Holiday Home vs R.P.Kapur Huf
2010 Latest Caselaw 5757 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI
%                  RFA 490 OF 2007
+                     Date of Decision: 20th December, 2010


#      HOLIDAY HOME                                    ...Appellant
!                        Through: Mr. G.L. Rawal, Sr. Advocate with
                                  Mr. Kuljeet Rawal, Advocate.

                              Versus
$      R.P. KAPUR HUF                                ...Respondent
^                             Through: Mr. K.R. Chawla, Advocate

       CORAM:
*      HON'BLE MR. JUSTICE P.K.BHASIN

1. Whether Reporters of local papers may be allowed to see the
   judgment? (No)
2. To be referred to the Reporter or not? (No)
3. Whether the judgment should be reported in the digest? (No)
                        JUDGMENT

P.K.BHASIN, J:

This is an appeal filed by the appellant, who was a tenant of

premises no. A-2/11, Safdarjung Enclave, New Delhi (hereinafter to be

referred as „the premises in suit‟) of the respondent herein, against

the judgment and decree dated 18th July, 2007 whereby the suit filed

by the respondent-landlord for possession, damages/mesne profits

etc. in respect of the suit premises had been decreed.

2. The respondent-plaintiff(hereinafter to be referred as „the

plaintiff‟) had filed a suit for recovery of possession, damages, mesne

profits for unauthorized use and occupation of the premises in suit

against the appellant(hereinafter to be referred as „the defendant‟),

inter-alia, on the allegations that the premises in suit were let out to

the defendant for lodging purposes only but the defendant had not

only started using the same for non-residential purposes, which was

against the terms of the perpetual lease executed in favour of the

plaintiff by the President of India, but had also illegally sub-let a

portion of the premises in suit to Abacus Computer for commercial

purposes and substantial damages to the premises had also been

caused. It was also pleaded that even though the contractual tenancy

of the defendant had expired by efflux of time in the year 1983 still it

terminated the tenancy of the defendant vide notice dated 28th

February, 1995 whereby the defendant was called upon to vacate the

premises in the suit on the expiry of the 30th April, 1995. Since the

defendant did not comply with that notice the plaintiff had to

approach the Court of law and the suit was filed on 04-08-95 for the

relief of possession etc. In the plaint, it was also claimed by the

plaintiff that since the defendant had caused substantial damage to

the premises in suit it was also liable to restore the premises to its

original condition in which the same were let out to it. A decree of

permanent injunction was also prayed for restraining the defendant

from parting with the possession of the premises in suit to some third

party.

3. The defendant contested the suit, inter-alia, on the grounds that

the plaintiff had no locus standi to file the suit since it was not the

owner of the premises in suit and that in any case the suit for

possession could not be decreed since no notice of termination of the

defendant‟s tenancy had been served upon it. It was denied that the

premises in suit had been sub-let to anyone or that the same were

being misused. Violation of the suit for the purpose of Court fee and

jurisdiction was also challenged. The defendant had also pleaded that

it had been permitted by the plaintiff to use the premises in suit for

the purpose for which it was being used, namely, for running a lodging

house and not only that, the plaintiff had also permitted the

defendant to spend huge money for carrying out improvements in the

premises for making it fit for running a lodging house and accordingly

the defendant had spent more than ` 25 lacs in carrying out additions

and alterations and improvements more than 15 years back and

further that it had been agreed between the parties that the

defendant shall not be evicted from the premises in suit for any

reason whatsoever unless the plaintiff would pay to the defendant the

said amount which had been spent by it on additions, alterations and

improvements. Regarding the relief of mesne profits it was prayed

that a preliminary decree may be passed as provided in law(Order XX

Rule 12 CPC) and thereafter a final decree should be passed.

4. The pleadings of the parties had led to the framing of the

following issues by the learned trial Judge:-

"1. Whether the plaintiff has no locus standi to file the present suit? OPD.

2. Whether the suit has been properly valued for the purpose of Court fee and jurisdiction? OPD.

3. Whether the plaintiff is entitled for rent of suit property, if so, for which period and for what amount? OPP 3A. Whether the plaintiff is entitled for recovery of possession of the premises A-2/11, Safdarjung Enclave, New Delhi?

4. Whether the plaintiff is entitled for mesne profit/damages for the use and occupation of suit property, if so, for which period and at what rate? OPP

5. Whether the plaintiff is entitled for mandatory injunction, as prayed for? OPP

6. Whether the plaintiff is entitled for permanent injunction, as prayed for? OPP

7. Relief.

5. Thereafter from the side of the plaintiff Shri R.P. Kapoor, karta

of the plaintiff HUF appeared in the witness box in support of his case

and he also examined his advocate who had sent a notice of the

termination of defendant‟s tenancy while the defendant firm

examined as many as nine witnesses including one of its partners Shri

Prem Chand Garg. The learned trial Court after examining the

evidence adduced by the parties and considering the arguments

advanced by their counsel passed a decree for possession of the

premises in suit in favour of the plaintiff with a direction to the

defendant to restore the premises to its original condition. A decree

for ` 9,000 on account of arrears of rent for the month of April, 1995

was also passed in favour of the plaintiff. The defendant was also

directed to pay mesne profits @ of ` 18,000 per month with effect

from 1st May, 1995 till the date of delivery of possession of the

premises in suit to the plaintiff. A decree for permanent injunction

was also passed against the defendant restraining it from using the

premises in suit for commercial purposes or from parting with its

possession or creating any kind of third party interest. It was also

decreed that in case the defendant would failed to pay the arrears of

rent and mesne profits within a period of two months interest

thereupon at the rate of 18% per annum would become payable from

the date of the institution of the suit till realization of the decreed

amount.

6. The defendant felt aggrieved with the judgment and decree

passed against it by the trial Court and therefore, the present appeal

was filed by it impugning the correctness thereof.

7. I have gone through the evidence before the trial Court and the

impugned judgment and have also considered the submissions made

by the appellant‟s senior counsel Shri G.L.Rawal and respondent‟s

counsel Shri K.R. Chawla.

8. The admitted facts emerging from the pleadings, evidence

adduced in the trial and the submissions made during the hearing of

the present appeal by the counsel for the parties are that the land

underneath the premises in suit were leased out to the plaintiff by the

Delhi Development Authority vide Perpetual Lease Deed Ex.DW-9/1

and the premises in suit were let out by the plaintiff to the defendant

firm in the year 1980 for a period of three years at a monthly rent of

Rs.9,000/- and further that the defendant had not vacated the

premises in suit after the expiry of the initial period of tenancy of

three years and it has been paying the agreed rent to the plaintiff.

9. The learned senior counsel for the defendant-appellant,

however, seriously challenged the plaintiff‟s right to get the premises

in suit vacated from the defendant, which has been upheld by the

trial Court while decreeing the suit, mainly on two grounds. The first

ground of challenge put in the forefront by Mr. Rawal, learned senior

counsel for the appellant, was that the perpetual lease in respect of

the land underneath the building which was let out to the defendant

having admittedly been cancelled way back in the year 1972 and the

premises re-entered also (symbolically) in the year 1984, as had been

confirmed during defendant‟s evidence by the official from Delhi

Development Authority examined by the defendant as DW-9, the

plaintiff could not have been given a decree of possession in respect

of the property which belonged to the Government. In support of this

submission Mr. Rawal drew my attention to the cross-examination of

PW-1 Shri R.P.Kapoor, who was the karta of plaintiff,

R.P.Kapoor(HUF), and also the defendant‟s landlord, where he had

admitted that the lease of the premises in suit had been cancelled by

the DDA on account of misuse. My attention was also drawn to the

evidence of defence witness DW-9, an official from DDA, who had

deposed that the lease of the premises in question stood cancelled in

the year 1972 but later on the Lt. Governor had restored the same on

certain conditions but since the plaintiff had not fulfilled those

conditions the termination of the lease was maintained by the Lt.

Governor and formal possession was taken over by the Junior

Engineer on 13/07/84 and eviction proceedings were ordered to be

initiated by the Estate Officer under the Public Premises( Eviction of

Unauthorised Occupants) Act,1971. Mr. Rawal contended that even

though physical possession of the premises was not taken over from

the plaintiff but for all practical purposes it stood taken over from the

plaintiff and the defendant‟s possession became the possession

under the paramount lessor and so the trial Court‟s view that since

physical possession had not been taken over by DDA the plaintiff

could get a decree of possession was not legally correct. It was also

contended that the trial Court had placed reliance on some judgments

on the principle of estoppel embodied in Section 116 of the Evidence

Act where the tenanted premises had not been re-entered by the

paramount lessor, as is the position in the present case, and so those

judgments had no application and had been wrongly relied upon by

the trial Court while coming to the conclusion that the defendant was

estopped from challenging the title of the plaintiff because of it

having admitted that it had been let out the premises in dispute by

the plaintiff. In support of this contention reliance was placed on two

judgments of this Court reported as 20 (1981) Delhi Law Times 127

and 1979(1) Rent Control Reporter 795 and one judgment each of

Patna and Madras High Courts reported as AIR 1977 Patna 247 and

AIR 1970 Madras 396. The second ground of challenge seriously put

forth was that the plaintiff had in any case failed to proved that the

defendant‟s tenancy had been terminated before the filing of the suit

for possession. On the point of non-service of notice of termination of

defendant‟s tenancy Mr. Rawal cited one judgment of the Supreme

Court in "Puwada Venkateswara Rao vs Chidamana Venkata

Ramana", (1978) 2 Supreme Court Cases 409. It was also argued by

the learned senior counsel that even though the plaintiff itself had

prayed for passing of a preliminary decree of mesne profits as

provided under Order XX Rule 12 CPC the trial Court had proceeded to

straightaway award mesne profits @ Rs.18,000/- p.m. for the period

after the filing of the suit till delivery of possession without holding

any enquiry which was mandatory and that having not been done the

decree for mesne profits the said period is liable to be set aside.

Another contention was that issue no. 3A regarding the prayer of

possession decree was framed by the trial Judge at the back of the

parties while writing the judgment which was not permissible. Mr.

Rawal also submitted that even though the defendant had pleaded

that a sum of Rs.25 lacs had been spent by the defendant on

additions and alterations in the premises in dispute on the

understanding with the plaintiff that it shall reimburse that much

amount to the defendant whenever it shall be asked to deliver back

the possession to the plaintiff but the trial Court had totally ignored

that plea and passed the decree of possession in favour of the

plaintiff.

10. On the other hand, learned counsel for the plaintiff while not

disputing that DDA had cancelled the lease of the land and had also

ordered initiation of proceedings for eviction against the plaintiff in

1984 argued that the defendant-appellant could not be permitted to

argue that DDA had exercised its right of re-entry after cancellation of

the lease in favour of the plaintiff since no such case was pleaded by

it in the written statement and in any case the trial Court had rightly

held that the defendant having taken the premises on rent from the

plaintiff could not take such a plea in the suit for possession filed by

its landlord. In any event, counsel further contended, since the

physical possession of the premises in dispute had not been taken

over by DDA till date the right of the plaintiff as a landlord to seek

possession of the tenanted premises from the tenant does not get

extinguished. In support of this submission on the applicability of the

principle of estoppel in the facts and circumstances of this case Mr.

Chawla cited four judgments of this Court reported as 139(2007)

Delhi Law Times 61, 112(2004) Delhi Law Times 82, 2000 (III) Apex

Decisions(Delhi) 821 and 20(1981) Delhi Law Times 127. Another

submission made was that the defendant had moved an application

during the trial for amendment in its written statement after the

evidence of DW-9 had been recorded to plead the fact of re-entry by

DDA and that application was allowed by the trial Court but that order

was set aside by this Court order dated 23rd August,2006 when

challenged by the plaintiff and in that order this Court had observed

that the defendant could not have any benefit from the re-entry by

DDA since it had admittedly been inducted as a tenant by the plaintiff

and so the cancellation of the lease of the land by DDA had no effect

on the right of the plaintiff to claim back possession of the tenanted

premises. That finding, counsel contended, became final and cannot

be re-considered on the principle of res judicata. In support of this

submission Mr. Chawla cited two decisions of the Supreme Court in

"State of Karnataka & ors. Vs All India Manufacturers Organisation &

ors." reported in (2006) 4 Supreme Court Cases 683 and " Ishwar

Dutt vs Land Acquisition Collector" reported as AIR 2005 Supreme

Court 3165. Regarding the service of notice upon the defendant

terminating its tenancy it was contended that the plaintiff had duly

proved service of notice of termination of defendant‟s tenancy and the

trial Court had rightly held so and no fault can be found in the

impugned judgment. Regarding the argument that without an enquiry

into the rate of mesne profits the same could not be awarded by the

trial Court the submission of Mr. Chawla was that since the original

rent in respect of the premises in dispute was settled at Rs.9,000/-

p.m. way back in the year 1980 the trial Court could have very well

fixed the mesne profits @ Rs.18,000/- in the year 2006 w.e.f. 1995,

without holding any enquiry, taking judicial notice of the huge

escalation of rents in Delhi over the years and particularly in the posh

areas like the colony where the premises in suit is situated.

11. In response to the submission of the counsel for the plaintiff

that the defendant could not be permitted to take the plea, in the

absence of pleadings, that since the DDA had re-entered the premises

and the plaintiff had no right to maintain the suit for possession the

learned senior counsel for the defendant submitted that since the fact

of re-entry by DDA came to light only when DDA‟s official(DW-1)

during his evidence brought on record that fact from DDA‟s file in

respect of the premises in dispute the same could be taken note of

and dealt with by the Court as a subsequent event, even if no such

plea was there in the written statement, although at one stage,

counsel submitted, the defendant had sought to plead such fact

during the trial by moving an amendment application but that

application was dismissed. Reliance in support of this submission was

placed on a judgment of this Court reported as 1979(1) Rent Control

Reporter 795 which decision, as noticed earlier, was also relied upon

for the proposition that after the DDA had exercised its right of re-

entry the plaintiff could not maintain the suit for possession and also

that with the cancellation of the lease in favour of the plaintiff it had

ceased to be the owner of the premises in suit. It was also contended

that even though the DDA had not taken over actual physical

possession of the premises in dispute it having taken constructive

possession, as deposed to by DW-9, the right of the plaintiff would still

get extinguished to claim possession from the defendant since the

acts of taking of constructive possession and actual possession by a

paramount lessor are at par as far as the lessee, which the plaintiff

was in this case, are concerned and, therefore, the possession of the

premises in dispute by the defendant after the order of re-entry by

DDA has to be considered to be the possession under the superior

lessor ,namely, Delhi Development Authority. Mr. Rawal also argued

that now in the year 2007 the Estate Officer had served a notice upon

the defendant-appellant to show cause as to why it should not be

evicted from the premises in disputer being in unauthorized

occupation of the premises belonging to and under the management

of the Government and its copy had been placed on record alongwith

an application dated 11th July,2009 under Order 41 Rule 27 CPC and

the counsel for the respondent had on 21st September,2009

consented that that document could be considered by this Court while

deciding this appeal. So, even this development has to be taken note

of by this Court, contended Mr. Rawal, as a subsequent event taking

place during the pendency of this appeal. Mr. Rawal also submitted

that since in the Single Judge Bench decision of this Court cited by

him reported as 1979(1) RCR 795 it was held that with the re-entry of

the tenanted premises by the Government, the superior lessor, the

landlord ceased to be the owner and so could not maintain eviction

case against his tenant while in another Single Judge Bench of this

Court cited from the other side and which is reported as 2000(III)

Apex Decisions(Delhi) 621 it has been held that mere re-entry is of no

consequence unless actual possession is taken over by the superior

lessor. Thus, there is apparent conflict in these two decisions of two

co-ordinate Benches and, therefore, Mr. Rawal contended, this Court

could refer the matter to a larger Bench instead of following one or

the other of the two conflicting judgments.

12. Regarding the plea of res judicata taken by the counsel for the

respondent-plaintiff Mr. Rawal submitted that the order relied upon by

the respondent was challenged before the Supreme Court but the

Special Leave Petition was withdrawn but while permitting

withdrawal of that petition the Supreme Court had observed in its

order dated 29th September,2006 that no observation made by the

High Court in the impugned order dated 23rd August,2006 shall

prejudice the case of any of the parties during the trial and, therefore,

there was no question of any observation of this Court operating as a

bar against re-consideration of the same point regarding applicability

of Section 116 of the Evidence Act by the Court on the principle of

res judicata.

13. When confronted with this situation, Mr. Chawla, the learned

counsel for the respondent-plaintiff did not pursue his submission

based on the principle of res judicata.

14. In my view, the mere fact that the Delhi Development Authority

had cancelled the lease in respect of the land underneath the

premises in dispute in the year 1972 because of misuser and had

also ordered initiation of eviction proceedings against the plaintiff-

landlord under the Public Premises(Eviction of Unauthorised

Occupants) Act, 1971 in the year 1984 that would not entitle the

defendant-tenant to resist the plaintiff-landlord‟s prayer for a decree

of possession after termination of its tenancy since there is nothing

on record to show that actually any eviction proceedings had been

initiated against the plaintiff by DDA or that any eviction order had

been passed against it by the Estate Officer. The initiation of eviction

proceedings against the defendant-tenant under the Public

Premises(Eviction of Unauthorised Occupants) Act in the year 2007

cannot come to its rescue since it is the eviction of the plaintiff-

lessee by the title paramount i.e. Delhi Development Authority which

would have made the difference as far as the plaintiff‟s right to claim

possession from the defendant is concerned. In this regard a useful

reference can be made to a judgment of the Supreme Court in "Vashu

Deo vs. Balkishan" reported as (2002) 2 Supreme Court Cases 50 in

which the facts were that the tenant of the disputed shop had sublet

the same and because of that subletting the landlord, which was a

Trust, had initiated eviction proceedings against the tenant. The

tenant had also initiated separate proceedings against his sub-tenant

for eviction on account of non-payment of rent for some period. The

sub-tenant had attorned directly in favour of the owner-Trust and a

direct tenancy agreement had also been executed between them.

The sub-tenant had resisted the eviction petition filed against him by

his landlord on the ground of his having attorned directly in favour of

the superior lessor i.e. the owner Trust. Accepting that plea, the trial

Court dismissed the eviction petition. However, the High Court held

that the sub-tenant could not have directly attorned in favour of the

Trust and eviction of the tenant was ordered. The sub-tenant then

approached the Supreme Court but his appeal was dismissed and it

was observed that mere institution of a suit for eviction by the Trust

against its tenant will not amount to eviction of the tenant by title

paramount and that the relationship between the Trust and its tenant

would not come to an end unless and until the eviction case filed by

the Trust was decreed and that decree had attained finality. In the

present case, as noticed already, there is nothing on record to show

that DDA had initiated any proceedings for eviction of the plaintiff

under the provisions of the Public Premises(Eviction of Unauthorised

Occupants) Act and so there is no question of eviction of the plaintiff

by title paramount. Consequently, the defendant was estopped from

contending that after creation of the tenancy with the plaintiff its title

to the premises in dispute had extinguished because of its eviction by

title paramount. And in view of the said decision of the Supreme

Court in Vashu Deo‟s case(supra) the defendant-appellant cannot get

any benefit from the judgment of this Court reported as 1979(1) RCR

795 cited by its counsel and I need not go into the question whether

any reference needs to be made to larger Bench on this aspect for the

reason put forth by Mr. Rawal. It is also significant to note that PW-1

had in his cross-examination claimed that his request for restoration

of the lease was pending consideration before the Lt. Governor. That

fact was not disputed by the defendant. It is also clear from the

evidence of DW-9 that DDA was in fact only interested in claiming

misuser charges for restoring the lease in favour of the plaintiff and

that is why no eviction proceedings against the plain tiff appear to

have been initiated at all. These facts also support the plea of the

plaintiff that the defendant cannot get any benefit from the mere

cancellation of plaintiff‟s the lease by DDA. I am, therefore, of the

view that the learned trial Court had rightly rejected the plea of the

defendant that the suit for possession was not maintainable because

of the cancellation of the lease in respect of the land underneath the

premises in dispute in favour of the plaintiff by DDA.

15. I now come to the other point raised on behalf of the defendant

- appellant by its senior counsel. That point was regarding absence

of service of notice of termination of defendant‟s tenancy. The

plaintiff had examined PW-2 Shri Vijay Chawla, advocate, who was

the son of Shri K.R.Chawla, advocate who had issued the notice

dated 28th February,1995, Ex.PW-1/1. He deposed that he had posted

the notice Ex.PW-1/1 by registered post as well as under postal

certificate(UPC). He also proved the postal receipts and the AD Card

Ex.PW-1/6. From the side of the defendant its partner Shri Prem

Chand claimed in his evidence that the said notice was not received

by the defendant firm or any of its partners. Learned trial Court after

examining the evidence adduced from both the sides came to the

conclusion that the notice dated 28th February, 1995 had been

proved to have been received by the defendant - tenant. I have gone

through the evidence adduced from both the sides and the discussion

of that evidence and the submissions made on behalf of the tenant

there, which were urged before this Court also by the defendant-

appellant‟s counsel, by the trial Court and its findings and I find myself

in full agreement with those findings. Since I am in general

agreement with the decision of the trial Court on the issue of

termination of defendant‟s tenancy I need not restate the evidence

and re-appraise the same in view of the judgment of the Supreme

Court in "Girja Nandini Devi and Ors. Vs. Bijender Narain Chaudhary",

AIR 1967 SC 1124 wherein it was observed that it was not the duty

of the appellate Court when it agrees with the view of the trial Court

on the evidence either to re-state the effect of the evidence or to

reiterate the reasons given by the trial Court and that expression of

general agreement with the reasons given by the trial Court would

ordinarily suffice.

16. The defendant did not claim before the trial Court that issue

should be framed regarding its plea that it had spent lacs of rupees in

carrying out additions in the property in dispute and that the landlord

had agreed that it will re-imburse that amount in case possession

would be demanded and therefore the trial Court was not obliged to

return any finding on that aspect. Similarly the framing of issue no.3A

by the trial Court while writing the judgment is of no effect since the

plaintiff had categorically claimed the relief of possession in the plaint

and parties had gone on trial on that claim even in the absence of

formal issue having been framed earlier and so even if no such issue

had been framed at the time of writing of the judgment that would not

have prevented the trial Court in passing a decree of possession. I am,

therefore, of the view that the learned trial Court had rightly passed

the decree of possession in favour of the plaintiff and against the

defendant and the same is, therefore, maintained.

17. As far as the decree for mesne profits passed by the learned

trial Court is concerned I am of the view that the same cannot be

sustained since no enquiry as contemplated under Order XX Rule 12

CPC had been ordered to be conducted by the trial Court and without

that mesne profits from the date of the filing of the suit till the

delivery of the possession could not be awarded. Under Order XX

Rule 12 CPC it is the discretion of the Court to order an enquiry into

the mesne profits for the period after the filing of the suit for

possession which means no decree for mesne profits can be passed

without enquiry and if no enquiry is ordered by the Court plaintiff can

initiate separate proceedings in respect of the mesne profits for the

period after the filing of the suit for possession of some immovable

property. In the present case, now that many years have passed after

the initiation of legal proceedings by the plaintiff it would not be

proper and in the interest of justice to tell the plaintiff to file an

independent suit for recovery of mesne profits and the appropriate

course would be to order an enquiry to be got conducted by the trial

Court so that both the parties can adduce evidence in support of their

respective claims in that regard. This course of action, in fact, should

have been adopted by the trial Court itself if mesne profits were to be

awarded to the plaintiff. There is no doubt that the Court is entitled to

take notice of general escalation in rents in Delhi but that can be

done by the Court only when some enquiry is conducted and the Court

feels that there is no sufficient evidence from the side of the landlord.

18. The findings of the trial Court on the other issues were not

challenged during the hearing of this appeal on behalf of the

defendant - appellant and, therefore, the same also stand upheld.

19. In the result, this appeal is disposed of by rejecting the

appellant‟s challenge to the impugned judgment and decree of the

trial Court except to the extent mesne profits @ ` 18,000 per month

have been awarded for the period after the filing of the suit till the

handing over of possession of the premises in suit to the plaintiff by

the defendant. For determination of the mesne profits the matter is

sent back to the trial Court with a direction to get an enquiry

conducted in that regard and there shall only be a preliminary decree

for the present holding that the plaintiff was entitled to claim mesne

profits for unauthorized use and occupation of the premises in dispute

by the by the defendant-appellant.

20. The trial Court shall now take up the matter for the purposes of

holding an enquiry or getting it conducting by appointing some local

commissioner on 1st February, 2011 and all efforts shall be made to

conclude the matter finally within a period of six months from that

date. Trial Court record be sent back.

P.K. BHASIN,J

December 20, 2010 pg/sh