Ms. Vanita Vohra vs Voith Paper Fabrics India Ltd.
2010 Latest Caselaw 5614 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI
 +                      RFA No. 254/1999
 %                                              9th December, 2010


 MS. VANITA VOHRA                                   ...... Appellant

                                    Through:    Mr. Abhinav Vasisht,
                                                Mr. Sumit Singh
                                                Benipal and Mr. Raman
                                                Kapur, Advocates
                        VERSUS

 VOITH PAPER FABRICS INDIA LTD.                   .... Respondent

                                    Through:    Mr. S.S.Rana, Ms.
                                                Bindra Rana and Ms.
                                                Meenu Sharma,
                                                Advocates.
 CORAM:
 HON'BLE MR. JUSTICE VALMIKI J.MEHTA

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

2. To be referred to the Reporter or not?

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

VALMIKI J. MEHTA, J (ORAL)

1. The present appeal under Section 96 of the Code of Civil

Procedure, 1908 (CPC) is filed challenging the impugned judgment and

decree dated 19.11.1998 of the trial Court whereby the suit of the

appellant-plaintiff for possession and mesne profits with respect to the

premises C-715 New Friends Colony, New Delhi, was dismissed.

I may note that the premises in question has already been

vacated by the respondent, erstwhile tenant on 1.4.1998 and

therefore, I only have to look at the issue of awarding of mesne profits

claimed by the appellant-plaintiff, the relief of which was dismissed by

the impugned judgment and decree.

2. The sole ground for dismissing the suit for possession and

consequently for mesne profits was that the legal notice terminating

the tenancy dated 21.2.1994, Ex.PW1/5 did not validly terminate the

contract of tenancy. The reason why it was held that the tenancy was

not validly terminated was on account of the fact that the appellant-

landlord was bound to have sent alongwith the notice of termination of

tenancy, the deposit of Rs.15 lacs which the appellant had received

from the respondent at the time of letting out of the property.

3. Since the issue with regard to validity of the notices turns

upon certain clauses of the agreement of letting out the fixtures and

fittings, which agreement was one of the agreements simultaneously

entered into at the time of letting out of the property, meaning thereby

that all the documents found are part and parcel of one transaction, a

reference to these terms would be necessary to determine this issue.

The relevant terms of the agreement are as under:

"Whereas the lessor and the lessee have entered into separate agreements for leasing out the residential premises situated at C 715 New Friends Colony, New Delhi as well as fans, gayser and such other fixtures and fittings

installed in the said premises to the Lessee by the Lessor.

Whereas in consideration of the said leasing out of the premises as well as of fan geysers and such other fixtures and fitting installed in the said premises by the lessor to the lessee, the lessee has agreed to keep and maintain a deposit of Rs.15,00,000/- (Rs. Fifteen lakhs only) with the Lessor during the currency of the said agreement dated 23 rd Feb. 1989.

Now this deed witnesseth as under:

1. That the lessee shall keep and maintain with the lessor a sum of Rs.15,00,000/- (Rupees fifteen lakhs only) till the currency of the lease agreements dated 23rd Feb. 1989.

2. That the said sum of Rs.15,00,000/- (Rupees fifteen lakhs only) kept and maintained by the Lessee with the Lessor will bear no interest.

3. That the deposit of Rs.15,00,000/- will become repayable immediately upon the termination of the lease and on the lessee handing over vacant possession of the premises to the Lessor. If for any reason the Lessor fails or refuses to repay to the lessee the sum of Rs.15,00,000/- the lessee shall have the right to retain possession of the premises without any obligation for the payment of any rent or compensation for use and occupation until the Lessor or in the case of her prior demise, her successor, heirs or legal representatives make a meaningful tender of the amount of Rs.15,00,000/- to the Lessee." (Emphasis added)

4. The aforesaid clauses have also been reproduced by the

trial Court in its impugned judgment. After reproducing the aforesaid

clauses the findings which are given by the learned trial Court on this

issue are contained in para 7 of the impugned judgment and which

reads as under:-

"7. The perusal of this agreement shows that deposit of Rs.15,00,000/- made by the defendant with the plaintiff

was in consideration of lease deed of the premises as well as fitting and fixture to the defendant. It was not a security amount at all, it was part of the consideration. The initial tenancy was registered tenancy but thereafter the tenancy become month to month. This agreement which is Ext.PW1/D-1 as well other agreements for leasing out of the fittings and fixtures were not terminated at any point of time by the plaintiff. Notice dated 21st Feb. 1994 does not speak of at all about the two agreements i.e. for leasing of fitting and fixtures and other by which as a consideration of lease the interest fee amount of Rs.15 lakhs was deposited with plaintiff by the defendant. Ext. PW1/D-1 makes it abundantly clear that amount of Rs.15 lacs was to be tendered by the landlord or her successor to the defendant at the time for asking for possession and if for any reason the lessor failed or refused to repay the amount of Rs.15 lacs the defendant-lessee was to have right to retain the possession of the premises without any obligation for payment of rent or compensation for use and occupation. It is specifically provided that tender is to be meaningful tender of the amount of Rs. 15 lakhs to the lessee. Surprising enough the plaintiff's notice does not find even a whisper about Rs.15 lacs, what to talk or tendering the amount. The plaintiff was supposed to tender the amount before asking for possession of the premises. The plea of the defendant that use of amount of Rs.15 lacs by the plaintiff was part of consideration and for this reasons rent in the registered deed was shown less, is proved by the document Ext.PW1/D-1. I come to the conclusion that notice dated 21st Feb. 1994 served by the plaintiff upon the defendant did not and could not determine the contract of lease between the parties, it could have terminated the lease between the parties only if the amount of Rs.15 lakhs had been meaningfully tendered through the notice to the defendant. It is no doubt that the tenancy was from month to month but tenancy was subject to a written contract Ext. PW1/D-1, and while terminating the month to month tenancy this contract could not be ignored. Since I have come to the conclusion that notice served upon the defendant has not validly terminated the tenancy of the defendant, the plaintiff was not entitled to claim possession of the premises from the defendant. Both the issues are decided against the plaintiff and in favour of the defendant."

5. I am afraid, I am completely unable to agree with the

reasoning as given in para 7 of the impugned judgment. A reference

to para 3 of the agreement of security deposit which is reproduced

above, shows that the deposit of Rs.15 lakhs was payable on the

handing over of the physical vacant possession of the property to the

landlord. It is not possible to read this clause as has been done by the

trial Court that such a clause should be interpreted to mean that

alongwith the notice of termination of tenancy the amount of deposit

of Rs.15 lakhs should have been sent. This clause does not require

sending of the amount of Rs.15 lakhs alongwith notice of termination

of tenancy but payment of such amount is simultaneous to the

receiving of vacant possession by the lessor.

6. I may note that the above said interpretation given by me

to clause 3 of the security deposit agreement was also the

understanding of the respondent itself when the respondent wrote its

letter dated 4.5.1994 (Ex.PW1/17) to the appellant and in which it was

clearly stated that the security amount would be payable on vacation

of the premises. This letter Ex.PW1/17 reads as under:-

"xxx Madam,

Re: C-715, New Friends Colony, New Delhi-110065

We acknowledge the receipt of your letter dated 25th April, 1994. The cheques given to you were on account of rent

of the above premises in our occupation as tenants accepted by you as such.

In these circumstances you cannot now treat the payments for any other account, especially one as imaginary as "use and occupation charges". We will of course hold you fully responsible for the return of the full security amount lying in deposit with you when we vacate the premises at the end of the period of tenancy. You are advised accordingly.

Yours faithfully, for Porritts & Spencer (ASIA) LTD.

sd/-

MANOJ KAPOOR COMPANY SECRETARY"

(Emphasis added)

7. Therefore, looking at it from any angle, it cannot but be

said that termination of tenancy under Section 106 of the Transfer of

Property Act, 1882 which was to be by means of an appropriate legal

notice however alongwith which it was not necessary to send the

amount of Rs.15 lacs. A different interpretation and the conclusion

arrived at by the trial Court does not stand to any reason or logic or

any legal basis and being clearly perverse, is accordingly quashed and

set aside.

8. The issue then arises that once it is held that the notice of

termination of tenancy was validly served, what are the reliefs which

can be granted to the appellant. I have already stated above that the

premises in question has already been vacated on 1.4.1998. The

tenancy was terminated w.e.f. 31.3.1994. The mesne profits would

therefore have to be calculated for the period from 1.4.1994 to

1.4.1998.

9. So far as the proof of mesne profits are concerned, the

admitted fact emerging on record is that except for an oral testimony

of the lessor and one property broker no documentary evidence was

filed to prove the mesne profits. However, there is an admission of the

witnesses of the respondent itself, namely, DW-2 Om Parkash Bhatia, a

property dealer. The property dealer DW-2 stated that as on October,

1996 the property in dispute can fetch a rent of Rs.40,000/- per month.

I may note that this rent is stated of 1996 and the property in question

was vacated on 1.4.1998 i.e. about one and half years later. This

aspect also will have to be considered for determining the amount of

mesne profits per month to be awarded to the appellant.

10. Another aspect which the Court bears in mind for grant of

mesne profits is a judicial presumption and a judicial notice which the

Courts have taken note of in different decisions with respect to

constantly increasing rents in urban areas/cosmopolitan cities and

especially in posh localities thereof. New Friends Colony, where the

subject property is situated is undoubtedly one of the poshest localities

in Delhi which has huge bungalows in which the upper strata resides.

11. It has been argued by the counsel for the appellant that

immediately after the respondent vacated the premises, the premises

was let out at a rent of Rs.1,50,000/- per month, however, I cannot look

into this aspect because this is not emerging from any evidence as

available in the trial Court record.

12. Therefore, the issue is what should be the mesne profits

per month which ought to be awarded in a case like the present. One

thing is clear that the witness of the respondent, if he was deposing in

favour of the respondent, would, while giving the figure of Rs.40,000/-

per month as rent with respect to a property for a bungalow having

an area of 419 sq. mtr. situated at New Friends Colony would

obviously be conservative to help the respondent. As I have already

noted above, the deposition is of October, 1996 and the premises were

vacated on 1.4.1998. Considering all the aspects of the matter, I feel

that in the facts and circumstances of the present case mesne profits

@ Rs.50,000/- per month from 1.4.1994 till 1.4.1998 should be payable

by the respondent to the appellant. For deciding the rate of mesne

profits I have also kept in mind the fact that the appellant also has the

benefit of a security deposit of Rs.15 lakhs and on which it would be

earning a reasonable rate of interest. No doubt, this deposit of Rs.15

lakhs will get reduced monthly by a sum of Rs.50,000/-, however, this

deposit would be adjusted in roughly about three years and till that

time, on this reducing amount, the appellant would be earning a

reasonable rate of interest.

13. Since the deposit with the appellant would get adjusted at

any time by approximately three years or so, from such month from

which the deposit would get adjusted, the appellant should also be

held entitled to interest on the mesne profits which would be in arrears

from that date and till the date of actual payment by the respondent to

the appellant. Considering the interest regime from the year 1998 till

date, I find that interest @ 12% per annum simple from the date the

mesne profits became due till the same are actually paid by the

respondent to the appellant would stand decreed in favour of the

appellant and against the respondent. I also hold that the mesne profit

per month will become due on the last date of the calendar month for

which the mesne profits would be payable.

14. In view of the above, the impugned judgment and decree is

set aside. The suit of the plaintiff-appellant for recovery of mesne

profits @ Rs.50,000/- per month from 1.4.1994 to 1.4.1998 is decreed

with costs both of the trial Court and the costs of the present appeal.

The appellant will also be entitled to interest on arrears of mesne

profits @ 12% per annum simple from the due date being the last date

of the calendar month for which the mesne profits would be payable.

It is agreed by the counsel that a sum of Rs.66,000/- already stands

paid by the respondent to the appellant which can be adjusted towards

the mesne profits decreed from 1.4.1994 to 1.4.1998. Decree sheet be

drawn up accordingly giving the adjustment of the amount of

Rs.66,000/- to the respondent.

15. With the aforesaid observations, the appeal is disposed of

as allowed.

Trial Court records be sent back.

DECEMBER 09, 2010                                 VALMIKI J. MEHTA,J
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