R.K.Chaudhary Alias Rajan & Anr. vs Prof. Ram Prakash
2010 Latest Caselaw 3770 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI


+                      RSA No. 85/2006


                                  Date of Decision: August 13, 2010


       R.K.CHAUDHARY ALIAS RAJAN & ANR. ....Appellants

                              Through:     Ms.Madhu Tewatia,
                                           Advocate.

                       Versus


       PROF. RAM PRAKASH                              .....Respondent

                              Through:     Respondent in person.

       %
       CORAM:
       HON'BLE MS. JUSTICE ARUNA SURESH

     (1)         Whether reporters of local paper may be
                 allowed to see the judgment?
     (2)         To be referred to the reporter or not?          Yes
     (3)         Whether the judgment should be reported
                 in the Digest ?                                 Yes

                           JUDGMENT

ARUNA SURESH, J.

1. Respondent/Cross-Objector had filed a suit for

possession as well as mesne profits against the appellants, who were

inducted by him as tenants in the property bearing No B-48, Ground

and Basement, South Extension, Part-I, New Delhi after the lease of

the property in suit had expired. Decree of the Trial Court was

challenged in appeal by the appellants. Respondent filed his cross-

objections questioning the rate and quantum of mesne profits

awarded to him by the Trial Court. Appellate Court vide impugned

judgment and decree dated 17th December, 2005 dismissed the

appeal as well as the cross-objections. Hence, second appeal was

filed by the appellants, wherein respondent has filed his cross-

objections.

2. Regular Second Appeal was dismissed by this Court on

20th March, 2007. Cross-objections were dismissed by this Court

vide a detailed judgment dated 7th January, 2008. Thereafter

respondent filed an application seeking review of the order dated 7th

January, 2008. The said application was allowed by this Court on 7th

November, 2008 and the order dated 7th January, 2008 was recalled.

3. Following question of law need to be answered with

respect to the cross-objections:-

"Whether the Courts below were justified in ignoring the rents reflected in Ex.PW-1/28 to Ex.PW-1/30 and additionally were the Courts justified in not awarding damages payable, if lessee continued to occupy the leased premises

beyond the period of lease, at 6 times the agreed rent?"

4. It is submitted by the respondent, who appeared in

person that while awarding mesne profits to him, courts below had

misconstrued the prevalent market rent of the premises ignoring the

principles of law laid down in various authorities. The courts below

should have awarded mesne profits equivalent to market rent

prevalent at the relevant time. The Appellate Court granted mesne

profits/damages at the rate of Rs.7.20 per square feet per month

w.e.f. 1st May, 1997 to 30th June, 2005 and Rs.9.60 from 1st July,

2005 till vacation of the premises for 2084 square feet area of suit

premises against the monthly rent @ Rs.5.30 being then paid by the

tenant whereas he was entitled to six times the agreed rate of rent.

He further submitted that the courts below went wrong in holding

that mesne profits claimed by the respondent six time the rent was

penal and should not be awarded. He has submitted that he is

entitled to mesne profits at the rate of Rs.60,000/- per month for use

and occupation of the property by the appellants w.e.f.1st May, 1997

till he received the vacant possession of the suit premises from the

appellants.

5. It is also argued by the respondent that premises were

let out apparently for residential purposes but effectively for

commercial purposes and therefore, the courts below were not

justified in ignoring the rents reflected in Ex. PW-1/28 to Ex. PW -

1/30. He has referred to "Sohan Singh Anand & Ors. Vs. State

Bank of Patiala, 2003 (66) DRJ 191 'Marshall Sons & Co. Vs.

Sahi Oretrans & Anr.', 1999 (2) SCC 325 'Cement Corp of India

Vs. Purya etc.', 2005 RLR 14 (SC) 'Land Acquisition Officer and

Mandal Revenue Officer Vs. Narasaiah', AIR 2001 SC 1117

'P.S.Bedi Vs. The Project and Equipment Corporation of India

Ltd.', 'Anderson Wright & Co. Vs. Amar Nath Roy & Ors.', AIR

2005 SC 2457 'Nina International Pvt. Ltd. Vs. Saraswati

Industrial Syndicate Ltd.', 1999 II AD (Delhi) 201, and

'Anusuyaben Kantilal Bhatt Vs. Rashiklal Manilal Shah & Anr.',

(1997) 5 SCC 457.

6. Ms.Madhu Tewatia, counsel appearing on behalf of the

appellants while refuting the submissions made by the respondent

has argued that the courts below rightly did not consider the Lease

Deeds Ex.PW-1/28 to Ex. PW-1/30 as the said Lease Deeds relate to

commercial user of the property, whereas the property in suit was let

out for residential purposes only. Respondent has not produced any

evidence on record to prove the prevalent market rate of rent for

residential premises in the vicinity of the suit property and therefore,

she has submitted that both the courts below were right in awarding

maintenance by assessing the market rent at a reasonable rate and

therefore, respondent is not entitled to mesne profits as claimed by

him which is exorbitant and is penal in nature.

7. Property in question is the basement and ground floor

of house No. B-48, which was let out to the appellants by a

Registered Lease Deed Ex. PW-1/1 for a period of five years. The

rate of rent agreed for first three years was Rs.9,500/- per month for

the period from 1st May, 1992 to 30th April, 1995 and thereafter at

the enhanced rate of Rs.10,925/- per month w.e.f. 1st May, 1995 till

30th April, 1997. Admittedly, clause 7 clearly stipulates that the

demised property has been let out for a residential use according to

conditions prescribed by DDA and that the lessee shall abide by the

terms of the Lease.

8. Trial Court as well as the Appellate Court did take into

consideration the three leases pertaining to the adjoining property

No. B-50, South Extension, Part-I, New Delhi, which are Ex.PW-

1/28 to Ex. PW-1/30. These three leases are between different

owners of different portions of the said property but the lessee is the

same. All the three leases were executed on 18th June, 1997. These

three leases relate to three different portions on the second floor of

the said building. Clause 4 (d) of the three leases is common and is

relevant for the reason, it shows that three portions on the second

floor were let out for a commercial purpose. It reads as under:-

"Not to make any structural alteration of a permanent nature in the Premises as would permanently damage or destroy the Demised Premises except those which are necessary for the Lessee to make in order to carry on its business as however not to cause any damage to any other portion of the said building. But the Lessee can erect and remove temporary/partition walls."

9. Case of the respondent throughout has been that he had

let out the premises for residential purposes only and the premises

were being misused by the appellants for commercial purposes. He

has tried to submit that the Lease Deed was for commercial purpose

but it was given a face of a residential deed and therefore, the

prevalent rate of rent for commercial premises as per the Lease

Deeds Ex. PW-1/28 to Ex.PW-1/30 should be the basis for fixation

of mesne profits of the suit premises payable by the appellants.

Respondent cannot be allowed to raise this plea at the stage of

appeal. Respondent is estopped from his own act and admissions as

he has filed a suit against the appellants being Suit No.297/96 (new

No.168/02) prior to filing of the instant eviction suit, seeking

mandatory injunction against the commercial use and also additional

property tax liability incurred by him due to appellants' unauthorised

commercial use of the suit property. The said suit is still pending

adjudication. Thus, it is clear that not only in words but in spirit

Lease Deed Ex.PW-1/1 was executed inter se the parties for

residential purposes only.

10. Under the circumstances, the courts below rightly

ignored the rent stipulated in the Lease Deeds Ex.PW-1/28 to

Ex.PW-1/30 for the reason, an adjoining property, letting was for a

commercial purpose. Respondent did not place any evidence on

record either documentary or oral to prove that the rent for the

adjoining properties for commercial purpose as well as for residential

purpose prevalent in the market at the relevant time was comparable.

Trial Court did consider in evidence the three leases Ex. PW-1/28 to

Ex.PW-1/30 accepting them as proved documents. These leases

were not ignored for the reason that they were certified copies of the

registered documents and not the originals. Cement Corporation's

case (supra) and Land Acquisition Officer's case (supra) have been

considered to the facts and circumstances of the case. The courts

below took into consideration the said lease deeds while delivering

the judgment and they were not discarded on the ground that they

have been refuted by the appellants or being certified copies that the

respondent (plaintiff) has not been able to prove them. The Court

had, while not taking the rent agreements into account, gave reasons

that the rent agreements although pertained to the other buildings

similarly placed, but were let out for business purposes, whereas the

suit property in the present case had been let out for residential

purposes.

11. Respondent has submitted that appellant No.1 in his

evidence-in-chief Ex.D-1 has stated that the rate of rent in or around

the suit property in building of identical age and location is not more

than Rs.10-11 per square feet but, the courts below ignored the

admission made by him in his affidavit in evidence while fixing the

mesne profits of the suit premises. I do not find much force in his

submissions. Statement contained in the affidavit in evidence

cannot ipso facto be considered as an admission made by the

appellant regarding market rate of rent of residential houses in the

vicinity of the premises in suit. Perusal of his statement clearly

indicate that he has fixed the maximum limit of rent at Rs.10-11 per

square feet. Appellant has further deposed in the affidavit that the

building being residential in nature could not fetch a good rent as

risk of action by local authorities for misuse was always in the offing

and respondent could not have fetched a better rent than were being

paid by M/s CMCS i.e. Rs.10,925/- per month. Therefore, the rate of

rent as suggested by appellant No.1 in his affidavit in evidence

cannot be considered as an unequivocal, unambiguous and voluntary

admission on his part of rate of rent as Rs.10-11 per square feet

prevalent in the market at the relevant time.

12. In Marshal Sons' case (supra), the Apex Court

observed:-

"reasonable mesne profits which may be equivalent to the market rent should be awarded to prevent parties in wrongful possession from taking advantage of lengthy delays in proceedings and execution."

13. Respondent has cited Nina International's case

(supra) to support his submissions that an admission has been made

by the appellant in the affidavit regarding prevalent rate of rent in the

market. In the said case, owner claimed damages at the rate of

Rs.1,80,000/- per month. It was observed that Court had the

authority to fix damages for use and occupation more than that was

claimed by the owner, on the basis of admission by person in

possession of the property on the date of the suit. However, as

discussed above, evidence available on record is regarding the

prevalent rate of rent in the locality relate to commercial leases and

not to residential lease. It is not a case where the tenant has made an

admission of the rent at much more than the rate claimed by the

owner in the suit. Therefore, this judgment has no bearing on the

present case. The courts below have awarded mesne profits to the

respondent, after taking into consideration the evidence available on

record in fair and just manner.

14. In 'Bakshi Sachdev (D) Vs. Concord (I)', 1993 RLR

563, it has been held by this Court that the damages and mesne

profits can be granted at higher rate than the agreed rate of rent after

the expiry of tenancy and after taking judicial notice of the fact of

phenomenal rise in rents in Delhi and particularly in posh colonies

like where the property in suit is located, higher rate of

damages/mesne profits could be awarded by the Court.

15. In 'Sohan Singh's case (supra) while awarding

damages/mesne profits, the Court had awarded damages as had been

claimed by the owner although they were higher to the prevalent

market rent but at the same time no interest was awarded on such

damages/mesne profits owing to the grant of damages at a rate higher

to the market rent.

16. Similarly in P.S. Bedi's case (supra), it was observed

that after the expiration of the tenancy and inspite of legal notice

having been served on the tenant, he fails to vacate the premises, he

is liable to pay the market rent as damages/mesne profits for use and

occupation of the demised premises. In the said case, the court

decided the market rent on the basis of the oral evidence available on

record in the absence of any documentary evidence and accordingly

awarded damages.

17. Similar are the observations in Anderson Wright's

case (supra). It is noted that the property in suit in the said case was

leased out for commercial purposes.

18. Anusuyaben's case (supra) relate to standard rent vis-

a-vis the contractual rent and the Apex Court upheld that the

standard rent was much less then the contractual rent and the

landlady was entitled to claim rent as per the contractual rent.

19. Trial Court while deciding issue N.4 analyzed the oral

evidence of the parties viz-a-viz the lease documents Ex.PW-1/28 to

Ex.PW-1/30 to conclude that it was appropriate to award use and

occupation charges/damages at the rate of Rs.15,000/- from 1st May,

1997 and at the rate of Rs.20,000/- thereafter till vacation of the

premises and did not find any ground to award interest on the

amount of damages. The Appellate Court vide impugned judgment

and decree dated 17th December, 2005 considered all the citations

relied upon by the respondent while concurring with the findings of

the Trial Court on award of mesne profits/damages for use and

occupation.

20. I do not find any reason to interfere in the findings of

the courts below. It is pertinent that after receipt of vacant

possession, the respondent has again leased out the suit premises for

residential purposes only to M/S. Bengali Sweet Centre on 1st

August, 2007 on a monthly rent of Rs.30,000/- with periodic annual

increase of 15% after every two years. Thus, it is clear that market

rate of rent for residential premises could not have been Rs.60,000/-

per month, as claimed by the respondent. In the absence of evidence

oral or documentary, courts below rightly assessed the mesne profits

at the rate of Rs.20,000/- per month.

21. Under these circumstances, claim of the respondent for

mesne profits being exorbitant is penal and unconscionable in nature.

22. In 'L. Bhagwan Das Mengi Vs. Union of India', AIR

1961 J&K 39, it was held that where a tenant does not vacate the

premises after the expiry of lease and remains in occupation of the

same despite service of notice on him to vacate, liability to pay the

amount claimed in the notice is on him provided it is not penal and

unconscionable. The courts below, therefore, rightly held that claim

of the respondent for mesne profits at the rate of Rs.60,000/- per

month was penal in nature.

23. Under these circumstances, I do not find any merits in

the cross-objections and the same are accordingly dismissed. Parties

are left to bear their own costs.

ARUNA SURESH (JUDGE) AUGUST 13, 2010 sb