Two Star Agencies Limited v Roma Wadhwa & Veeral Shah [2021] KEBPRT 114 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 246 OF 2021 (NAIROBI)

TWO STAR AGENCIES LIMITED...................................................................TENANT

VERSUS

ROMA WADHWA.........................................................................................LANDLORD

VEERAL SHAH...........................................................................................LANDLORD

RULING

1.  The Landlord’s/Applicant’s notice of motion dated 11th June 2021 seeks for orders that the Tenant’s reference dated 17th March 2021 be struck out.

2.  The grounds upon which the application is brought and the affidavit in support thereof may be summarized as follows;

a.  That the Tribunal lacks the jurisdiction to entertain the dispute between the parties herein.

b.  That there is a lease agreement between the late Ramesh Kumar Gupta and the Tenant herein for a period of 5 years, 6 months.

c.  That although the said lease was not executed by the late Ramesh Kumar Gupta it is valid as there was intention, performance and an ongoing relationship pursuant to the said lease agreement.

d.  That the lease herein is not a controlled tenancy.

e.  That the orders issued by the Tribunal on 1st April 2021 are prejudicial to the Applicant.

f.  The lease agreement has been annexed to the Applicant’s affidavit as VS – 1.

3.   The application is opposed.  The Tenant has sworn a replying affidavit whose contents I proceed to summarize as follows;

a.  That the Respondent is a Limited Liability Company registered under Cap 486 of the Laws of Kenya on 29th August 2000.

b.  That the agreement referred to by the Landlords/Applicants at paragraphs 3, 4 and 5 of their affidavit is unknown to the Tenant and the signatures appearing on the document are superimposed and a forgery.

c.  That the signature of one Musa Chibole Khayundi appearing on the purported lease cannot be correct as the said Musa Chibole Khayundi died on 23rd February 2014.  He could not have authored the document in the year 2016.

d.  That the purported lease agreement does not have the Tenant’s company seal.

e.  That the purported lease has not been duly executed and registered in accordance with the law, it cannot therefore form the basis of this application.

4.   The Landlords/Applicants have filed their written submission and a list of the authorities they seek to rely on in support thereof.  I have read and considered the same.

5.   In my humble view, the only issue to be determined in this application is whether the tenancy relationship between the parties herein is a controlled tenancy or not.  In order to determine this issue, I will also have to determine the validity of the lease agreement said to have been entered into between the parties herein.

6.   The agreement annexed to the Applicant’s affidavit as exhibit VS – 1 clearly states that the said agreement is for a term of five years and six months (5 years, 6 months).  It is admitted by the Applicant that the agreement was not executed by the late Ramesh Kumar Gupta.

7.   The Tenant/Respondent on its part states that the agreement is strange to it and the signatures thereon superimposed.  The Tenant has stated in its affidavit that Musa Chibole Khayudi whose signature appears on the lease document died in February 2014.  The lease was purported to have been executed in the year 2016.  It is noteworthy that the averment has not been challenged by the Landlord/Applicant.  I have looked at the lease document and there indeed appears the signature of an impression “Mchayundi”, whether it is superimposed or not, I am not in a position to tell.

8.   The Landlord has indicated that the agreement is valid for the reason that there was intention, performance and an ongoing relationship pursuant to the said agreement.  Have the parties herein acted in obedience to the lease agreement unexecuted by the deceased Ramesh Kumar Gupta?

9.   The agreement was effective from 1st January 2016 and terminating end of June 2021.  The monthly rent was agreed at Kshs 400,000/- subject to an annual review at the rate of 10% every January, commencing 1st January 2017.  The Tenant was also to pay an additional security deposit of Kshs 600,000/-.

10. The Tenant in his affidavit dated 17th March 2021 has stated that in the year 2016, he was given an offer letter for rent at Kshs 400,000/- per month but the Landlord died before the lease could be finalized.  The Tenant in the said affidavit further states that the Landlord had agreed to a monthly rent of Kshs 232,000/- and this was to be captioned in their new lease.  The Tenant has been paying this amount of rent to the representatives of the estate of the deceased Ramesh Kamar Gupta without any problems.

11. It is therefore clear that the agreement referred to by the Landlord/Applicant has not been performed by the parties as alleged by the Applicant.  I have not seen any evidence of the payment of the monthly rent of Kshs 400,000/- per month or the payment of the additional security of Kshs 600,000/-.

12. If the parties herein are not operating under the terms of the unexecuted lease, then on what agreement are they operating?

13. The lease that the Applicant seeks to rely on is not executed by the Landlord, the Tenant has denied the lease in its entirety and gone ahead to state that it is a stranger to the lease.  The Tenant has further challenged the validity of the lease on the basis that one of the purported signatories on behalf of the Tenant died in 2014.  He could not have executed the lease in2016. There is further no evidence that the unexecuted lease has been acted upon.

14. The Tenant has further demonstrated that its lease with the deceased Ramesh Kumar Gupta expired in 2016.  It is therefore clear that the parties herein are operating on the basis of an unwritten lease.

15. Under section 2 of Cap 301, “controlled tenancy means a tenancy of a shop, hotel or catering establishment;

a.  Which has not been reduced into writing or

b.  Which has been reduced into writing and which

i. Is for a period not exceeding five years or

ii.   Contains a provision for termination otherwise than for breach of covenant within five years from the commencement thereof or

iii.    Relates to premises of a class specified under subjection (2) of this section.”

16. I am of the view that the tenancy between the Tenant and the estate of the deceased Ramesh Kumar Gupta is a controlled tenancy as defined under section 2 of Cap 301 above.  The lease agreement relied on by the Applicant cannot be the basis of the tenancy between the parties for the reasons that the validity of the same has been challenged and the signatures therein disputed.

17. Even if I was to agree that a signature is one of the factors which prove and establish both offer and acceptance but not necessarily the validity of a contract, in the obtaining circumstances, the Tenant has stated that it is a stranger to the lease, and the challenge goes to the very core of the validity of the lease.

18. Consequently, I do find and hold that the tenancy between the parties herein is a controlled tenancy, the lease exhibited by the Applicants as VS – 1does not and cannot amount to a valid lease agreement between the parties and therefore this Tribunal has jurisdiction to hear and determine this matter.

19. The application dated 11th June 2021 is hereby dismissed with costs to the Tenant.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON CYPRIAN MUGAMBI NGUTHARI THIS 13TH DAY OF OCTOBER 2021.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

13. 10. 2021