Air India Ltd. vs Atma Ram Properties (P) Ltd.
1996 Latest Caselaw 335 Del

JUDGMENT

M. Jagannadha Rao, C.J.

(1) The appellant,Air India, entered into an agreement with the respondent company on 1.11.1989 in respect of occupation of the premises called "Scindia House" as a tenant for 5 years, subject to renewal for a further period of 5 years. The agreement was not registered nor was any regular lease deed executed. Under the agreement, the appellant had to pay a monthly rental of Rs. 3,54,321.00 and also an advance of Rs. 80,93,000.00 and the advance was repayable by the owners in 60 instalments (spread over 5 years) at Rs. l,34,898.00 per month. In other words, the appellant-defendant would pay the landlord Rs. 3,54,321.00 per month, while the respondent would return back Rs. l,34,898.00 per month. Clause 4 of the agreement stated that the tenanted premises should be of top quality construction, which shall be carried out and completed at the cost of the owners and the said renovation and reconstruction should be completed within 3 months of the starting of the job. For the aforesaid purpose, the appellant would vacate the premises or a part thereof temporarily to enable the owners to start the work and also would pay 2 years advance rent. In no case, the construction should proceed beyond 3 months from the date of commencement of the work. In the event of the owners not being able to complete the reconstruction or renovation, it would be open to the appellant to complete the work itself and adjust the cost against the rentals payable to the owners. It would be the responsibility of the owners to obtain the necessary permissions and sanctions,if required, for the renovation work. Till the completion of reconstruction/renovation work, as stated above, or the expiry of three months, whichever was earlier, the rental at 20% of the rates mentioned alone need to be paid and no rental at all would be paid for the period beyond 3 months upto the time the premises were made available after the reconstruction/renovation was duly completed. Thereafter, the premises would be measured and the total rent would be calculated. Once the total rent was so calculated, the appellant should pay the 2 years advance to the respondent. The advance was to. be repaid in 60 monthly instalments. The appellant was to keep the premises in good condition at all limes and maintain the same against normal wear and tear. The appellant was not to make any structural additions or alterations which were likely to cause any damage to the building. The lease was subject to renewal for a further period of 5 years. This document was unregistered.

THE following facts would show how the dispute started.

PURSUANT to the agreement dated 1.11.1989, the appellant gave temporary possession of the premises to the owner-respondent for the purpose of completing the renovation contemplated by the above said agreement and possession was given back to the appellant after such renovation. Thereafter, the appellant wanted a separate lift and a mezzanine floor and a staircase to be built by the owners. The said work started but on the ground that there was violation of the Building byelaws, the N.D.M.C. sealed the premises on 27.10.1991 and consequently the appellant, could not use the premises.

Thereafter, appellant sent a letter to the owners on 4.12.1991 stating that the appellant would not be able to pay the rent for the period from 27.10.1991 when the building remained sealed. The respondents/owners then wrote to the appellant on 11.3.1992 that at the instance of the appellants, the respondent started construction but that the N.D.M.C. did not allow the construction of lift and staircase. On 25.3.1992 the respondent again wrote to the appellant that the construction of lift and the staircase were contemplated at the instance of the appellant and the blame for the sealing by the Ndmc could not be thrown on the respondents. It was further stated that the respondents would not be able to give possession of the premises to the appellant till they received all their rents upto date.

AT that juncture, the appellant came round and wrote to the respondent on 6.4.1992 slating that they would not want the lift or the mazennine. They wrote as follows:-

"PLEASE refer to the correspondence resting with your letter dated March 25,1992 pertaining to the desealing of Scindia House premises without the lift and the staircase.

(2) We confirm that we will be willing to accept the Scindia House premises without the lift and the staircase As such, you are requested to take urgent action to get the same desealed and advise us so that the renovation work can be restarted. - 3.Please advise the date by which you will be getting the building desealed from NDMC. Your urgent reply in the matter will be highly appreciated." Thereafter, the writ petition against the Ndmc was allowed on 9.7.1992 and the desealing was ordered. On the same day, the owners wrote to the appellant that they will handover possession to the tenant if arrears for the 'sealed' period were paid. The respondent stated as follows:- "We are pleased to inform you that the Hon'ble High Court of Delhi today has ordered de-sealing of the premises under your tenancy in our building Atma Ram Manaoa (Scindia House), Connaught Circus, New Delhi. The High Court has asked N.D.M.C. to de-seal the said premises within three days of the order. However, we will hand over possession of the premises to you only after receiving the arrears of rent, up to date, as stated in our letter dated June 27,1992, addressed to you."

(2) The appellant then wrote back to the respondents on 14.7.92 staling that the appellant was in de jure and de facto possession of the premises even during the period of sealing by the N.D.M.C but that there is no question of paying rent far the 'sealed' period. Appellant said:

"ONCE the premises were desealed by N.D.M.C, the possession of the premises automatically comes to us. As soon as the N.D.M.C. officials remove the seal of the premises, we will start our normal functioning from the said premises, and if you seek to interrupt and interfere in our possession or our working, you shall be creating a law and order problem for which you solely shall be responsible. You will also be exposing yourself to criminal action.

YOU are not entitled to claim any arrears of rent and in any case that is separate issue altogether and you cannot use it as a pretext to interfere in our possession of the premises."

(3) On 15.7.92, the Ndmc desealed the premises. From 16.7.92,, appellant was in possession and, in fact, has paid rent upto 31.8.93 for its occupation. This is clear from the letter of the appellant dated 20.8.1992 to the respondent/plaintiff wherein, while staling that they were not liable to pay arrears of rent much less the amount of Rs. 28,34,568.00 claimed for the period during which the building was sealed, they agreed that "The premises have now been de-sealed and we shall be making regular payment to you in terms of our agreement. "

(4) Therefore the appellant accepted the premises without the lift and mezzanine and agreed that they will also pay the rent regularly in future, though not for the 'sealed' period.

(5) Thereafter, inasmuch as the appellant refused to pay rent for the period during which the building was sealed, the respondents terminated the tenancy by notice dated 12.10.1993 with effect from 13.10.1993 and filed a suit for possession (accepting appellant was in posession) and also for arrears of Rs. 26,28,833 for the period 27.10.1991 to 15.7.1992 during which period the building was sealed and also claimed Rs. 7,08,642 for the period from 1.9.1993 to 31.10.1993. The plaintiff also stated in para 14 of the plaint that the plaintiff proposed to file a separate suit against the appellant for damages with effect from 1.11.1993 onwards. The suit was laid in September,1994.

(AFTER the respondent filed a suit for possession and arrears of rent, as stated above, the appellant Air India filed a separate suit in 1995 claiming refund of Rs. 1.26 crore already paid to the respondent alleging that the said amount towards monthly rent was paid under "mistake", hi the said plaint the appellant referred to two categories of payments. It mentioned that it had paid rent for November,1989 and also for the period from 1.12.1989 to February,1990. However appellant said that the following amounts were paid under "mistake:-"

RENT for March, 1990 to March, 1991 : Rs. 46.06 lakh

RENT for April, 1991 to November'91 : Rs. 28.34 lakh

RENT for 16.7.92 to the end of that month : Rs-2,05,375.

RENT for August'92 to August'93 : Rs. 46.06 lakh)

IN the present suit filed by the respondent for possession and arrears of rent, the respondent also filed I.A. 8919/94 seeking the following interlocutory reliefs:-

A)the appropriate ex-parte orders/directions be given directing the defendant to pay the plaintiff all arrears of rent @ Rs. 3,54,321.00 i.e. from 1.12.91 to 15.7.92 and from 1.9.93 to 31.10.93 and continue to pay the same during the pendency of the suit without prejudice to the rights and contentions of the parties.

B)such other/or further ex-parte order/direction may be passed in this regard which may appear to this Hon'ble Court be just/fit and proper in the facts and circumstances of the case.

(6) On the said application the learned Single Judge passed an order on 26.9.1995. By that order, he said that (i) the appellant was a tenant and (ii) whether as rent/damages for use and occupation, whatever nomenclature is applied - the appellant was liable to pay at Rs. 3,54,321 p.m. The learned Judge directed the appellant to inform him how much was due upto 30.9.95 (30.9.92 is a mistake in the order). The figure was mentioned as Rs. 88,59,125.00 . It was pleaded for the appellant that Rs. 12 lakhs of the appellant remained with the plaintiff unadjusted. The learned Judge therefore deducted the said amount and directed the appellant to deposit Rs. 66,59,125.00 in 12 weeks, and pay Rs. 3,54,321 p.m. w.e.f. 0ctobere,1995, the first of such payment to be made on or before 11.11.95, and subsequent payments to be made by 10th of every succeeding month. It i¯ against this order that the appellant has filed this appeal.

(7) In this appeal, it is argued by the learned counsel for the appellant that the learned Single Judge was in error

(A)in arriving on a figure of Rs. 88,59,125.00 comprising of

(I)rent for the period 1.12.91 to 15.7.92 at Rs. 3,54,321 = Rs. 26,28,833

(II)rent for the period 1.9.93 to 31.10.93 and damages for use and occupation for the period 1.11.93 to 30.9.95 at Rs-3,54,321 p.m. = Rs.62,30,287

RS.88,59,125

(B)in directing payment of Rs. 66,59,125.00 (after adjusting Rs. 12 lakhs available with respondent as advance) and

(C)in directing payment in future, pending eviction, at the rate of Rs. 3,54,321/"-.

AFTER the impugned order the appellant has paid the sum of Rs. 66,59,125 as directed under the impugned order.

THREE specific contentions were raised before us by the learned counsel for the appellant:-

(1)In para 14 of the plaint, the respondent-plaintiff had reserved its right to claim damages from 1.11.93. Therefore the claim for past profits from 1.11.93 to September,1994 (date of suit) as also the claim for future profits from date of the suit (September,94) must be deemed to have been reserved and no damages could be awarded either in the suit or in the Ia for the period after suit i.e. after September,1994 upto 30.9.95.

(2)After the suit premises was desealed on 15.7.92, it was not in an usable condition and there was also a threat of demolition by the New Delhi Municipal Corporation, the building was not in 'top quality' and the appellant was prepared to pay the agreed rent only if the building was in 'top quality'. As there was a breach of the said term, no rent was payable even if the building was in possession upto 31.10.93 (when the tenancy was terminated) nor any damages could be recovered for any period thereafter.

(3)In view of the judgment of the Supreme Court in Mohd. Amin vs. Vakil Ahmed , in the absence of a prayer for future profits, a relief regarding future profits cannot be granted.

CONTENTION1

IN para 14 of the plaint, the following reservation was made by the respondent-plaintiff:

"THAT the defendant No.1 has not paid to the plaintiff, the rent for the period from 1.12.91 to 15.7.92 and from 1.9..1993 to 31.10.1993. The tenancy of the defendant was determined by notice dated 12th October, 1993 with expiry of the tenancy month of October,1993. Therefore, w.e.f. 1.11.93, the plaintiff is entitled to the damages,for which the plaintiff shall file a separate suit against the defendant".

(8) While it is the contention of the respondent-plaintiff that the above reservation in para 14 of the plaint concerns only the period from 1.11.1993 upto September, 1994 when the suit was filed, it is the contention of the appellant's counsel that this reservation in the plaint concerns even the period after suit and hence no damages for use and occupation could be awarded from the date of plaint (September, 1994) to 30.9.95 nor for every month beyond 30.9.95, and the impugned order is bad.

(9) In our view, para 14 of the plaint has to be considered in the context of the entire plaint and cannot be read in an isolated manner. The reservation has to be read reasonably and viewed in that manner would, in our opinion, apply only for the period from 1.11.93 upto date of filing of the suit for ejectment (Seplcmber,1994) and does not concern the period after the filing of the suit. The plaintiff would not have made any reservation for the claims relating to future damages from date of suit for the following reasons.

(10) The Supreme Court in Gopalekrishna Pillai vs. Meenakshi Ayal explained the difference between a claim for past profits ana a claim for future profits in a suit for possession. The Supreme Court said "Order 20 Rule 12 of the Civil Procedure Code enables the Court to pass a decree for both past and future mesne profits, but there are important distinctions in the procedure for enforcement of the two claims. With regard to past mesne profits, the plaintiff has an existing cause of action on the date of the institution of the suit. In view of Order 7 Rules 1,2 and 7 of the Civil Procedure Code and Section 7(1) of the Court Fees Act, a plaintiff must plead a cause of action, specifically claim a decree for past proffits, value the claim approximately and pay court fee thereon. With regard to future mesne profits, the plaintiff has no cause of action on the date of institution of the suit and it is not possible for him to plead this cause of action or to value it or to pay Court fee thereon at the time of institution of the suit. ..... But in a suit to which the provisions of Order 20 Rule 12 apply, the Court has discretionary power to pass a decree directing an enquiry into future mesne profits and the Court may grant a general relief though it is not specifically asked for in the plaint".

(11) Thus, on the date of suit, there could be no cause of action for the future profits. It would accrue, day by day, only after the suit.

(12) Therefore, no question of reserving relief in respect of cause of action concerning any right to mesne profits from date of the plaint, could arise. A question of reserving a right to seek relief could arise only in respect of an existing cause of action on date of suit, such as (here) a right to past mesne profits. Therefore this reservation in para 14 of the plaint cannot, in law and in fact, be attributed to a cause of action which has not arisen by date of suit. The words in the plaint, "THEREFORE,w.e.f. 1.11.93, the plaintiff is entitled to the damages, for which the plaintiff shall file a separate suit against the defendant".

cannot, in view of what is explained by the Supreme Court, be deemed to be a reservation in respect of a claim for future mesne profits arising from date of suit. We cannot put a construction on para 14 of the plaint to the effect that the plaintiff reserved a right to a relief in respect of which no cause of action arose (i.e. future profits) on date of suit. Following the judgment of the Supreme Court in Gopalakrishna Pillai's case the contention of the learned counsel for the appellant is rejected and we hold that the reservation in para 14 does not preclude the Court from award- ing future profits, in this suit itself, that might have later accrued, as on the date of any order/decree that may be passed. Contention 2

(13) Coming to the second contention that after the premises was desealed on 15.7.92, it was not in a usable condition and there was also a threat of demolition, we do not find merit in that contention.

(14) In this connection, a preliminary aspect of the matter has to be first cleared. Clause 4 of the agreement dated 1.11.89 contemplated that the tenanted building should be in top quality and the renovation/reconstruction shall be completed within 3 months of the starting of the job and for this purpose, the appellant-tenant would vacate the premises and handover possession to the landlord and till completion of the renovation work, only 20% of the rent alone need be paid.

(15) Learned counsel for the appellant, Sri Ganesh fairly and rightly stated before us that the renovation work was completed by the respondent and possession was thereafter given back to the appellant tenant. In fact this is clearly borne out by the correspondence between the parties. By letter dated 9.11.89, the landlord wrote to the appellant-tenant for handing over possession for purpose of enabling the landlord to complete renovation; the letter dated 29.11.89 of the landlord shows possession was given by the appellant to the landlord; the letter dated 2.3.90 of the landlord to the appellant says that the landlord has "completed the work on mezzanine and the repairs on the second floor of No.1, Scindia House, New Delhi, which is under your tenancy. We now wish to handover the same to you from today." It also says: "The final painting and polishing work, to be taken up by us can be undertaken as and when you are ready with your interiors". The appellant, in its letter dated 28.12.90 stated: "As we are already in the process of starting renovation work", and that is obviously .referable to the "interiors". Letter dated 16.7.91 of appellant also refers to difficulty in removing furniture and the respondent has to carry on maintenance by covering the same with . tarpaulins. The above correspondence amply justifies the fair submission of the learned counsel for the appellant that there is no dispute now as to whether the renovation work was done by the respondent or not.

(16) There is also prima facie no material to say that there was threat of demolition by the Ndmc, even after the desealing. There is no such plea raised in any letter of the appellant to the respondent, after 15.7.1992 . In fact the respondent-landlord, as already stated, filed a writ petition and the same was allowed on 9.7.92. On 14.7.92, the appellant wrote to the landlord" "AS soon as Ndmc officials remove the seal of the premises, we will start our normal functioning from the said premises...."

(17) On 20.8.92, the appellant wrote to the landlord another letter and in para 3 thereof it was stated: "THE premises have now been desealed and we shall be making regular payment to you in terms of our agreement."

(18) In the light of the above letters by the appellant, the contention that there was threat of demolition after 15.7.92 cannot also be accepted. The contention that the building was not renovated and the other contention that there was threat of demolition, are therefore rejected.

CONTENTION3

(19) We shall then come to the last contention based on Mohd. Amin vs. Vakil Ahmed . In that case it was no doubt held by the Supreme Court that in the absence of a prayer for future mesne profits, the Court could not grant a decree directing ascertainment of future profits under Order 20 Rule 12 CPC.

(20) The above judgment was however distinguished by Subba Rao, C.J. in Atchamma vs. Rami Reddy (AIR 1958 Sc 517). Both the decisions were considered by the Supreme Court in Gopalakrishna Pillai vs. Meenakshi Ayal . The judgment of the Andhra Pradesh High Court and an earlier Full Bench of the Madras High Court in Basarayya vs. Guravayyar were approved while the decision in Mohd. Amin vs. Vakil Ahmed was distinguished, on the ground that that was a suit not for possession and past profits but for declaration of the title and possession. It was held that where the suit is for possession and past profits, the Court could grant relief for future profits from date of suit even if there was no prayer in the plaint seeking future profits.. Their Lordships said that the Court may grant such a "general relief though it is not specifically prayed in the plaint". In the case before us the position is identical. The suit is for possession and there is already a relief for the period in a sum of Rs. 7,08,642 from 1.9.93 to 31.10.93 and for claim of Rs. 26,28,833 for the period 1.12.91 to 15.7.92 - both prior to suit.. Following the Supreme Court judgment in Gopala Krishna Pillai's case, , we find that the direction in regard to future damages is perfectly in order.

(21) Before parting with the case, we may state that the landlord (respondent) had given notice under Section 106 of the Transfer of Property Act on 12.10.93 terminating the tenancy with effect from 31.10.93 and the suit was Filed in September,1994 for eviction and other reliefs. The defendant-appellant (AIR INDIA), which is a public-sector organisation, has not vacated the premises so far, in spite of the fact that admittedly, it has taken another premises on lease at a monthly rental of Rs. 8.27 lakhs and paid advance deposit and in spite of the fact that the appellant is not using the premises in question (as is revealed from inc Local Commissioner's report dated 28.2.96, which shows that the premises inside is in very bad shape). It is unfortunate that public monies of Rs. 66 lakhs and even now Rs. 3 lakhs and odd per month are being incurred for this building which is not under use. Rs. 3 lakhs and odd directed to be paid in future is, in fact, on the basis of 1989 rent. Damages could be more. It is unfortunate that public monies are being squandered in this fashion. It is a fit case for an enquiry.

(22) For the aforesaid reasons, the order under appeal is affirmed and the appeal is dismissed.