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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 440/2014
Decided on 4th December, 2014
CEMENT CORPORATION OF INDIA LTD ..... Appellant
Through: Mr. Kailash Pandey and Mr. Chirag,
Advs.
versus
MRS. SHOBHA DIKSHIT ..... Respondent
Through: Mr. Naveen K Chaudhry, Adv. CORAM: HON'BLE MR. JUSTICE A.K. PATHAK A.K.PATHAK, J.(ORAL)
1. Respondent filed a suit for possession and recovery of mesne profits against the appellant alleging therein that she had purchased the suit property, that is, Flat No. 501 on the 5th Floor, C.C.I. House, 87, Nehru Place, New Delhi admeasuring 530 square feet, more particularly shown in yellow colour in the site plan, from the erstwhile owner. Appellant was tenant of erstwhile owner. Thereafter, appellant attorned the tenancy in favour of respondent and accepted her as landlord. Appellant started paying monthly rent of `1590/- to respondent with effect from March, 1980. However, no registered lease deed was executed between the parties. Appellant increased the rent from time to time and the last paid rent in the RFA 440/2014 Page 1 of 7 month of May, 2008 was `3749.12. Since respondent no longer desired the appellant to continue as a tenant, she terminated the tenancy by serving a legal notice dated 20th May, 2008 thereby calling upon the appellant to hand over possession of the suit premises, on the expiry of 15 days of receipt of notice. Appellant was also asked to pay market rent @ `200 per sq fee per month amounting to `1.6 lacs per month in case of failing to deliver the possession, on termination of tenancy. Interest @ 18 % per annum was also claimed on the unpaid use and occupation charges.
2. Appellant admitted that it had been the tenant of respondent with effect from 1st March, 1980. However, it was alleged that appellant was the contractual tenant in terms of the Rent Agreement executed between the parties for a period of three years. Further that tenancy stood renewed with effect from 15th October, 2006 as there was no valid termination of tenancy under the provisions of Transfer of Property Act, 1882 (for short hereinafter referred to as the 'Act'). Appellant claimed that it was occupying the suit property as a tenant vide lease deed dated 22nd September, 1979 executed between the appellant and erstwhile owner; Subsequently, first tenancy came into existence between the parties, on execution of Rent Agreement dated 1st March, 1980. It was denied that tenancy was on month to month RFA 440/2014 Page 2 of 7 basis. Appellant alleged that rent was increased to `3749.12 per month for a period of three years with effect from 15th October, 2006, accordingly, termination of tenancy vide notice dated 20th May, 2008 was illegal and without any basis since respondent had no right to terminate the tenancy. It was denied that appellant became unauthorised occupant with effect from 6th June, 2008. It was prayed that suit be dismissed.
3. On an application under Order XII Rule 6 CPC filed by the respondent a decree of possession was passed by the trial court against the appellant on 18th May, 2010. It has been admitted that decree has since been executed through the process of court and possession was taken through court bailiff from the appellant on 30th September, 2010. Accordingly, only question of determination of mesne profits remained pending before the trial court. Opportunities were granted to the parties to lead evidence on the point of quantum of mesne profits, for the period 7th June, 2008 to 30th September, 2010. Respondent placed on record two lease deeds which have been exhibited as Ex. PW1/8 and Ex. PW1/9 respectively. Both these lease deeds pertain to properties adjoining to the suit property. The rate of rent as mentioned in Ex. PW1/8 is `106 per sq feet; whereas rate of rent as stipulated in Ex. PW1/9 is `85 per sq feet. Lease deed dated 27th October, RFA 440/2014 Page 3 of 7 2006 (Ex. PW1/8) is in respect of a flat at second floor; whereas lease deed dated 6th April, 2010 (Ex. PW1/9) is in respect of the flat at 10th floor. Appellant did not lead any documentary evidence to counter the lease deeds Ex. PW1/8 and Ex. PW1/9. In view of the documentary evidence, which came on record, trial court has determined the rent as `100 per sq feet per month for the period 7th June, 2008 up to 30th September, 2010 and has directed the appellant to pay the same to respondent with interest @ 12 % per annum.
4. Aggrieved by the decree of mesne profits appellant has preferred this appeal.
5. Learned counsel for the appellant has contended that appellant was not an unauthorised occupant in the suit property but was a contractual tenant in terms of the Rent Agreement, thus, mesne profits could have been awarded only from the date of decree of possession, that is, 18th May, 2010 till possession of the premises was taken over by the respondent through the process of court. Mesne profits could not have been awarded from the date of alleged termination of tenancy, that is, 7th June, 2008. He has placed reliance on M/s Atma Ram Properties (P) Ltd. vs. M/s Federal Motors Pvt. Ltd. (2004) Insc 751. I do not find any force in this contention of learned RFA 440/2014 Page 4 of 7 counsel. Admittedly, no registered Lease Deed was executed between the parties. Terms and conditions of an unregistered Rent Agreement cannot be enforced by either of the parties. In absence of registered lease deed/rent agreement the tenancy has to be treated on month to month basis. Section 107 of the Act envisages that lease of an immovable property for a term exceeding one year can be made only by a registered instrument and not otherwise. In this case, no registered rent agreement/lease deed was executed; meaning thereby tenancy has to be taken on a month to month basis terminable on the part of either lessor or lessee by 15 days' notice. Section 106(1) of the Act provides that in the absence of a contract, lease of an immovable property shall be deemed to be a lease from month to month and which can be terminated either on the part of lessor or lessee by giving 15 days' notice unless it is a lease for agriculture or manufacturing purposes, which shall be from year to year, terminable on the part of either lessor or lessee by six months' notice. Accordingly, in this case, in absence of any registered lease deed tenancy has to be taken from month to month and could have been terminated by the appellant or by respondent by giving 15 days notice. Respondent terminated the tenancy by serving the notice dated 20th May, 2008 receipt whereof is not in dispute. Vide this notice tenancy RFA 440/2014 Page 5 of 7 was terminated with effect from 6th June, 2008, thus, appellant became unauthorised occupant of the suit property with effect from 7th June, 2008. Accordingly, trial court has rightly awarded mesne profits with effect from 7th June, 2008 till suit property was vacated by the appellant. Judgment relied upon by the learned counsel is in the context of different facts and is not applicable to the facts of present case.
6. The next contention of learned counsel is that trial court has erroneously assessed the mesne profits @ `100 per sq feet. I do not find any force in this contention either. As mentioned hereinabove appellant has not lead any evidence on the point of mesne profits. Appellant did not provide any documentary evidence to show the prevalent market rate of rent in respect of similarly situated properties. As against this, respondent has proved two lease deeds of flats in adjoining properties. Indubitably, the best evidence would be of the similar properties in the same building but in absence thereof the rent prevalent in respect of the similar flats in adjoining building will be the guiding factor to determine the market rate of rent in respect of property in question. As per Ex. PW1/8 a flat in the adjoining building was leased out in the year 2006 @ `106 per sq feet. This flat was situated at the second floor. As regards to the property involved in Ex. RFA 440/2014 Page 6 of 7 PW1/9, same was on the 10th floor and was leased out @ `85 per sq feet in the year 2010. Trial court has not awarded the rent as mentioned in the lease deed dated Ex. PW1/8 but has assessed the rent @ `100 per sq feet keeping in mind both the lease deeds. In my view, rent determined by the trial court is just, fair and equitable and needs no interference, more particulary since it is based on documentary evidence. I do not find any illegality or perversity in the view taken by the trial court.
7. However, I am of the view that trial court has erred in awarding interest @ 12 % per annum; more so when while deciding Issue No. 6 relating to the interest, it was concluded by the trial court that award of interest @ 9% per annum would be fair and equitable.
8. Accordingly, appeal is partially allowed. Mesne profits as awarded by the trial court are upheld. However, rate of interest is reduced to 9% per annum from 12 % per annum. Decree be drawn accordingly. The amount lying deposited in this Court be released to respondent together with interest accrued thereon, if any. Miscellaneous application is disposed of as infructuous.
A.K. PATHAK, J.
DECEMBER 04, 2014 ga RFA 440/2014 Page 7 of 7