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Delhi High Court Affirms Eviction Order in Delhi Rent Control Act Dispute, Rejects Petition on Bona Fide Requirement Claim

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Delhi High Court Affirms Eviction Order in Delhi Rent Control Act Dispute, Rejects Petition on Bona Fide Requirement Claim 

Case Name: Scon Financial Services Pvt Ltd v. S C Kaura  

Case No.: RC.REV. 358/2023 

Dated: May 15,2024 

Quorum:  Justice Girish Kathpalia  

 

FACTS OF THE CASE: 

The present respondent filed an eviction petition against the petitioner under Section 14(1)(e) of the Act, claiming to be the owner of the ground floor flat at 49, Basant Enclave, New Delhi (henceforth referred to as “the subject premises”). The petitioner claimed that, by virtue of a rent agreement, the petitioner (previously known as M/s Sarein Consultants Pvt. Ltd.) was inducted as a tenant in the subject premises with effect from 01.12.1988 for the general manager, Mr. Shiv Kumar Vasesi, for residential purposes.  

The rent for the petition was Rs. 2,420/-per month, excluding water and electricity charges. He currently has a legitimate need for the subject premises as a place to live and doesn’t have access to a suitably adequate substitute. Due to his marital strife, he had been living with his sister in the government housing that was assigned to her. 

 However, on December 31, 2004, when she retired, they moved into her Dwarka flat. He wedded Ms. Promila on July 23, 2005, following the breakdown of his first marriage, and he retired from the military on August 31, 2005. He had been living in several rented properties with his wife since May 2011, during which time she also passed away.  

The tenant/petitioner submitted an application for leave to contest after receiving the summons in the prescribed format. In it, they made a wide claim that the respondent/landlord had hidden not only his property but also all other properties, including his dwelling property in New Delhi. The respondent/landlord’s demonstration of a non-genuine demand for the subject premises is demonstrated by the concealing of the additional accommodations that are available to him.  

After considering all sides of the argument, the petitioner/tenant submitted a rebuttal to the application for leave to contest. The learned Additional Rent Controller then issued the contested order, denying the petitioner/tenant the opportunity to appeal the proceedings. 

 LEGAL PROVISIONS: 

  • Section 25B(8) of the Delhi Rent Control Act- Vacant possession to landlord. In spite of any other laws that may be in place, if a tenant’s interest in a property is determined for any reason and an order is made by the Controller under this Act to recover possession of the property, all parties who may be occupying the property must abide by the terms of section 18, and the landlord will obtain vacant possession of the property by evicting all such parties from it. However, nothing in this section will apply to any parties who have an independent title to the property. 

 CONTENTIONS OF THE APPELLANTS:  

The learned counsel for the appellant argued that from a legal standpoint, the contested order cannot stand. The petitioner, who is also the tenant, contended that the petition is not legitimate since the landlord, who is the respondent, failed to reveal his affiliation with the Green Park property. The respondent, or landlord, filed rent deeds displaying his dwellings in leased premises, but the learned counsel for the tenant/petitioner further contended that as the documents were not registered or stamped, the learned Additional Rent Controller should have seized them. 

He also contended that the contested order is unsustainable. On behalf of the petitioner/tenant, it was contended that the petition lacked genuineness because the landlord/respondent failed to reveal his relationship to the Green Park property. The learned attorney representing the tenant/peter further contended that since the respondent/landlord’s rent deeds, which list his houses on leased property, are not stamped or registered, the learned Additional Rent Controller should have seized them. 

 CONTENTIONS OF THE RESPONDENTS: 

The learned counsel for the respondents argued that the current petition is without merit and backed the contested eviction decision. After walking me through the opposing pleadings, the learned counsel for the respondent/landlord cited the order dated 18.12.2023 of the previous bench in support of his argument that the petitioner/tenant had not presented any evidence at all to support a leave to contest request, even though notice of the current proceedings had been given to them on the limited portion of the Green Park property.  

To bolster his contention that a tenant cannot be granted permission to contest based solely on unsubstantiated allegations, the landlord’s/respondent’s knowledgeable legal representative cited numerous court rulings, such as Abid-Ul-Islam vs. Inder Sain Dua, 2022 (6) SCC 30; Hari Shankar vs. Madan Mohan Gupta, 111 (2004) DLT 534; and Suresh Chand vs. Vijay Shankar, 2024.  

Even though the petitioner/tenant had been informed of the current proceedings on the limited portion of the Green Park property, the learned counsel for the respondent/landlord cited the order dated 18.12.2023 of the previous bench to support his argument that they had not provided any evidence at all to support a leave to contest request. 

COURT’S ANALYSIS AND JUDGMENT: 

The court reviewed in terms of the legal position, the respondent/landlord claims that merely making bald assertions without providing any evidence is insufficient to allow permission to challenge the issues of a bona fide requirement and the existence of a reasonably appropriate alternative lodging.  

The court further pronounced that the petitioner/tenant contends that only the allegations made in the affidavit requesting permission to contest are sufficient to create a triable issue; in support of this claim, the petitioner/tenant’s skilled counsel cited the ruling made by the Honourable Supreme Court.  

The tenant’s averments in the affidavit requesting leave to contest must be supported by some credible evidence, according to the court’s considered opinion. If this were not the case, clever affidavit drafting would inevitably result in the grant of leave to contest, defeating the very purpose for which Chapter IIIA was added to the Act in 1976. 

Regretfully, our judicial system does not guarantee the prompt determination of cases. Under the Delhi Rent Control Act, a tenancy lawsuit may take over ten years, or even longer, to get a final verdict.  

Regarding the Green Park property, the petitioner/tenant entered into the record of the current proceedings a few carefully chosen documents from previous court cases involving the Green Park property and Smt. Promila, the now-deceased wife of the respondent/landlord, who was a party to those cases.  

Lean legal counsel for the petitioner/tenant attempted to portray the respondent/landlord as having acquired a stake in the Green Park property following the death of his wife by using those handpicked documents.  

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Judgment reviewed by Riddhi S Bhora 

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Legal Precedent Upheld: Himachal Pradesh High Court Condemns Petitioner’s Attempt to Shift Blame onto Government for Notice Issuance Error

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Case Name: State of H.P. & anr v. M/s Jagson International Ltd. 

Case No.: OMP(M) No. 89 of 2024 

Dated: April 30, 2024 

Quorum: Justice Satyen Vaidya 

 

FACTS OF THE CASE: 

The instant application for a pardon of delay was filed with the allegations that no decision could be made regarding a challenge to the contested award until after general elections were conducted by the Election Commission on November 11, 2022, and the majority of senior officers were on election duty until December 8, 2022.  

Furthermore, it has been claimed that even after 8.12.2023, the government took a long time to form. Again, for this reason, it was not possible to decide whether to dispute the award, and as a result, the petition’s filing was delayed by 30 days.  

The respondent has objected to the prayer for a pardon of the delay. It has been argued that 120 days is the maximum amount of time that an application under Section 34 of the Act may be filed, according to the Act. Based on calculations made by the respondent, the petitioners’ Section 34 Act application was deemed unmaintainable since it was filed 122 days after it was submitted.  

It has also been claimed that even after 8.12.2023, the government took a long time to form, and once more, as a result, no decision could be made to contest the award. As a result, the filing of the petition was delayed by thirty days throughout this process. 

 

LEGAL PROVISIONS: 

  • Section 34 of the Arbitration and Conciliation Act. If a request was made under section 33, the request may be set aside only after three months have passed from the date the party making the request received the arbitral award or the date the arbitral tribunal decided to proceed with the request. The applicant may file an extension of thirty days for the Court to consider the application, but only if the Court determines that the applicant was prevented from filing within the allotted three months due to substantial reason.  

 

CONTENTIONS OF THE APPELLANTS: 

According to the petitioners, the decision to file the application could not be made since there would be elections until December 8, 2022, and then there would be a delay in the formation of the government. From my perspective, the petitioners’ given cause is extremely ambiguous.  

The petitioners contended that because the majority of senior officers were assigned to election duty until December 8, 2022, and because general elections were scheduled by the Election Commission on November 11, 2022, no decision could be made regarding a challenge to the contested award until after that date. This was the basis for their instant application for a pardon of delay. 

It has also been claimed that even after 8.12.2023, the government took a long time to form, and once more, as a result, no decision could be made to contest the award. As a result, the filing of the petition was delayed by 30 days throughout this process.  

The petitioners argued that In response to the explanation provided by the petitioners for the delay in filing the application, it has been stated that the decision to file the application could not be made because of elections through December 8, 2022, and the subsequent delay in the formation of the Government. 

 

CONTENTIONS OF THE RESPONDENTS: 

 The learned counsel representing the respondents argued that the respondent has objected to the prayer for a pardon of the delay. It has been argued that 120 days is the maximum amount of time that an application under Section 34 of the Act may be filed, according to the Act. The petitioners’ application under Section 34 of the Act was deemed preferable by the respondent after 122 days, indicating that the application was not maintainable. 

It has also been claimed that the Act’s Section 34(3) allows for a maximum extension of 30 days during the period beyond three months, provided the court is satisfied that the applicant was prevented from filing the application within the three months allotted by justifiable cause.  

The respondent claims that the petitioners seeking an extension of time past three months have not established any cause at all, let alone adequate cause. At the application hearing, the respondent also presented the argument that the statute of limitations of 30 days beyond a period of three months had run out on November 3, 2023—a public holiday known as Second Saturday. The public holiday continued into the following day, 12.3.2023.  

The repondents argued that the petitioners had given notice under Section 34(5) of the Act on 7.2.2023 indicating their intention to file the application under Section 34 of the Act, according to the respondent’s specific submission. The application, which can be found on page 206 of the paper book, has a copy of the notice that the petitioners sent to the respondent in accordance with Section 34(5) of the Act attached as Annexure P-5. 

 

COURT’S ANALYSIS AND JUDGMENT: 

The respondent’s argument that the petitioners filed the application 122 days later seems to be based on an incorrect computation. Instead of using the three months that are specified in sub-Section (3) of Section 34 of the Act, the respondent has computed a period of 90 days, which is not an accurate calculating method. Since three months would equate to the conclusion of three calendar months, the three months in this instance had ended on 11.2.2023. 

The petitioners have therefore requested a 30-day period of condonation. Under this interpretation, there is no reason not to evaluate the merits of an immediate application for a pardon of tardiness. 

The petitioners were expected to disclose their bona fides together with a reasonable explanation for their failure to file the application within the allotted time, as required by the proviso to Section 34(3) of the Act, as the court observed. The petitioners have utterly failed to provide any justification at all, much less a compelling one. 

Even the nebulous claims regarding the obstruction of decision-making caused by the elections and the subsequent formation of the government are refuted by the fact that on 7.2.2023, the petitioners themselves issued a notice under Section 34(5) of the Act, indicating that a decision had already been made by 7.2.2023 to file the application under Section 34 of the Act. However, the application was not filed until 13.3.2023 and there is no explanation provided as to why it was not filed immediately after 7.2.2023.  

Based on the presented facts and legal explanation, the court determined that the petitioners have not demonstrated a valid reason, much less a sufficient one, for their failure to file their Section 34 Act application within the allotted three months. Consequently, the application is rejected as it is deemed unsuccessful. 

  

 

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Judgment reviewed by Riddhi S Bhora. 

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Maximum Stamp Duty of Rs. 25 lakhs is applicable only as a one-time measure and not on each subsequent increase in the share capital of a company: Supreme Court

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Case title: State of Maharashtra & Anr. Vs National Organic Chemical Industries Ltd.

Case no.: Civil Appeal No. 8821 of 2011

Decision on: April 5th, 2024

Quoram: Justice Sudhanshu Dhulia and Justice Prasanna B. Varale

Facts of the case

The respondent company was incorporated with an initial share capital of Rs. 36 crores and in 1992, it increased its share capital to Rs. 600 crores and accordingly paid a stamp duty of Rs.1,12,80,000/- as per Article 10 of Schedule-I of the Bombay Stamp Act, 1958. The State/appellant amended Article 10 and introduced a maximum cap of Rs. 25 lakhs on stamp duty which would be payable by a company. Subsequently, the respondent passed a resolution for a further increase in its share capital to Rs. 1,200 crores and paid Rs. 25 lakhs as stamp duty. However, according to the respondent, this was done inadvertently as it was soon realized that stamp duty was not liable to be paid by them since the maximum stamp duty which was of Rs. 25 lakhs payable on Articles of Association (AOA) as per the provisions of the Stamp Act, had already been paid by them in 1992.

Consequently, the respondent wrote a letter seeking a refund of the payment of Stamp Duty of Rs. 25 lakhs but this request was turned down stating that whenever the authorized share capital of a company is increased, the stamp duty is payable on each such occasion at the time of filing of Form No. 5 and it is not a one-time measure. Aggrieved by the same, the respondent filed a writ petition before the High Court seeking a refund of Stamp Duty of Rs. 25 lakhs with interest, paid by them inadvertently. The High Court ruled in favor of the respondent and held that Form No.5 is not an instrument as defined by Section 2 of the Stamp Act and that stamp duty can only be charged on AOA, where the maximum duty (Rs.25 Lakhs), payable as per the amendment has already been paid. An appeal contesting the same was preferred before the Apex Court.

Submissions on behalf of the Appellants/State

The Counsel submitted that every time a company increases its share capital, it is a separate taxing event and stamp duty is liable to be paid irrespective of whether the maximum amount payable under the section has previously been paid. Further, he relied on Section 14 A of the Stamp Act and contended that any material or substantial alteration in the character of an instrument requires a fresh stamp duty according to its altered character. Hence, the maximum cap of Rs. 25 lakhs which was introduced after the payment of Stamp Duty of Rs.1,12,80,000/- cannot be taken into consideration in any case.

Submissions on behalf of the Respondents

The Counsel submits that it is only the Articles of Association of a company which are chargeable to Stamp Duty under Article 10. The Form No.5 which is being contended by the appellants to be a separate instrument is completely alien to the Stamp Act as it serves a very limited purpose of giving notice to the Registrar that a company has increased its share capital beyond the authorised share capital. She further submitted that increase in the share capital of a company does not materially or substantially alter the character of the Articles of Association so as to fall within Section 14A of the Stamp Act. Thus, the counsel through a catena of judgement contended that the fiscal statutes have to be construed strictly

Court’s Analysis and Judgement

The Court examined the relevant provisions of Stamp Duty Act and quoted the definition of instrument. The first question before the Court was whether the notice sent to the Registrar in Form No.5 is an “instrument” as defined under Section 2(l). On perusal of the provisions of Companies Act noted that it is the Registrar who is the custodian of the articles of a company and not the company. Thus, when a company has to alter the same or modify its share capital as recorded therein, it has to pass a resolution and file its Form No. 5. It relied on the decision of Allahabad High Court in New Egerton Woollen Milthels, In re, where the Court answered the above question in negative. The Court noted that filing of Form No. 5 is only a method prescribed, whereby “notice” of increase in share capital has to be sent to the Registrar, within 30 days of passing of such resolution. It further emphasized that it is only the articles which are an instrument within the meaning of Section 2(l) of the Stamp Act and not the Form No. 5.

Further, the Court addressed the question on whether the increase in share capital of the respondent would mandate the payment of Stamp Duty on the materially alters the character of the instrument, i.e., Articles of Association or whether the same could be considered as a part of and valid according to Section 31(2) of the Companies Act. The Court asserted that it is a settled position of law that in case of conflict between two laws, the general law must give way to the special law. A conjoined reading of the Stamp Act and the Companies Act would show that while the former governs the payment of stamp duty for all manner of instruments, the latter deals with all aspects relating to companies and other similar associations. Hence, stated that the Companies Act which is the special law overrides the General Law (Stamp Act) and thereby, any increase in the share capital of the company also shall be valid as if it were originally there when the Articles of Association were first stamped.

Secondly, on the question of whether the maximum cap on stamp duty is applicable every time there is an increase in the share capital or it is a one-time measure. The Court ruled that the Maharashtra Stamp (Amendment) Act, 2015 which amended the charging section for Articles of Association i.e., Article 10 of the Stamp Act fortifies on the fact that the maximum cap of Rs. 25 lakhs would be applicable as a one-time measure and not on each subsequent increase in the share capital of a company.

The Court rejected the contention of appellant that the stamp duty paid before the amendment cannot be taken into account and held that it is true that the amendment does not have retrospective effect, however since the instrument ‘Articles of Association’ remains the same and the increase was initiated by the respondent after the cap was introduced, the duty already paid on the same very instrument will have to be considered and that it is not a fresh instrument which has been brought to be stamped, but only the increase in share capital in the original document, which has been specifically made chargeable by the Legislation.

The Apex Court therefore, dismissed the appeal and upheld the order of the Bombay High Court. Accordingly, it directed the appellants to refund Rs. 25 lakhs paid by the respondent.

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Judgement Reviewed by – Keerthi K

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