TMI Blog2022 (10) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... pertain to the years prior to execution of the Lease Agreement. Therefore, none of these documents show that any rent was being paid or was payable by the defendant firm to the plaintiff company under the Lease Agreement. The plaintiff company was incorporated as a family owned company with the two grandchildren of late Sh. Sanmukh Singh Batra being the only shareholders and directors. Subsequently, disputes arose between the parties and it appears that Sanmukh Singh Batra sided with one of the grandsons, resulting in the shares of the plaintiff company and the control of the plaintiff company being transferred in favour of Jaspreet Pal Singh Batra, to the exclusion of Prabhdit Singh Batra - From the accounts of the plaintiff company that have been placed on record, it is evident that the plaintiff company was not engaged in any business activity and was only an asset holding company owned by the family. The only income shown of the plaintiff company is from lease rental. Further, the directorship and majority shareholding of the plaintiff company has, at all times, been with the family members of late Sh. Sanmukh Singh Batra. In view of settled principles of law with regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on 31st March, 2010, but the defendant firm failed to vacate the lease premises. (iv) The plaintiff company terminated the lease agreement vide legal notice dated 15th May, 2015 and vide notice dated 14th July, 2015 called upon the defendant firm to handover the vacant and peaceful physical possession of the leased premised and pay the outstanding lease rent amount for the last three years. (v) Defendant firm failed to respond to the aforesaid notice. 5. Accordingly, the present suit was filed on 10th August, 2015 praying for the following reliefs: a) Decree in favour of the Plaintiff and against the Defendant / its partners directing them to vacate and hand over the vacant and peaceful possession of the suit property as fully mentioned in the lease deed and Para 4 of the suit to the Plaintiff. b) Decree in favour of Plaintiff and against the Defendant / its partners for a sum of Rs. 90,00,000/- (Rupees Ninety Lacs only) towards arrears of rent; c) Pass a decree in favour of the Plaintiff and against the Defendant / its partners directing them to pay a sum of Rs. 4,50,000/- per month as damages for the illegal use and occupation of the premise from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The plaintiff company has, throughout been a family owned company and therefore, is in the nature of a quasi-partnership. (x) On 28th October, 2002, upon persuasion of late Sh. Sanmukh Singh Batra, a conveyance deed was executed by Prabhdit Singh Batra and Jaspreet Pal Singh Batra in favour of the plaintiff company towards their respective half share in the suit property, without receipt of any sale consideration. (xi) Vide letter dated 20th November, 2002, the DDA converted the lease hold rights in the suit property in favour of the plaintiff company with 50% share each in favour of Jaspreet Pal Singh Batra and Prabhdit Singh Batra. (xii) When the plaintiff company was incorporated, Prabhdit Singh Batra held 50% of the shares in the plaintiff company. Subsequently, disputes arose between the parties and the share of Prabhdit Singh Batra was diluted in the plaintiff company. 7. Counsel for the plaintiff has made the following submissions: (i) There is no dispute with regard to the plaintiff company being the owner of the suit property. Reliance is placed on the pleadings in the suit filed on behalf of Hardit Singh Batra and Prabhdit Singh Batra, being CS(OS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DLT 241 in support of the submission that the oral pleas which are contrary to the written document cannot be considered by the Court. 11. Per contra, counsel for the defendant has made the following submissions: (i) The Lease Deed was never intended to be acted upon and therefore, the same was superseded by a subsequent MoU entered into between the parties. (ii) No rent was ever paid by the defendant firm ever since the aforesaid Lease Agreement was entered into between the parties on 1st April, 2007. If it were a genuine lease transaction and no rent was paid by the tenant, the plaintiff would not have waited till the year 2015 to file the present suit. There are no averments in the plaint as to the period for which the rent was not paid. From the legal notice sent on behalf of the plaintiff company, it is clear that the rent was not paid for at least three years prior to the filing of the suit and that is why a demand of Rs.90,00,000/- has been made. (iii) In the MoU dated 20th December, 2007, it has been recorded that the only purpose of entering into a lease agreement between the plaintiff company and defendant was for getting loans from banks. If the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the judgment of the Supreme Court in Himani Alloys Limited v. Tata Steel Limited, (2011) 15 SCC 273, which is as under: 11. It is true that a judgment can be given on an admission contained in the minutes of a meeting. But the admission should be categorical. It should be a conscious and deliberate act of the party making it, showing an intention to be bound by it. Order 12 Rule 6 being an enabling provision, it is neither mandatory nor peremptory but discretionary. The court, on examination of the facts and circumstances, has to exercise its judicial discretion, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore unless the admission is clear, unambiguous and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. In short the discretion should be used only when there is a clear admission which can be acted upon. ( See also Uttam Singh Duggal Co. Ltd. v. United Bank of India [(2000) 7 SCC 120], Karam Kapahi v. Lal Chand Public Charitable Trust [(2010) 4 SCC 753 : (2010) 2 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. The Financial Loan from Banks and/or any other Financial Institutions were primarily for the payment for Plot No.188, Sector58 in Faridabad, Haryana and construction of the building on it, which is owned by Mr. Sanmukh Singh Batra. In addition to the above stated mutual agreement between the Batra Family, the expenses of maintenance and the house ta of A41 Naraina Industrial Area, Phase-2, New Delhi-110028, which is owned by Arrena Overseas Pvt. Ltd., will be continuously borne by Batra Art Press, Welco Overseas Pvt. Ltd., and their respective sister concerns as usually paid in the past. 7. The intent of the parties to enter into a Lease Agreement is evident from a reading of the aforesaid MoU. The only purpose for entering into a Lease Agreement was to show income of the plaintiff company so as to obtain loans from banks and other financial institutions and no rent was actually payable under the said Lease Agreement. The aforesaid MoU was executed soon after the execution of the Lease Agreement and therefore, a cloud is created over the genuineness of the lease. 18. There is merit in the submission by the counsel for the defendant firm that if no rent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thumb impression be sent to CFSL, Rohini for analysis. The aforesaid petitions are still pending adjudication before the NCLT. 21. Based on the aforesaid, it appears that the plaintiff company was incorporated as a family owned company with the two grandchildren of late Sh. Sanmukh Singh Batra being the only shareholders and directors. Subsequently, disputes arose between the parties and it appears that Sanmukh Singh Batra sided with one of the grandsons, resulting in the shares of the plaintiff company and the control of the plaintiff company being transferred in favour of Jaspreet Pal Singh Batra, to the exclusion of Prabhdit Singh Batra. 22. The outcome of the proceedings before the NCLT would have a crucial bearing on the outcome of the present case as the subject matter of the said petitions is whether the transfer of shares of the plaintiff company in favour of Smt. Balwant Kaur Batra and their subsequent transfer in favour of late Sh. Sanmukh Singh Batra were genuine. In the event the aforesaid transfers are held not to be valid, the shareholding and directorship of Prabhdit Singh Batra in the plaintiff company would be restored. Even as on date, 15% shareholding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , his wife and his two sons Jaspal Singh Batra and Ravinder Pal Singh Batra and their respective wives. 25. From the accounts of the plaintiff company that have been placed on record, it is evident that the plaintiff company was not engaged in any business activity and was only an asset holding company owned by the family. The only income shown of the plaintiff company is from lease rental. Further, the directorship and majority shareholding of the plaintiff company has, at all times, been with the family members of late Sh. Sanmukh Singh Batra. 26. At this stage, reference may be made to the observations made by the Supreme Court in Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad, (2005) 11 SCC 314, which are set out below: 225. A company incorporated under the Companies Act is a body corporate. However, in certain situations, its corporate veil can be lifted. (See Kapila Hingorani v. State of Bihar [(2003) 6 SCC 1 : 2004 SCC (L S) 586 ].) 226. The Court, however, has made a clear distinction between a family company, a private company and a public limited company. The true character of the company, the business realities of the situation should not be confine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany. I am of the prima facie view that the plaintiff company is nothing but a family owned company and the real owner of the suit property was Sanmukh Singh Batra, who expired during the pendency of the present suit. If that be so, the property would devolve by laws of succession on both his sons Jaspal Singh Batra and Ravinderpal Singh Batra. All these issues would have to be determined in the trial and the defendant firm cannot be denied its right to contest the claim of the plaintiff company when no clear, unambiguous and unconditional admissions have been made. 29. In S. M. Asif v. Virender Kumar Bajaj, (2015) 9 SCC 287 , the Supreme Court has observed that a mere admission of the relationship of landlord and tenant cannot be said to be an unequivocal admission for decreeing a suit and relevant factors of each case have to be considered while exercising the discretion afforded to the Court under Order XII Rule 6 of the CPC. The present suit is not a simpliciter case of admission of the relationship of landlord and tenant on the basis of which a judgment on admissions can be granted to the plaintiff company. Therefore, the judgments cited on behalf of the plaintiff in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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