Delhi High Court

M/S Anant Raj Agencies Properties vs State Bank Of Patiala on 21 January, 2010

Author: Reva Khetrapal

                                     REPORTED
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            DATE OF RESERVE: January 07, 2010

                             DATE OF DECISION: January 21, 2010

+                            RFA 535/1999

       M/S ANANT RAJ AGENCIES PROPERTIES ..... Appellant
                     Through Mr. Neeraj Malhotra with
                             Mr. Nishant Kumar and Ms. Jyoti,
                             Advocates.

                    versus

      STATE BANK OF PATIALA                ..... Respondent
                    Through Mr. Vishnu Mehra with
                            Mr. R.L. Kadamb and Ms. Sakshi
                            Mittal, Advocates.

      CORAM:
      HON'BLE MS. JUSTICE REVA KHETRAPAL
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?

:     REVA KHETRAPAL, J.

1. This appeal is directed against the judgment dated 15.05.1999

passed by the learned Additional District Judge whereby and

whereunder a decree for the possession of premises on the second floor

of C-31/32, Connaught Place, New Delhi was granted in favour of the

plaintiff and against the defendant and damages/mesne profits awarded

to the plaintiff at the rate of Rs.25/- per sq. ft. per month, that is,

Rs.68,500/- per month, with effect from 01.09.1990 till the delivery of

vacant possession of the premises in question.

2. The challenge in the appeal is confined to the quantum of mesne

profits awarded by the trial court on the ground that the trial court failed

to take notice of the steep rise in the market rates from the date of the

institution of the suit till the date of the decree. The entire approach of

the learned trial court in granting damages at the same rate, for the

period from 01.09.1990 till 15.05.1999, and for the subsequent period

till the delivery of possession, is stated to be on the face of it erroneous.

The appellant contends that the learned trial court after finding and

holding that the mesne profits in respect of the suit premises as on

01.09.1991 could be granted to the appellant at Rs.25/- per sq. ft., erred

in law and on the facts of the case in not enhancing and increasing the

same for the subsequent period/years, which period was spread over

nearly a decade.

3. The essential facts are not in dispute, being that the respondent

Bank was a tenant of the appellant on the second floor of the premises

bearing No.C-31/32, Connaught Place, New Delhi, having a total

covered area of 2,740 sq. ft. The tenancy was for a period of five years,

initially with effect from 01.09.1980 with one renewal option for five

years on 10% enhanced rent. The initial rent was fixed at Rs.9.50 per

sq. ft. and the total rent per month was paid at the rate of Rs.26,030/- per

month with effect from 01.09.1980 to 31.08.1985. The defendant

exercised the option to renew the tenancy for a further period of five

years vide its letter dated 16.08.1985, and hence the lease was extended

for a further period of five years upto 31.08.1990 at a monthly rent of

Rs.28,633/-. The lease stood terminated by efflux of time on

31.08.1990.

4. The appellant also terminated the lease by serving a registered

A.D. Notice on the respondent dated 08.08.1990, whereby the tenancy

was terminated with effect from the midnight of 31.08.1990. The

appellant then filed a suit on 13.09.1990 for recovery of possession and

mesne profits on the ground that after the termination of the tenancy the

respondent had no right to occupy the premises. He was in unauthorised

occupation. The appellant claimed damages/mesne profits at the rate of

Rs.82,200/- per month, being the prevailing market rate of rent per

month, i.e., Rs.30/- per sq. ft. for use and occupation of the premises

with effect from 01.09.1990.

5. By the impugned judgment, the learned trial court, after

considering the evidence adduced by the parties and the law, held the

plaintiff entitled to recover the damages for use and occupation of the

premises at the prevailing market rate. The plaintiff was awarded

damages at the rate of Rs.25/- per sq. ft. per month with effect from

01.10.1990 till the delivery of vacant possession of the premises in

question to the appellant, i.e., till 20th December, 2000.

6. Aggrieved by the quantum of damages awarded to him, the

appellant has preferred the present appeal on the ground that the trial

court failed to take note of the fact that the suit was instituted on

13.09.1990 and kept pending for almost a decade, i.e., till 15.05.1999,

during which period the rate of rent had escalated significantly. The

learned counsel for the appellant strongly contended that the grant of

damages at the same rate for the period from the filing of the suit till the

passing of the decree and thereafter till the delivery of possession is

contrary to the well settled principles of law. The learned trial court

failed to take judicial notice of the manifold increase in the rate of rent

during the pendency of the suit and granted mesne profits to the

appellant at a uniform rate of Rs.25/- per sq. ft. The learned trial court,

according to the appellant's counsel, even failed to take note of the

judgments rendered from time to time by this Court and by the Supreme

Court on the grant of damages for use and occupation of the premises,

including the judgment rendered by a Division Bench of this Court in

the case of Vinod Khanna & Others vs. Bakshi Sachdev (Deceased)

reported in 59 (1995) DLT 89 wherein, relying on D.C. Oswal vs.

V.V.K. Subbiah and Ors. AIR 1992 SC 184, it is observed as under:-

"However, it is well known fact that the amount of rent for various properties in and around Delhi has been rising staggeringly and we cannot see why such judicial notice could not be taken of the fact about such increase of rents in the premises in and around Delhi which is a city of growing importance being the capital of the country which is a matter of public history. At this stage, we may appropriately refer to the Court taking judicial notice of the increase of price of land rapidly in the urban areas in connection with the land acquisition matters. Even the Apex Court has taken judicial notice of the fact of universal escalation of rent and even raised rent of disputed premises by taking such judicial notice in case of D.C. Oswal v. V.K. Subbiah; reported in AIR 1992 SC 184."

7. It was further contended by the learned counsel for the appellant

that the learned trial court failed to take note of the fact that the property

is situated in the heart of Connaught Place and is, therefore, extremely

valuable property. It was pointed out by him that a Division Bench of

this Court in Roger Enterprises Private Limited vs. Renu Vaish 1998

(44) DRJ 322 had granted mesne profits/damages at the rate of Rs.70/-

per month in respect of a property situated at Kasturba Gandhi Marg,

New Delhi for the period 1996 till 13.01.1998 and that a Special Leave

Petition against the said judgment, being SLP No.6310(C)/98 had been

dismissed by the Supreme Court on 07.04.1998. Similarly, in RFA

No.154/1998 entitled R.I.T.E.S. Ltd. vs. Shri I.M. Puri & Ors., a

Division Bench of this Court had granted damages at the rate of Rs.50/-

per sq. ft. per month for the period from 01.07.1994 till 31.01.1995 in

respect of the property situated at Barakhamba Road, New Delhi and at

the rate of Rs.60/- per sq. ft. per month for the period from 28.02.1995

till 19.11.1997. In the said case decided on 29.04.1998, it was observed

as under:-

"However, this Court cannot lose sight of the fact that in similar other cases regarding similar properties in the same locality, i.e., Connaught Place area, what is the rate of mesne profits being generally upheld by this Court for the same point of time."

8. The learned counsel for the appellant contends that the learned

trial court itself had accepted that the property was situated at a prime

location in Connaught Place and further that the rates of rent were

approximately the same for the Connaught Place and Barakhamba Road

properties. The learned trial court had also accepted that it was settled

law and had been held by the Supreme Court and this Court in various

judgments, including the judgment of this Court in Vinod Khanna &

Ors. Vs. Bakshi Sachdev 1995 RLR 431 (DB) that the Court is

competent to take judicial notice of the fact that rents had gone

astronomically high in Delhi and in the surrounding areas. However,

the learned trial court erred in relying upon the judgment of this Court

rendered in Dr. P.S. Bedi vs. Project and Equipment Corp. India Ltd.

1994 (28) DRJ 680, in respect of the premises situated in Barakhamba

Road in a multi storeyed building, in which case damages were

calculated and awarded at the rate of Rs.25/- per sq. ft. per month from

1st May, 1989 to February, 1990, and in further holding that "for the

convenience of calculation, the plaintiff is awarded damages at the rate

of Rs.25/- per sq. ft. per month.

9. Mr. Vishnu Mehra, the learned counsel for the respondent,

rebutting the contentions raised on behalf of the appellant, contended

that the reliance placed by the appellant's counsel on the judgments of

this Court in the aforementioned cases was misplaced as the properties

in question were not comparable. The property in the instant case,

though situated in Connaught Place, was on the second floor and was in

an old, dilapidated condition. The learned trial court had rightly

awarded damages at the same rate of Rs.25/- per sq. ft. per month taking

into consideration and noting that the "building is very old may be 40 or

50 years old and much amenities are not provided in this building".

Therefore, the decisions in the other cases decided by this Court were

not applicable to the present case and the appellant could not derive any

assistance from the same.

10. Having heard the learned counsel for the parties, this Court is of

the view that the learned trial court took an overly conservative view in

granting damages to the appellant at the rate of Rs.25/- per sq. ft. per

month for following reasons.

11. The appellant had produced in the witness box Shri Raj Kumar

Sharma, PW-2, who is a property dealer by profession and who had

brought with him photocopies of the certified copies of various rent

agreements, which was executed by the various parties through him, and

which showed the rent of the premises in Connaught Place and nearby

to be between Rs.135/- to Rs.140/- per sq. ft. to Rs.200/- per sq. ft. per

month for the period from 1991-92 to 1997, depending upon the

facilities. There was no cross-examination of this witness nor the leases

executed through him questioned in any manner.

12. Then again, the learned trial court was not correct in holding

that the "relevant date of determination of rate of damages in this case

was September, 1990" and in failing to take into consideration the

amended plaint wherein the damages had been claimed for the period

subsequent to the filing of the suit at the prevailing market rate, more so,

as the litigation itself spanned a period of nearly ten years, and quite

obviously, the rents were not static during this period but were on the

increase. For the same reason, the learned trial court was also not

correct in relying upon the judgment in Dr. P.S. Bedi's case (supra)

which pertained to the period from 1st May, 1989 to 1990. The learned

trial court also ignored the fact that the respondent itself had admitted in

this case that it had taken another premises in Chanderlok Building in

Connaught Place at the rate of Rs.44/- per sq. ft. per month during the

relevant period.

13. In Pushpa Kakkar and Anr. Vs. The New India Assurance Co.

Ltd. decided on 08.04.2009, which was a suit for possession and

recovery of rented premises situated at Connaught Place, this Court has

held that judicial notice can be taken of the fact of increase of rents for

the purpose of calculating the fair amount payable towards damages,

mesne profits in favour of the plaintiffs.

14. I am further buttressed in coming to the conclusion that rate of

mesne profits fixed by the trial court was meagre from a judgment

rendered by Division Bench of this Court, in RFA No.382/1999, titled

Anant Raj Agencies Properties vs. State Bank of Patiala, dated 3rd

May, 2002. Admittedly, the said judgment was rendered inter se the

same parties as in the present case and pertains to the very same

premises, i.e., the premises bearing No.C-31/32, Connaught Place, New

Delhi. The facts in the said case and in the present case are also

identical, inasmuch as in the said case the suit, which was filed in April,

1991, was kept pending for eight years, and was eventually decreed

awarding damages at the rate of Rs.7,025/- per annum for the

unauthorised use and occupation of the premises by the respondent

Bank. The Division Bench held that till the institution of the suit, the

trial court had rightly awarded the mesne profits at the rate of Rs.35/-

per sq. ft. as claimed in the amended plaint. However, since the suit

was kept pending from 15th April, 1991 till 8th January, 1999, the trial

court ought to have taken into consideration the manifold increase of

rents in the area in question. It was further held as follows:-

"Taking this into consideration and also taking judicial notice of the increase of rent during the relevant time we assess that rate of use and occupation charges for the period from the filing of amended plaint till delivery of possession of the first floor of the premises in question, the Bank shall pay at the rate of Rs.50/- pe sq. ft. p.m. This was treated to be not only reasonable but also appropriate rate to apply for the purposes of determining the mesne profit in this case. Decree

of the trial court is accordingly modified to the extent that for mesne profit (pre suit) the appellant will be entitled as decreed by the trial court but from the date of institution of the suit till delivery of possession, the respondent/bank shall pay @ Rs.50/- per sq. ft. per month. The appeal is dismissed subject to aforesaid modification in the decree of the trial court. Parties are left to bear their own cost in the appeal."

15. The aforesaid judgment rendered by the Division Bench is

binding upon this Court. Even otherwise, it is pointed out by the

learned counsel for the appellant that an appeal filed against the said

judgment has since been dismissed by the Supreme Court by passing the

following order:-

"Heard learned counsel for the parties. We do not find any merit in these appeals. Accordingly, the appeals are dismissed. However, the rate of interest on the arrears of rent payable is reduced from 15% per annum to 12% per annum. No order as to costs."

16. It may be noted that the only difference in the aforesaid appeal

(RFA 382/1999) and in the instant appeal is that the said appeal pertains

to the first floor of the premises, while the present appeal pertains to the

second floor of the very same premises. Admittedly, both the first and

the second floor are alleged to be in an equally dilapidated condition.

However, taking into account the fact that the premises in the present

case are located on the second floor while the premises in RFA

No.382/1999 were located on the first floor, in my view, the ends of

justice would be met if the decree is modified to the extent that the rate

of use and occupation charges are assessed to be at the uniform rate of

Rs.44/- per sq. ft. per month with effect from 01.09.1990 till the date of

delivery of vacant possession of the premises in question to the