*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 29th May, 2014
+ FAO(OS) No.265/2014
TRANS ASIA INDUSTRIES EXPOSITION PVT. LTD. Appellant
Through: Mr. Aman Lekhi, Sr. Adv. with Mr.
Rajat Wadhwa, Mr. Ashish Batra, Mr.
Honey Jain, Advs.
Versus
IQUBAL CHAND MALHOTRA ..... Respondent
Through: None.
AND
+ FAO(OS) No.266/2014
TRANS ASIA INDUSTRIES EXPOSITION PVT. LTD. Appellant
Through: Mr. Aman Lekhi, Sr. Adv. with Mr.
Rajat Wadhwa, Mr. Ashish Batra, Mr.
Honey Jain, Advs.
Versus
ANU MALHOTRA ..... Respondent
Through: None.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.
1. These intra-court appeals impugn the consolidated order dated 03.04.2014 on identical applications under Order XXXIX Rule 10 of the Code FAO (OS) Nos.265/2014 & 266/2014 Page 1 of 11 of Civil Procedure, 1908 in identical suits being CS(OS) No.1768/2013 and CS(OS) No.1769/2013 filed by the respondent / plaintiff in each of the appeals against the appellant / defendant. Vide the impugned order, the learned Single Judge (exercising Ordinary Original Civil Jurisdiction) has held the appellant / defendant liable for payment of an amount at the rate of last paid rent to the respondents landlords in each of the appeals till the date of vacation on 05.02.2014 of the premises held by the appellant / defendant as a tenant under the respondent landlord in each of the appeals and accordingly directing adjustment thereof from the security deposit held by the respondent landlord in each of the appeals and directing the appellant / defendant to pay the balance two months rent within two months - of course without prejudice to the rights and contentions of the parties and subject to the final order in the suit.
2. The senior counsel for the appellant / defendant has argued that the order is erroneous inasmuch as in exercise of powers under Order XXXIX Rule 10 of the CPC such a direction could have been made only in the face of an admission by the appellant / defendant of liability to any extent. It is argued that on the contrary, the appellant / defendant had disputed the said liability. FAO (OS) Nos.265/2014 & 266/2014 Page 2 of 11
3. We have however invited attention of the senior counsel for the appellant / defendant to order XV-A of the CPC as applicable to Delhi.
4. The undisputed position is:
(i) that the appellant / defendant was a tenant in the premises subject matter of FAO (OS) No.265/2014 and CS(OS) No.1769/2013 under the respondent / plaintiff therein at a rent of Rs.6 lacs per month and on the other terms and conditions contained in the registered lease deed dated 07.12.2009;
(ii) the appellant / defendant was similarly a tenant in the premises subject matter of FAO (OS) No.266/2014 and CS(OS) No.1768/2013 and under the respondent / plaintiff therein at a rent of Rs.7.5 lacs per month and on the other terms and conditions contained in the registered lease deed dated 07.12.2009;
(iii) the respondents / plaintiffs instituted the suits from which these appeals arise, averring that though the lease had expired by efflux of time on 28.02.2013 but the appellant / defendant had not vacated the premises and was also in default of payment of rent FAO (OS) Nos.265/2014 & 266/2014 Page 3 of 11 and other terms and conditions of the lease, for the reliefs of ejectment of the appellant/defendant from the premises and for recovery of the amounts due till the institution of the suit and for recovery of future mesne profits. The plaints in the suits were accompanied with applications under Order XXXIX Rule 10 of the CPC seeking a direction to the appellant / defendant to, for the period of occupation after the expiry of the term of the leases, pay double the last paid rent as agreed by the appellant / defendant in the registered lease deeds;
(iv) the learned Single Judge, while issuing summons of both the suits, directed the appellant / defendant to deposit in the Court as interim damages the arrears of rent and mesne profits / damages for use and occupation for the period after the expiry of the lease by efflux of time at the rate at which the appellant / defendant had agreed to pay the rent;
(v) the appellant / defendant during the pendency of the suits, as aforesaid, delivered possession of the premises to the respondent landlord in each appeal on 05.02.2014;
FAO (OS) Nos.265/2014 & 266/2014 Page 4 of 11
(vi) that the appellant / defendant did not comply with the direction aforesaid issued while issuing summons of the suits and on the contrary filed applications for recall of that order.
5. The learned Single Judge has vide the impugned order dismissed the applications of the appellant / defendant for recall of the order and allowed the application of the respondent / plaintiff in both the appeals under Order XXXIX Rule 10 of the CPC and held the respondent / plaintiff in each appeal to be entitled to adjust the unpaid rent / mesne profits from the security deposit held by the respondent / plaintiff and directed the appellant / defendant to pay the balance amount within two months.
6. The senior counsel for the appellant / defendant though has not made any argument qua Order XV-A of the CPC to which attention was drawn, has invited our attention to the registered lease deeds and has contended that it was a term thereof that on the expiry of the lease by efflux of time, the appellant / defendant shall handover possession of the tenancy premises to the respondent / plaintiff, simultaneously with the refund of the security deposit held by the respondent / plaintiff to the appellant / defendant. The lease deeds further provided that if the security deposit is not refunded back at the time of FAO (OS) Nos.265/2014 & 266/2014 Page 5 of 11 handover of the possession of the leased premises, not only would the respondent / plaintiff be liable to pay interest thereon at the rate of 18% per annum but the appellant / defendant would also be entitled to retain possession of the leased premises with use, without payment of rent. It is argued that the respondent / plaintiff in each appeal will have to prove that he / she was so ready to refund the security deposit and if fails in proving so, the appellant / defendant would not be liable to pay any amount for the period after the expiry of the term of the lease deeds and till the date of delivery of possession.
7. The learned Single Judge in the impugned order has held that the appellant / defendant did not at any time write to the respondent / plaintiff to take possession of nor handed over possession, thus the question of the respondent / plaintiff being not ready to return the security deposit did not arise.
8. The senior counsel for the appellant / defendant though does not controvert that the appellant / defendant did not at any time write to the respondent / plaintiff in each appeal to take possession but contends that since the date of expiry of the lease was fixed and was known to the respondent / plaintiff also, there was no need for the appellant / defendant to write any such letter to the respondent / plaintiff and it was for the respondent / plaintiff to FAO (OS) Nos.265/2014 & 266/2014 Page 6 of 11 come forward to refund the security deposit and had the respondent / plaintiff done so, the appellant / defendant would have delivered possession -- the respondent / plaintiff having not done so, the appellant / defendant was entitled to continue in the premises for the period after the expiry of the term of the lease without paying any amount / charges therefor.
9. The appellant / defendant was using the tenancy premises for commercial purposes. We have enquired from the senior counsel for the appellant / defendant, whether the appellant / defendant had removed its furnitures, fixtures, fittings and personnel from the premises or had taken any other premises or shifted thereto.
10. The answer is again in the negative.
11. We have yet further enquired from the senior counsel for the appellant / defendant, whether it was the plea even of the appellant / defendant that it had so offered possession to the respondent / plaintiff and the respondent / plaintiff was not in a position to take possession owing to being not in a position to refund the security deposit.
FAO (OS) Nos.265/2014 & 266/2014 Page 7 of 11
12. The senior counsel for the appellant / defendant fairly admits that it is not the plea in the reply to the application under Order XXXIX Rule 10 CPC and only reference to the clauses aforesaid of the lease deed was made though subsequently under instructions, he stated that such a plea was taken in the written statement.
13. However the written statement was filed belatedly and in fact the delay in filing the written statement was condoned and the written statement ordered to be taken on record vide the same order dated 03.04.2014. The plea to the said effect, even if any taken in the written statement, is thus an afterthought.
14. In the aforesaid state of affairs, no error is found in the impugned order. The error sought to be shown by relying upon clauses of the lease deed is a figment of legalese and legal acumen; else there are no factual pleadings to take advantage thereof. The appellant/defendant, in the ordinary course of human conduct and behavior, if had been intending to vacate the premises on the expiry of the term of the lease thereof, would have communicated so to the respondent/plaintiff, well in advance, also calling upon the respondent/plaintiff to ensure that the security deposit is refunded against delivery of possession. Not only was nothing of this sort done, but even thereafter no communication FAO (OS) Nos.265/2014 & 266/2014 Page 8 of 11 was sent to the effect that inspite of appellant/defendant being ready to deliver possession, the same had not been taken. The appellant / defendant having neither made any preparation nor taken any steps for vacation of the tenancy premises inspite of expiry of the lease thereof and having continued to use and occupy the premises, cannot on such basis shake off the liability for payment therefor, at least at the rate at which it was last paying the rent.
15. We have recently, in judgment dated 15.05.2014 in FAO(OS) No.597/2013 titled Raghubir Rai Vs. Prem Lata held:
(I) that the Court, in exercise of powers under Order XV-A of the CPC is not incapacitated from directing deposit / payment at a rate higher than that admitted by the defendant;
(II) that the Court in exercise of powers under Order XV-A of the CPC is empowered to direct deposit / payment at such rate as the erstwhile tenant / defendant may on the basis of material on record be found to have agreed to pay to the landlord for the said period even if the tenant, before the Court may not have admitted the same or may have disputed / controverted the same; FAO (OS) Nos.265/2014 & 266/2014 Page 9 of 11 (III) however the Court in exercise of powers under Order XV-A, cannot without evidence assess mesne profits or, merely by taking judicial notice and without any material on record, arbitrarily direct the defendant to deposit a much higher amount than what he had been paying or had agreed to pay; of course if the erstwhile tenant / defendant was found to have agreed to periodically increase the rent / user charges, even if such contract may have come to an end, in exercise of powers under Order XV-A of the CPC, direction for deposit with such increases can be made unless strong grounds exist for such increases being not due.
16. Applying the aforesaid principles also, the impugned order of the learned Single Judge is in consonance therewith.
17. The senior counsel for the appellant / defendant has lastly contended that the prayer of the respondent / plaintiff in the applications under Order XXXIX Rule 10 of the CPC was for a direction to the appellant / defendant to pay for the said period at the rate double the last paid rent; that since the learned Single Judge has allowed the applications, the same may be construed as a direction for payment at double the rate.
FAO (OS) Nos.265/2014 & 266/2014 Page 10 of 11
18. The learned Single Judge though has allowed the applications but has out of the eleven months rent which was due, directed nine months rent to be adjusted in the security deposit and directed payment of the balance two months rent only. It is thus clear that the directions are not for payment at double the rate. The appellant/defendant is again, choosing to read the order selectively, not holistically.
19. There is thus no merit in the appeals which are dismissed.
RAJIV SAHAI ENDLAW, J.
CHIEF JUSTICE MAY 29, 2014 'gsr' FAO (OS) Nos.265/2014 & 266/2014 Page 11 of 11