Delhi High Court

M/S. Consep India Pvt. Ltd. vs M/S. Cepco Industries Pvt. Ltd. on 26 March, 2010

Author: Reva Khetrapal

                               REPORTABLE
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                            DATE OF RESERVE: December 11, 2009

                             DATE OF DECISION: March 26, 2010



+     RFA 329/2007 and CM Nos.16188/2007 and 17682/2007



      M/S. CONSEP INDIA PVT. LTD.             ..... Appellant
                     Through: Mr. Saurabh Kirpal, Ms. Gauri
                              Subramanian, Mr. Jatin Mongia,
                              Ms. Abiruchi Mengi and
                              Mr. Debmalya Banerjee,
                              Advocates

                    versus

      M/S. CEPCO INDUSTRIES PVT. LTD.          ..... Respondent
                     Through: Mr. B.B. Gupta, Advocate

      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 and decree dated 23rd

May, 2007 passed by the learned Additional District Judge in a suit for

ejectment, recovery of mesne profits and permanent injunction filed by

the respondent against the appellant herein.

2. The facts as they emerge from the record are that the appellant

was inducted as a tenant under the respondent with respect to one big

hall, one office room and one WC, all measuring 900 sq. ft. with a

common passage on the second floor of property No.F-14/15,

Connaught Place, New Delhi of the respondent. The said premises were

let out by the respondent to the appellant by an agreement dated 1st

December, 1976, whereunder the appellant had agreed to pay rent to the

respondent at the rate of Rs.2,700/- p.m. for the first three years and at

the rate of Rs.3,240/- p.m. for the next two years and at the rate of

Rs.3,780/- p.m. to the respondent after five years of 01.12.1976, i.e.,

with effect from 01.12.1981.

3. On or about 29th November, 1983, the appellant instituted a

petition in the Court of the Rent Controller, Delhi under Sections 6 and

9 of the Delhi Rent Control Act, 1958 against the respondent, inter alia,

for the determination of the standard rent of the suit premises. In the

said petition, the appellant in para 11 against the column "Monthly rent

together with details of House-Tax, Electricity, Water and other

charges paid by the tenant" stated: "Rs.3,780/- P.M. exclusive of

water and electricity charges". The said petition for determination of

standard rent filed by the appellant against the respondent remained

pending till 1st September, 1997 when the same was dismissed as

withdrawn.

4. In the meanwhile, on account of the fact that the appellant had

stopped payment of rent in spite of a notice of demand, the respondent

herein, in or about the year 1984, instituted a petition for eviction of the

appellant from the aforesaid premises under Section 14(1)(a) of the

Delhi Rent Control Act, 1958. It was, inter alia, stated in the said

petition that the rent of the premises was Rs.3,780/- p.m. and that

initially the premises were let out by the respondent to the appellant by

an agreement dated 01.12.1976 as per which the rent was Rs.2,700/-

p.m. for the first three years, Rs.3,240/- p.m. for the next following two

years and Rs.3,780/- p.m. for the following two years. It was further

stated in the petition that the appellant, who was paying a rent of

Rs.3,780/- p.m. to the respondent with effect from 01.12.1981, had

stopped paying the rent with effect from 1st September, 1982.

5. The appellant filed a written statement/reply to the aforesaid

petition for eviction filed by the respondent, in which the appellant did

not dispute the agreement of 01.12.1976 and the agreement with the

respondent to pay rent at Rs.2,700/-, Rs.3,240/- and Rs.3,780/- p.m. as

aforesaid, but alleged that there was a prohibition under Section 4 of the

Delhi Rent Control Act to the periodical increase of rent in such

manner.

6. The aforesaid petition for eviction filed by the respondent

against the appellant was decided by the Court of the Additional Rent

Controller by order dated 7th March, 1999, in which it was, inter alia,

held that the appellant was liable to pay rent at the rate of Rs.3,780/-

p.m. which he had agreed to pay and in fact paid for one year since

December, 1981. The learned Additional Rent Controller also held the

appellant to be in default of payment of rent and being a case of first

default, gave a liberty to the appellant to pay the arrears of rent.

7. The appellant preferred an appeal from the aforesaid order to the

Rent Control Tribunal, Delhi, which was decided by the order dated 6 th

December, 2003. The Tribunal, inter alia, held that on the date of the

issuance of the notice of demand by the respondent to the appellant,

there was no rent due from the appellant to the respondent and for the

aforesaid reason the order of the Additional Rent Controller could not

be sustained.

8. Subsequently, on 21st September, 2005, the respondent got

issued a legal notice of the said date to the appellant, determining the

tenancy of the appellant and informing the appellant that upon its failure

to vacate the premises in spite of determination of its tenancy, it shall be

liable to pay mesne profits/damages for use and occupation at the

prevalent letting value of the premises from time to time, which

presently was Rs.150/- per sq. ft. p.m., together with interest at the rate

of 24% p.a. on arrears thereof. In the said legal notice, it was asserted

by the respondent that the appellant had been illegally paying rent at the

rate of Rs.2,700/- p.m. only to the respondent and as such Rs.38,880/-

were the arrears of rent which the appellant was liable to pay. The

appellant, it was further stated, was also liable to pay mesne

profits/damages for use and occupation for the month of November,

2005 to the respondent at the rate of Rs.1,35,000/- p.m. and thus, in all,

a sum of Rs.1,73,880/- was due from the appellant to the respondent.

The said notice was duly served on the appellant, to which the appellant

got sent a reply dated 5th October, 2005.

9. On the appellant's failing to vacate the premises in spite of the

determination of its tenancy, the respondent instituted the aforesaid suit,

being Suit No.175 of 2005 for ejectment, recovery of mesne profits and

permanent injunction against the appellant.

10. In the written statement filed by the appellant to the suit instituted

by the respondent, the appellant raised a number of preliminary

objections to the maintainability of the suit, inter alia, being that the suit

was ill-conceived and had been filed with malafide intentions and

ulterior motives - all as a counter-blast to the dismissal by the Rent

Control Tribunal, vide its order dated 6th December, 2003, of the

original petition for eviction filed by the respondent-landlord in or

around 30th November, 1983; that the plaint was a repetition of, if not

identical to, the case made out by the appellant before the Rent Control

Tribunal on which orders had already been passed by the Tribunal on 6th

December, 2003; that the suit was not maintainable and was liable to be

dismissed as the contents of the alleged notice dated 21st September,

2005 were at variance with what was stated by the respondent before

the learned Rent Control Tribunal; that the suit was instituted without

any cause of action and was mischievous in nature; that the suit had

been signed and filed by CEPCO Industries Pvt. Ltd. whereas the lease

agreement dated 1st December, 1976 was executed with CYCLE

Equipment Pvt. Ltd. - and not with CEPCO Industries Pvt. Ltd.; that the

suit was untenable and non-maintainable as the relief sought for fell

within the ambit of the Delhi Rent Control Act and not within the

jurisdiction of Civil Courts; that the respondent was protected against

eviction under the provisions of Section 14 of the Delhi Rent Control

Act and there was an express bar on the jurisdiction of the Civil Court

laid down by Section 14(1) of the said Act.

11. On merits, it was stated that the appellant was a tenant under

CYCLE Equipment Pvt. Ltd. and not under CEPCO Industries Pvt. Ltd.;

the petition for determination of the standard rent was withdrawn by the

respondent only due to limitation and keeping in mind that the

respondent was bound to pay not more than the initial agreed rent of

Rs.2,700/- p.m., which was upheld by order dated 8th May, 1986 by the

Additional Rent Controller. It was denied that a new contractual

tenancy had come into force between the respondent and M/s. CYCLE

Equipment Pvt. Ltd. or that there existed any contractual tenancy

between the respondent and CEPCO Industries Pvt. Ltd. as purportedly

implied in the plaint. It was contended that the suit was an abuse of the

due process of law and totally mischievous, the eviction petition of the

respondent on the ground of non-payment of 12 months outstanding rent

at the rate of Rs.3,780/- p.m. with effect from 1st September, 1981

having been dismissed by the learned Rent Control Tribunal. It was

emphatically denied that the appellant had ever increased the rent, as

alleged, from Rs.2,700/- to Rs.3,240/- or to Rs.3,780/-, and stated that if

payments by cheques in excess of Rs.2,700/- had been made it was only

out of duress and ignorance of the law. It was also stated that no rent

was outstanding as "on the date of the issuance of the notice of demand"

and that the respondent-landlord, by his own written admission, had

himself admitted that his earlier statement, vide notice of demand dated

22nd September, 1983, of 12 months outstanding rent being due was not

correct and that he in fact had received rent for the period between

27.09.1982 and 12.08.1983 by way of 12 cheques amounting to

Rs.45,360/-. It was submitted that that the eviction petition filed by the

respondent-landlord had been rightly dismissed by the learned Rent

Control Tribunal by its order dated 6th December, 2003 in RCA

No.206/1999. It was denied that the appellant-tenant was subsisting on

a month-to-month tenancy and that the tenancy of the appellant-tenant

stood determined after 15 days of the notice dated 21st September, 2005

(received on 26th September, 2005). It was submitted that the suit was

untenable and non-maintainable and had been filed as all earlier

attempts by the respondent-landlord to force the appellant-tenant to pay

an enhanced monthly sum of Rs.3,780/- had failed. The notice dated

21st September, 2005 was invalid and not in accordance with law while

the suit instituted by the respondent-plaintiff was misconceived and

liable to be rejected.

12. In replication, the respondent-landlord reiterated and reaffirmed

the averments made in the plaint while controverting and denying the

averments made in the written statement. On 19.12.2006, from the

pleadings of the parties, the learned trial court culled out nine issues for

the adjudication of the suit.

13. Arguments were advanced by Mr. Saurabh Kirpal, the learned

counsel for the appellant and Mr. B.B. Gupta, the learned counsel for

the respondent on the findings given by the learned trial court on the

nine issues framed for the trial of the suit, to which I now propose to

advert.

Issues No.1 and 2 were dealt with together by the learned trial

court. The said issues read as under:-

"Issue No.1: Whether the suit is barred by the provisions of DRC Act as alleged in the written statement? OPD.

Issue No.2: Whether the rent is Rs.2,700/- as claimed by the defendant in the written statement or the rent is Rs.3,780/- as claimed by the plaintiff? OP Parties."

15. At the outset, it may be noted that the onus of proving Issue No.1

was placed upon the appellant whereas the onus of proving Issue No.2

was upon both the parties. The relevant provision of law is Section 3(c)

of the Delhi Rent Control Act, 1958 (as amended with effect from

01.12.1988), which provides that the said Act would not apply to any

premises whose monthly rent exceeds Rs.3,500/- per month.

16. On the behalf of the appellant-tenant, it was argued that the

relationship between the appellant and the respondent was governed by

the Delhi Rent Control Act because the initial agreed rate of rent was

Rs.2,700/-. The suit was barred by the provisions of the Act as after the

order of the learned Rent Control Tribunal the appellant was required to

pay rent at the rate of Rs.2,700/- p.m. and as such the premises is not

taken out of the purview of the Act. It was submitted that the appellant

had been compelled to pay rent at Rs.3,780/- p.m. with effect from

01.12.1981 under pressure and the increase of rent was illegal and

arbitrary.

17. Mr. B.B. Gupta, the learned counsel for the respondent-landlord,

on the other hand, argued that the onus of proving the rate of rent was

upon both the parties, and not upon the respondent alone. He submitted

that the respondent had discharged the onus placed upon him, but the

appellant had miserably failed to discharge its onus. In support of this

contention, Mr. Gupta placed reliance upon the admissions, expressly

and impliedly made by the appellant admitting that he had made

payment of rent at the rate of Rs.3,780/- p.m. till November, 1983, as

contained in the following documents:-

(i) The lease agreement dated 01.12.1976 (Exhibit RW-1/1).

(ii) The petition under Sections 6 and 9 of the Delhi Rent

Control Act filed by the appellant on 29.11.1983 (Exhibit

PW-1/3).

(iii) The order dated 1st September, 1997 (Exhibit PW-1/4)

passed by the learned Additional Rent Controller

regarding the unconditional withdrawal of the aforesaid

petition.

(iv) Notice of demand dated 22nd September, 1983 sent to the

appellant by the respondent.

(v) Petition under Section 14(1)(a) of the Delhi Rent Control

Act filed by the respondent against the appellant (Exhibit

PW-1/5).

(vi) Written statement filed by the appellant to the aforesaid

petition (Exhibit PW-1/6).

(vii) The statement made by the appellant RW-1 Shri M.K.

Bhagwagar (Exhibit PW-1/7).

(viii) The judgment of the learned Additional Rent Controller

dated 07.03.1999 (Exhibit PW-1/8).

(ix) The judgment of the learned Additional Rent Control

Tribunal dated 06.12.2003 (Exhibit PW-1/9).

18. Before I advert to the admissions allegedly contained in the

aforesaid documents, it may be noted that the learned counsel for the

respondent placed reliance upon the provisions of Sections 17 and 58 of

the Indian Evidence Act and the following judgments rendered by this

Court and by the Supreme Court to contend that judicial admissions by

themselves can be made the foundation of the rights of the parties and

an admission made by a party to the lis is admissible against him

proprio vigore:-

(i) Draegerwerk Aktiengesellschaft vs. Usha Drager Pvt. Ltd. &

Anr. 136 (2007) DLT 355.

(ii) Sangramsinh P. Gaekwad and Ors. vs. Shanta Devi P.

Gaekwad (Dead) Through LRs and Ors. (2005) 11 SCC 314.

(iii) Gautam Sarup vs. Leela Jetly and Ors. (2008) 7 SCC 85.

(iv) Steel Authority of India Ltd. vs. Union of India and Ors. (2006)

12 SCC 233.

(v) Uttam Singh Duggal & Co. Ltd. vs. United Bank of India and

Ors. (2000) 7 SCC 120.

(vi) Claridges Hotel Pvt. Ltd. vs. M/s. M.M. Bhagat & Company

2001 IV AD (DELHI) 790.

19. Having considered and weighed the rival submissions of the

parties and gone through the records and the aforesaid decisions, I am of

the view that the respondent has discharged the onus placed upon it of

proving that the rent of the premises was Rs.3,780/- p.m. I say so for

the following reasons.

20. The lease agreement dated 01.12.1976 (Exhibit RW-1/1) is an

admitted document, the legality and validity whereof are not in dispute.

The appellant itself has filed this document and placed reliance upon it.

A bare perusal of Clause 1 and Clause 10 thereof make it abundantly

clear that the monthly agreed rate of rent at the time of the

determination of the tenancy of the appellant was above Rs.3,500/- p.m.,

i.e., Rs.3,780/- p.m. Clause 1 of the lease agreement provides as under:-

"That the Lessor hereby demised to the lessee all that of portion of second floor adjacent to the office of Brady & Company having an area of 900 square feet with a facility to use the bathroom and service room and fixtures for a period of three years paying therefor during the said term the monthly rent of Rs.2,700/- per month only excluding water and electricity charges payable in advance by the 10th day of every English Calender month. The tenancy month shall commence from the 1st day of every such month."

21. The provisions with regard to the increase of rent are mentioned

in Clause 10 of the Lease Deed, which reads as under:-

"The Lease is hereby granted for the three years fixed lease. Further extension of two years will be on the terms and conditions as stipulated in this agreement with increase of rent by 20% of the existing rent. All further extension will also be on the same terms and conditions with increase of rent by 20% after every two years period of Lease Agreement hence onwards."

22. From the above undisputed document, it stands clearly proved

that the rate of rent at the time of determination of the tenancy was

Rs.3,780/- p.m. as alleged by the respondent. I am fortified in coming

to this conclusion from the standard rent petition filed by the appellant,

bearing No.SR-52/83 (Exhibit PW-1/3), wherein the appellant had

specifically stated in para 11 that the rate of rent was Rs.3,780/- p.m.,

exclusive of water and electricity charges. Again, in para 18(a), it was

stated that the contractual tenancy came into force on 01.12.1981 at the

rate of Rs.3,780/- p.m., exclusive of water and electricity charges. It

was further stated:

"This agreed rate of rent is exorbitant, excessive, unreasonable and out of all the proportion to the reasonable cost of construction including the cost of land on which the whole building is constructed."

23. The aforesaid petition filed by the appellant under Sections 6 and

9 of the Delhi Rent Control Act was unconditionally withdrawn by the

appellant on 01.09.1987 (Exhibit PW-1/4). The necessary inference, to

my mind, is that the appellant abandoned its claim for determination of

standard rent (Order XXIII Rules 1 and 1A CPC). The plea of the

appellant that the said petition was withdrawn as it was barred by

limitation appears to me to be clearly untenable as the same is

unsupported by any such evidence on the record. Even assuming it to

be so, it does not now lie in the mouth of the appellant to contend that

the rate of rent was not Rs.3,780/- p.m. as admitted by him in the

petition itself.

24. Next, reference may be made to the notice of demand dated 22nd

September, 1983 sent by the respondent to the appellant demanding the

arrears of rent at Rs.3,780/- p.m. Based upon the said notice, as stated

above, a petition under the provisions of Section 14(1)(a) of the Delhi

Rent Control Act was filed by the respondent (Exhibit PW-1/5), stating

therein that the tenant had stopped paying the rent with effect from

01.09.1982. The appellant-tenant filed a written statement (Exhibit

PW-1/6) to the said petition, wherein in paragraph 5 of the preliminary

objections, it was admitted that the rent was increased to Rs.3,780/-

p.m., but asserted that there was a prohibition under Section 4 of the

Delhi Rent Control Act to such increase. In reply to para 11 of the

eviction petition also, wherein the rate of rent was again stated to be

Rs.3,780/- p.m., the increase was stated to be illegal and it was

submitted that the appellant was not liable to pay more than Rs.2,700/-

p.m. Similarly, in para 18(a) of the written statement, the payment was

admitted and again it was submitted that the rate of Rs.3,780/- p.m. was

violative of the standard rent.

25. The admissions made in the statement of the appellant-tenant as

RW-1 before the learned ARC, Delhi on 09.07.1987 (Exhibit PW-1/7)

are also significant which read as follows:-

"As per the lease, the respondent company was to abide by the same terms and conditions of perpetual lease as entered into between the parties and L&DO. Again said: The petitioner and respondent. As per after the initial period of three years the rent was to be increased by 20% and, thereafter, after every two years rent was increased by 20%. Therefore, after three years the rent was increased from Rs.2,700/- to Rs.3,240/- and then after a further period of two years the rent was increased from Rs.3,240/- to Rs.3,780/-. This increase in rent was and is illegal and the same cannot be increased from Rs.2,700/- to Rs.3,240/- or Rs.3,780/-. .................... The monthly rent used to be paid by cheques but the landlord was invariably reluctant in issuing stamped receipts for the same. Over a period of 82 months from 1.12.1976, I have with

me only 10 receipts which the landlord would give with great reluctance and would cover 3/4 months in one receipt. In respect of monthly rentals I have paid 12 nos. cheques amounting to Rs.3,780/- each or the details of cheques nos. details of the cheques dates and the amount are available on record. In 1986/96 and petitioner has issued a overall statement which is totally false."

26. The above deposition, to my mind, affirms that the rate of rent as

per the lease deed was Rs.3,780/- p.m., which was being paid by the

appellant by cheques. The only grievance of the appellant before the

learned ARC, Delhi was that the rent so increased was arbitrary and

illegal and in violation of the provisions of Section 4 of the Rent Control

Act. The learned ARC, by her judgment dated 7th March, 1999 (Exhibit

PW-1/8), adjudicating upon the dispute between the parties as to

whether standard rent was liable to be paid by the tenant or as to

whether the landlord was entitled to recover the agreed rent in

accordance with the Lease Deed, in paragraphs 12 and 16 held as

under:-

Paragraph 12 "12. I, therefore, hold that the respondent was liable to pay the rent @ Rs.3,780/- per month which he had agreed to pay and in fact paid for one year since December 1981 as admitted by him as RW1.

Paragraph 16

16. However, the present case is one of first default. Having come to the conclusion that the rate of rent was Rs.3,780/- per month and not Rs.2,700/- per month, the order u/s 15(1) of the DRC Act has to be modified and in order that the respondent be entitled to the protection of section 14(2) of the DRC Act, it is directed that the respondent shall pay or deposit the entire arrears of rent @ Rs.3,780/- w.e.f. 1.9.1982 upto the month preceding the month in which the deposit is made within one month of the date of this order. The respondent shall be entitled to adjust the amounts already deposited vide orders u/s 15(1) of the DRC Act passed on 14.3.1986 and 8.5.1986."

27. Aggrieved and dissatisfied by the judgment of the learned

Additional Rent Controller, the appellant-tenant preferred an appeal to

the Additional Rent Control Tribunal. It would be apposite at this

juncture to note that in the appeal itself (Ground 21), it is again stated by

the appellant that the last paid rent was Rs.3,780/- p.m., which was not

the initially agreed rent. This, by itself, is sufficient to show that the

appellant was paying rent at the rate of Rs.3,780/- p.m.

28. Adjudicating upon the appeal filed by the appellant-tenant, the

Additional Rent Control Tribunal in paragraph 10 of his judgment dated

06.12.2003 (Exhibit PW-1/9) held as follows:-

"10. The demand in the notice is of Rs.45,360/-. This demand has been met by the 12 cheques

which were mentioned in the reply notice. There was no else demand for which the respondent can prefer the petition u/s 14(1)(a) of the DRC Act (sic.). Assuming for the sake of arguments respondent had made any demand of any previous rent due which was not depicted in the notice then it was the duty of the respondent to make a demand of the said rent. When a specific demand is made and the specific demand is met then for any other dues if such payments are adjusted then the demand as expressed in the notice cannot be said to be demand within the meaning of section 14(1)(a) of the DRC Act. Therefore, ingredient of demand of previous dues was missing and once the ingredient of demand was missing there cannot be any cause of action to the respondent to prefer the petition u/s 14(1)(a) of the DRC Act. The court below while passing the impugned order has not looked into this vital aspect of the matter. The court below went with the alleged adjustment. Respondent was to prove by standard evidence that what was adjusted was also due. The standard evidence is lacking. Respondent has simply submitted a statement of account which is no evidence in the eye of law. In this view of the matter the court below was not justified even considering the statement of account as have been submitted. (sic.) I need not refer to the other evidence as on the face of the demand, petition of the respondent cannot stand.

11. In view of the foregoing discussion the order of the court below cannot be sustained. The averments have been set out with regard to the rate of rent. This court has nothing to do with the same as what has been demanded same has been met and cause of action as was required u/s 14(1)(a) of the DRC Act was not there. Therefore, I need not refer the arguments with regard to the locus standi of the respondent since

the petition is being dismissed.

12. Accordingly, appeal is allowed. The impugned order is set aside. The petition of the respondent is dismissed."

29. From the above findings of the learned Additional Rent Control

Tribunal, Delhi, it is clear that the Tribunal did not at all touch the

aspect of the rate of rent nor altered the same from Rs.3,780/- to

Rs.2,700/- as prayed for by the appellant and the prayer for

modification of the rate of rent was not granted.

30. Thus, significantly, in the instant case, the notice of demand was

raised at the rate of Rs.3,780/- p.m. and the rent paid in consequence

thereof was at the rate of Rs.3,780/- p.m. This is crystal clear from the

order of the learned Additional Rent Control Tribunal (Exhibit PW-1/9),

wherein it is recorded that payment of arrears of rent was sought by

notice dated 22.09.1983 from 01.09.1982 to 31.08.1983, i.e., for a

period of 12 months and a total payment of 12 number of cheques at the

rate of Rs.3,780/-, totalling Rs.45,360/- had been paid (Rs.3,780/- x 12

= Rs.45,360/-) and as such there was no cause of action. It was on that

ground that the eviction proceedings were dismissed and the appeal

allowed.

31. A perusal of the record also shows that the plea that the payment

was being made by the appellant "under pressure" was raised for the

first time in the eviction proceedings. It was however not elaborated

either in the pleadings in the eviction proceedings or in the course of

evidence, as to what was the nature of the pressure being exerted upon

the appellant and as a matter of fact nothing has been placed on the

record by the appellant to show that any amount was paid by him under

protest. The same remains a bald allegation. It is settled law that

where an averment is made that payment was made under pressure or

protest, all the particulars thereof are required to be pleaded (Order VI

Rule 4 CPC) and duly proved in the course of evidence. In the absence

of pleadings and proof, the plea of pressure is, therefore, of no avail to

the appellant.

32. Mr. Saurabh Kirpal, the learned counsel for the appellant also

contended that the trial court has based its judgment on some form of

res judicata, in that, the trial court has held that the finding of the

Additional Rent Controller (ARC) that the rent of premises was

Rs.3,780/- has become final between the parties. He further contended

that this is on the basis that the Tribunal which was hearing an appeal

from the decision of the ARC has not disturbed this finding of the ARC.

Hence, as per the learned trial court the decision of the ARC has

become final and binding and cannot be challenged. Mr. Kirpal

submitted that this finding ignores the fact that the appeal was allowed

by the Tribunal and as such there was no question or occasion for the

appellant to file an appeal from the order of the Tribunal. The

observations of the Supreme Court in the case of Deva Ram vs. Ishwar

Chand (1995) 6 SCC 733, which are extracted herein below, were relied

upon by the counsel for the appellant in support of his contention that

the judgment of the trial court was untenable:-

"27. Thus, an appeal does not lie against mere 'findings' recorded by a court unless the findings amount to a 'decree' or 'order'. Where a suit is dismissed, the defendant against whom an adverse finding might have come to be recorded on some issue has no right of appeal and he cannot question those findings before the appellate court. (See Ganga Bai v. Vijay Kumar).

28. In Midnapur Zamindari Co. Ltd. vs. Naresh Narayan Roy, it was observed as under:-

"Their Lordships do not consider that this will be found an actual plea of res judicata, for the defendants, having succeeded on the other plea, had no occasion to go further as to the finding against them: but it is the finding of a court which was dealing with facts nearer to their ken than the facts are to the Board now, and it certainly creates a paramount duty on the appellants to displace the finding, a duty which they have now been able to perform."

33. The aforesaid contention of the learned counsel for the appellant,

in my opinion, is devoid of merit though undoubtedly the proposition of

law laid down in Deva Ram's case (supra) cannot be undisputed. In the

instant case, the findings of the learned trial court as is clear from a

perusal of the judgment are not based on the principle of res judicata.

Reference has been made by the learned trial court to the judgment of

the Tribunal only with a view to show that the appeal was allowed by

the Tribunal for the reason that there were no arrears of rent payable on

the date of the institution of the eviction petition and thus no ground for

the preferment of the petition under Section 14(1)(a) of the Delhi Rent

Control Act existed and thus the contention of the appellant that his

prayer for reduction of the rent to Rs.2,700/- p.m. from Rs. 3,780/- p.m.

was granted by the Tribunal, was misconceived.

34. With regard to plea of the suit being barred by the provisions of

the Delhi Rent Control Act, a Division Bench of this Court in Shalimar

Paints Ltd. vs. Bani Jagtiani Trust and Ors. 107 (2003) DLT 58, while

holding that the landlord was competent to increase the rent legally as

per the provisions of Section 6A and Section 8 of the DRC Act, has laid

down that there is no legal bar in the landlord availing the remedy of

filing a suit once the rent stood increased to more than Rs.3,500/-

p.m. Paragraph 22 of the said judgment, which is apposite, is being

reproduced hereunder:-

"22. In view of the aforesaid position of law, we do not find any merit in the submission of the learned counsel for the appellant that the respondent cannot avail two remedies for a single cause of action. Even according to Ambalal's case (supra) there is no legal bar even in availing of two remedies but it will not be right for the landlord to continue two proceedings. In the instant case the 1st proceeding was initiated when the rent was less than Rs.3500/- and the second proceedings were initiated when the rent was more than Rs.3500/- and the tenancy fell outside the purview of the Rent Control Act. The respondent was wholly justified in initiating two proceedings in the facts and circumstances of this case."

35. It also deserves to be noticed that the plea of fixation of standard

rent under Section 4 of the Delhi Rent Control Act is not available to the

appellant, inasmuch as a Division Bench of this Court in the case of

Raghunandan Saran Ashok Saran (HUF) vs. Union of India & Ors.

2002 (61) DRJ 457 (DB), after delineating the entire history of rent

legislation and examining the various provisions of the Rent Control

Act has taken the view that Sections 4, 6 and 9 of the Delhi Rent

Control Act, which deal with the determination and fixation of standard

rent, have not taken into account the huge difference between the cost of

living in the past and the present times and thus do not pass the test of

reasonableness. The said provisions have thus been adjudged to be

"archaic" in nature in that they contain no mechanism to compensate the

landlords and to offset inflation. These provisions relating to standard

rent, therefore, have been held to offend Articles 14, 19(1)(g) and 21 of

the Constitution and ultra vires the Constitution.

36. Another submission made by Mr. Kirpal on behalf of the

appellant was that even assuming that the respondent-landlord was

entitled to enhance the rent in terms of the lease agreement, the Act

requires a notice to be sent for such an increase. No such notice has

been given in this case. Therefore, even assuming that the increased

rent has been paid, the same has not been enhanced in a manner known

to law. The enhancement is thus contrary to Section 8 of the Delhi Rent

Control Act and hence any increase is void.

37. Mr. B.B. Gupta, the learned counsel for the respondent relying

upon the judgments rendered in Ram Prakash (Prof.) vs. D.N.

Shrivastava 162 (2009) DLT 419, Crack Detectives Pvt. Ltd. vs. P.S.

Malhotra 129 (2006) DLT 584, Standard Pharmaceuticals Ltd. vs.

Gyan Chand Jain & Anr. 2002 (62) DRJ 733, National Cooperative

Consumer Federation of India Ltd. vs. Jwala Pershad Ashok Kumar

Chopra and Ors. 74 (1998) DLT 842 and Nopany Investments (P) Ltd.

vs. Santokh Singh (HUF) 2008 (2) SCC 728 contended that the

provisions of Section 8 are not applicable to the instant case.

38. A look at Section 6A and Section 8 of the Act, in my opinion,

clearly shows that the said Section has no application to the instant case

where the Lease Deed itself provided for the increase of the rent from

time to time. Section 6A and Section 8 reads as under:-

"6A. Revision of rent.- Notwithstanding anything contained in this Act, the standard rent, or, where no standard rent is fixed under the provisions of this Act in respect of any premises, the rent agreed upon between the landlord and the tenant, may be increased by ten per cent every three years."

"8. Notice of increase of rent.- (1) Where a landlord wishes to increase the rent of any premises, he shall give the tenant notice of his intention to make the increase and in so far as such increase is lawful under this Act, it shall be due and recoverable only in respect of the period of the tenancy after the expiry of thirty days from the date on which the notice is given. (2) Every notice under sub-section (1) shall be in writing signed by or on behalf of the landlord and given in the manner provided in section 106 of the Transfer of Property Act, 1982 (4 of 1882)."

39. Clearly, Section 6A envisages and permits revision of rent by

10% every three years. Such increase, the Section envisages, shall be

made upon the standard rent or where no standard rent is fixed under the

provisions of the Act in respect of any premises, the rent agreed upon

between the landlord and the tenant. As such, it is only the rent agreed

upon between the landlord and the tenant which is subject to revision by

10% every three years. This provision clearly can have no application

in a case where in Lease Deed itself provision is made for the increase

of rent and the rent is agreed upon between the landlord and the tenant

by consensus.

40. In view of the aforesaid, I am of the view that the learned

Additional Trial Judge was justified in holding that there was sufficient

evidence on record to prove that the rent of the tenanted premises was

Rs.3,780/- p.m. w.e.f. 01.12.1981 as claimed in the plaint and the

appellant/defendant had failed to prove that the suit was barred by the

provisions of the DRC Act. Issues No.1 and 2, in my considered

opinion, were correctly decided in favour of the respondent and against

the appellant.

41. Issue No.3

Issue No.3 reads as under:-

"Issue No.3: Whether the name of M/s. Cycle Equipment Pvt. Ltd. has been changed to M/s. CEPCO Industries Pvt. Ltd., if so, its effect? OPP."

42. The onus of proving this issue was upon the respondent, who

discharged the aforesaid onus by deposing that the respondent Company

was earlier known as 'CYCLE Equipment Pvt. Ltd.'. The name

'CYCLE Equipment Pvt. Ltd.' had been changed to 'CEPCO Industries

Pvt. Ltd.' and the certificate of incorporation as well as the certificate of

the change of the name were incorporated in the Memorandum and

Articles of Association of the respondent Company, which were Exhibit

PW-1/1. The appellant was well aware of the change of the name of

'CYCLE Equipment Pvt. Ltd.' to 'CEPCO Industries Pvt. Ltd.'.

43. In cross-examination, the testimony of the aforesaid witness

(PW-1) remained unshaken. From the deposition of PW-1 and from the

cross-examination of DW-1, in my view, the learned trial court rightly

decided this issue in favour of the respondent and against the appellant.

In any case, the findings on this issue were not seriously challenged by

the appellant in the course of arguments.

44. Issue No.4

Issue No.4 reads as under:-

"Issue No.4: whether the tenancy stands terminated vide notice dated 21.9.2005, if so, its effect? OPP."

45. The findings of the learned trial court on this issue as set out in

paragraph 24 of the judgment are as follows:-

"The onus of this issue was upon the plaintiff. The plaintiff has proved the notice dated 21.9.2005 as Ex PW1/10 wherein the lease of the defendant was determined. The service of the

said notice is not denied. As the notice was duly replied vide reply Ex PW1/14 dated 5.10.2005, it was alleged in the reply that the defendant was liable to pay rent @ Rs.2,700/- per month which he has paid upto date and the rate of rent determined @ Rs.3,780/- by the Ld. ARC, Delhi has already been set aside by the Ld. Additional Rent Control Tribunal, Delhi and as such the legal notice determining the tenancy was not maintainable. Admittedly the tenancy is a month to month tenancy which is terminable by a 15 days notice. As per the provisions of section 111 sub section (h) of The Transfer of Property Act, 1882, the said tenancy is determined on the expiration of a notice to determine the lease. In the light of my findings on the issue no.1 and 2, it is held that the rate of rent of the tenanted premises was Rs.3,780/- on the date of service of the notice and the lease of the defendant qua tenanted premises stands determined after 15 day of service of notice dated 21.9.2005 Ex PW1/10. As per the reply Ex PW1/14, the said notice was received on 26.9.2005 by the defendant. The plaintiff has, therefore, succeeded in proving that the lease stands determined by notice dated 21.9.2005 and the tenancy stands terminated. The issue no.4 is decided accordingly in favour of the plaintiff and against the defendant."

46. The above findings on Issue No.4 were also not seriously assailed

by the appellant in the course of arguments and, therefore, I do not

propose to dwell any longer on this issue.

Issues No.5, 6 and 8 pertain to the prayer for mesne profits made

in the suit and read as under:-

"Issue No.5: Whether the plaintiff is entitled to the recovery of Rs.1,73,880/- as arrears of rent? OPP.

Issue No.6: Whether the plaintiff is entitled to the mesne profits, if so, at what rate and for what period? OPP.

Issue No.8: Whether the plaintiff is entitled to the interest on the mesne profits as claimed for? OPP."

48. The onus of proving the aforesaid issues was upon the

respondent. In prayer clause (ii), the respondent has prayed for recovery

of Rs.1,73,880/- with interest at the rate of 24% p.a. from the date of the

institution of the suit till the date of realisation, i.e., Rs.38,880 towards

short fall in the rent for the last three years before the determination of

of the lease and mesne profits at the rate of Rs.1,35,000/- p.m. (i.e.

Rs.150/- per sq. ft. per month) till the institution of the suit, i.e., for the

month of November, 2005. In prayer clause (iii), the plaintiff has

claimed future mesne profits/damages at the rate of Rs.150/- per sq. ft.

per month, i.e., at the rate of Rs.1,35,000/- p.m. along with interest at

the rate of 24% p.a.

49. In view of the findings of the learned trial court on Issues No.1

and 2 which have been affirmed by this Court, the learned trial court, in

my view, has rightly held the respondent to be entitled to the aforesaid

amount of Rs.38,880/- calculated @ Rs.3,780/- per month as arrears of

rent along with interest at the rate of 12% p.a.

50. With regard to the claim of Rs.1,35,000/- as mesne profits, the

learned trial court awarded mesne profits at the rate of Rs.50/- per sq. ft.

The contention of the learned counsel for the appellant is that the

determination of mesne profits at the rate of Rs.50/- per sq. ft. per

month by the learned Court was based on no evidence or material

whatsoever, but was simply the ipse-dixit of the respondent. The Court

could at best have passed a decree directing an inquiry into the rate of

mesne profits as contemplated by the provisions of Order XX Rule

12(c) of the CPC. Rather than directing an inquiry, the trial court

simply passed a decree, which was not permissible in law.

51. Mr. Gupta, the learned counsel for the respondent, on the other

hand, contended that under Order XX Rule 12 CPC, it is the absolute

discretion of the Court either to determine the mesne profits of its own

or to order for an inquiry. In the present case, the Court after

considering the evidence on record and taking into account the entirety

of the facts and circumstances of the case and the background of the lis

between the parties has exercised its lawful discretion to determine the

mesne profits of its own. Such exercise of discretion by the learned

Court, Mr. Gupta contended, has not been challenged before this Court

except in the course of arguments. It was also contended by Mr. Gupta

that the respondent had discharged the onus placed upon it with regard

to proving the rate of damages/mesne profits by leading oral evidence

and also by cross-examining the appellant. The appellant, on the other

hand, had not led any evidence to prove the market rate at the relevant

time.

52. The learned counsel for the respondent also relied upon a catena

of decisions in support of his contention that while determining mesne

profits the Court is entitled to take judicial notice of the increase of

rentals in Delhi under Sections 56 and 57 of the Indian Evidence Act,

1872, including the decisions of this Court in M.R. Sahni vs. Doris

Randhawa 2008 (104) DRJ 246, National Radio & Electronic Co. Ltd.

vs. Motion Pictures Association 122 (2005) DLT 629 (DB), State

Bank of Bikaner and Jaipur vs. I.S. Ratta & Ors. 120 (2005) DLT 407

(DB), Anant Raj Agencies Properties vs. State Bank of Patiala 2002

IV AD (Delhi) 733 (DB), Motor & General Finance Ltd. vs. M/s.

Nirulas & Ors. 92 (2001) DLT 97, Vinod Khanna and Ors. vs. Bakshi

Sachdev (Deceased) Through LRs and Ors. AIR 1996 (Delhi) 32 (DB)

and Bakshi Sachdev (D) by LRs vs. Concord (I) 1993 Rajdhani LR

563.

53. Specific reference was made to a Division Bench judgment of

this Court in Anant Raj Agencies Properties vs. State Bank of Patiala

2002 IV AD (Delhi) 733, wherein this Court in respect of premises

situated in Connaught Place, New Delhi had, on the basis of the

evidence on record, allowed the payment of mesne profits at the rate of

Rs.50/- per sq. ft. per month for the property in the possession of the

Bank, and further held that since the suit had been kept pending from

15.04.1991 till 08.01.1999, the trial court ought to have taken into

consideration the manifold increase of rent in the area in question and

also taken judicial notice of the same. In doing so, the Division Bench

relied upon the judgment of the Supreme Court in D.C. Oswal vs. V.K.

Subbiah and Ors. AIR 1992 SC 184, where the rent of the premises

was enhanced by the Supreme Court from Rs.275/- p.m. to Rs.400/-

p.m. taking judicial notice of the escalation of rents everywhere.

54. In Vinod Khanna and Ors. vs. Bakshi Sachdev (Deceased)

Through LRs and Ors. AIR 1996 (Delhi) 32, a Division Bench of this

Court relying upon the D.C. Oswal's case held as under:-

"21. The learned Counsel for the appellants also urged before us that the learned trial Court was not justified in taking a judicial notice of the fact of increase of rents like the suit property and also in providing Rupees 10,000/- per month as fair amount towards damages/mesne profits in

favor of the plaintiffs. It is true that no substantial evidence has been led by the plaintiffs in respect of the increase of rent in the properties like that of the suit property. However, it is a 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 in case of D.C. Oswal v. V.K. Subbiah; reported in AIR 992 SC 184.

22. In that view of the matter we have no hesitation in our mind in holding that the trial Court did not commit any illegality in taking judicial notice of the fact of increase of rents and determining the compensation in respect of the suit premises at Rs.10,000/- per month w.e.f. 19- 1-1989, in view of the fact that the rent fixed for the said premises was at Rs.6,000/- per month as far back as in the year 1974. We may, however, note here that the learned counsel for the appellants did not seriously challenge the findings of the learned Judge that Rs.10,000/- per month would be the fair market rent of the suit premises. Accordingly, in view of the aforesaid findings arrived at by us the submissions of the learned counsel for the appellants in our view have no substance at all."

55. In another Division Bench judgment of this Court titled as S.

Kumar vs. G.K. Kathpalia 1991 (1) RCR 431, where the respondent

landlord had not led any documentary evidence on the prevalent market

rates of other premises in the vicinity, it was held by the Division Bench

that keeping in mind the prime location of the suit premises, its

proximity to the community centre and commercial activity, a sum of

Rs.25,000/- p.m. would be a just and fair amount by way of

damages/mesne profits from the date of the institution of the suit till the

date of the delivery of the possession of the premises.

56. In Motor & General Finance Ltd. vs. M/s. Nirulas & Ors. 92

(2001) DLT 97, it was held that where the defendants are prima facie

unauthorised occupants, they cannot be allowed to remain in possession

of the premises without paying any amount. The Court can take judicial

notice of the location of the premises, its area, etc. for the purpose of

awarding mesne profits to the landlord thereof.

57. In International Pvt. Ltd. vs. Saraswati Industrial Sundictes

Ltd. 1992 (2) RCR 6, this Court held that a certain amount of guess

work in the calculation of mesne profits was inevitable.

58. In Shri M.R. Sahni vs. Mrs. Doris Randhawa 2008 (104) DRJ

246, while reiterating that the steep increase in the rentals in Delhi is a

matter of fact of which judicial notice can be taken of by the Courts,

this Court again emphasized:-

"44. I note that in relation to determination of mesne profits there is always some element of guesswork. What has to be ensured is that the finding has not to be the conjecture of the Court. As long as there is some evidence to sustain the same, the finding cannot be faulted."

59. In the instant case, on an examination of the records, it transpires

that on behalf of the respondent PW-1 Shri R.N. Aggarwal has tendered

in evidence his affidavit by way of evidence wherein he deposed that

the tenancy of the appellant was determined vide notice dated

21.09.2005 and thereafter the occupation/possession of the appellant

became unauthorised and the appellant was liable to pay mesne

profits/damages for the use and occupation of the premises. He further

stated on oath that the then letting value of the premises was at the rate

of Rs.150/- per sq. ft. per month; that there had been a tremendous

increase in the letting value of the premises, and that ever since the

sealing of unauthorised commercial premises in residential areas had

started, i.e., since the beginning of the year 2006, the rate of letting

value of authorised commercial and/or office premises had increased

manifold. He also deposed that as at present, the letting value of the

premises was Rs.800/- per sq. ft. per month and that the respondent was

also entitled to interest thereon at the rate of 24% p.a. till the date of

payment. The testimony of this witness remained unshaken in cross-

examination and barring a few suggestions put to the witness there was

no effective cross-examination on the issue.

60. In the cross-examination of the appellant (Shri M.K. Bhagwagar,

who appeared in the witness box as RW-1), there was no denial by the

appellant that the ground floor of the premises in question, which were

tenanted, had been let at the rate of Rs.800/- per sq. ft. per month, where

the Pantaloon Showroom was being run. The appellant also did not

choose to lead any evidence in rebuttal to prove the market rate at the

relevant time. Thus, it is on the record and is not denied by the

appellant that the ground floor of the very same premises is at present

leased out for the purpose of running the Pantaloon Showroom at the

rate of Rs.800/- per sq. ft. per month.

61. As regards the contention of the learned counsel for the appellant

that it was incumbent upon the Court to have ordered an inquiry into the

mesne profits, the provisions of Rule 12 of Order XX CPC are apposite,

which read as under:-

"12. Decree for possession and mesne profits.- (1) Where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree:

(a) for the possession of the property;

(b) for the rents which have accrued on the

property during the period prior to the institution of the suit or directing an inquiry as to such rent;

(ba) for the mesne profits or directing an inquiry as to such mense profits;

(c) directing an inquiry as to rent or mense profits from the institution of the suit until,-

(i) the delivery of possession to the decree-holder,

(ii) the relinquishment of possession by the judgment-debtor with notice to the decree-holder through the Court, or

(iii) the expiration of three years from the date of the decree, whichever event first occurs.

(2) Where an inquiry is directed under clause

(b) or clause (c), a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such inquiry."

62. The learned trial Judge has held, and in my view rightly so, that

in view of the provisions of Order XX Rule 12(ba) of the CPC in a suit

for recovery of possession of immovable property and for rent or mesne

profits, the Court while passing decree for possession of the property

may pass a decree for mesne profits or direct an inquiry as to such

mesne profits. The Court has discretion to award future mesne profits if

sufficient evidence is found available on the record by the Court for

determination of the claim of mesne profits and if the Court finds that

the evidence brought on record by the landlord is not sufficient for such

determination, the Court may direct an inquiry as to such mesne profits.

63. In Gopalakrishna Pillai & Ors. vs. Meenakshi Ayal & Ors. AIR

1967 SC 155, it has been held that Order XX Rule 12 of the CPC

enables the Court to pass a decree both for past and future mesne

profits. It was further held that as regards the past mesne profits, the

plaintiff has existing cause of action at the time of institution of the suit

while for future mesne profits though he has no cause of action as on

date of institution of the suit but he can claim such relief of future

mesne profits under Order XX Rule 12 CPC and the Court may award

such relief even if the same is not specifically asked for in the plaint.

64. As regards the claim for interest on mesne profits, in I.S. Ratta

(supra), relying upon the judgment of the Supreme Court in Mahant

Narayana Dasjee Varu & Ors. vs. The Board of Trustees, the

Tirumalai Tirupathi Devasthanam AIR 1965 SC 1231, it was held that

interest is an integral part of the mesne profits and, therefore, the same

has to be allowed in the computation of mesne profits itself. Paragraphs

16 to 18 of the said judgment are apposite and are reproduced

hereunder:-

"16. Having decided the aforesaid question in the aforesaid manner, we proceed to deal with the next contention of Counsel appearing for the appellant that the interest awarded by the

learned Trial Court for the damages is unknown in law. We have given our anxious consideration to the aforesaid contention of Counsel appearing for the appellant. The said contention is however, liable to be rejected straightaway in view of the settled position of law in that regard in the decision of the Supreme Court in Mahant Narayana Dasjee Varu & Ors. v. The Board of Trustees, the Tirumalai Tirupathi Devasthanam, reported in AIR 1965 SC 1231. The Supreme Court in the said decision held that Section 2(12) of the CPC has defined what 'mesne profits' is. It was also held in the said judgment that interest is an integral part of the mesne profits and, therefore, the same has to be allowed in the computation of mesne profits itself. The following paragraph from the judgment is relevant to be extracted which accordingly stands quoted herein:

"The last of the points urged was that the learned Judges erred in allowing interest up to the date of realisation on the aggregate sum made up of the principal and interest up to the date of the decree, instead of only on the principal sum ascertained as mesne profits. For the purpose of understanding this point it is necessary to explain how interest has been calculated by the learned Judges. Under Section 2(12) of the Civil Procedure Code which contains the definition of "mesne profits", interest is an integral part of mesne profits and has, therefore, to be allowed in the computation of mesne profits itself. That proceeds on the theory that the person in wrong possession appropriating income from the property himself gets the benefit of the interest on such income. In the present case the Devasthanam was entitled to possession from and after June

7, 1933 i.e., when the Act came into force and the Devasthanam Committee was appointed. The Mahant having wrongfully resisted the claim of the Devasthanam to possession without surrendering the property, was admittedly bound to pay mesne profits. This, it may be stated, is not disputed. The question raised are, however, two: (1) when is the aggregation of the principal amount of the mesne profits and the interest thereon to be made for the purpose of the total carrying further interest? (2) What is the rate of interest to be charged. The learned trial Judge allowed interest at 6 per cent for the calculation of interest which is part of mesne profits. Having calculated mesne profits on this basis he aggregated the amount of mesne profits, i.e., income from the several items of property plus the interest on it up to the date of the plaint i.e., January 10, 1946. On the total sum so ascertained he decreed interest at 6 per cent till the date of his decree i.e., March 28, 1952. He passed a decree for this sum with further interest at 6 per cent till the date of realisation."

17. The aforesaid issue is no longer res integra that interest on mesne profits could be paid. The next question, therefore, would be as to what would be the appropriate rate of interest. The learned Trial Court has awarded 16.5% p.a., interest on the rent. In the aforesaid case decided by the Supreme Court 6% interest was held to be a reasonable interest. In the said case it was held that:

"In any event, if the Trial Court in its discretion awarded interest at 6 per cent, and that is admittedly not per se an unreasonable rate, there was no compelling

equity in the Mahant to justify interference with that discretion."

18. Considering the facts and circumstances of the case we consider that direction to pay interest @ 16.5% p.a was on the higher side. We, in the facts and circumstances of the case, deem it proper to fix the rate of interest payable by the appellant to the respondents towards the arrears of mesne profits from the date of decree till the date of possession at 12% p.a. Ordered accordingly. The amount paid in excess shall be returned by the respondents to the appellant, failing which security furnished for restitution shall be enforced and the amount which is lying with the Trial Court amounting to Rs.40 lakhs and TDS amount of Rs.5 lakhs shall be returned to the appellant.

The appeal stands disposed of in terms of the aforesaid order."

65. In the facts and circumstances, the learned trial court, in my

view, has rightly held that the respondent is entitled to mesne profits at

the rate of Rs.50/- per sq. ft. per month, i.e., Rs.45,000/- per month with

effect from the month of November, 2005 till the vacation of the

tenanted premises. As held by the Division Bench in the I.S. Ratta's

case (supra), interest is liable to be awarded on mesne profits. The only

question, therefore, which remains to be considered is what would be

the appropriate rate of interest on the mesne profits awarded by the

learned trial court. The learned trial court has awarded 12% p.a. interest

on the rent. Considering the facts and circumstances of the case, it is

deemed appropriate to fix the rate of interest payable by the appellant to

the respondent towards the arrears of rent and mesne profits @ 9% p.a.

throughout.