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2008 DIGILAW 1028 (DEL)

Satwinder Singh v. Kanwar Krishan Anand

2008-11-06

SHIV NARAYAN DHINGRA

body2008
1. The petitioner is aggrieed by an order of Additional Rent Control Tribunal dated 8th January, 2007 whereby he set aside the judgment of ARC dated 27th May, 2004 and allowed the Eiction petition filed by the respondent under Section 14(1)(b) of Delhi Rent Control Act. 2. The facts releant for the purpose of deciding this petition are that the petitioner was a tenant in respect of premises no. 13/39, Arya Samaj Road, Karol Bagh. The respondent found that the premises was in occupation of M/s. Letheria (an undertaking of Punjab Goernment) and the petitioner had sub- let/parted with the possession of premises to M/s. Letheria without obtaining consent in writing of the landlord. A petition under Section 14(1)(b) of Delhi Rent Control Act was preferred. The landlord also got a Local Commissioner appointed for inspection of the property, immediately on filing the Eiction Petition. The Local Commissioner appointed by the Court inspected the premises and filed his report stating that premises was occupied by Sh. Sanjee Kumar, an employee of Letheria (a Punjab Goernment undertaking), who informed him that Mr. R.M. Lal was the Area Manager of Punjab State Leather Deelopment Corporation (PSLDC) and incharge of the shop. There were 4 employees of Letheria working with him in the shop. 3. The petitioner/tenant in the WS denied the allegations regarding sub-letting and took the stand that the petitioner was the agent of Punjab State Leather Deelopment Corporation (PSLDC) for the sale of complete range of leather goods. The company (PSLDC) used to supply goods to him bill-wise on consignment basis and he used to get commission of 10% of the net sale alue. The goods left unsold were returned in the same condition to PSLDC. 4. The petitioner, howeer, filed no documents in respect of his stand along with WS. The learned ARC after considering the eidence adduced by both the parties came to conclusion that the sub-letting cannot be presumed merely because a third person was in possession of the property. There was an agency agreement between petitioner and M/s. Punjab State Leather Deelopment Corporation (PSLDC). The documents such as sale tax return and income tax return filed by the tenant show that it was an agency agreement and there was no sub-letting. There was an agency agreement between petitioner and M/s. Punjab State Leather Deelopment Corporation (PSLDC). The documents such as sale tax return and income tax return filed by the tenant show that it was an agency agreement and there was no sub-letting. The respondent herein preferred an appeal against the order of the learned ARC and also filed an application under Order 41 Rule 27 CPC for summoning officials of Punjab State Leather Deelopment Corporation (PSLDC) who had though been earlier summoned, but had not brought releant documents at that time on the ground that the record was not traceable. 5. The application under Order 41 Rule 27 CPC was allowed by the learned ARCT and additional eidence was taken on record. The learned ARCT after considering the eidence as led in the case came to conclusion that only initial burden was on the landlord/respondent to show that the premises was in occupation of a third party and thereafter burden shifted to the tenant to explain the presence of third party and found that learned ARC had not appreciated the eidence on record and had een not gien heed to the contradictions in the testimony of the petitioner/tenant himself. He came to conclusion that it was not a case of agency but was a case of sub-letting. 6. Aggrieed by this judgment, the petitioner has preferred this petition on the ground that the learned Tribunal failed to appreciate that there was an agency agreement of the petitioner with Punjab State Leather Deelopment Corporation (PSLDC) for sale of their goods as far back as in the year 1985 and the Tribunal erred in not appreciating all the terms and conditions goerning the agency agreement executed between the parties and there was no reason to beliee that there was sub-letting. The learned ARCT had no reason to doubt the terms and conditions of agency agreement. It is also submitted that the learned ARCT failed to appreciate that though the staff of Punjab State Leather Deelopment Corporation (PSLDC) was present at the rental premises but he ignored the fact that it was a part of the agreement with the petitioner that Punjab State Leather Deelopment Corporation (PSLDC) was to proide professional and technical guidance. 7. It was also contended that Tribunal allowed application under Order 41 Rule 27 CPC made by the respondent without cogent reasons. 7. It was also contended that Tribunal allowed application under Order 41 Rule 27 CPC made by the respondent without cogent reasons. The other ground taken is that Tribunal based its findings on the basis of documents filed as Ex.AW4/1 to AW4/17. The said documents were exhibited in the statement of AW- 4. The exhibiting of these documents was objected to and the documents were not proed in accordance with law. It was further submitted that Tribunal erred in returning a finding of the possession of the Corporation(PSLDC) on the basis of presence of its employees, obtaining a telephone in their name at the premises or doing communication from the address of the premises. These facts did not constitute exclusie possession. 8. An agency is a fiduciary relationship created between the principal and the agent by express or implied contract in which agent acts on behalf of the principal and binds the principal by his works or actions. The basic theory of agency deice is to enable a person through the serices of another to broaden the scope of its actiities and receie the product of anothers effort retaining net benefits resulting from the work of the agent. An agent is normally entitled to a fee or a commission. 9. In the present case, the petitioner had taken a stand in the WS that there was an agency agreement between the petitioner and the Punjab State Leather Deelopment Corporation (PSLDC). Since it was the stand of the petitioner that there was an agency agreement, the onus shifted to petitioner to come forward with all the eidence in respect of functioning of the agency agreement and the petitioner was supposed to file all documents in his possession regarding the agency business. The petitioner did not file documents of the agency business till the end. When the matter was listed for eidence he only filed a photo copy of the agency agreement at that stage. 10. Let us consider the terms and conditions of the agency agreement as placed on record by the petitioner and the eidence which has come on record. The following coenants of the agency agreement dated 9th August, 1985 would be releant: Whereas the party no. 2 has offered to gie the agency for the sale of leather goods footwears under the brand name of LEATHERIA to the party no. 1 on commission basis. The following coenants of the agency agreement dated 9th August, 1985 would be releant: Whereas the party no. 2 has offered to gie the agency for the sale of leather goods footwears under the brand name of LEATHERIA to the party no. 1 on commission basis. The terms settled between the parties are as under : 1. That the party no. 1 has agreed to take the agency of the sale of complete range of Leather goods from party no. 2 under the brand name of LETHERIA in the premises No.13/39, Arya Samaj Road, Karol Bagh, New Delhi. 2. Party no. 1 has undertaken to sell exclusiely the goods supplied by the party no. 2 and no other products at the said premises. That party no. 2 has agreed to supply the goods bill wise on consignment basis against receipt in writing to party no. 1 according to his requirement. Party no. 1 also undertakes to follow the guide lines and instructions issued by the Marketing professionals of party no.2 to achiee best commercial results. 3. That it has been agreed that party no. 2 will pay a commission @ 10% of the net sale alue (excluding sales tax, discount etc.) to party no. 1 upto the annual net sales of Rs.15 lakhs. For the sale exceeding Rs.15 lakhs per annum the commission will be paid @ 8% of the net additional accruals. 4.That party no. 1 further undertakes that the goods receied on consignment basis and sold will be fully accounted for and full sales proceeds shall be credited to the bank account of party no. 2 on the following day. The goods which are left unsold will be returned in the same good condition to party no. 2 within three months of their receipt or payment made thereof. 5. That the goods of party no.2 will be sold by party no. 1 under the bills and ouchers of party no. 1 only. The collection and timely payment of sales tax or other taxes will be the responsibility of party no. 1. 6. That the accounts will be inspected and settled at the end of eery calender month and the commission will be paid to the agents by 7th of the following month at the latest on the basis of preious months sale. 7. That the insurance liability for all the stocks/stores supplied to party no. 1. 6. That the accounts will be inspected and settled at the end of eery calender month and the commission will be paid to the agents by 7th of the following month at the latest on the basis of preious months sale. 7. That the insurance liability for all the stocks/stores supplied to party no. 1 on consignment basis, bill wise will be that of party no. 2. 8. That the primary responsibility for maintaining the accounts of all transactions annually will be that of party no. 1 and party no. 2 will hae no right of interference. Howeer, party no.1 undertakes to render to party no.2 true statements of accounts of all the sale transactions of the goods receied and sold by the agents. The bill ouchers and other original records of sales/transfers will also be put up periodically, and when required for the examination of the auditors and the Finance Diision of the party no. 2 which is a wholly owned State Got. Undertaking. The periodic physical inspection of the stocks at said premises will also be jointly carried out by the parties to ensure that the stocks tally with the stock registers and the record of consignments supplied to party no. 1. 9. That the business in the said shop will be run by party no. 1 exclusiely and eery document of business will continue to be in the name of party no.1. Howeer, party no.2 will proide professional and technical guidance of its marketing and sales executies in the best mutual interest of achieing higher sales. Party no. 2 has further agreed to suitably furnish the premises for display and sale of its products and also proide suitable publicity support to promote the sale of its products. 10. That the goods in the said shop will always remain under the custody of party no.1, howeer, party no. 1 will be fully liable to pay their alue on sale or return the goods which are unsold as stated aboe. 11. The petitioners contention is that this agency agreement continued. 10. That the goods in the said shop will always remain under the custody of party no.1, howeer, party no. 1 will be fully liable to pay their alue on sale or return the goods which are unsold as stated aboe. 11. The petitioners contention is that this agency agreement continued. The work to be performed by the petitioner in terms of aboe agreement is ery clear and can be enumerated as under : 1) The petitioner was to sell the goods of Punjab State Leather Deelopment Corporation (PSLDC) and PSLDC was only to supply the goods on consignment basis against receipt in writing to the petitioner according to petitioners requirement. 2) An account was to be maintained by the petitioner of the goods receied and sold to all. Sale proceeds of the goods were to be credited by the petitioner to the bank account of PSLDC. 3) The goods were to be sold under the ouchers of the petitioner only. 4) All accounts were to be maintained by the petitioner and were to be inspected and settled eery month with PSLDC. 5) The primary responsibility of maintaining accounts and of transactions was that of the petitioner and PSLDC had no right to interfere. 6) The petitioner was to render true accounts of all sale transactions and goods to PSLDC. 7) Bills, ouchers and other original records of sale and transfer were to be maintained by the petitioner and were to be periodically examined by PSLDC. 8) The business in the shop was to be run exclusiely by the petitioner and PSLDC was only to proide professional and technical guidance. 9) The goods were always to remain in custody of the petitioner. .12. In order to run agency business of respondent in aboe terms it would has been necessary for the petitioner to employ Accountant, Sales Boys and Manager of the shop. Surprisingly enough, the petitioner had not examined any of the employees employed by .him. He has not placed before the learned ARC any record regarding any of the business transactions of the agency. He did not place before the learned ARC, the bank accounts where he was depositing the sale proceeds. He did not place before the learned ARC daily sale proceeds charts or monthly sale proceeds charts or monthly turnoer of the shop showing how much was his commission. He did not place before the learned ARC, the bank accounts where he was depositing the sale proceeds. He did not place before the learned ARC daily sale proceeds charts or monthly sale proceeds charts or monthly turnoer of the shop showing how much was his commission. In fact he placed no record whatsoeer before ARC in respect of agency business allegedly being run by him. During eidence when he was asked to produce the record he took a plea that records got burnt. Een if record had got burned he would hae disclosed at least bank accounts where he was depositing the sale proceeds, his bank accounts where he was receiing the commission. In fact the entire attitude of the petitioner had been not to produce any eidence in the Court. In respect of alleged agency business he produced before the Court only sales tax return and his income tax return, that also without any supporting corresponding record. Belieing that he had allowed use of his sales tax number to PSLDC, does not mean that he was running an agency business. His own testimony was also shaky and totally bereft of credibility. In his testimony he had stated that his monthly commission was arying between Rs.13,000/-to 15,000/-. Howeer, when he was asked about the quantum of the sales he stated that sale per day was Rs.1,000/- approximately. If the per day sale of the shop was Rs.1,000/-, the total monthly sale would hae been Rs.26,000/- his commission @ 10% would hae been Rs.2600/- per month. While his statement was that his commission was Rs.13,000/-to Rs.15,000/- per month. Not only this, the learned ARCT also obsered that the petitioner took a stand that his accounts books etc. were destroyed in fire in 1998 but there was no explanation as to why he did not file all documents and books in the Court along with the written statement. He also did not produce a witness who could proe that the fire took place in which account books were destroyed. No FIR was lodged about breaking out of the fire and destruction of the record. Neither such eidence was led in the Court. He also did not produce a witness who could proe that the fire took place in which account books were destroyed. No FIR was lodged about breaking out of the fire and destruction of the record. Neither such eidence was led in the Court. ARCT also obsered that in any eent een if the stand of the petitioner regarding breaking out of fire is belieed on the face of it petitioner could hae certainly proed his bank statements and bank accounts to show that he was doing transactions but he did not een do that. .13. On the other hand, it was found that when Local Commissioner isited the premises there was no employee of the petitioner on the shop and all employees were of Punjab State Leather Deelopment Corporation (PSLDC). The Local Commissioner noted their names. An objection has been raised against the admissibility of the report of the Local Commissioner. Howeer, the report of Local Commissioner per say has not been admitted or considered by the ARCT. The report of Local Commissioner was proed by Mr. Manish Sharma DW-2 who appeared in the witness box and he testified the facts which he obsered and in his testimony he deposed that Sh. Sanjee Kumar, Sh. D.R. Sharma, Sh. Balbir Singh and Sh. Mathura Dass were person present at the time of inspection and they were all employees of PSLDC. This fact has not been denied by the petitioner neither any suggestion was gien that they were not employees of the PSLDC. Testimony of AW-4 who produced documents regarding the showroom, Letheria also shows that Punjab State Leather Deelopment Corporation (PSLDC) had submitted the names of these employees with ESI and other authorities. The record of PSLDC also shows that the shop was being used as an exclusie showroom of PSLDC. Though, the objection has been raised on the exhibiting of documents AW-4/1 and AW-1/12 of the .witness, but all these documents come from the official record of the PSLDC and the witness examined had no personal axe to grind. There was no reason to disbeliee the testimony of this witness or to disbeliee the documents. 14. It is settled law that the efforts of the Court has to dig out the truth and not to act only as an umpire in a bout of two litigants. There was no reason to disbeliee the testimony of this witness or to disbeliee the documents. 14. It is settled law that the efforts of the Court has to dig out the truth and not to act only as an umpire in a bout of two litigants. The Court can allow an application for additional eidence if Court considers that the recording of additional eidence is necessary to come at a proper decision in the case. Objection of the petitioner regarding allowing of an application under Order 41 Rule 27 CPC was therefore baseless and the witness examined as a result of this and the documents exhibited cannot be doubted. The official record produced before the ARCT showed that Punjab State Leather Deelopment Corporation was initially paying rent of Rs.22,000/- to the petitioner as rent and the petitioner had demanded an increase in the rent to Rs.33,000/-. PSLDC finding that it was not possible to run the showroom with the increased rent had thought it better to terminate the tenancy. The plea of the petitioner that PSLDC had become defunct and therefore left the premises has not been established by examining any official from the PSLDC nor this fact has been testified by any other witness examined by the PSLDC. The internal noting of the PSLDC proed on record, also showed that the shop was on rent with PSLDC @ Rs.22,000/- per month. 15. It is settled law that in case of ciil disputes or disputes under Rent Control Act the Court has to come to conclusion only by weighing eidence on scale of probabilities and see what was more probable. It is a case where the petitioner, to circument the law and in order to keep the premises under Delhi Rent Control Act had entered into a paper agreement regarding agency but actually the shop was gien on the rent to PSLDC and the entire shop was being run by PSLDC. All employees at the shop were of PSLDC , all accounts were being maintained by PSLDC and only rent cheques were being gien to the petitioner. Had petitioner come forward with his bank account where this so- called commission was being deposited, the cat would hae been out of bag and it would hae been reealed that a fix rent amount was going into the account of the petitioner. Had petitioner come forward with his bank account where this so- called commission was being deposited, the cat would hae been out of bag and it would hae been reealed that a fix rent amount was going into the account of the petitioner. The petitioners non-production of his bank statement where money was coming from PSLDC and withholding all other eidence on the ground that a fire broke out, appears malafide. 16. The learned ARCT rightly arried at conclusion that it was a case of sub-letting and not a case of agency. I find no ground to interfere in the order of the learned ARCT. The petition is hereby dismissed.