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CASE NO.: Special Leave Petition (civil)  18722 of 2006

PETITIONER: DELHI FINANCIAL CORPORATION

RESPONDENT: V.P.PURI & OTHERS

DATE OF JUDGMENT: 08/12/2006

BENCH: K.G.BALAKRISHNAN & D.K. JAIN

JUDGMENT: JUDGMENT

O R D E R

D.K. JAIN, J.: 1.      Challenge in this petition is to the order, dated  31.8.2006, passed by a Division Bench of the Delhi High  Court, affirming the order passed by a learned Single  Judge, whereby the application filed by the Delhi  Financial Corporation (for short "DFC") defendant No. 2  in the suit, seeking to wriggle out of the settlement  arrived at with the plaintiffs, respondents No. 1 to 7  herein (hereinafter referred to as "the landlords") was  dismissed. 2.      Having heard learned counsel for the DFC and the  landlords who are on caveat, we are of the view that there  is no ground to interfere with the impugned order. 3.      The backdrop of this long drawn litigation, at times  coming to this Court, in brief, is as follows: The suit premises bearing No. 6-7, Saraswati Bhawan, E- Block, Connaught Place, New Delhi were let out by the  landlords to the Union of India \026 Respondent No. 8  herein, some time in the year 1967.  The lease was  further extended vide agreement dated 1.1.1994 for a  period of two years, with effect from 11.11.1993 at a  monthly rent of Rs.2,28,255/- with right to sublet whole  or any part of the premises, as per clause (4) of the lease  deed, with a rider that the Union of India will remain  responsible for full payment of rent.  A substantial part of  the premises was sublet by Union of India to DFC. 4.      Determining the tenancy, after serving notice, dated  6.3.1995, on the Union of India, the landlords filed a suit  for possession by ejectment and recovery of the mesne  profits w.e.f. 1.5.1995 against the Union of India.   5.      It appears that there was default on the part of the  Union of India in payment of rent.  By order dated  20.12.2000 a Division Bench of the High Court directed  the Union of India to pay the stated amount as per earlier  order dated 15.5.1997 towards use and occupation  charges of the said premises, adding that on failure to  pay it with interest on or before 31.3.2000 its right to  continue contesting the suit would stand struck off. 6.      The Union of India failed to comply with the said  order.  Consequently, their defence was struck off vide  order dated 1.5.2001. 7.      Subsequently, an application was filed by the DFC,  claiming to be a necessary party, praying for its  impleadment in the suit.  The application was dismissed  by the Single Judge, which order was affirmed by the

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Division Bench in the appeal preferred by DFC. On  matter being taken to this Court, vide order dated  16.7.2004, it was felt that for effective settlement of the  disputes, DFC was a proper party.  DFC’s appeal was  allowed and it was impleaded as the second defendant in  the suit.  Pursuant whereto, DFC filed its written  statement.   8.      Thereafter, basing the case on some admissions by  the DFC in the written statement, inter alia, as to UOI’s  tenancy, the rate of rent and determination of tenancy on  their notice, the landlords filed an application under  Order XII Rule 6 CPC contending that no triable issue  having been raised by the DFC they were entitled to a  decree of possession forthwith.  9.      During the course of arguments on landlords’  aforesaid application under Order XII Rule 6 CPC,  counsel for the DFC sought adjournment in order to  obtain instructions.  The matter being listed again on  13.12.2005, counsel for the DFC made a statement to the  effect that the Corporation was ready to vacate and hand  over the premises to the landlords by 31.8.2006.  DFC  was asked to file an affidavit/undertaking to that effect,  which was done, stating in the affidavit dated 12.1.2006  that the DFC would not induct any other person in the  suit premises and would hand over vacant and peaceful  possession thereof to the landlords on or before  31.8.2006 and till then would pay to them future  compensation for use and occupation of the suit premises  month by month.  On 13.1.2006 the undertaking was  accepted and a decree in terms thereof was passed by the  learned Single Judge in favour of the landlords and  against the DFC qua the ground floor, first floor and  second floor of the suit premises, except one room of the  first floor (already in occupation of the landlords).  In so  far as the basement of the premises in possession of the  Union of India was concerned, the matter was fixed for  arguments on 30.1.2006. 10.     After a lapse of about four months,  an application  (I.A. No. 5852/2006) was filed by the DFC seeking closure  of the case on the plea that the settlement made by it  with the landlords was on a distinct understanding that  all the disputes were settled and there was no question of  payment of any mesne profits.  In the alternative it was  pleaded that the undertaking of DFC may not be treated  as binding on them and it be deemed to be withdrawn.   As noted above, the application was dismissed by the  learned Single Judge vide order dated 7.8.2006. Appeal  against this order was turned down by the impugned  detailed and well reasoned order of the Division Bench.   11.     The DFC is, thus, before us. 12.     Mr. Mukul Rohtagi, learned senior counsel  appearing for DFC has strenuously urged that the High  Court has failed to appreciate that all the issues between  the parties to the suit, including issue of possession,  compensation etc. except regarding the possession of the  basement floor, in the occupation of the Union of India,  stood settled by virtue of order dated 13.1.2006.  Therefore, the said order having attained finality the  landlords are now estopped from raising the issue in  regard to the mesne profits.  It is asserted that the claim  of damages/mesne profits by the landlords at this stage  is an after thought.  In the alternative, it is contended  that if the arrangement arrived at between the DFC and  the landlords is not acceptable to the landlords, the DFC  may be put back in possession of the suit premises and

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the suit may be tried afresh on all the issues. 13.     We are unable to persuade ourselves to agree with  learned counsel for the DFC.  In the light of plain terms of  the undertaking filed in the form of an affidavit by the  Senior Manager of DFC; the order dated 13.1.2006 and  the fact that the said undertaking was filed at a stage  when arguments on landlords’ application under Order  XII Rule 6, praying for a decree for possession on  admissions were being heard, we are of the view that  order dated 13.1.2006 did not put a quietus to the issue  of mesne profits.  Apparently, neither the Union of India  who in terms of clause (4) of the lease deed was  principally liable to pay rent and other charges in respect  of the whole of the suit premises, was a party to the said  arrangement nor is there any mention or indication in the  affidavit, filed by the DFC, on the question of mesne  profits.  That apart, admittedly, the suit as a whole was  not disposed of and the issue of mesne profits still  remained to be decided. We say no more at this stage,  lest it may cause prejudice to either of the parties at the  time of final adjudication on the issue. As regards the  question whether or not the DFC is liable to pay the  mesne profits to which a passing reference was made by  learned counsel for the DFC, it was not the subject  matter of the application giving rise to the present  petition. 14.     However, while opposing the petition, Mr.  P.V.Kapur, learned senior counsel appearing for the  landlords offered and gave an undertaking at the Bar,  that notwithstanding the fact that the defence of the  Union of India has been struck off, the landlords will not  stand in the way of the Union of India raising the plea,  even at this stage, of the stated settlement between the  landlords and the DFC and the affidavit dated 12.1.2006  having been filed by DFC on some clear and distinct  "understanding" as alleged by the DFC in these  proceedings.  The landlords shall remain bound by the  said undertaking. 15.     In view of the above said scenario, we hold that the  impugned judgment does not suffer from any infirmity,  warranting interference. Resultantly, subject to the  aforenoted direction, the petition is dismissed.