Fire Immune Systems Vs. Elesco Traders Pvt. Ltd.

Brief Introductory Head Note Summary of Case

The present legal analysis focuses on a significant judgment delivered by the Division Bench of the High Court of Delhi regarding a commercial tenancy dispute. The case highlights the judiciary’s approach towards tenants who attempt to delay eviction proceedings through technical procedural objections rather than substantive defence. The central theme of this matter revolves over a commercial suit for possession, ejectment, and recovery of mesne profits filed by a corporate landlord against a partnership firm acting as a tenant. The High Court was tasked with determining whether a fresh suit is maintainable after a plaint is returned for presentation before a proper forum and whether technical objections regarding the authorization of a Company Director to sign pleadings can invalidate a suit when the tenant has no defence on merits. The Court ultimately upheld the sanctity of the landlord-tenant relationship established through registered documents and reinforced that procedural rules, such as those governing corporate signatories, are meant to facilitate justice, not defeat it.

Factual Background

The factual matrix of the case dates back to April 2015, when the Respondent, M/S Elesco Traders Pvt. Ltd. (the Landlord), leased out the rear portion of the ground floor of a property located in Udyog Nagar, Delhi, to the Appellant, M/S Fire Immune Systems (the Tenant). This initial lease was executed through a registered deed. Subsequently, the tenancy was extended in 2017 for a specific period ending on February 28, 2018, at a monthly rent of Rs. 15,000.

According to the Landlord, the tenancy stood determined (ended) by the efflux of time on February 28, 2018. To ensure clarity, the Landlord also issued termination notices in February and June of 2018, asking the Tenant to vacate the premises. Despite receiving these notices and the lease period expiring, the Tenant refused to vacate and continued to occupy the property unauthorizedly. Consequently, the Landlord initiated legal action to recover possession of the property and claim mesne profits (damages for unauthorized use of the property).

Procedural Detail

The procedural history of this litigation is quite specific. Initially, the Landlord filed a suit for possession before the Court of the Additional District Judge. However, in January 2022, that Court observed that the dispute was commercial in nature and returned the plaint under Order VII Rule 10 of the Code of Civil Procedure (CPC). This legal provision allows a court to return a filed case if it believes it does not have the jurisdiction to hear it, instructing the plaintiff to file it in the correct court.

Following this, the Landlord instituted a fresh Commercial Suit (CS (COMM.) No. 495/2022) before the appropriate Commercial Court. The Tenant was duly served with the summons in July 2022. However, the Tenant failed to file a Written Statement (their formal legal defence) within the mandatory statutory period. As a result, the Tenant’s right to defend the case was struck off, and their subsequent request to condone the delay was rejected. The Trial Court then proceeded to hear the Landlord's evidence, which went largely unrebutted, and passed a judgment in November 2024 decreeing the suit in favour of the Landlord. Aggrieved by this eviction order, the Tenant approached the High Court of Delhi with the present appeal.

Core Dispute

The core dispute before the High Court was not regarding the payment of rent or the existence of the lease, as the Tenant had practically no defence on record. Instead, the dispute centered on three primary technical legal contentions raised by the Tenant to challenge the validity of the decree.

First, the Tenant challenged the competency of the person signing the suit on behalf of the Landlord company. They argued that the Director, Mr. Vivek Luthra, was not properly authorized because the "Minutes Book" of the company meetings was not produced in court.

Second, the Tenant argued that the specific Director who filed the suit was not a signatory to the original lease deed, and therefore, the Landlord-Tenant relationship was not properly established with him.

Third, and perhaps most legally significant, was the objection regarding the "Return of Plaint." The Tenant argued that when the first court returned the plaint, the Landlord filed a "fresh" suit with improvements and changes, which they claimed was legally impermissible. They contended that the Landlord should have merely re-presented the old plaint without additions.

Detailed Reasoning and Discussion by Court Including on Judgment with Complete Citation Referred and Discussed for Reasoning

The Division Bench of the High Court of Delhi, comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar, undertook a meticulous examination of the legal arguments, dismissing the Tenant’s appeal on all grounds.

On the issue of authorization, the Court analyzed Order XXIX Rule 1 of the Code of Civil Procedure. This provision allows the Secretary, any Director, or other Principal Officer of a corporation to sign and verify pleadings. The Court observed that the Landlord had produced a Board Resolution dated July 10, 2018 [Ex.PW1/1], which authorized the Director to institute the suit. The Tenant relied on the Supreme Court judgment in State Bank of Travancore vs. Kingston Computer Pvt. Ltd. [2011 (11) SCC 524] to argue that without the Minutes Book, the resolution was invalid. The High Court distinguished the present case from State Bank of Travancore. In that precedent, the person filing the suit merely described himself as a director without producing any Board Resolution or proof of his position. In contrast, in the present case, a specific Board Resolution was on record, and the Director had deposed on oath. The Court relied on the landmark judgment of the Supreme Court in Union Bank of India vs. Naresh Kumar and Ors. [1996 (6) SCC 660]. In that case, the Supreme Court interpreted Order XXIX Rule 1 of the CPC to hold that a plaint signed and verified by a Director is valid and maintainable. The High Court reasoned that once a Board Resolution is produced and the witness affirms their Directorship, the burden shifts to the defendant to disprove it. Since the Tenant offered no contrary evidence, the authorization was held to be valid.

Regarding the Landlord-Tenant relationship, the Court found the Tenant's argument baseless. The relationship was proven through "overwhelming documentary evidence," specifically the registered lease deed and the subsequent extension letter. The Court noted a crucial piece of evidence: a letter written by the Tenant’s own partner requesting an extension of the lease. Since the Tenant admitted the signature on this letter during cross-examination, they could not deny the relationship. The Court held that the mere fact that a different Director signed the suit than the one who signed the lease does not negate the corporate entity’s ownership or the tenancy agreement.

Finally, on the issue of the maintainability of the fresh suit after the return of the plaint, the Court clarified the legal position under Order VII Rule 10 of the CPC. The Court stated that the return of a plaint for presentation before a proper court does not bar the filing of a fresh suit, nor does it attract the principle of res judicata (a rule preventing the same dispute from being litigated twice). The Court examined the content of the new plaint and noted that it was not just a copy of the old one but included a subsequent cause of action. The Landlord had pleaded that in June 2022 (after the first plaint was returned), the Tenant threatened to transfer possession to a third party. The Court reasoned that this threat created a new trigger for legal action. Therefore, filing a fresh suit incorporating these new events was legally permissible and not a procedural error.

Decision

Based on the detailed analysis of the facts and the application of settled legal principles, the High Court of Delhi found no infirmity in the Trial Court’s judgment. The Court concluded that the findings were based on a correct appreciation of evidence and law. Consequently, the High Court dismissed the appeal filed by M/S Fire Immune Systems and upheld the decree for possession, ejectment, and recovery of mesne profits in favour of M/S Elesco Traders Pvt. Ltd., along with costs.

Concluding Note

This judgment serves as a vital reminder that while procedural law is essential, it cannot be weaponized to defeat substantive justice, especially in commercial disputes where a tenant holds over property without legal justification. The ruling clarifies that when a plaint is returned for lack of jurisdiction, the plaintiff is entitled to file a fresh suit, particularly if new events affecting the property rights have occurred. Furthermore, it reinforces the corporate law principle that a Director is inherently capable of signing legal pleadings for the company, and courts will presume validity of such actions unless there is strong evidence to the contrary. This decision safeguards the rights of property owners against frivolous technical defences raised by unauthorized occupants.

Case Title: Fire Immune Systems Vs. Elesco Traders Pvt. Ltd. Order Date: 27.11.2025 Case Number: RFA(COMM) 78/2025 Neutral Citation: 2025:DHC:10454-DB Name of Court: High Court of Delhi Name of Hon'ble Judge: Hon'ble Mr. Justice Anil Kshetarpal and Hon'ble Mr. Justice Harish Vaidyanathan Shankar

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suggested Titles for Legal Analytical Article

1. Substance Over Form: High Court Dismisses Technical Objections in Commercial Eviction Suit

2. Corporate Signatories and Eviction: Analyzing the Scope of Order XXIX Rule 1 CPC

3. Return of Plaint and Fresh Suits: Understanding the Legal Nuances of Order VII Rule 10 CPC

4. No Defence, No Refuge: Courts Clamp Down on Tenants Delaying Commercial Eviction

5. The Validity of Fresh Plaints: A Judicial Perspective on Continuing Causes of Action in Tenancy Disputes

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High Court Upholds Commercial Eviction Decree, Rejects Tenant’s Technical Defence

In a significant ruling by the High Court of Delhi on November 27, 2025, the Division Bench comprising Hon'ble Mr. Justice Anil Kshetarpal and Hon'ble Mr. Justice Harish Vaidyanathan Shankar dismissed an appeal, RFA(COMM) 78/2025, filed by the tenant in the matter titled M/S Fire Immune Systems vs. M/S Elesco Traders Pvt. Ltd.. The High Court upheld the Trial Court's judgment and decree for possession, ejectment, and recovery of mesne profits, effectively rejecting the tenant's attempts to evade eviction by raising purely procedural and technical objections.

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Factual Matrix: Expiry of Tenancy

The case concerned the rear portion of the ground floor of property No. J-11, Udyog Nagar, Delhi. The landlord, M/S Elesco Traders Pvt. Ltd., had leased the premises to the tenant, M/S Fire Immune Systems, initially through a lease deed dated April 22, 2015. The tenancy was subsequently extended until February 28, 2018, at a monthly rent of Rs. 15,000/-. The landlord contended that the tenancy ended either by efflux of time on the said date or by termination notices issued in February and June 2018. Despite this, the tenant continued in unauthorized occupation, leading to the suit for possession.

Procedural Hurdles and Defence Struck Off

Initially, the landlord's suit was returned by the ADJ Court in January 2022 under Order VII Rule 10 CPC, as the dispute was deemed commercial. The landlord then filed a fresh suit before the Commercial Court. Crucially, the tenant failed to file a Written Statement within the statutory/extended period after being served summons on July 9, 2022. Consequently, the tenant’s defence was struck off by the Trial Court on January 15, 2024.

The Trial Court eventually decreed the suit on November 22, 2024, granting possession to the landlord and awarding mesne profits/occupation charges totaling Rs. 18,54,743/- with 12% interest, along with continuing mesne profits of Rs. 24,158/- per month till realization.

High Court Analysis: Rejection of Technical Pleas

In the appeal, the tenant primarily raised three procedural challenges:

1. Authorization of Director to Sue (Order XXIX Rule 1 CPC)

The tenant argued that the landlord failed to prove the Resolution of the Board of Directors authorizing Mr. Vivek Luthra to institute the suit, relying on State Bank of Travancore vs. Kingston Computer Pvt. Ltd. .

• The High Court observed that Order XXIX Rule 1 CPC independently allows a Director or principal officer to sign and verify pleadings, as the very office they hold is prima facie sufficient.

• The Court noted that the landlord produced the Board Resolution [Ex.PW1/1] and the Director deposed on oath, whose directorship was not rebutted.

• Distinguishing the cited precedent, the Court relied on the established legal position in Union Bank of India vs. Naresh Kumar and Ors. , which holds that a plaint signed by a Director is valid. The onus shifted to the tenant to disprove the authority, which they failed to discharge.

2. Landlord-Tenant Relationship

The tenant contended that the landlord-tenant relationship was not proved because the Director filing the suit was not a signatory to the original lease deed.

• The Court found this objection "equally without merit," citing the registered lease deed [Ex.PW1/3] and the extension letter [Ex.PW1/7] which unequivocally recorded the tenancy.

• Furthermore, the tenant's own partner, Mr. Sagar Gulati, had expressly sought extension of the lease vide a letter [Ex.PW1/5], the signature on which was admitted in cross-examination.

3. Maintainability of Fresh Suit After Return of Plaint

The tenant argued that filing a fresh suit after the return of the earlier plaint under Order VII Rule 10 CPC was impermissible as it was an "improved" or "embellished" plaint.

• The Court reiterated the settled law that the return of a plaint does not bar the filing of a fresh suit and does not attract the principle of res judicata.

• Crucially, the Court found the fresh suit was based on a subsequent and continuing cause of action, specifically the tenant's threat on June 3, 2022, to transfer possession to a third party, which arose after the return of the first plaint on January 11, 2022.

Conclusion

Finding no legal infirmity in the Trial Court’s findings, which were based on the appreciation of evidence and correct application of law, the High Court dismissed the appeal along with all pending applications. The judgment underscores the principle that commercial courts will not permit unwarranted delay through technical objections when substantive evidence overwhelmingly favours the property owner.

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Disclaimer:This is for general information only and should not be construed as legal advice as it may contain human errors in perception and presentation: Advocate Ajay Amitabh Suman, IP Adjutor (Patent & Trademark Attorney), High Court of Delhi

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