Life Insurance Corporation Of ... vs Narender Nath Gauba & Ors.
2009 Latest Caselaw 93 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

                   +     W.P.(C) 571/1993

                                           Date of decision : 15.01.2009

IN THE MATTER OF :

LIFE INSURANCE CORPORATION OF INDIA       ...   Petitioner
                   Through:       Mr. Mohinder Singh and
                                  Mr. Ankur Goel, Advocates

                   versus


NARENDER NATH GAUBA & ORS.                     ..... Respondents
                  Through:                 Nemo.


CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

     1. Whether Reporters of Local papers may
        be allowed to see the Judgment? Yes.

     2. To be referred to the Reporter or not? Yes.

     3. Whether the judgment should be
        reported in the Digest? Yes.

HIMA KOHLI, J. (ORAL)

The present writ petition is directed against the judgment dated

16.01.1992 passed by the learned ADJ before whom, the order dated

21.04.1990 passed by the Estate Officer was assailed.

2. In a nutshell, the facts of the case are that the respondent No. 1

was a tenant under the petitioner, in respect of a portion of Flat No. 1,

Shankar Niwas Building, 1515-17, Bhagirath Palace, Chandni Chowk, Delhi,

which is a public premises as defined under Section 2 of the Public Premises

(Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred to as

'the Act'). The respondent No. 1 was a tenant specifically in respect of a

premises measuring 196.37 sq. ft. (approximately) on the first floor of the

aforesaid premises at a monthly rent of Rs.79.18 paise excluding water and

electricity charges. It was the case of the petitioner that as the respondent

No.1 was a habitual defaulter of payment of rent and other dues and also

sublet the premises to the respondent No. 2 without the written consent of

the petitioner, the tenancy of the respondent No.1 was terminated.

However, neither the respondent No.1, nor the respondent No. 2 vacated

the premises or paid the damages. Hence, the petitioner/Corporation

initiated proceedings under Sections 5 and 7 of the Act before the Estate

Officer for eviction and recovery of rent/damages.

3. The Estate Officer, vide order dated 22.12.1980, evicted the

respondents from the premises. The said order was assailed by the

respondents by filing an appeal before the Additional District Judge, Delhi.

Vide order dated 11.10.1983, the learned ADJ dismissed the appeal

preferred by the respondents No. 1 and 2. Against the aforesaid order, a

writ petition was preferred by the respondents No.1 and 2, registered as

Civil Writ Petition No. 2713/1983. It is stated by the counsel for the

petitioner that during the pendency of the present writ petition, the

aforesaid writ petition has been disposed of and the petitioner has received

the vacant possession of the premises in question.

4. Insofar as damages in respect of the premises were concerned,

the petitioner claimed damages from the respondents No. 1 and 2 on

account of unauthorized use and occupation @ Rs.981.85 paise per month

w.e.f. 01.01.1981 to 30.09.1985 (i.e., @ Rs.5/- per sq. ft. per month) and

w.e.f. 01.10.1985 onwards, at the same rate, besides water charges

alongwith interest @ 12% per annum. Thereafter, the petitioner initiated

proceedings under the Act before the Estate Officer and filed a claim. The

Estate Officer issued a notice to show cause dated 14.11.1985, to the

respondents calling upon them to show cause as to why they should not pay

the damages as indicated in the said notice for the period w.e.f. 01.01.1981

to 30.09.1985 and for the period w.e.f. 01.10.1985 onwards, damages at

the same rate alongwith interest @ 12% per annum till the decision of the

case, apart from water charges. The aforesaid notice to show cause was

duly replied to by the respondent No. 1 vide reply dated 26.12.1985. The

proceedings before the Estate Officer culminated in an order dated

21.04.1990 whereunder, the Estate Officer held that the respondents No. 1

and 2 would be liable to pay damages to the petitioner @ Rs.5/- per sq. ft.

per month w.e.f. 14.11.1985, till the payment and w.e.f.1.4.1990, at the

same rate alongwith water charges as claimed by the municipal authority till

their eviction from the said premises alongwith interest at the rate of 10%

per annum in case the damages were not paid within ten days of their falling

due.

5. Aggrieved by the aforesaid order of the Estate Officer, the

respondents No. 1 and 2 preferred an appeal before the learned ADJ, Delhi,

which was decided vide order dated 16.01.1992. The learned ADJ partly

allowed the appeal preferred by the respondents by setting aside the order

of the Estate Officer insofar as it directed payment of damages to the

petitioner @ Rs.981.85 paise w.e.f. 01.10.1985 to 31.03.1990. Instead,

directions were issued to the Estate Officer that arrears of damages w.e.f.

01.01.1981 be calculated at the rate of Rs.79.18 paise per month.

Aggrieved by the aforesaid order, the petitioner/LIC has preferred the

present writ petition. Respondent No.2 could not be served by ordinary

process and hence was served by way of publication in the press. However,

none appeared on its behalf. Though appearance was entered by the

respondent No.1, counter affidavit has not been filed. Nor has any one

appeared for the respondent No.1 even today, though matter has remained

on the regular board since 6.1.2009.

6. Counsel for the petitioner states that the impugned order dated

16.01.1992 is erroneous inasmuch as the learned ADJ wrongly arrived at the

conclusion that the Estate Officer decided damages for the period w.e.f.

01.09.1985 to 31.03.1990 irrespective of the fact that no show cause notice

for claiming damages for the said period had been issued or served upon the

respondents No. 1 and 2. In this regard, he draws the attention of the Court

to the show cause notice dated 14.11.1985 (Annexure-B). A perusal of the

aforesaid notice shows that the Estate Officer had called upon the

respondents to show cause as to why they should not pay damages for the

period w.e.f. 01.01.1981 to 30.09.1985, as also for the subsequent period

w.e.f. 01.10.1985 onwards, till a decision of the case. In these

circumstances, it has to held that the observation of the learned ADJ to the

effect that the Estate Officer assessed the damages for the period, which

was not even referred to him, is contrary to the documents on the record.

As a consequence, it can also not be held that in the absence of notice to

show cause, the respondents were not given a fair opportunity of hearing.

Hence, the order passed by the learned ADJ to the aforesaid extent, being

contrary to the material placed on the record, cannot be upheld and is set

aside.

7. Insofar as the assessment of damages is concerned, the

observations of the Estate Officer, are contained from page-13 onwards of

his order. He observed that the respondents had not led any documentary

evidence to show that the market rate of rent prevalent at the time of

termination of their tenancy was less than what has been claimed by the

petitioner/corporation. While discussing the importance of the commercial

area in question, the Estate Officer held that being an area of high

commercial value, the premises in question was likely to fetch a good rental.

The material placed on record by the petitioner was taken into consideration

by the Estate Officer. In this regard, he referred to a registered Lease Deed

executed on 29.01.1986 between the petitioner/Corporation and one Shri

Sudhir Gupta, pertaining to the same building, wherein the monthly rent was

fixed at the rate of Rs.300/- for portion measuring 58.51 sq. ft. payable

w.e.f. 01.09.1985, which comes to more than Rs.5/- per sq. ft. per month.

It was also taken note of by the Estate Officer that the said premises was

situated under the staircase and was quite insignificant as compared to the

premises under the occupation of the respondents, which was situated on

the first floor of the building. The petitioner also produced the original Rent

Ledger in respect of the premises, let out to Shri Sudhir Gupta to prove that

the rent was regularly paid and the agreement was duly complied with since

01.09.1985.

8. Taking into consideration the aforesaid material placed on the

record and keeping in view the provisions of Rule 8 of the Act, the Estate

Officer turned down the plea of the petitioner/Corporation to claim prevalent

market rate for the block of four years, eight months starting from the

period w.e.f. 01.01.1981 to 31.08.1985. He held that the same could not be

allowed in the absence of any material, and as the prevalent market rent

could be ascertained, hence, benefit was given to the respondents by

holding that they were liable to pay damages equal to the agreed monthly

rent for the period w.e.f. 01.01.1981 to 31.08.1985. For the subsequent

period w.e.f. 01.09.1985, it was held that the respondents were liable to pay

damages at the rate of Rs.5/- per sq. ft. per month, i.e., Rs.981.85 paise

per month till the actual vacation of the premises, besides water charges.

As against the claim of the petitioner for grant of interest at the rate of 12%

per annum, the Estate Officer granted interest at the rate of 10% per annum

on the arrears w.e.f. 14.11.1985, i.e., the date of issue of the notice to show

cause till payment.

9. In the impugned order dated 16.01.1992, the learned ADJ

arrived at a conclusion that the Estate Officer had not applied his

independent mind and was biased in arriving at the aforesaid conclusion. He

went on to observe that the cross-examination of the witnesses produced by

the petitioner to ascertain market rent, had not been taken into

consideration by the Estate Officer before returning a finding with regard to

the quantum of damages. He also observed that apart from the case of

Sudhir Gupta, where a letting order was passed by the competent authority,

i.e., the Zonal Manager of the petitioner/Corporation, no other case of letting

was considered by the Estate Officer. It was also noted that there was

another tenant in the said property, namely, Hari Talkies from whom

damages were claimed at the rate of Rs.1.50 paise per sq. ft. and yet

another tenant, namely, Shaukat Abdul Tahir, from whom damages were

claimed at the rate of Rs.2/- per sq. ft.

10. The order of the Estate Officer has been faulted by the learned

ADJ by making an observation to the effect that he ought not to have placed

intrinsic reliance upon the decision of the Zonal Manager of the

petitioner/Corporation for the purpose of awarding damages against the

respondents. In this regard, counsel for the petitioner submits that insofar

as the aforesaid two tenants, referred to by the learned ADJ in para-3 of the

impugned order, are concerned, their tenancy had been terminated by the

petitioner/Corporation long before the termination of the tenancy pertaining

to the premises under the occupation of the respondents and that litigations

in respect of the said tenancies were also pending. He also states that the

learned ADJ erred in arriving at the conclusion that the amount of Rs.1.50

paise per sq. ft. and Rs.2/- per sq. ft. being paid by the aforesaid tenants,

was towards `rent'. This fact is borne out from a perusal of the impugned

order where the word 'damages' and not `rent' is used in respect of the

amounts paid by the aforesaid parties. Furthermore, the observation of the

learned ADJ that the Estate Officer could not have relied on the rate as

decided by the Zonal Manager of the petitioner/Corporation while assessing

quantum of damages is unjustified for the reason that the Lease Deed

registered in respect of the premises in question and relied upon by the

Estate Officer, was voluntarily entered into by a third party with the

petitioner/Corporation. It was not a case where any `damages' were

imposed by the Zonal Manager, but a case where a party entered into the

arrangement of his free will and volition and had no objection to pay the rent

agreed upon.

11. That the registered Lease Deed came into existence on

29.01.1986, while damages in respect of the premises, subject matter of the

present writ petition, were fixed by the Estate Officer for the period w.e.f.

01.09.1985, cannot be a ground to hold that the said Lease Deed could not

be taken into consideration for the purpose of fixing the rent for a period

starting from three months prior to existence of the registered Lease Deed.

A perusal of The Public Premises (Eviction of Unauthorized Occupants)

Rules, 1971 indicates the parameters, which are required to be taken into

consideration by the Estate Officer while assessing damages for

unauthorized use or occupation of any public premises. One of the criteria

for assessing the quantum of damages is the rent which could have been

realized if the premises had been let out for the period of unauthorized

occupation, to a private person. It is undisputed that Shri Sudhir Gupta was

a private person, who, of his own free will, approached the

petitioner/Corporation for taking on lease a portion of premises on the

ground floor under the staircase of the same premises, wherein the

respondents were in occupation, the only difference being that the

respondents were under occupation of the first floor of the same premises.

Hence, there is no scope of holding that there was lack of exercise of choice

by the said tenant while entering into the Lease Deed with the

petitioner/Corporation. On the basis of the evidence led before him, the

learned Estate Officer was justified in assessing the quantum of damages on

the basis of the guidelines laid down in Rule 8. Thus, the Estate Officer

cannot be faulted for placing reliance on the aforesaid Lease Deed.

Furthermore, apart from cross-examining PW-1, a witness who appeared on

behalf of the petitioner/Corporation, the respondents on their own did not

produce any evidence to demolish the case of the petitioner/Corporation for

claiming damages at the rate of Rs.5/- per sq.ft. per month and to establish

the rent that would have been realized if the premises had been let out for

the period of unauthorized occupation to a private person.

12. In view of the aforesaid discussion, this Court is of the opinion

that the present writ petition is liable to be allowed. Accordingly, the

impugned order dated 16.01.1992 in so far as it sets aside and quashes the

order of the learned Estate Officer directing the respondents No. 1 and 2 to

pay damages at the rate of Rs.981.85 paise for the period w.e.f. 01.10.1985

to 31.03.1990, is set aside. The order of the Estate Officer is restored. The

writ petition is disposed of.

13. Parties are left to bear their own costs.

HIMA KOHLI,J JANUARY 15, 2009 rkb/mk/sk