INTERNATIONAL DEVELOPMENT RESEARCH CENTRE Vs. DURGESHWARI SAHI

JUDGEMENT

(1.) International Development Research Centre (hereinafter referred to as 'the appellant') questions the correctness and legality of the judgment and decree passed by the learned Single Judge of this court in exercise of its original jurisdiction inter alia but primarily on the ground that the appellant being "Foreign State" is entitled to the protection of provisions of Section 86 of the CPC (hereinafter referred to as 'the Code') and the suit in question, thus, was not maintainable against the appellant.

(2.) Before we proceed to discuss this substantial question of law, reference to the facts giving rise to the present Regular First Appeal would be necessary.

(3.) Smt. Durgeshwari Sahi, respondent herein claimed that she was the owner and landlord of the property situated at 17, Jor Bagh, Lodhi Road, New Delhi. The suit property was leased out by her to the appellant vide registered lease deed dated 7.2.1994 for a period of five years starting from 1.4.1994. In terms of the lease deed, the rent of the premises was fixed at Rs. 40,000/- per month for first three years whereafter it was to be Rs. 48,000/- p.m. w.e.f. 1st April, 1997 to 31st March, 1999. The entire advance rent for the said two years was payable before 31st March, 1997 failing which the lease would stand terminated from 1st April, 1997 and the appellant was liable to hand over the vacant and peaceful possession of the property to the respondent. It was further pleaded by the reaspondent that instead of paying the advance rent in terms of the agreement, certain unnecessary queries were raised by the appellant including demand of perpetual lease deed executed by the Department of Land and Development, Ministry of Urban Affairs, Govt. of India in favour of the respondent. Apprehending the default on the part of the appellant, the respondent served a legal notice stating that they should make the payment of the entire advance rent of 11,52,000/- for the relevant period failing which the lease would stand terminated w.e.f. 1.4.1997. Despite service of such legal notice, no payment was made resulting in filing of the present suit wherein, the respondent in her plaint, claimed possession of the suit property as well as prayed for passing of a decree for a sum of Rs. 9 lakhs on account of mesne profits/damages for the use and occupation of the premises w.e.f. 1st April, 1997 to 30th May, 1997 @ 15,000/- per day and also claimed the same damages for future till the date the possession of the property was handed over to her. She also claimed interest @ 24% per annum. This suit was contested by the appellant who claimed that it was a Canadian, public sector, non commercial, international corporation created in 1970 by an act of the Parliament of Canada and as per its objective and purposes, it was a 'foreign state'. It was also pleaded that it was a Crown owned corporation and was not present in India to conduct commercial or profit-making activities, thus was entitled to the protection of Section 86 and the present suit was not maintainable against them. They in fact denied the ownership of the plaintiff and claimed that in absence of title of ownership, the suit was not competent and the plaintiff could not pray for the relief. The suit was instituted without permission of the Ministry of External Affairs which has to accord such permission to any person to institute a legal action against a foreign entity which is a representative of a foreign government and it alone can determine the status and dimensions of the activities of such foreign entity, of its function in India and whether such entity was entitled to diplomatic protections, as such the suit could not have proceeded in law. On merits, it was stated that the facts in plaint were not correct. The premises was to be leased to the appellant for ten years and not for five years with possibility of further extension. They had spent more than Rs. Fifty lakhs on the repair of the premises and if the period was five years, they would not have spent so much of money on the premises. According to the appellant, the respondent had failed to provide any documents showing her ownership over the suit property despite demand and the presumption would be that she is not owner of the property. It was also averred that there were four agreements in respect of leased premises between the plaintiff and the defendant and another family members. All the agreements had not been placed on record as they were sham transactions and the plaintiff had only produced on record the lease agreement which could be correctly interpreted in isolation. The appellant in the written statement also took up the stand that there was no occasion for not making the payment and in fact the respondent had received payments much in excess of the amount due and to coerce the further amounts from the appellant, the respondent had informed that she was likely to get notice from the L and DO for payment of charges on account of mis-user as the premises was not being used for residential purposes. Vide their letter dated 31st March, 1997 in addition to other fax messages they had asked the respondent to furnish the documents which were not furnished and the payment was not disbursed which of course was paid under the orders of the court. In fact, the plaintiff owed defendant a balance amount of nearly Rs. Ten lacs after adjusting the sum of Rs. 11,52,000/- payable to them. It was denied that the appellant was liable to pay charges @ 15,000/- per day as per the agreement. On these grounds, the defendant had prayed for dismissal of the suit .