Syndicate Bank vs Kewal Krishan Chopra & Ors.
2008 Latest Caselaw 1957 Del

*                         IN THE HIGH COURT OF DELHI

                     Judgment reserved on : September 20, 2008
%                    Judgment delivered on : November 5, 2008


+                         RFA 73/2008

SYNDICATE BANK                                 ..... Appellant
         Through:         Mr. V.K.Dhar, Advocate

                          VERSUS

KEWAL KRISHAN CHOPRA & ORS.            ..... Respondents
         Through: Mr. Ravi Gupta, Advocate


                          RFA 75/2008

SYNDICATE BANK                                 ..... Appellant
         Through:         Mr. V.K.Dhar, Advocate

                          VERSUS

KEWAL KRISHAN CHOPRA & ORS.            ..... Respondents
         Through: Mr. Ravi Gupta, Advocate


                          RFA 77/2008

SYNDICATE BANK                                 ..... Appellant
         Through:         Mr. V.K.Dhar, Advocate

                          VERSUS

KEWAL KRISHAN CHOPRA & ORS.            ..... Respondents
         Through: Mr. Ravi Gupta, Advocate

CORAM:

Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R. Midha

1. Whether reporters of local papers may be allowed
   to see the judgment?

2. To be referred to the Reporter or not?

3. Whether judgment should be reported in Digest?

RFA Nos.73/2008, 75/2008 & 77/2008                     Page 1 of 9
 : PRADEEP NANDRAJOG, J.

1. Vide three separate lease deeds executed by the

respondents in favour of the appellant entire second floor and

two portions on the third floor of property bearing Municipal

No.66, Swami Shardanand Marg, Delhi were leased to the

appellant for a period of 5 years with effect from 1.5.1981 to

30.4.1986.

2. Property leased on the second floor ad-measured

1855 sq.ft. The two portions leased on the 3rd floor ad-

measured 1085 sq.ft. and 770 sq.ft. respectively. The rent for

the second floor portion was Rs.12,985 per month. For the

portion ad-measuring 1085 sq.ft. on the 3rd floor the monthly

rent was Rs.7,595/-. For the portion ad-measuring 770 sq.ft.

on the 3rd floor the monthly rent was Rs.10,000/-.

3. For each portion let out, a monthly maintenance

charge towards lift and water pump was also payable. Said

amounts are not being noted by us for the reason the instant

appeal relates only to the question of determination of mesne

profits for the period 1.10.1992 to 31.7.1999.

4. After expiry of the lease period on 30.4.1986, with

effect from 1.5.1986 till 30.4.1991, all leases were extended

with rent enhanced by 40%.

5. The respondents were prepared to further extend

the lease period by a period of 5 years with effect from

1.5.1991 but demanded further 40% increase in rent. The

bank did not accept the same.

6. Alleging that appellants had lost the right to occupy

the three portions as the lease period had expired by efflux of

time and additionally pleading that by way of abundant

precaution the leases were determined, respondents sought

ejectment of the appellants and claimed mesne profits @

Rs.40/- per sq. foot per month with effect from 1.10.1992. The

respondents also claimed additional money for the amenities

provided.

7. The appellant vacated the three tenanted premises

on 31.7.1999. Vide impugned decrees dated 29.9.2007, the

three suits stand disposed of determining mesne profits @

Rs.23/- per sq. foot per month with effect from 1.10.1992 till

30.7.1999. Additionally, the respondents have been entitled to

receive Rs.2,000/- per month for the amenities of life provided

by them and Rs.400/- per month for water pump charges.

8. The learned Trial Judge has determined fair market

rent of the subject property at Rs.23/- per sq. foot per month

with reference to property bearing Municipal No.39, G.B.Road,

Delhi which was let out vide lease deed Ex.PW-2/2 at a

monthly rent of Rs.23/- per sq. foot with effect from 21.6.1996.

9. With respect to property No.39, G.B.Road, Delhi the

issue of comparison was urged by the appellant on two counts.

Firstly, that the said property was situationally and locationally

in an advantageous position being closer to Ajmeri Gate Chowk

and that the suit premises was 400 meters further down the

road and away from Ajmeri Gate Chowk having many brothel

houses in between. Thus, appellant urged before the learned

Trial Judge that due to being further away from Ajmeri Gate

Chowk and having brothel houses in between the rent of the

subject property was less. Second contention urged was that

the lease deed Ex.PW-2/2 is dated 21.6.1996 and hence the

same cannot be a good measure of fair market rental as of

1.10.1992.

10. Both contentions have been negated by the learned

Trial Judge holding that the distance from Ajmeri Gate Chowk

and brothel houses in between made no difference to the rent

of the suit premises.

11. We find no reasons given by the learned Trial Judge

as to why the rental evidenced by Ex.PW-2/2 dated 21.6.1996

should form the basis to fix the rent with effect from

1.10.1992.

12. The only issue which required to be adjudicated is

whether property No.39, G.B.Road, Delhi is comparable with

property No.66, G.B.Road, Delhi and whether Ex.PW-2/2 would

be good evidence of rental as of 1.10.1992.

13. Pertaining to the question of situational

advantageous location of property No.39, G.B. Road, Delhi, we

may note that as per the testimony of the witnesses of the

appellants the said property is little away from Ajmeri Gate

Chowk. The suit property bearing No.66, Shardanand Marg,

Delhi is 400 meters down the road. It is not in dispute that

between the two properties a number of brothel houses are

operating.

14. Inherent in every comparative analysis of two

properties is an element of guesswork for the reason no two

properties can be identically situate. There are bound to be

minor variations in the locational advantages and

disadvantages of two properties. Thus, there can be no

straitjacket formula in matters of notional determination of

rents.

15. Certainly, a property abutting a crossing i.e. a

chowk and in particular if the same happens to be a

commercial property would be situated locationally

advantageous vis-a-vis a property down the lane and away

from the crossing (chowk).

16. G.B.Road commences at Ajmeri Gate and leads up

to Lahori Gate. The road is in the wall city. Buses plying on

Asaf Ali Road, Pahar Ganj Road, New Delhi Railway Station and

Hauz Qazi cross Ajmeri Gate Chowk and to reach buildings at

G.B.Road one has to either walk down or take on cycle

rickshaw. G.B.Road is an over-crowded road with traffic

moving very slowly. Thus, a property on G.B.Road nearer

Ajmeri Gate Chowk would certainly be situated in a locational

advantageous position viz-a-viz a property further down said

road.

17. We are not too sure whether existence of brothel

houses would diminish the rental value of the commercial

property on G.B.Road and more so when the user is for

banking purposes, for the reason, activities at the brothel

house usually commence in the secrecy of darkness and

banking transactions took place in sunlight meaning thereby,

during banking business hours the activities in a brothel house

would be in a slumber, being nocturnal in nature.

18. Thus, while comparing the rent of property No.39,

G.B.Road, Delhi with the suit property some discount in the

rental value has to be accounted for on account of the

locational advantage of the former.

19. Inherently, a rent fetched as of 21.6.1996 cannot be

treated as a fair rental as of 1.10.1992.

20. In the instant case there is intrinsic evidence that

the rental of the suit premises had not risen to Rs.23/- per sq.

foot per month in the year 1992. The said intrinsic evidence is

the offer by the landlords to renew the lease(s) with effect

from 1.5.1991 at a rent increased by 40% of the last paid rent.

21. To understand the impact thereof, qua the second

floor portion, the rent demanded by the landlords was

Rs.25,450.60 per month.

22. As noted above, the second floor property let out

ad-measured 1855 sq. foot. Thus, the monthly rent per month

demanded by the landlords comes to 25450 ÷ 1855 =

Rs.13.72 per sq. foot per month. Now, it can reasonably be

presumed that the landlords had evaluated the market while

making the offer to renew the lease for a further period of 5

years provided the tenant pays the rent enhanced by 40% i.e.

increase the same from Rs.18179/- per month to Rs.25450.60

per month for the second floor portion. Similar would be the

position for the portions on the 3rd floor. We thus hold that the

intrinsic evidence on record requires it to be held that as of

1.5.1991 the fair market rent for the property would be Rs.14

per sq. foot per month.

23. The past history of the property shows that the

landlords were agreeing to continue with the lease, with the

rent increasing by 40% every 5 years. Thus rent at Rs.14 per

sq. foot per month as of 1.5.1991 enhanced by 40% comes to

Rs.19.50 per sq. foot per month with effect from 1.5.1996.

24. Property No.39, G.B.Road has been let out on

21.6.1996 at a monthly rent of Rs.23/- per sq. foot. We have

already held that the said property is situated in an

advantageous position due to its location and hence would

fetch a better rent qua the suit property.

25. What better proof we can find of the said conclusion

of fact other than the fact that increasing the rent of the

subject property by 40% every 5 years, its rent as of 1.5.1996

comes to Rs.19.50/- per sq. foot per month.

26. Since the mesne profits have to be awarded with

effect from 1.10.1992 to 31.7.1999 we deem it appropriate to

determine the fair market rent of the subject property as of the

two dates and award mesne profits on the weighted average

basis.

27. Taking Rs.19.50 per sq. foot per month as the fair

market rent as of 1.5.1996 and suitably enhancing the same

over the next 3 years i.e. by 30% thereof and rounding off the

figures, the fair market rent as of 31.7.1999 comes to Rs.25.50

per sq. foot per month. The weighted mean average comes to

Rs.19.75 per sq. foot per month.

28. We thus dispose of the 3 appeals modifying the

impugned judgment and decree dated 29.9.2007 by

determining the mesne profits for the 3 properties from

1.10.1992 to 31.7.1999 @ Rs.19.75/- per sq. foot per month.

We maintain the directions in the impugned decree pertaining

to other charges.

29. We further hold that the respondents would be

entitled to interest on the mesne profits awarded by us with

effect from the date rent was to be paid each month, of course,

while calculating the interest the last agreed rent which was

tendered by the bank and received by the respondents without

prejudice to their rights would be adjusted. Similarly, while

quantifying the decretal amount the amount paid each month

would be adjusted. The interest payable by the appellant to

the respondents would be @6% per annum.

30. We note that the appellant has deposited 50% of

the decretal amount in this Court pursuant to order dated

13.5.2008 passed in each appeal. Since the respondent would

be entitled to more than 50% decretal amount even as per the

modified decree passed by us, we direct the Registry to pay

over the amount deposited by the appellant to the

respondents.

31. No costs.

PRADEEP NANDRAJOG, J.

J.R. MIDHA, J.

November 5, 2008 mm