* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) No.519/1994
% 3rd October, 2012
SH. INDER SAIN BEDI ...... Plaintiff
Through: Mr. Rajan Sabharwal with
Ms. Seema Singh, Advs.
VERSUS
M/S CHOPRA ELECTRICALS ...... Defendant
Through: Mr. Ashish, Adv.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes
VALMIKI J. MEHTA, J (ORAL)
1.
The subject suit has been filed by the plaintiff/landlord for recovery of possession of (i) the leased area, and (ii) the area in occupation of the defendant/tenant beyond the leased out area. I may state that the plaintiff/landlord had separately filed a suit for possession of the leased premises, and which suit was decreed in terms of the judgment dated CS(OS) No.519/1994 Page 1 of 18 23.4.1993 passed by Sh.P.K.Bhasin, ADJ (as his Lordship then). This judgment has been upheld right till the Supreme Court, and therefore the possession of the leased premises has already been taken back by the plaintiff/landlord. The plaintiff in execution of the said judgment has also taken back possession of the encroached areas.
2. The facts of the case are that the plaintiff is the owner/landlord of the property bearing No. B-59/1, Naraina Industrial Area, Phase-II, New Delhi-28. A portion of this building comprising of one main hall on the ground floor, three office-cum-store rooms, two mezzanine halls and toilets for workmen as stated in the deed of license dated 26.5.1980 was let out to the defendant. Though the document is titled as a deed of license the admitted position is that there was a relationship of landlord and tenant between the parties. The rate of rent fixed under the deed dated 26.5.1980 was Rs.4,500/- per month. In the present suit, the following aspects are to be decided:
i) The mesne profits which would be payable by the defendant/tenant to the plaintiff/landlord for the leased premises from 1.2.1991 till 31.1.2005. While on this aspect, I must note that it is an CS(OS) No.519/1994 Page 2 of 18 admitted case of the parties that the lease was terminated by the legal notice dated 6.3.1989 (proved as Ex.P1 in the suit of 1989) with effect from 31.5.1989 i.e the defendant became an unauthorized occupant from 1.6.1989. Since the suit however was filed only in February, 1994, and arrears can only be claimed for a period of three years prior to filing of the suit, hence the period for which the mesne profits are to be calculated are from 1.2.1991 till 31.1.2005, the latter date being the date when the landlord/plaintiff received possession of the tenanted premises and the encroached areas.
ii) What is the area encroached by the defendant, i.e. what is the extent of the area beyond the areas/portions stated in the deed of license, Ex.P6, dated 26.5.1980, and which were illegally occupied by the defendant.
3. The defence on behalf of the defendant, as argued before me today is two fold:-
i)There is no encroached area and whatever area was with the defendant/tenant was actually part of the leased area.CS(OS) No.519/1994 Page 3 of 18
ii) Alternatively it is argued that the area encroached is not 3193 sq.ft. as stated by the plaintiff/landlord, but only 2068 sq.ft, inasmuch as, 1125 sq.ft. of alleged encroached area is nothing but mezzanine floors constructed within the portions leased out to the defendant/tenant under the deed dated 26.5.1980.
4. The following issues were framed in this suit on 21.5.1999:-
"1. Whether the plaintiff is entitled for recovery of possession of the suit premises? OPP
2. Whether the present suit is barred by res judicata? OPD
3. Whether the present suit is pre-matured? OPD
4. Whether Delhi Vidyut Board is the necessary party?
OPD
5. Whether the suit property was part of the agreement executed between the parties? OPD
6. Whether the present suit is filed on the basis of agreement/lease deed? OPD
7. Whether the plaintiff is entitled for mesne profit and if so, then at what rate? OPP
8. Whether the suit is barred under Order II Rule 2 of the CPC? OPD
9. Whether notice under Section 106 of the Transfer of Property Act was given for the termination of the alleged encroached portion of the tenancy? OPP CS(OS) No.519/1994 Page 4 of 18
10. Whether there are any addition/alteration or encroachment done by the defendant as alleged by the plaintiff? OPP
11. Relief."
5. Issue nos. 2, 3, 4 and 8 are not pressed by the defendant and are therefore decided in favour of the plaintiff. That leaves for decision issue nos. 1, 5, 6, 7, 9 and 10. These issues are being dealt with together inasmuch as they would basically fall under two heads, as to, firstly, the entitlement of the plaintiff/landlord to the mesne profits with respect to the leased premises from 1.2.1991 till 31.1.2005 and secondly of the claim of mesne profits to be granted for the encroached area and which head will include the aspect as to what is the extent of the encroached area. Issue Nos.1,5,6,7,9 and 10
6. In order to prove the rate of rent the plaintiff/landlord relies upon four documents: the lease deed dated 15.1.1999 (Ex.P-21) with respect to 10,000 sq.ft. of area in the premises bearing no.B-48, Naraina Industrial Area, Phase-II, New Delhi; a lease deed dated 10.12.1998(Ex.P-20) with respect to 8650 sq.ft. area once again in the aforesaid premises bearing No. B-48, Naraina Industrial Area, Phase-II, New Delhi; a lease deed dated CS(OS) No.519/1994 Page 5 of 18 6.2.1999(Ex.P-22) for a commercial area of 2400 sq.ft. situated at A-1, Community Centre, Naraina Industrial Area, Phase II, New Delhi; and lastly a lease deed also dated 6.2.1999(Ex.P23) for an area of 800 sq.ft. again with respect to the same commercial premises A-1, Community Centre, Naraina Industrial Area, Phase II, New Delhi.
7. Reliance is also placed on behalf of the plaintiff to three valuation reports, Ex.P-33 to Ex.P-35, of one Sh. Virender Cambow, for arriving at rate of rent on the basis of cost of construction and the area on which construction is made.
8. So far as the valuation reports Ex.P-33 to Ex.P-35 are concerned, I cannot look into the same inasmuch as, the defendant right at the inception of cross-examination objected to exhibiting of these documents on the ground of mode of proof. When we refer to the additional affidavit by way of examination-in-chief dated 4.5.2006 on behalf of the plaintiff- Sh.Ram Prakash Malhotra, PW1, it becomes clear from para 2 of this affidavit that exhibit marks have been given to the valuation reports without proving the same in terms of Section 47 of the Indian Evidence Act, 1872. There is no deposition that the signatures existing on these valuation CS(OS) No.519/1994 Page 6 of 18 reports of Sh. Virender Cambow are identified as they were put in the presence of the witness or that the other conditions as stated under Section 47 of the Evidence Act, 1872 are satisfied. Therefore, these valuation reports do not stand proved as required by law, and thus they cannot be referred to.
Even assuming the reports can be referred to as evidence, the fact that they are evidences is different from the aspect as to the weight which should be attached to the same. The valuation reports are in a way theoretical because what is the rent of premises is best known by means of actual rentals in area. Plaintiff has failed to file any documents of actual rentals in the area, with respect to the years 1994-95, 1999-2000 and 2003- 04 and for which the valuation reports, Ex.P-33 to Ex.P-35 are relied upon. I, therefore, hold that very very little weight can be attached to these valuation reports. In any case, as already held above, the same have not been proved in accordance with law for the same to be taken/referred to as evidence in the present case.
9. So far as the lease deeds, Ex.P-22 and P-23, both dated 6.2.1999, it could not be seriously disputed on behalf of the plaintiff that these lease deeds are with respect to commercial premises in a Community CS(OS) No.519/1994 Page 7 of 18 Centre and rents of such commercial premises are therefore definitely higher than industrial areas where the suit premises are situated. Ex.P-22 and Ex.P- 23 therefore cannot be referred to in order to decide the rate of rent of the suit premises which is in an industrial area.
10. That leaves us with two documents being Ex.P-21 and Ex.P-20, and which are two lease deeds dated 15.1.1999 and 10.12.1998 with respect to the same area where the leased premises are situated inasmuch as the leased premises are B-59/1, Naraina Industrial Area, Phase-II, New Delhi and the subject matter of the lease deeds Ex.P-21 and Ex.P-20 are portions of the property situated at B-48, Naraina Industrial Area, Phase II, New Delhi. However, whereas the mesne profits are to be awarded from 1.2.1991 till 31.1.2005, both these lease deeds Ex.P-21 and Ex.P-20, are of the year December 1998/January1999, and therefore they can be looked at for determining the rent only in around the year 1998-99 and not for the entire period from 1.2.1991 till 31.3.2005. These lease deeds are therefore relevant evidence and will be considered for awarding the mesne profits, although for a part of the period, out of the total period from 1.2.1991 till 31.3.2005.
CS(OS) No.519/1994 Page 8 of 18 11(i). The admitted last rent paid was Rs.4,500/- per month for the leased area of 2609 sq.ft. This translates to about Rs.1.75 per sq.ft. at the time of granting of the lease in around the year 1980. Since I have to calculate the mesne profits payable firstly as on 1.2.1991, I can safely take the rate of rent on 1.2.1991 at Rs.5/- per sq. ft. because though there is no evidence with respect to rate of rent from 1980 till 1991 as filed by the plaintiff/landlord, a Division Bench of this Court in the case of S.Kumar vs. G.R.Kathpalia, 1999 RLR 114; 77(1999) DLT 266 has held that Courts are entitled to take judicial notice of increase in rents. I have also in the judgment reported as M.C. Agrawal (HUF) vs. Sahara India Pvt. Ltd. 183 (2011) DLT 105 held that in the absence of any evidence one can take 15% increase of rent every year with respect to non-residential premises.
(ii) In every determination of mesne profits, some amount of honest guesswork is always involved, and therefore, on the basis of the evidence led in this case, the admitted fact of rate of rent being of Rs.1.75 per sq.ft in 1980, and judicial notice being required to be taken of increase in the rent, I hold that as on 1.2.1991, the prevalent rate of rent would be Rs.5/- per sq.ft. and which would be the rate from 1.2.1991 till 31.1.1992. CS(OS) No.519/1994 Page 9 of 18
(iii) For the period from 1.2.1992 till 31.12.1998, in accordance with the aforesaid judgment in the case of M.C.Agrawal (supra), I grant an increase of 15% cumulative every year i.e the rent payable from 1.2.1992 till 31.1.1993 will be 15% more than Rs.5/- per sq. ft, and the rent payable for 1.2.1993 till 31.1.1994 will be 15% more than Rs.5.75/- per sq.ft. and so on till 31.12.1998.
(iv) From 1.1.1999 till 31.12.1999 in view of the documents Ex.P- 21 and Ex.P-20, plaintiff will be entitled to rent at Rs.12/- per sq.ft.
(v) From 1.1.2000, the rate of rent will be 15% more cumulative every year as detailed above in sub-para (iii) till the date of vacation of the premises on 31.1.2005.
I may reiterate that this rate of mesne ptofit is being given with respect to the leased premises and not for the encroached area/portion, and which subject I will deal with hereinafter.
12. Though there is no issue framed qua grant of interest on arrears of mesne profits, the same is only a natural corollary and in fact forms a part of the mesne profits payable, and therefore, in accordance with the judgment CS(OS) No.519/1994 Page 10 of 18 of the Supreme Court in the case of Indian Oil Corporation vs. Saroj Baweja 2005(12)SCC 298 interest at the rate of 12% per annum simple will be payable from the end of the month for which mesne profits are payable till the time that such arrears of mesne profits are actually paid.
13. Now the aspect which has to be determined is whether the defendant has encroached upon an area beyond the area granted by the deed of license, Ex.P-6 dated 26.5.1980, and if there is encroachment, then, what is the area encroached, and what should be the mesne profits payable for this encroached area.
14. The encroached area is stated by the plaintiff in para 8 of the plaint and which para 8 reads as under:-
"8. That the portion encroached upon by the defendants comprised of an area measuring about 20‟ x 16.8‟ where they had put up a Parchhatti/Mezannine, on the left hand side. On the right side also they have encroached upon a portion measuring about 20‟ x 30‟ where Parchhatti/Mezannine had been put up by them. The defendants have also put up another Mezannine on the left side on an area of 15‟ x 13‟. On the rear side there is a lawn on a portion of which shed had been constructed by the plaintiff and the said portion too have been encroached upon by the defendants. This portion measures 1068 square feet. In the open space (Gallary) also encroachment has been made by the defendants CS(OS) No.519/1994 Page 11 of 18 which portion measures about 1,000 square feet. The total area encroached upon by the defendants measures about 3193 square feet. A plan of the property is filed in this Hon‟ble Court in which the encroached portions have been shown in „red‟ colour while the portions which stood rented to the defendants have been shown in „green‟ colour."
15. A reading of the aforesaid para 8 shows that the three areas of 20‟ x 16.8‟, 20‟ x 30‟ and 15‟ x 13‟ are actually only additional mezzanine portions constructed by the defendant within the area of the leased premises granted under Ex.P-6. It is not disputed on behalf of the plaintiff that these three mezzanine areas are in the main ground floor hall, and which main ground floor hall forms part of the leased premises as per Ex.P-6. Once that is so, it cannot be said that the defendant has encroached an area beyond the leased area so far as these three mezzanine areas are concerned, and therefore, no mense profits can be granted for the total of these three areas of 195 sq.ft. + 330 sq.ft. + 600 sq.ft. i.e a total of 1125 sq.ft. The encroached area therefore will only be 1068 sq.ft. forming part of the premises on the rear side and 1000 sq.ft. of the open space (gallery) in the premises which are owned by the plaintiff/landlord.
CS(OS) No.519/1994 Page 12 of 18
16. So far as the encroached area of 2068 sq.ft. is concerned the same will be divided in two parts. One part will be of 1068 sq.ft. and which is a shed (admitted as not to be a full fledged construction) which was constructed by the plaintiff and the other part will be of an open area of 1000 sq.ft.
So far as the shed of 1068 sq.ft. in the rear side portion, considering that there is no evidence as to what is the type of construction, but there is an indication on record that the construction is not a normal full fledged pucca construction, interest of justice will suffice if for this area of 1068 sq.ft., mesne profits are granted at exactly half the rate of the leased premises as determined above. Accordingly, the mesne profits granted for this encroached area of 1068 sq. ft. will be at 50% of the rate of mesne profits granted for leased portion for the entire period from 1.2.1991 till 31.1.2005 and for which the mesne profits are held to be payable.
17. So far as the open area of 1000 sq.ft. is concerned, since there are no specified parameters as to how rent for this open area should be granted, interest of justice will suffice if for this open area, mesne profits are granted at 25% of the rate for which the mesne profits have been granted for CS(OS) No.519/1994 Page 13 of 18 the leased area. Therefore, from 1.2.1991 to 31.1.2005 the mesne profits which would be granted for the open area of 1000 sq.ft. will be 25% of the mesne profits granted for the leased portion from 1.2.1991 till 31.1.2005.
18. I further hold that interest at 12% per annum simple in terms of the Supreme Court judgment in Indian Oil Corporation (supra) case will be granted on the mesne profits awarded for the shed area of 1068 sq.ft. and an open area of the 1000 sq.ft.
19. While on the aspect of encroachment, I may state that the fact that encroachment has taken place cannot be disputed by the defendant inasmuch as the plaintiff in para 5 of the plaint has specifically referred to the encroached area as shown in green colour in the plan filed in the earlier suit, and in the written statement in reply to para 5 of the plaint, the defendant does not dispute this and only states that the same is only a matter of record. Therefore, the fact that encroachment has taken place, cannot be disputed by the defendant.
20. In view of the aforesaid, issue nos. 1, 5, 6, 7, 9 and 10 are decided by holding that the plaintiff/landlord is entitled to mesne profits for the leased portion from 1.2.1991 till 31.1.2005 at the rates as stated above. CS(OS) No.519/1994 Page 14 of 18 The plaintiff/landlord will also be entitled to the mesne profits for the encroached area of 2068 sq.ft. as stated above. The plaintiff/landlord will also be entitled to interest on the mesne profits commencing from the end of the month of unauthorized occupation till the payment is actually made at 12% per annum simple. It is also held that the encroached area is beyond the leased premises as specified in Ex.P-6 and the same did not form part of the leased premises in Ex.P-6. It is also held that once there is an encroached area, there is no need to serve notice under Section 106 of the Transfer of Property Act, 1882 inasmuch as under Section 106 of the Transfer of Property Act, 1882 notice is served with respect to a tenanted portion and not for a portion in which a person is an unauthorized occupant. So far as the issue no. 10 is concerned, I have held that within the leased premises where the mezzanine portion has been constructed by the defendant no mesne profits would be payable and mesne profits will only be payable for the total of 2068 sq.ft. and that too in two parts of 1068 + 1000 sq.ft. as stated above.
CS(OS) No.519/1994 Page 15 of 18 Relief
21. In view of the above, the suit of the plaintiff for mesne profits is decreed by granting to the plaintiff the following mesne profits for the leased portion, the encroached area, and also interest thereon: -
(A)(i) Plaintiff is granted mesne profits at Rs.5/- per sq.ft. from 1.2.1991 till 31.1.1992. The mesne profits payable would become Rs.5.75/-per sq.ft. per month from 1.2.1992 till 31.1.1993.
ii) From 1.2.1993 till 31.1.1994, the mesne profits would be 15% more than Rs.5.75/- per sq.ft. per month and which rate of rent will be cumulatively increase every year at 15% till 31.12.1998.
iii) Plaintiff is granted mesne profits for the leased portion at Rs.12/- per sq.ft. per month from 01.01.1999 till 31.12.1999. From 1.1.2000 till 31.12.2000, the mesne profits which would be payable for leased portion would be 15% more than Rs.12/- per sq.ft per month i.e. Rs.13.80 from 1.1.2000 till 31.12.2000 and cumulatively 15% increases so on every year till 31.1.2005.CS(OS) No.519/1994 Page 16 of 18
iv) On all the aforesaid amounts interest at 12% per annum simple will be payable from the end of the month for which the mesne profits are payable, till the amounts are paid by the defendant to the plaintiff.
v) For the encroached area of 1068 sq.ft., mesne profits from 1.2.1991 till 31.1.2005 will be 50% of what is calculated for the leased portion.
vi) In the encroached area of 1000 sq.ft., the mesne profits will be 25% of what is calculated for the leased premises from 1.2.1991 till 31.1.2005.
vii) Even on the mesne profits granted for this total encroached area of 2068 sq.ft., interest will be payable at 12% per annum simple from the end of the month for which mesne profits would be payable till actual payment.
(B) If for the period for which mesne profits have been granted above, any payments have been made by the defendant to the plaintiff, then, to the extent of payments made, such amounts will be deducted, and deduction will take place for that month for which payment has been made, CS(OS) No.519/1994 Page 17 of 18 meaning thereby, interest will only be payable on the remaining portion of the mesne profits which will remain due and payable. These aspects of such calculations are left to be determined, if so necessitated, in execution proceedings.
(C) Plaintiff will also be entitled to costs in terms of the Rules of the Court.
Decree sheet be prepared on the plaintiff filing court fees with respect to the mesne profits decreed.
VALMIKI J. MEHTA, J OCTOBER 03, 2012 ak CS(OS) No.519/1994 Page 18 of 18