Justice Neena Bansal Krishna, Delhi High Court

 The Delhi High Court has observed that the acceptance of the pagri amount at the time of letting out the premises will not make the tenancy non-terminable and perpetual, and will not inherently change the nature of the relationships between the parties, which was of landlord-tenant. 

Dismissing a Regular Second Appeal, the Court clarified that even if a substantial upfront amount is accepted, it cannot dissolve the standard tenancy relationship, particularly when the underlying lease agreement explicitly provides a notice mechanism for termination.

The Court further affirmed that in areas where regional rent control protections do not statutorily apply, the formal service of suit summons itself constitutes a valid legal notice to vacate the premises.

The Bench of Justice Neena Bansal Krishna observed, "There is no denial to pagri amount being taken by the Plaintiff/Respondent at the time of letting out the Suit Shop. The question, which thus arises, is whether acceptance of pagri amount, would make the tenancy non-terminable. The Rent Agreement itself gave a right to the tenant to terminate the tenancy by giving a two-month Notice. Inherently, this tenancy was not a non-terminable one...Even if this document and the averments made in the Rent Agreement are accepted and it is assumed that an amount of Rs.1,48,000/- was taken by the Plaintiff, but the fact remains that it does not inherently change the nature of the relationship between the parties, which was that of landlord-tenant."

Advocate Pankaj Vivek appeared for the Appellant/Defendant, while Advocate Abhishek Grover appeared for the Respondent/Plaintiff.

Brief Facts

The Plaintiff (Respondent herein), a senior citizen and a widow, filed a civil suit for possession, declaration, and permanent and mandatory injunction against the Defendants (Appellants herein) in respect of a commercial shop situated on the ground floor of her absolute property. The rent was initially fixed at a specific monthly rate and was later enhanced, exclusive of utility charges.

The Plaintiff asserted that she required the suit premises bona fide to support her joint family, as her younger son was the sole earning member with an insufficient income, and her daughters-in-law were unemployed. She further maintained that upon the expiry of the initial rent agreement, the tenancy became month-to-month. When the Defendants failed to vacate the premises despite requests, the Plaintiff terminated the tenancy and instituted the suit to recover possession and to restrain the Defendants from creating any third-party rights.

The trial court subsequently decreed the suit for possession in favor of the Plaintiff under Order XII Rule 6 of the Code of Civil Procedure, holding that the relationship of landlord and tenant was admitted, the local rent control legislation was inapplicable to the area, and the summons of the suit itself constituted valid notice of termination. This decree was upheld by the First Appellate Court, prompting the Defendants to prefer the present Regular Second Appeal.

Contentions of the Plaintiff (Respondent)

The Plaintiff contended that she was the absolute owner and landlady of the suit property, and that the Defendants occupied the commercial shop strictly in the capacity of tenants. It was submitted that since the original rent agreement was unregistered and its term had expired, the tenancy was regularized as a month-to-month tenancy, which was legally terminable by the landlady.

The Plaintiff argued that she required the tenanted premises urgently for her personal and family needs to augment the household income, as her current general store was insufficient to sustain her large joint family. It was maintained that the courts below rightly decreed the suit on admissions, as the tenant could not challenge the landlord's title under the rule of estoppel, and the statutory bar under rent control laws did not apply to the locality.

Contentions of the Defendants (Appellants)

The Defendants contended that the tenancy was perpetual and non-terminable because the Plaintiff had accepted a substantial premium (pagri) at the inception of the tenancy, which amounted to nearly three-fourths of the market value of the shop.

It was argued that by virtue of a contemporaneous Memorandum of Understanding executed alongside the rent agreement, the Defendants had acquired an ownership interest equivalent to three-fourths of the suit premises, thereby dissolving the standard landlord-tenant dynamic.

The Defendants asserted that the civil court lacked jurisdiction to entertain the eviction suit, arguing that the premises were protected under the regional rent control act and that the Plaintiff had failed to prove any government notification removing the locality from the rural estate.

It was further contended that the suit was bad for non-joinder of all the partners of the firm, that no formal notice of termination had been served under the Transfer of Property Act, and that there were no clear, unambiguous admissions to warrant a summary decree under Order XII Rule 6 of the Code of Civil Procedure.

Observations of the Court

The Court observed that the Plaintiff was the absolute owner of the suit property and had validly let out the commercial shop to the Defendant firm through its partners under a rent agreement. It was noted that despite the various defences raised regarding a permanent interest, the fundamental status and relationship between the parties remained strictly that of a landlord and tenant.

The Court also held that while the receipt of a substantial premium (pagri) by the landlady at the inception of the tenancy was undisputed, it did not inherently alter the nature of the relationship or render the tenancy perpetual or non-terminable. The Court further noted that the rent agreement explicitly granted the tenant a right to terminate the occupancy by serving a two-month notice, which fundamentally disproved the contention that the arrangement was intended to be non-terminable or an absolute transfer of ownership.

It said that the First Appellate Court had rightly dismissed the application for amendment of the written statement under Order VI Rule 17 of the Code of Civil Procedure. It was held that any such modification to the pleadings ought to have been actively pursued before the trial court prior to the passing of the summary decree under Order XII Rule 6 of the Code, rather than being introduced as an afterthought at the appellate stage to incorporate an unrecorded Memorandum of Understanding.

The Bench said that for the protective provisions of Section 50 of the Delhi Rent Control Act to apply, a specific statutory notification extending the legislation to the concerned locality was a mandatory prerequisite. Since the Defendants failed to produce any notification or circular demonstrating that the revenue estate where the suit property was located had been brought under the ambit of the Act, the trial court and the First Appellate Court were fully justified in holding that the civil court retained absolute jurisdiction to entertain the suit for possession.

On the issue of prior notice of termination, the Court observed that it was a well-settled proposition of law that the formal institution of an eviction suit and the subsequent service of summons upon the tenant collectively constituted a valid and legal notice to vacate the premises. Consequently, the lack of a separate, pre-suit statutory notice under the Transfer of Property Act did not invalidate the proceedings or prejudice the rights of the landlord.

It was observed that since the tenancy had been originally created in the name of the firm, the suit instituted against the firm as Defendant No. 1 was entirely maintainable. The objection that the suit was bad for non-joinder of all the individual partners or because the firm was unregistered was held to be legally untenable.

Ultimately, the Court held that the concurrent findings of fact recorded by both the trial court and the First Appellate Court were based on a sound appreciation of the admissions made by the tenant.

"The defence taken by the Appellants, firstly, was not mentioned in the Written Statement and secondly, even if considered, does not change the relationship of landlord-tenant between the parties...Learned Civil Judge and learned ADJ have rightly concluded that there existed a relationship of landlord-tenant; Delhi Rent Control Act was not applicable; and that the filing of the Suit itself amounted to the Notice to the tenant to vacate the premises", the Court said.

Concluding that no substantial question of law arose for determination under Section 100 of the Code of Civil Procedure, the High Court found no merit in the appeal and accordingly dismissed the Regular Second Appeal along with all pending applications.

Cause Title: M/s Shyamlal & Sons v. Smt. Mithlesh Devi [Neutral Citation:2026:DHC:5115]

Appearances:

Appellant/Defendant: Advocates Pankaj Vivek and Naveen Malik

Respondent/Plaintiff: Advocate Abhishek Grover

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