proceedings to allow either party to alter or amend his
pleadings in such manner and on such terms as may be just. The rule goes on to
provide that all such amendments shall be made as may be necessary for the
purpose of determining the real questions in controversy between the parties.
Unless and until the Court is told how and in what manner the pleading
originally submitted to the Court is proposed to be altered or amended, the
Court cannot effectively exercise its power to permit amendment. An amendment
may involve withdrawal of an admission previously made, may attempt to
introduce a plea or claim barred by limitation, or, may be so devised as to
deprive the opposite party of a valuable right accrued to him by lapse of time
and so on. It is, therefore, necessary for an amendment applicant to set out
specifically in his application, seeking leave of the Court for amendment in
the pleadings, as to what is proposed to be omitted from or altered or
substituted in or added to the original pleadings.
In
Pleadings : Principles and Practice by Jacob & Goldrein (1990 Edition) it
is stated that a party served with a pleading which is subsequently amended may
not amend his own pleading and may rely on the rule of implied joinder of issue
but "if he does amend his own pleading, he is not entitled to introduce
any amendment that he chooses. He can only make such amendments as are
consequential upon the amendments made by the opposite party" (at page
193). "In all cases except where amendment is allowed without leave, the
party seeking or requiring the amendment of any pleading must apply to the
Court for leave or order to amend. The proposed amendment should be specified
either by stating them, if short, in the body of the summons, notice or other
application or by referring to them therein.
In
practice leave to amend is given only when and to the extent that the proposed
amendments have been properly and exactly formulated, and in such case, the
order giving leave to amend binds the party making the amendment and he cannot
amend generally." (at pages 206-207).
The
Court may allow or refuse the prayer for amendment in sound exercise of its
discretionary jurisdiction. It would, therefore, be better if the reasons
persuading the applicant to seek an amendment in the pleadings as also the
grounds explaining the delay, if there be any, in seeking the amendment, are
stated in the application so that the opposite party has an opportunity of
meeting such grounds and none is taken by surprise at the hearing on the
application.
How an
amendment allowed by the Court is to be effectuated in the pleadings? English
practice in this regard is stated in Halsbury's Laws of England (Fourth
Edition, Vol.36, para 63, at pages 48-49) as under:-
63.
Mode of amendment. A pleading may be amended by written alterations in a copy
of the document which has been served, and by additions on paper to be
interleaved with it if necessary.
However,
where the amendments are so numerous or of such nature or length that to make
written alterations of the document so as to give effect to them would make it
difficult or inconvenient to read, a fresh document must be prepared
incorporating the amendments. If such extensive amendment is required to a writ
it must be reissued.
An amended
writ or pleading must be indorsed with a statement that it has been amended,
specifying the date on which it was amended, the name of the judge, master or
registrar by whom any order authorizing the amendment was made and the date of
the order; or, if no such order was made, the number of the rule in pursuance
of which the amendment was made. The practice is to indicate any amendment in a
different ink or type from the original, and the colour of the first amendment
is usually red.
Stone
and Iyer in Pleadings (Second Edition) state the practice in regard to
incorporating amendments in pleading as under (at page 165):- "In England
it often happens that before the case comes into Court and while still the
Master is exercising the powers conferred by a Summons for Directions, Counsel
seek leave to amend not once but several times. The practice is to amend first
in red and make later amendments in different coloured inks. A practice which
we think might, with advantage, be followed would be to place before the Court,
as one places before a Master in England, the proposed amendments. These may or
may not be allowed as proposed, or may be altered before leave is given. Leave
having been given, a new plaint or written statement showing the old pleading
and with the amendments written or typed in might then be prepared and taken on
the file of the Court. In cases where the addition is substantial it may be
necessary to deliver a copy of the pleading as amended. If old matter is scored
out, it must be done in such a manner as to show the original pleading and the
alteration. Under Order VI, Rule 17, C.P.C., a party has apparently to amend
his pleading while it is in Court. Under the old Code it was returned to him
for amendment. The Court may even now have power to return it if it is
necessary to do so. Where leave to amend is asked for, the actual amendment
must be formulated before leave is given. If it is proposed to apply for
amendment, it is desirable to inform the other side so that there can be no
question of surprise and no adjournment may be necessary on allowing the
amendment. Pursuant to the leave granted the proceedings should be amended
before the judgment is pronounced." Thus, once a prayer for amendment is
allowed the original pleading should incorporate the changes in a different ink
or an amended pleading may be filed wherein with the use of a highlighter or by
underlining in red the changes made may be distinctly shown.
The
amendments will be incorporated in the pleading by the party with the leave of
the Court and within the time limited for that purpose or else within fourteen
days as provided by Order 6 Rule 18 of the CPC. The Court or an officer
authorized by the Court in this behalf, may compare the original and the
amended pleading in the light of the contents of the amendment application and
the order of the Court permitting the same and certify whether the amended
pleading conforms to the order of the Court permitting the amendment. Such
practice accords with the provisions of Code of Civil Procedure and also
preserves the sanctity of record of the Court. It is also conducive to the ends
of justice in as much as by a bare look at the amended pleading the Court would
be able to appreciate the shift in stand, if any, between the original pleading
and the amended pleading. These advantages are in addition to convenience and
achieving maintenance of discipline by the parties before the Court. Amendments
and consequential amendments, allowed by the Court and incorporated in the
original pleadings, would enable only one set of pleadings being available on
record and that would avoid confusion and delay at the trial. Most of the High
Courts in the country follow this practice, if necessary by making provisions
in the rules framed by the High Court for governing the subordinate Courts and
their Original Side, if there be one. In fact in the State of Punjab and Haryana
and Union Territory of Chandigarh, there is a local amendment whereby the text
of Rule 17 in Order 6 of the CPC has been renumbered as sub-rule (1) and the
following sub-rule (2) added:- "(2) Every application for amendment shall
be in writing and shall state the specific amendments which are sought to be
made indicating the words or paragraphs to be added, omitted or substituted in
the original pleading" The abovesaid rule appears to have been completely
over-looked while moving the application for amendment. It is expected that the
Courts in Punjab, Haryana and Chandigarh would follow the rule in letter and
spirit.
When
one of the parties has been permitted to amend his pleading, an opportunity has
to be given to the opposite party to amend his pleading. The opposite party
shall also have to make an application under Order 6 Rule 17 of the CPC which,
of course, would ordinarily and liberally be allowed. Such amendments are known
as a consequential amendments. The phrase "consequential amendment"
finds mention in the decision of this Court in Bikram Singh & Ors.
judicially
recognized. While granting leave to amend a pleading by way of consequential
amendment the Court shall see that the plea sought to be introduced is by way
of an answer to the plea previously permitted to be incorporated by way of
amendment by the opposite party. A new plea cannot be permitted to be added in
the garb of a consequential amendment, though it can be applied by way of an
independent or primary amendment.
Some
of the High Courts permit, as a matter of practice, an additional pleading, by
way of response to the amendment made in the pleadings by opposite party, being
filed with the leave of the Court. Where it is permissible to do so, care has
to be taken to see that the additional pleading is confined to an answer to the
amendment made by the opposite party and is not misused for the purpose of
setting up altogether new pleas springing a surprise on the opposite party and
the Court. A reference to Order VI Rule 7 of the CPC is apposite which provides
that no pleading shall, except by way of amendment, raise any new ground of
claim or contain any allegation of fact inconsistent with the previous
pleadings of the party pleading the same.
In the
case before us the application for amendment moved by the occupants did not
satisfy the abovesaid requirements. Again we have grave doubts if the High
Court could have, in exercise of its revisional jurisdiction, granted leave to
amend the written statements by a cursory order. However, the trial has taken
place on the amended pleadings and yet the occupant-defendants have failed on
merits. We therefore leave the matter at that only.
The
appeal is allowed, the impugned judgment of the High Court is set aside, the
judgment of the Appellate Authority is restored.
No
order as to the costs.
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