Smt.Anjini Devi & Ors. vs M/S.Vst Industries Ltd.

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                           Date of Decision : 14th November, 2011

+                           RFA(OS) 45/1999

       SMT.ANJINI DEVI & ORS.              ..... Appellants
            Through: Mr.P.K.Agrawal, Advocate.

                                  versus

       M/S.VST INDUSTRIES LTD.                  ....Respondent
            Through: Dr.Arun Mohan, Senior Advocate with
                     Mr.Arvind Bhatt, Advocate.

                            RFA(OS) 25/2000

       M/S.VST INDUSTRIES LTD.                  ....Appellant
            Through: Dr.Arun Mohan, Senior Advocate with
                     Mr.Arvind Bhatt, Advocate.

                                    versus

       SMT.ANJINI DEVI & ORS.            ..... Respondents
            Through: Mr.P.K.Agrawal, Advocate.

       CORAM:
       HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
       HON'BLE MR. JUSTICE S.P. GARG

1.     Whether the Reporters of local papers may be allowed
       to see the judgment?

2.     To be referred to Reporter or not?

3.     Whether the judgment should be reported in the
       Digest?

PRADEEP NANDRAJOG, J. (Oral)

1. These are cross appeals by Anjini Devi and others i.e. the plaintiffs (landlords) and the defendant RFA(OS) 45/1999 & 25/2000 Page 1 of 6 (tenant) M/s. VST Industries Ltd. against the judgment and decree dated 6.8.1999.

2. The grievance of the plaintiffs is to the mesne profits awarded by way of damages @ `50.40 per square foot per month as against the claim made for the same to be paid @ `85/- per square foot per month. The grievance of the tenant is that none were payable.

3. Vide registered lease deed dated 23.5.1990, Ex.P-1, the tenant was inducted into the suit premises ad- measuring 2175 square feet on the first floor of Ram House A/18, Middle Circle, Connaught Place at a monthly rent of `25.20 per square foot for a period of 5 years and as per clause 17 of the lease deed Ex.P-1 sought renewal of the lease by offering to pay rent @ `85/- per square foot per month if the lease was extended by 5 years. As the parties negotiated the tenant started paying rent enhanced by 25% of the agreed rent i.e. `25.20 per square foot per month since the lease deed Ex.P-1 had envisaged this to be the minimum increased rent if lease was renewed. The bargain did not materialize and thus after issuing Ex.P-10, the quit notice on 14.6.1995 the suit for ejectment was filed on 3.7.1995.

4. The tenant filed a counter claim seeking specific performance of the renewal clause in the lease deed Ex.P-1.

5. No oral evidence was led since the documents filed were admitted.

6. Interpreting clause 17 of the lease deed Ex.P-1 the learned Single Judge has held that the clause envisaged lease to be renewed upon mutually agreed consent terms RFA(OS) 45/1999 & 25/2000 Page 2 of 6 and was not a renewal clause at the option of the tenant. Holding that the parties admittedly could not agree upon the term of the rent to be paid, the counter claim has been dismissed.

7. Sh.Arun Mohan learned senior counsel for the tenant on instructions from the Advocate on record Sh.Arvind Bhatt states that the appeal filed by the tenant i.e. RFA (OS) No.25/2000 is not being pressed.

8. Thus, RFA(OS) No.25/2000 is dismissed.

9. As regards the appeal filed by the landlords, Sh.P.K.Agarwal learned counsel for the landlords concedes that no evidence was led by the appellants on the issue of the fair market rent in the area but urges that Ex.P-8 being the offer by the tenant to pay monthly rent @ `85/- per square foot was sufficient evidence and thus urges that the mesne profits determined @ `50.40 per square foot per month needs to be suitably enhanced and further states that interest should have been paid on the mesne profits reckoning liability from each month.

10. The reasoning of the learned Single Judge not to determine mesne profits with respect to the letter dated 27.1.1995 Ex.P-8 is as under:-

"On the expiry of the period of lease, namely, 31st May, 1995 and the lease having not been renewed, the defendant was obliged to hand over vacant possession of the premises to the plaintiffs. That having not been done the defendant became unauthorized occupant of the premises and the plaintiffs are, therefore, entitled only to damages/mesne profits and not rent for the month of June, 1995 and for the period subsequent thereto till the premises was vacated by the defendant. As per letter dated RFA(OS) 45/1999 & 25/2000 Page 3 of 6 27th January, 1995 the defendant had agreed to pay rent @ `85/- per sq.ft. In the plaint, when it is stated that the market rent at the relevant time was `85/- per sq.ft, the same has not been denied by the defendant in its written statement. However, the question is as to whether inspite of the defendant having not denied the market rent to be `85/- per sq.ft. is it liable to pay the same till 31st March, 1997 when it vacated the premises. A perusal of the letter shows that the defendant had agreed to pay the said rent on its having been assured that it will continue to be a tenant for a period of five years. There was a security of tenure which must have weighed in the mind of the defendant to agree to pay rent @ `85/- per sq.ft. In case there was no security of tenure for a period of five years, may be the parties had agreed on a different rent. There being no security of tenure, in my opinion, the plaintiffs are not entitled to claim rent @ `85/- per sq.ft."

11. We agree with the reasoning of the learned Single Judge and additionally note the argument of Sh.Arun Mohan, learned senior counsel for the tenant, that his client did offer to pay monthly rent @ `85/- per square foot, which was accepted by the landlords but the tenant was misled by the property dealers in the area qua the prevailing rentals and when this dawned upon the tenant, the offer was withdrawn. Learned senior counsel submits that the onus was on the landlords to prove the fair market rental and had they entered the witness box, the tenant would have subjected them to cross examination and had they attempted to produce contemporaneous lease deed, truth could have been extracted.

12. We supplement our reasons to the reasoning of the learned Single Judge by noting that offers made at un-

concluded bargains would not be evidence as understood in the law of evidence. Offers and counter-offers which are made, are neither statements of fact or statements of facts of facts in issue. In any case, it is settled law that a statement by way of admission can be relied as a statement in whole and not in part. Thus, if a person offers to take a premises on lease and offers to pay a sum of `‟X‟ towards monthly rent and the offer is contingent upon the landlord agreeing to the lease period being „Y‟, it would be impermissible to split the offer made by the person and treat the sum of `‟X‟ as his admission of the fair market rent and disassociate the same from the condition that „X‟ would be paid if the lease period is „Y‟.

13. The landlords have not stepped into the witness box nor produced any witness to prove the fair market rent and thus the initial onus upon the landlords having not been discharged, we agree that there was no reliable evidence to determine the fair market rent for the period the tenant remained in possession as a tenant at sufferance without lawful possession and technically the claim for mesne profits would require to be dismissed. But, we refrain from doing so inasmuch as the appeal filed by the tenant has not been pressed. Left with no evidence, the learned Single Judge, as observed by him, has fixed the mesne profits @ `50.40 per square foot per month. to meet the ends of justice.

14. We decline to grant any interest as prayed for by learned counsel for the landlords noting that the tenant complied with the decree before filing the appeal, which amount has been paid over to the landlords.

15. RFA (OS) No.45/1999 is dismissed.

16. Since both appeals are dismissed, security furnished by the landlords to withdraw the sum decreed which was deposited in RFA (OS) No.25/2000 is discharged. Security bond is discharged.

17. Both parties are left to bear their own costs.

(PRADEEP NANDRAJOG) JUDGE (S.P. GARG) JUDGE NOVEMBER 14, 2011 mm RFA(OS) 45/1999 & 25/2000 Page 6 of 6