Delhi HC refuses summary judgment in 26-year-old Connaught Place eviction suit that was never commercial
Justice Sachin Datta held that Order XIII-A exists only for suits in the Commercial Division, that the landlord Trust had itself pleaded this is not a commercial matter, that issues were framed years ago, and that a Rs 45 lakh sale-agreement defence raised by the tenants must go to trial.
A charitable trust that has been trying since July 2000 to recover a 3,780 square foot showroom in the Inner Circle of Connaught Place from tenants paying Rs 3,660.25 a month has lost its third attempt to win without a trial. The Delhi High Court on 16 October dismissed the Trust's application for summary judgment under Order XIII-A of the Code of Civil Procedure. Justice Sachin Datta held that the provision, inserted by the Commercial Courts Act, 2015, is simply not available in a suit that has never been a commercial suit; that even if it were, the window for invoking it closed when issues were framed; and that the tenants' defence, an agreement to buy the premises for Rs 45 lakh backed by an admitted cheque for Rs 5 lakh, has already been found triable by a District Judge, by the High Court and, by refusal of leave, by the Supreme Court.
A 1954 tenancy, a 2000 notice, and a cheque for Rs 5 lakh
Shri Raghbir Saran Charitable Trust, spelt Raghubir in parts of the record, let out property No. E-9, Inner Circle, comprising a basement, ground floor and mezzanine, in 1954 at Rs 585.50 a month. By 2000 the rent had risen to Rs 3,660.25. Because that exceeded Rs 3,500, the tenancy had fallen outside the protection of the Delhi Rent Control Act, 1958, leaving the Trust free to terminate it under the Transfer of Property Act. It served a notice on 7 June 2000 and filed a suit for possession and mesne profits in the High Court on 31 July 2000, registered as CS(OS) 1691/2000. When pecuniary jurisdiction changed in 2003 the suit went to the District Court, where it became Suit No. 1013/2008 and later Suit No. 663/2014.
The tenants, Arun Kumar Jain and Tarun Kumar Jain, who run a showroom there as M/s Jain Sons, pleaded that before the suit was filed the Trust had agreed to sell them the premises for Rs 45 lakh. They said they had paid Rs 5 lakh by cheque No. 615480 dated 8 May 2000, drawn on Citibank and encashed on 10 May 2000, and a further Rs 10 lakh in cash on 12 May 2001 after the Trust asked for Rs 20 lakh in cash, holding back the rest because the paperwork was incomplete. They relied on two letters from M/s Bagolia Associates Pvt Ltd, brokers they say the Trust engaged: one of 4 May 2000 recording that trustee Harsh Kumar Agarwal had agreed at a joint meeting to sell, and one of 14 May 2001 saying the formalities would be completed when he returned from medical treatment abroad by 31 December 2001, with the balance of Rs 40 lakh payable by demand draft at registration. On that footing, they said, the termination notice stood waived.
The Trust did not deny receiving and encashing the Rs 5 lakh cheque. Its replication said the money was a deposit the tenants had offered during negotiations to raise the rent to market levels, which it put at over Rs 5 lakh a month, and that the tenants never came back to negotiate. It called the agreement a concocted story, noted that no signed agreement had been filed, put the property's value at not less than Rs 5 crore even in May 2000, and denied the Rs 10 lakh cash payment outright. The tenants, for their part, filed their own suit for specific performance of the alleged agreement, CS(OS) 666/2003.
Three attempts to win without a trial
On 11 May 2004 an Additional District Judge passed a decree for possession, which the Trust described as a judgment on admissions under Order XII Rule 6. A Division Bench of the High Court set it aside on 21 September 2007 in RFA 299/2004, recording that no application under Order XII Rule 6 was on the trial court's record at all, and remanded the suit for fresh consideration with liberty to file one. The Trust's special leave petitions against an interim order in that appeal were dismissed by the Supreme Court on 16 November 2004.
The Trust filed a fresh application under Order XII Rule 6 on 25 January 2008. The Additional District Judge dismissed it on 30 March 2012, holding that the tenants had raised triable issues, in particular the alleged agreement to sell, and that the Trust's explanation for the Rs 5 lakh “does not appeal to reason”, since no tenant would agree to a rent increase of about 150 times at one go. The suit was listed for framing of issues. The Trust challenged that order under Article 227; Justice M.L. Mehta dismissed the petition on 27 September 2012, holding the tenants were entitled to prove their case, and the Supreme Court dismissed the Trust's special leave petition on 16 December 2013.
Issues were framed on 30 April 2014. On 16 September 2014 the trial court recorded that the Trust's affidavits of evidence were not ready despite five months' time, imposed Rs 3,000 in costs, and the suit was adjourned sine die. The Trust applied for revival on 5 March 2016, in an application affirmed by its secretary O.P. Bhandula stating that issues had been framed on 30 April 2014 and the matter was at the pre-trial stage; the suit was revived on 30 July 2016 on payment of Rs 5,000 costs, and the two suits were consolidated on 7 October 2016.
The Trust then amended its plaint to value the relief of possession at Rs 2.40 crore and the suit at Rs 2,45,67,000. On 28 May 2018 the plaint was returned for presentation to the court of competent pecuniary jurisdiction, the District Judge observing, on the authority of Vogel Media International GmbH v. Jasu Shah, which neither side had cited, that the suit would be tried de novo. Re-presented in the High Court as CS(OS) 574/2018, it went through fresh summons on 14 November 2018, a fresh written statement, a replication and admission and denial, and on 21 May 2019 the Joint Registrar recorded that pleadings were complete and sent it up for framing of issues. Meanwhile the Trust's own transfer petition brought the tenants' suit to the High Court on 3 December 2018, with CS(OS) 574/2018 as the lead suit.
On 3 September 2019, Justice V. Kameswar Rao, with both sides present, recorded that issues had been framed in both suits, by the High Court in the tenants' suit on 4 February 2010 and by the trial court in the Trust's suit in April 2014, that no further developments had taken place, directed the Trust to file its evidence by affidavit within four weeks, and appointed a Local Commissioner by consent to record evidence. That order was never challenged. The Trust neither filed its affidavit nor paid its share of the Commissioner's fee. Its counsel stopped appearing without seeking discharge, the court issued notice on 11 November 2024, and on 27 February 2025 new counsel took liberty to file an application for summary judgment, which was filed on 11 July 2025. On 12 February 2026 the court itself asked whether an Order XIII-A application could lie in a suit that is not a commercial suit, and the matter was argued at length on 8 September 2026.
The arguments
For the Trust, Ms Maneesha Dhir, Senior Advocate, said the tenancy, the rent and receipt of the June 2000 notice were all admitted; that the agreement to sell and the broker letters were unsigned, so there was no concluded contract capable of resisting a decree; that the cheque had been received about a year before the date on the agreement, during rent negotiations; that Rs 45 lakh was far below the property's value of at least Rs 5 crore in 2000-01; and that the defence was so lacking in credibility as to be an abuse of process. She argued the suit should be treated as commercial in substance, and that after return and re-presentation it was a fresh suit in which issues had never been framed, so the proviso to Rule 2 of Order XIII-A did not bite.
For the tenants, Mr Ankit Jain, Senior Advocate, said Order XIII-A does not apply because the suit was never instituted, registered or treated as a commercial suit; that the application was barred by the proviso to Rule 2 because issues were framed on 30 April 2014, as the Trust's own 2016 application admitted and the 3 September 2019 order recorded; and that this was the Trust's third attempt to get a decree without trial on pleas already found triable. He relied on Hari Steel and General Industries Ltd v. Daljit Singh, where the Supreme Court refused a judgment on admissions because the plea that pages of the agreement were fabricated went to the root of the case and issues had already been framed.
Order XIII-A belongs to the Commercial Division
The judge started with the statute. Order XIII-A is not part of the Code as ordinarily applicable. It was inserted by the Schedule to the Commercial Courts Act, and Section 16(1) of that Act amends the Code only in its application to a suit in respect of a commercial dispute of a specified value; Rule 1(1) of the Order says the same thing. In any other suit the unamended Code applies, and the unamended Code contains no Order XIII-A.
This suit was filed on 31 July 2000, more than fifteen years before the 2015 Act came into force. It has never been instituted, registered, numbered or treated as a commercial suit. No application was ever made under Section 15 of the Act to transfer it to the Commercial Division, and even the present application did not plead that the dispute is a commercial dispute of specified value. The Trust's written submissions claimed the Act applied from the date the suit was transferred to the Commercial Division under an order of 3 February 2018. The judge found no such order. The only transfer order on either file is the one of 3 December 2018 in the Trust's own petition, which moved the tenants' suit to the High Court's ordinary original civil jurisdiction so that the two could be tried together; it makes no reference to the Commercial Division. The Trust's reliance on a notification of 24 November 2015 was equally misplaced: issued under Section 4 of the Delhi High Court (Amendment) Act, 2015, it concerns pecuniary jurisdiction, transfers nothing to the Commercial Division, and was in fact the reason the tenants' suit had been sent down to the District Court on 9 December 2015.
A suit, the judge held, does not come under the amended Code because of the nature of the dispute it raises; it does so when it is instituted in, or transferred to and registered in, the Commercial Division. Until then it is an ordinary civil suit governed by the unamended Code, and no remedy created by the Schedule, including summary judgment, is available in it. He left open whether the dispute would fall within Section 2(1)(c)(vii) of the Act, covering agreements relating to immovable property used exclusively in trade or commerce.
There was a further obstacle. Paragraph 12 of the Trust's own plaint in CS(OS) 574/2018, verified by the same O.P. Bhandula who affirmed the present application, states in terms: “This is not a commercial matter”. Having pleaded that on affidavit and prosecuted the suit on that footing for nearly eight years, the Trust could not now say the suit was commercial in substance for the limited purpose of Order XIII-A. “The law does not permit a person to both approbate and reprobate”, the judge wrote. The application was not maintainable on this ground alone.
Issues were framed, and then adopted
The proviso to Rule 2 of Order XIII-A bars an application for summary judgment after the court has framed issues. The Division Bench in Bright Enterprises Pvt Ltd v. MJ Bizcraft LLP called this a clear stipulation: the window opens on service of summons and shuts when issues are framed. The Supreme Court in Reliance Eminent Trading and Commercial Pvt Ltd v. Delhi Development Authority described the application as time bound and required strict compliance with the Order's procedural mandate. The proviso, the judge held, goes to maintainability, not discretion.
Issues were framed on 30 April 2014; the tenants had placed a certified copy of that order on record, and the Trust's own 2016 revival application said so in its opening lines. Having told a court in categorical terms that issues stood framed, the Trust could not now assert the opposite.
The Trust's answer was the de novo rule. A three-judge bench of the Supreme Court in EXL Careers v. Frankfinn Aviation Services, approving ONGC v. Modern Construction, held that once a plaint returned under Order VII Rule 10 is presented to the competent court it is a fresh plaint and the trial must begin afresh. The judge accepted the rule and found it had been followed to the letter: fresh summons, fresh written statement, replication, admission and denial, pleadings declared complete, and the matter placed before the court for framing of issues. That stage arrived on 3 September 2019, when the court, with both sides present, recorded that issues stood framed in both suits on pleadings that were in substance identical, and moved to evidence. Order XIV Rule 1(5) requires the court to frame issues but prescribes no form, and Rule 5 lets it amend or add issues at any time before decree; the 3 September 2019 order effectively did that work. The Trust was represented, consented to the Local Commissioner, raised no objection, and sought no review or appeal.
That the framing took the form of adopting issues already settled on identical pleadings made no difference. In Nedunuri Kameswaramma v. Sampati Subba Rao the Supreme Court held that even the absence of an issue is not fatal where the parties went to trial knowing the rival case; a fortiori, adoption by judicial order, in the presence of both sides, of issues framed on identical pleadings in the connected suit is a valid discharge of the obligation under Order XIV. The Trust could not invoke the de novo rule to obtain a fresh trial and simultaneously deny that the fresh trial had reached the stage it did; Vogel Media says nothing about the stage a re-presented suit may reach. A party that had conducted itself for nearly seven years on the footing that the suit was at the stage of evidence could not now say it was at the stage of pleadings. The window under Rule 2 closed at the latest on 3 September 2019, nearly six years before the application was filed.
A defence already found real, three courts up
Even if the application had been maintainable, the judge found it devoid of merit. He accepted that Order XII Rule 6 and Order XIII-A ask different questions, one looking for a clear and unconditional admission, the other for whether the defendant has any real prospect of success, and that on Su-Kam Power Systems Ltd v. Kunwer Sachdev summary judgment is a remedy independent of judgment on admissions; so the earlier dismissal did not by itself bar the later application. What mattered was what had been found in 2012: not merely that the admissions were equivocal, but affirmatively that the tenants' pleas raised triable issues as to whether an agreement to sell existed, whether the tenancy ended on part payment and whether the termination notice survived, that these could not be decided without evidence, and that, if proved, they would defeat the claim for possession. The High Court approved those findings under Article 227 and the Supreme Court declined to interfere. A determination between the same parties in the same suit, affirmed up the line, that the defence requires evidence negated the very premise of an application asserting that the defence had no real prospect. The Trust could not escape it by attaching a different label to the same pleas.
Hari Steel applied with full force, the judge said. So did S.M. Asif v. Virender Kumar Bajaj, where a tenant who admitted the tenancy but set up an agreement for sale, with an advance of Rs 82.50 lakh and a separate suit for specific performance, was held entitled to have that defence tried rather than face a decree on admissions. Tested against the Reliance Eminent guidelines, which call the power exceptional and ask whether trial is better suited to weighing evidence and assessing credibility, this was not a case for summary disposal: the defence rested on a pleaded course of dealing, and whether it produced a concluded contract was a question of fact. A summary decree would also sit alongside the tenants' specific performance suit on identical facts, in which their affidavit of evidence is already on file and their first witness has been listed for cross-examination several times, inviting inconsistent findings and defeating the object of consolidation.
Order
The court held that the application under Order XIII-A in CS(OS) 574/2018 is not maintainable and is outside the stage prescribed by Rule 2; that the findings on the earlier Order XII Rule 6 applications, affirmed by the High Court and left undisturbed by the Supreme Court, negate its premise; and that in any case it cannot be said the tenants have no real prospect of defending the claim or that there is no compelling reason for trial. I.A. 16434/2025 was dismissed. The tenants' application, I.A. 10647/2026, to place certified copies of the trial court's orders from 7 March 2011 to 28 May 2018 and the Trust's 2016 revival application on record, was allowed.
CS(OS) 574/2018 is to proceed to trial along with CS(OS) 666/2003 in terms of the order of 3 September 2019. The Trust and its trustees, Harsh Kumar Agarwal and Kiran Agarwal, were directed to file their affidavits of evidence and pay their share of the Local Commissioner's fee within four weeks. Both suits are listed before the Joint Registrar (Judicial) on 20 November 2026. Ms Maneesha Dhir, Senior Advocate, with Ms Varsha Banerjee and Mr Shubham Gupta, appeared for the Trust; Mr Ankit Jain, Senior Advocate, with Mr S.P. Mehta, for the tenants.