Court's Power Under Order XII Rule 6 CPC Discretionary, Should Only Be Exercised On Clear Admission Of Facts - SC

The Supreme Court has held that the power of a Court to pass judgment on admissions under Order XII Rule 6 of the Code of Civil Procedure is discretionary.

The Bench of Justice Indira Banerjee and Justice J.K. Maheshwari observed "Thus, legislative intent is clear by using the word 'may' and 'as it may think fit' to the nature of admission. The said power is discretionary which should be only exercised when specific, clear and categorical admission of facts and documents are on record, otherwise the Court can refuse to invoke the power of Order XII Rule 6."

Order XII Rule 6 of CPC states thus- (1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions. (2) Whenever a judgment is pronounced under sub-rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.

The brief facts of the matter are that the Appellant was a tenant in the Residential Property owned by Respondent. The Respondent-­Landlord had entered into a Lease Agreement with proprietorship concern of the Appellant, namely M/s. Fantasy Lights, for a period of 24 months. An interest-free security deposit of Rs.3,51,000/­ (Three Lakhs Fifty – One Thousand Only) was also paid by the Appellant at the time of the execution of the Lease Agreement.

After the expiry of the Lease Agreement, an extended Lease Agreement for a subsequent term of 11 months was executed. The Appellant tenant did not pay any rent after the expiry of the extended Lease Agreement and continued in occupation of the Suit Property.

A legal notice was served by the Respondent landlord upon the Appellant calling him to vacate the Suit Property. However, even thereafter, neither the Suit Property was vacated, nor the rent was paid which led the Respondent/Plaintiff to file Civil Suit for recovery of possession, arrears of rent, mesne profit, pendant lite, and interest.

The Appellant/Defendant filed a Written Statement contending that after the expiry of the Lease Agreement, the Respondent/Plaintiff had approached to him and made the offer to sell the right, title and interest in the Suit Property, in furtherance of which Agreement to Sell ('ATS-I') was executed between the parties.

Appellant had contended that he also agreed to transfer its right, title and interest of a plot of land situated at Amloh in favor of Respondent for consideration of Rs.15 Lakhs through Agreement to Sell.

Further, it was averred in the Written Statement that certain adjustments were made to the consideration payable for the subject property consequent to a new Agreement to Sell ('ATS­III') being executed.

In view of the averments made in Written Statement filed by the Appellant/Defendant, the Respondent/Plaintiff filed an Application under Order XII Rule 6 and another application under Order XXXIX Rule 10 of the CPC with a prayer to pass a judgment on admission of facts made in Written Statement and to draw a decree accordingly.

The contention of the Respondent/Plaintiff before the Trial Court was that looking to the admissions made with respect to the Landlord­-Tenant relationship, rate of rent and the defense taken by the Appellant/Defendant in Written Statement was sham, as no consideration was exchanged.

While on the other side, the Appellant/Defendant contended that the Respondent/Plaintiff had concealed material facts regarding the existence of ATS­I, II, and III.

The Trial Court relying upon the admissions in the written statements passed the judgment and decree allowing the application under Order XII Rule 6 of CPC for delivery of possession with respect to the Suit Property in favor of the Respondent/Plaintiff.

The appeal filed before the High Court by the appellant-defendant came to be dismissed.

Aggrieved the appellant-tenant approached Supreme Court.

The Appellant argued that the issues put before the Trial Court were triable issues and in such a scenario the Trial Court should not dismiss the suit in limine and pass a decree under Order XII Rule 6 of CPC when only the truth can be revealed by a full­fledged trial.

He contended that Trial Court should have refrained from exercising its jurisdiction by decreeing the suit of Respondent/Plaintiff under Order XII Rule 6 keeping in mind that the judgment on admission is judgment without trial which permanently denies any remedy to the Appellant on merit.

On the other hand, the respondent argued that the appellant continued to be in possession without payment of rent from 2014 onwards. It was further contended that the Respondent had a prima facie case to decree the suit on admission under Order XII Rule 6.

The Court while placing reliance on observation made in- S.M. Asif v. Virendar Kumar Bajaj (2015) remarked that the power under Order XII Rule 6 CPC is discretionary and it cannot be claimed as a matter of right.

The Court further observed "it is clear that to pass a judgment on admission, the Court if thinks fit may pass an order at any stage of the suit. In case the judgment is pronounced by the Court a decree be drawn accordingly and parties to the case is not required to go for trial."

The Court held that the arguments advanced by both sides can be appreciated by the Trial Court by affording an opportunity to lead evidence.

"There may be admission with respect to tenancy as per lease agreements but the defense as taken is also required to be looked into by the Court and there is need to decide justiciability of defense by the full­fledged trial. In our view, for the purpose of Order XII Rule 6, the said admission is not clear and categorical, so as to exercise a discretion by the Court without dealing with the defense as taken by Defendant", the Court observed.

The Court noted that any observation made by it may affect the merit of either side, therefore, the Court didn't record any finding either on the issue of tenancy or with respect to the defense as taken by the Defendant.

"We are only inclined to say whether the judgment and decree passed in exercise of the power under Order XII Rule 6 of CPC is based on clear and categorical admission", the Court opined.

Therefore the Court set aside the judgment and decree passed by the Trial Court, as confirmed by the High Court. The Court remitted the matter back to the Trial Court.

The Court noted that the Defendant had not paid any rent till date therefore the Court held thus "we direct that in terms of the admitted fact by extended Lease Agreement and the increase in the percentage of rent, the Trial Court shall first decide the issue of payment of monthly rent applying the said increase on year to year basis and pass appropriate orders for payment of arrears as well as deposit of regular monthly rent."

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