Unchallenged testimony proving rent above the statutory threshold defeats the Section 50 DRC Act bar.

The respondent-plaintiff had allotted the suit property at 33-A, LIG Flats, Masjid Moth-I, Greater Kailash-I, New Delhi, and let it to Late P.A. Joseph for residential use under an Agreement of Licence dated 5 February 1981 at ₹660 per month, initially for 11 months.

After Joseph’s death, his legal heirs—the appellants—continued in occupation.

The plaintiff alleged that the rent was periodically enhanced and stood at ₹15,000 per month from October 2016, but that the appellants stopped paying rent from November 2016.

A legal notice dated 13 August 2018 terminated the tenancy and demanded possession, but the appellants failed to vacate.

The plaintiff instituted a suit for possession, arrears of rent, permanent injunction and mesne profits.

The Trial Court decreed possession, awarded ₹3,30,000 as arrears of rent, granted permanent injunction, and awarded mesne profits from September 2018 with a 15% annual increase.

The appellants preferred the present appeal.

Whether the relationship of landlord and tenant existed between the parties and whether the appellants were liable to deliver possession of the suit property.

Whether the rent had been enhanced to ₹15,000 per month from October 2016, thereby taking the tenancy outside the protection of the DRC Act and avoiding the bar under Section 50.

Whether the tenancy had been validly terminated by the legal notice dated 13 August 2018, or otherwise by institution of the eviction suit.

Whether the plaintiff was entitled to arrears of rent and mesne profits, and if so, at what rate and for what period.

The Court applied the settled requirements for a suit for possession: proof of the landlord–tenant relationship, rent exceeding the statutory threshold under Section 3(c) of the DRC Act, and valid termination of the tenancy.

Section 50 of the DRC Act bars the jurisdiction of civil courts in matters protected by the Act; however, that bar does not apply where the rent exceeds the statutory threshold.

The Court relied on the principle that unchallenged testimony may be accepted where the opposing party neither cross-examines the witness nor adduces evidence, and that an adverse inference may be drawn against a party who fails to enter the witness box, as recognised in Vidhyadhar v. Manikrao, (1999) 3 SCC 573.

It further relied on Neeraj Aggarwal v. Ravinder Parkash Punj, RFA (COMM) 23/2023, for the principle that, where no written agreement governs the prevailing rent, the Court may consider surrounding circumstances and credible evidence, with the evidentiary burden shifting once the asserted rent is prima facie established.

Under M/s Nopany Investments (P) Ltd. v. Santokh Singh (HUF), (2008) 2 SCC 728, institution of an eviction suit itself may constitute notice to quit even in the absence of a notice under Section 106 of the Transfer of Property Act, 1882.

The appellants admitted that their occupation derived from their deceased father, who had been inducted by the plaintiff; the Court therefore upheld the finding that the landlord–tenant relationship was established.

Although the original agreement recorded rent of ₹660 per month, the plaintiff deposed that the rent had been enhanced to ₹15,000 per month from October 2016.

This evidence remained wholly unrebutted because the appellants neither cross-examined the plaintiff nor led evidence to substantiate their assertion that the rent remained ₹660.

The Court consequently accepted ₹15,000 as the last rate of rent, held that the tenancy fell outside the DRC Act’s rent-control protection, and rejected the Section 50 objection.

The termination notice dated 13 August 2018 was also unchallenged; independently, the filing of the suit constituted notice to quit under Nopany Investments.

The plaintiff was therefore entitled to arrears at ₹15,000 per month from November 2016 until termination, totalling ₹3,30,000, together with mesne profits from September 2018 and the stipulated 15% annual escalation.

It held that the landlord–tenant relationship was proved, the rent had been established at ₹15,000 per month from October 2016, the suit was not barred by Section 50 of the DRC Act, and the tenancy had been validly terminated.

The appellants were accordingly directed to hand over possession, pay ₹3,30,000 as arrears of rent, and pay mesne profits from September 2018 with a 15% annual increase until delivery of possession; the permanent injunction against creation of third-party rights was also sustained.