Full Judgment Text
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CASE NO.:
Appeal (civil) 2896 of 2001
PETITIONER:
GURDIAL SINGH & ORS.
Vs.
RESPONDENT:
RAJ KUMAR ANEJA & ORS.
DATE OF JUDGMENT: 04/02/2002
BENCH:
R.C. Lahoti & Brijesh Kumar
JUDGMENT:
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%.
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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
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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,
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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%.
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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.
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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
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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"
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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.
Vs. Ram Baboo & Ors. AIR 1981 SC 2036. The expression is
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.
..........J
( R.C. LAHOTI )
...J
( BRIJESH KUMAR )
February 4, 2002