| Citation | (2022) 10 SCC 496 |
| Date of Adjudication | July 6, 2022 |
| Court | The Hon’ble Supreme Court (henceforth, SC) |
| Appellant | Karan Kapoor |
| Respondent | Madhuri Kapoor |
| Bench | J.K. Maheshwari, J. |
Facts of the Case
Karan Kapoor, the appellant, was a tenant in the residential property owned by the respondent, including the space (henceforth, property) on the ground floor, consisting of a drawing room, dining room, a foyer, among other facilities. The Respondent signed a 24-month Lease Agreement with the Appellant’s proprietorship, commencing with an interest-free security deposit paid by the Appellant. Following the expiry of the Lease Agreement, a renewed agreement for an additional 11 months was signed, and the previously submitted Security Deposit was retained and applied as an interest-free security deposit for the renewed Agreement.
After the lapse of the extended Lease Agreement lapsed, the appellant did not pay any rent but remained in possession of the property. A legal notice instructing the appellant to vacate the property was also issued by the respondent, inspite of which, the former neither vacated nor settled the overdue rent, following which the respondent filed a suit in the trial court. The appellant, argued that post the Lease Agreement’s expiration in 2014, the respondent had proposed to sell the rights of the property. Consequently, an Agreement to Sell (henceforth, ATS I) was executed in 2017, including an agreement to offset the accrued rent from 2014 to 2017 within the sales arrangement. It was further argued that a second agreement (henceforth, ATS II) was entered into by both the parties, as per which, the appellant consented to transferring his rights over a plot of land to the respondent to partially fulfill the obligations of the sale consideration of the ATS I.
The Trial Court after assessing the facts of the case, granted a decree in favour of the respondent. A review petition which was filed by the appellant, was also rejected, following which he approached the HC, but couldn’t get a favourable order. Thus, he has now filed an appeal before the SC.
Issues of the Case
Whether the appellant is required to clear off his due rent or not?
Rules Applicable
Transfer of Property Act, 1882 (henceforth, TPA)
Arguments of the Appellant
In the SC, following arguments were put forth by the counsel of the appellant-
- That he is fully justified in protecting his possession over the property, having met the criteria established by this Court in Shrimant Rao Suryavanshi v. Prahlad Bhairoba Suryavanshi[1].
- That the respondent, by accepting the earnest money, effectively executed the terms of the ATS I, and this acceptance, as stipulated in the ATS I, terminated the lessor-lessee relationship, leading to the cessation of the tenancy.[2]
- That the appeal should be set aside, and the judgement of the HC be upheld.
Arguments of the Respondent
In the SC, following arguments were put forth by the counsel of the respondent-
- That the appellant is continuing to be in possession of the property even after the lapse of the Lease Agreement and the extended Lease Agreement without paying, which is a clear abuse of due process of law.
- That the defense under Section 53A of the TPA[3] is only relevant when consideration has been reciprocated, a circumstance not applicable to the appellant’s situation.
- That the ruling of the HC is absolutely fine and needs no interference of the SC; the present appeal should be dismissed.
Adjudication by the SC
Relying on S.M. Asif v. Virendar Kumar Bajaj[4], the SC set aside the judgement and order passed by the Trial Court, and backed by the HC solely on the acknowledgment of facts and without taking into account the defense, using discretionary power. The matter was sent back to the Trial Court for a prompt resolution of the suit, ensuring both parties have adequate opportunities to present evidence, which will be evaluated by the Court on its merits.
It was also held that the appellant ought to pay off the rent and arrears as per the Landlord-Tenant Agreement. It was acknowledged by the Court that although more than 7 years have passed already, the rent still stands unpaid. The Trial Court was therefore instructed to first address the matter of monthly rent payment, considering the annual increment, and issue suitable orders for settling any outstanding arrears along with the regular monthly rent deposit.
Thus, the appeal was allowed only to an extent, mentioned herein, and the rulings of the Trial court and the HC were set aside.
Written by Aarya Dubey an intern under legal vidhiya.
[1] Shrimant Rao Suryavanshi v. Prahlad Bhairoba Suryavanshi, 2002 (3) SCC 676.
[2] R. Kanthimathi v. Beatrice Xavier, 2000 (9) SCC 339.
[3] The Transfer of Property Act, 1882, § 53, cl. a, No. 4, Acts of Parliament, 1882 (India).
[4] S.M. Asif v. Virendar Kumar Bajaj, (2015) 9 SCC 287.
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