Joginder Lal Kuthiala vs Bank Of India
1994 Latest Caselaw 850 Del

JUDGMENT

R.C. Lahoti, J.

(1) This is a suit filed by the plaintiffs against the defendant based on landlord-tenant relationship seeking recovery of possession and damages/manse profit.

(2) The suit premises are B-7, Connaught Place, Kothiala Building New Delhi. The plaintiffs are the landlords. The defendant was inducted as a tenant in a part of the property marked in red in the site plan annexed with the plaint admeasuring 2225 sq.ft ( approx.) w.e.f. 5.12.1982 under a deed of lease dated 30.11.1984 ( Ex. DW1/1). The lease was for a period of three years with a clause for renewal for another three years subject to an increase in the rent by 15%. On the date of the suit, the defendant was holding the premises at a monthly rent of Rs. 9200.00. The defendant was served by the plaintiffs through their counsel with a notice dated 12.12.1988 under Section 106 of the Transfer of Property Act terminating the tenancy of the defendant with the expiry of the day of 5.1.1989.

(3) According to the plaintiffs, tenancy of the defendant having been terminated the defendant is liable to restore the possession over the premises to the plaintiff-landlords who are also owners of the premises. The suit premises are situated in a prima locality of New Delhi which can fetch rental at the rate of Rs. 3000.00per day.

(4) The defendant in its written statement has not disputed the tenancy. The main pleas on which the plaintiffs' claim for recovery of possession is contested are two: namely that he lease had stood renewed for a further term of three years w.e.f. 5.12.1988 and so the suit filed on 19.5.89 was premature and that the provisions contained in Section 3(c) of the Delhi Rent Control Act were unconstitutional and so the defendant was entitled to the protection available under Delhi Rent Control Act which prohibits ejectment of a tenant except on the specified grounds of which none is available to the plaintiffs. It is denied that the premises carry a rental value of Rs. 3000.00 per day and can fetch that much or more than. that.

(5) The plaintiffs have filed a replication. The plea of the lease- having been renewed for a further term of three years from 5.12.1988 at an enhanced rate of rent has been denied. It is pointed out that an amount of Rs. 55200.00 purporting to be the rent for the month of January to June, 1989 at the rate of Rs. 9200.00 per month was credited by the defendant bank in the saying bank account No. 131 of the plaintiffs but no sooner this fact came to the knowledge of the plaintiffs they served a legal notice through their advocate on 29.6.89 and intimated that the amount so deposited was not acceptable to the plaintiffs and was being returned. The amount was in fact returned back. The question of lease having been renewed for any fixed term of three years, as alleged by the defendant, does not therefore arise.

(6) On the above said pleadings of the parties the following issues have been framed: (1) Whether the lease in question stands validly terminated. (2) Whether the plaintiff is entitled to damages ? If so, at what rate ? (3) Relief. Issue No.1

(7) The lease deed Ex DPW1/1 though executed on 30.11.1984, dearly mentions the lease having as commenced w.e.f. 5.12.1982. There has been no change in the terms of tenancy except of rate of rent. On the expiry of the term of lease, the tenancy being neither for agricultural nor for manufacturing purpose, the tenancy shall run from month to month terminable on 15 days notice expiring with the end of the month of tenancy. The day on which the tenancy commenced has to be excluded from counting. The notice Ex. PW1/1 dated 12.12.1988 was served on the defendant on 15.12.1988 vide Ad receipt Ex. Pw1/2. It terminated the tenancy of the defendant on the close of 5th day of January, 1989 'or on such other day on which according to him ( the tenant) the month of tenancy ends'. The notice called upon the tenant to give peaceful possession of the premises to the landlords on the 'expiry of the month of tenancy. Such a notice is legal and validly terminates the tenancy.

(8) In spite of termination of tenancy whether the plaintiffs would be entitled to recovery of possession, though there may not be a ground for ejectment of the tenant within the meaning of Section 14 of the Delhi Rent Control Act available to the landlords ? Section 3(c) of the Act, as inserted by Act No. 57 of 1988, excludes the applicability of the Act to any premises whether residential or not, monthly rent of which exceeds Rs.3500.00. Though the defendant has raised challenge to the constitutional validity of the provisions, however, the point is no more res integra in view of the recent pronouncement of the Supreme Court in D.C.Bhatia vs Union of India Jt 1993 (7) S.C. 114, wherein the constitutional validity of the said provision has been upheld. The defendant is,therefore, not entitled to the protection of Section 14 of the Delhi Rent Control Act.

(9) The defendant has claimed tenancy having been renewed for a further term of three years onwards from 5.12.1988. However, the plea cannot be upheld. The deed of lease contemplates only one renewal for a period of three years with 15% increase in rent. The first term had expired on 5.12.1985. There could have been a renewal up to 5.12.1988. Secondly, the defendant has relied on a communication dated 2.12.1988 Ex DWI/2 read with letter dated 13.10.1988 Ex DW1/1 in support of the plea of renewal. Letter dated .13.10.1988 merely asks the plaintiffs to call on the defendant at an early date for the renewal of the lease agreement. There is not 'a slightest indication in the letter of the defendant exercising or having exercised the right of renewal. For the first time, it was letter dated 2.12.1988 ( ExDW1/.2) which exercised the right for renewal. It would be useful to reproduce the letter as it is: "RE:Renewal of Lease Agreement Please refer to our letter dated 13.10.1988 ( copy enclosed) requesting you to call on us for renewal of the lease agreement. Please note that we hereby exercise our right for renewal of the lease agreement for a further period of three years from the expiration of the lease i.e. 5-12-88. Please arrange to call on us at the earliest for the execution of renewal of lease agreement."

(10) Clause (5) of the lease provides for grant by the Lesser of one renewal of three years with 15% increase in rent subject to a written request of the lessee made not less than three calendar months before the expiration of the term created by the lease. It is clear that the demand made on 2.12.1988 for renewal of the lease for three years w.e.f.5.12.1988 was in disregard of the renewal clause and hence not liable to be accepted. It was not accepted by the plaintiffs. Issue No.1 is answered in favor of the plaintiffs against the defendant. Issue No.2

(11) The lease having been terminated the tenant is liable for Its possession after the expiry of the term of the lease to pay damages at such rate at which the premises may fetch rent. The learned counsel for the plaintiffs has not only relied on the plaintiffs' own evidence but also relied on the defendant's evidence in proof of the rate of rent which the premises may fetch. Mr Prem Kumar Bagaria, DW1, as admitted in his cross-examination that the defendant had acquired premises with 10530 sft area in Pti building at Parliament Street at a monthly rent of Rs. 2,27,000.00. The rate of rent would be around Rs-22.50 per sq ft. it is also admitted by him that Connaught Place branch is as attractive as Parliament Street branch from the point of view of the bank. It was admitted by him that Connaught Place is a more desirable place. Taking the evidence adduced by the plaintiff also in consideration this Court is of the opinion that it would be reasonable to assume that the suit premises could have fetched rent at the rate of Rs. 30,000.00 per month after the termination to the tenancy. The plaintiff is entitled to mesne profiles/damages at this rate. The claim for mesne profit/damages at the rate of Rs. 3,000.00 per day is refused as excessive.

(12) The suit is decreed. It is directed that the plaintiffs sh all be entitled to vacant possession over the suit premises shown in red in the plan annexed with the plaint. The plaintiffs shall also be entitled to mesne profit calculated at the rate of Rs. 30,000.00 per month for the period 6.1.1989 to 5.3.1989 as stated and claimed in para 10 of the plaint. The plaintiffs have given up the claim for damages/ mesne profit/ compensation from 6.3.1989 till the filing of the suit which is 19.5.1989. The plaintiffs shall also be entitled to damages at the same rate from the date of the suit till the recovery of possession subject to payment of court fees. Let a decree be drawn accordingly. The plaintiffs shall also be entitled to costs.

(13) However, in order to relieve the defendant from the hardship of sudden eviction, it is directed that the decree for possession shall not be available for execution for a period of one year from today, subject to the condition that within two months from the date of the decree, the defendant shall deposit the entire money part of the decree including the costs for payment to the plaintiffs landlords and shall thereafter continue to pay or deposit mesne profit calculated at the above rate month by month till the delivery of possession. On failure to observe any of the, terms above said, decree for possession shall be available for execution forthwith.