A registered, acted-upon lease establishes tenancy despite contrary pleadings at the interim stage.

Respondents 1–3 instituted CS (COMM.) No. 364/2022 seeking possession, recovery of rent, permanent injunction and mesne profits against Jatin Gupta and Raj Kumar.

The respondents claimed joint ownership of the suit property and relied on a registered lease agreement dated 9 March 2018, under which the appellant took the property on lease for five years from 1 April 2018 at a monthly rent of ₹1,50,000.

The appellant paid the rent for April 2018 and thereafter allegedly made no further rent payments, although he handed over three cheques totalling ₹11 lakhs in January 2019.

In an application under Order XXXIX Rule 10 CPC, the appellant denied the landlord–tenant relationship and alleged that the property had been given for a partnership venture to operate a bar, in which he had invested approximately ₹60 lakhs.

Raj Kumar stated that the bar licence was never issued and that the keys were eventually handed back to the appellant after return of the security amount.

The Commercial Court directed the appellant to clear the rent arrears within three months, relying on the registered lease deed and the payments made by him.

The appellant challenged that order in the present appeal.

1. Whether, for purposes of an application under Order XXXIX Rule 10 CPC, the registered lease agreement and the appellant’s conduct established a prima facie landlord–tenant relationship and liability to pay rent, despite his denial of the relationship.

2. Whether the appellant’s allegations concerning the allegedly forged lease agreement, the stamp paper purchased in the name of a deceased person, and the proposed bar partnership justified interference with the Commercial Court’s order directing payment of rent arrears.

The Court applied Order XXXIX Rule 10 CPC, which permits the Court to direct deposit in Court or delivery to the entitled party of money or other property held by one party as trustee or admitted by that party to be due to another.

The Court further applied the principle that a registered lease document, coupled with conduct consistent with that document, may establish the landlord–tenant relationship at the interlocutory stage, particularly where the tenant has acted upon the document and has not specifically denied non-payment of rent.

The Court also held that a collateral arrangement or alleged partnership with a third party does not, without more, dilute or condition the appellant’s independent contractual obligation to pay rent under the lease agreement.

The Court found that Raj Kumar was not a party to the registered lease agreement and that the appellant had acted pursuant to that agreement by making payments.

These circumstances supported the existence of a landlord–tenant relationship between the respondents and the appellant, notwithstanding the contrary plea in the written statement.

The appellant had not specifically denied that rent remained unpaid from May 2018 to January 2019, and an amount of ₹16 lakhs was outstanding when the suit was filed.

His objection that the stamp paper had initially been purchased in the name of deceased Smt. Saroj Bala did not displace the lease, since a rectification certificate dated 9 March 2018 substituted her name with that of Smt. Raj Rani and others, and there was no material showing that the rectification certificate had been challenged.

Similarly, the alleged oral partnership and the proposed rent payable by Raj Kumar did not establish that the appellant’s obligation to pay rent to the respondents was suspended or dependent upon receipt of rent from Raj Kumar.

The Commercial Court therefore committed no factual or legal error in directing payment of the arrears.

It upheld the prima facie landlord–tenant relationship arising from the registered lease and the appellant’s conduct, and rejected the forgery, stamp-paper and partnership-contentions as insufficient to defeat the rent claim at that stage.

Finding no factual or legal error in the impugned order, the Court dismissed the appeal and disposed of all pending applications.

It clarified that its observations were confined to disposal of the appeal and would not be treated as findings on the merits of the suit.