The Delhi High Court has dismissed a second appeal filed by a tenant firm challenging an eviction decree, holding that payment of a substantial pagri amount did not change the basic landlord-tenant relationship between the parties. The Court found no legal error in the earlier decisions passed by the trial court and the first appellate court.
Background of the Case
The dispute concerned a shop located in Gulab Bagh, Nawada, New Delhi. Landlady Smt. Mithlesh Devi had rented the premises to M/s Shyam Lal & Sons under a rent agreement executed on January 1, 2001. The tenant firm was operating a shoe business from the shop.
The landlady later sought possession of the premises, claiming that the shop was needed for her family's use. The tenant resisted the suit, arguing that a large amount had been paid as pagri (advance consideration) at the time of the tenancy and that the tenancy was therefore permanent and could not be terminated.
The tenant also relied on a Memorandum of Understanding (MoU), claiming it entitled the firm to remain in possession indefinitely.
Justice Neena Bansal Krishna examined the rent agreement and the arguments raised by the tenant. The Court noted that even if the payment of Rs.1.48 lakh as pagri was accepted, it did not alter the legal nature of the relationship between the parties.
The Court observed,
“Even if this document and the averments made in the Rent Agreement are accepted... it does not inherently change the nature of the relationship between the parties, which was that of landlord-tenant.”
The High Court further noted that the rent agreement itself gave the tenant a right to terminate the tenancy by serving notice, which contradicted the claim that the tenancy was perpetual.
On the tenant’s argument that the Delhi Rent Control Act protected the tenancy, the Court found that the area where the shop was situated had not been notified for the Act's application. As a result, the statutory protection claimed by the tenant was unavailable.
The Court also rejected the argument that no eviction notice had been served before filing the suit. Referring to settled legal principles, it held that institution of the eviction suit itself amounted to notice to vacate.
After reviewing the record, the High Court concluded that both the trial court and the first appellate court had correctly found the existence of a landlord-tenant relationship and had rightly decreed possession in favour of the landlady.
Finding no substantial question of law requiring consideration, Justice Neena Bansal Krishna dismissed the Regular Second Appeal along with all pending applications, thereby affirming the eviction decree passed against M/s Shyam Lal & Sons.
Case Details:
Case Title: M/s Shyam Lal & Sons v. Smt. Mithlesh Devi
Case Number: RSA 136/2018
Judge: Justice Neena Bansal Krishna
Decision Date: 16 June 2026
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