M/S Indian Sugar Exim Corporation ... vs Subhash Chand Kohli
2010 Latest Caselaw 3220 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                Judgment Reserved on: 09.07.2010
%                                Judgment Delivered on: 13.07.2010

+                         R.S.A. No.136/2004

M/S INDIAN SUGAR EXIM CORPORATION LTD.
                                     ...........Appellant
                 Through: Mr.Sandeep Sethi, Sr.Advocate
                          with  Mr.Suresh     Singh    &
                          Ms.Sunita Bansal, Advocates.

                     Versus

1.SUBHASH CHAND KOHLI
2.CHANDRA MOHAN KOHLI
                                            ..........Respondents
                     Through:    Mr.Dinesh Kapoor & Mr.Manu Nayar,
                                 Advocates.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers 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

INDERMEET KAUR, J.

1. This appeal has been preferred against the impugned

judgment dated 23.02.2004 passed by the learned Additional

District Judge affirming and endorsing the finding of the Trial

Court dated 03.05.2003 whereby future mesne profits had been

granted to the plaintiff for period 10.08.1990 to 30.09.2001 in view

of the fact that the property had stood vacated on 01.10.2001.

2. The present being a second appeal, the substantial question

of law as formulated by a Single Judge of this Court on 12.12.2007

reads as follows:-

"Whether the findings by the Courts below that respondents is entitled to mesne profits @ Rs.70,000/- per month is based on legally admissible/or creditworthy evidence. If so, effect thereof?"

3. The Single Judge of this Court had modified the order of the

First Appellate Court and the mesne profits granted @ Rs.70,000/-

per month had been reduced to Rs.40,000/- per month for the

aforenoted relevant period; the remaining part of the judgment had

been affirmed.

4. The plaintiff/respondent had filed a Special Writ Petition in

the Supreme Court. The Supreme Court vide its order dated

06.02.2009 granted leave and the matter was remanded back to

this Court with the directions which are inter alia contained in para

4 and read as follows:-

" In our view, the judgment of the High Court needs to be set aside on a simple ground. That while reducing and modifying the order of the courts below regarding the rate of mesne profits from Rs.70,000/- to Rs.40,000/- per month, the High Court had not dealt with the evidence adduced by the parties and considered the materials on record to come to a conclusion that the orders of the courts below directing Rs.70,000/- per month as mesne profits be modified to the extent of Rs.40,000/- per month payable to the landlord. We do not find from the judgment that any consideration was made by the High Court to reduce the rate of mesne profits from Rs.70,000/- to 40,000/- per month. That being the position, we set aside the judgment of the High Court and send the case back to it for fresh disposal in accordance with law after giving hearing to the parties and after passing a reasoned order. We request the High Court to dispose of the second appeal within three months from the date of supply of a copy of this order to it."

5. Before proceeding further it would be useful to extract the

factual matrix of the case which is as follows:-

The plaintiff/respondent had filed a suit for possession and

mesne profits in respect of property bearing No. 21, Community

Centre, East of Kailash, New Delhi which he had leased out to the

defendant company being his tenant vide lease deed agreement

dated 29.06.1973 on a monthly rent of Rs.6200 only. The lease was

initially for a period of three years effective from 01.06.1973 but

with the consent of the parties the lease period continued and the

defendant/appellant became a tenant holding over. He became a

tenant on a month to month basis. Rent was being paid @

Rs.6200/- per month. On 29.03.1978 a legal notice had been

served upon the defendant/appellant calling upon him to vacate the

property as also to pay damages. Legal notices dated 23.01.1989

and 20.02.1989 terminating the tenancy of the defendant/appellant

were issued. Damages @ Rs.25000/- per month were claimed.

Thereafter the legal notice dated 06.11.1989 was issued claiming

damages @ Rs.70,000/- per month w.e.f. 20.8.1989 to 20.11.1989.

The defendant/appellant not having vacated the suit property, the

plaintiff/respondent filed the present suit.

6. Both the parties have addressed arguments at length. On

behalf of the defendant/appellant it has been submitted that the

order dated 12.12.2007 of the High Court calls for no interference

as the Court has taken judicial notice of the fact that rentals had

increased in the market but the rate of Rs.70,000/- per month

being based on no evidence yet taking judicial notice of the

increasing rentals over the years mesne profits at the rate of

Rs.40,000/- per month was fair and reasonable and did not call for

any interference. Counsel for the appellant has placed reliance

upon a judgment of the Apex Court reported as (2004) 5 Supreme

Court Cases 304 Union of India vs. Banwari Lal & Sons (P) Ltd. to

support his submission that the present is a case in which the

possession was admittedly not wrongful in the beginning and had

assumed a wrongful character only when it was unauthorizedly

retained and in such a case, the owner is not entitled to claim

mesne profits but only the fair rent. Applying the ratio of the afore-

noted judgment mesne profits awarded @ Rs.40,000/- per month

would qualify as a „fair rent‟.

7. It is submitted that the first Appellate Court had also ignored

the report of the Local Commissioner and reliance had been placed

solely upon the version of PW2 which is also liable to be discarded

as admittedly PW2 had only proved the assessment order of the

property wherein the ratable value of the property had been fixed

at Rs.16,41,600/- which had been challenged in a writ petition

preferred by the plaintiff/respondent and which ratable value has

since been rectified. It is submitted that in these circumstances,

the testimony of PW2 has to be ignored in totality as this testimony

of PW2 qua the ratable value of the property having been fixed at

Rs.16,41,600/- has since been set aside by the subsequent

rectification.

8. Attention has been drawn to the legal notices dated

23.01.1989 and 20.02.1989 wherein the plaintiff had made a claim

of damages/mesne profits at the rate of Rs.25000/- per month. It is

submitted that it was only thereafter in the third legal notice dated

6.11.1989 that the plaintiff had all of a sudden unexplainably raised

his claim of damges/mesne profits from Rs.25000/- to Rs.70,000/-

per month.

9. The respondent has countered these arguments. It is stated

that the High Court while reducing the mesne profits from

Rs.70,000/- to Rs.40,000/- per month has erroneously

reappreciated the testimony of PW2 and the report of the local

commissioner which a Court in Second Appeal is not permitted to

do so; there was a legal bar which the Court had not adhered to

and that is the reason why the matter had been remanded back to

this Court by the Apex Court.

10. Attention has been drawn to the versions of PW1, PW2 as

also the report of the local commissioner and the findings given by

the Trial Court which had been endorsed by the First Appellate

Court.

11. Counsel for the respondent has placed reliance upon a

judgment of the Apex Court reported in 2004(3) Supreme 474

Thiagarajan & Ors. Vs. Sri Venugopalaswamy B. Koil & Ors. It is

submitted that where the High Court had exceeded its jurisdiction

in reassessing, re-appreciating and making a roving enquiry by

entering into the factual arena of the case; where a finding of fact

by the lower appellate Court are based on evidence; the High Court

in second appeal cannot substitute its own findings on a re-

appreciation of the evidence merely on the ground that another

view was possible. Reliance has also been placed upon a judgment

of this Court reported in 60(1995) DLT 336 Anant Raj Agencies Pvt.

Ltd. Vs. Rajinder Jaina. It is submitted that where there is no

evidence in rebuttal as is so in the present case there is no reason

why the versions of the witnesses of the plaintiff should be

disbelieved.

12. Perusal of the record shows that the trial court had framed

three issues. PW-1 had deposed about the prevailing market rate

of similar premises i.e. at the rate of Rs.25/- per sq. ft. PW-2 was

the crucial witness upon which the trial court had placed reliance

to decide the issue of mense profits. He was the Assistant Zonal

Inspector from the Special Assessment Unit, MCD. He had

deposed that the rateable value of the property had been fixed at

Rs.16,41,600/- by the Assessor & Collector on the basis of the

market rent at Rs.20/- per sq. ft., the record of which was lying in

the office of the Assessor & Collector and which could be

summoned from the said department. Report of the local

commissioner was another important piece of evidence relied upon

by the trial court qua the mesne profits to be awarded to the

plaintiff/respondent. The local commissioner, an advocate had

been appointed by an order of the court in the pending civil suit on

24.2.2003 and he had filed his report in the court on 25.3.2003.

Perusal of the order dated 24.2.2003 shows that this order had

been passed on an application filed by the plaintiff under Order 26

Rule 9 read with Order 20 Rule 1 of the Code of Civil Procedure

(hereinafter referred to as „the Code‟) with a specific prayer that

the local commissioner be directed to make his enquiry under

Order 20 Rule 12 (b) (c) of the Code. This order was passed in the

presence of both the parties directing the local commissioner to

visit the suit property on 28.2.2003 at 4 p.m. to ascertain the rent

at which the portion of the first and second floor of the property

had been rented out. The court had relied upon the provisions of

Order 20 Rule 12 (b) (c) of the Code to pass the aforenoted order.

The local commissioner had made enquiries from adjoining

property dealers and had observed that the disputed property was

situated in the heart of the Community Centre Complex, East of

Kailash and was surrounded by a renowned and established

business houses, banks, institutions and companies. On the basis

of his enquiry he had assessed the market rental of the first and

second floor of adjoining properties to be between Rs.15/- to

Rs.20/- per sq. ft. per month. It is relevant to state that at no point

of time any objection has been filed by the defendant to the report

of the local commissioner. His submission that he was not

permitted to cross-examine the local commissioner is of no

relevance in view of the fact that no such submission was ever

made before the fact finding courts; his report was a piece of

evidence under Order 20 Rule 12 sub clause (2) of the Code which

clearly states that where an enquiry had been directed under

Order 20 Rule 12 sub clause (b) or sub clause (c) of the Code

(under which provision of law the local commissioner had been

appointed on 24.2.2003) a final decree in respect of the mesne

profits shall be passed only in accordance with the result of this

enquiry. This was not an appointment under Order 26 Rule 9 & 10

of the Code and as such not an investigation which he was required

to conduct. Even for the sake of argument if it is assumed that the

order appointing the local commissioner has been passed under

Order 26 Rule 9 and 10 of the Code nevertheless report of the local

commissioner would be read as evidence and form a part of the

record of the case and in case if for any reason the court is

dissatisfied with the proceedings of the commissioner, the

commissioner could be examined in person. No such

dissatisfaction was ever brought to the notice of the court as no

objection had been filed by the defendant to the report of the local

commissioner. The question of the court directing his presence in

the witness box did not arise.

13. The submission of the learned counsel for the appellant that

the testimony of PW-2 is to be ignored is ill-founded. It is not

disputed that a writ petition had been filed by the plaintiff

challenging the ratable value and which had since stood rectified;

his contention being that the ratable value of the property has to

be fixed on the cost of construction; it was not his case that the

rate of Rs.20/- sq.ft. was not the market value of the suit property.

14. The courts below had correctly appreciated the

evidence brought before it to conclude that the mesne profits of the

suit property to be awarded in favour of the plaintiff for the

relevant period i.e. the period of 10.8.1990 to 30.9.2001 would be

at the rate of Rs.70,000/- per month which would approximate to

about less than Rs.10/- per sq.ft. Version of PW-2 had been re-

enforced by the report of the local commissioner and which

findings of fact cannot in any manner be faulted with.

15. Substantial question of law framed by this court is

answered accordingly. Appeal is without any merit; it is dismissed.

INDERMEET KAUR, J.

JULY 13, 2010 ns/rb