Gkw Limited vs Lic Of India & Anr.
2011 Latest Caselaw 6198 Del

             IN THE HIGH COURT OF DELHI AT NEW DELHI


                              Judgment reserved on: 09.08.2011
                              Judgment delivered on: 19.12.2011



                   W.P.(C) 8326/2007 & CM No.15117/2009


GKW Limited                                           ......Petitioner

                        Through: Mr. Rajiv Virmani, Sr. Adv. with Ms. Shruti
                                 Verma, Adv.

                                   Vs.

Life Insurance Corporation of India & Another          ......Respondent

                        Through: Mr. Kamal Mehta, Adv.



CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR


KAILASH GAMBHIR, J.

1. By this petition filed under Article 226 of the Constitution

of India, the petitioner seeks to challenge the judgment dated 6 th July,

2007 passed by the learned Additional District Judge whereby the

appeal filed by the petitioner under Section 9 of the Public Premises

(Eviction of Unauthorized Occupants) Act, 1971 against the order of

the Estate Officer dated 5.1.2004 was dismissed.

2. Brief facts which necessitated the filing of the present petition

are that the petitioner had taken on lease the premises admeasuring

4587 sq.ft on the second floor of the building known as Jeevan Vihar

Building, situated at 3, Parliament Street, New Delhi in February,

1963 on a monthly rent of Rs. 8,027.25 from the respondent LIC. The

said lease was being renewed from time to time and lastly the same

was renewed for a period of three years commencing from 1st

December, 1993 till 30th November, 1996 @ Rs. 11.30 per sq.ft. per

month vide lease deed dated 31st May, 1995. In terms of the renewal

clause contained in the said lease deed, the petitioner sought further

renewal of its tenancy for a period of 9 years but the said request of

the petitioner was not conceded to by the respondent and one of the

reasons for non-renewal of the lease by the respondent was that the

petitioner did not agree to the proposal of the respondent to increase

the rent from 11.30 per sq.ft. to Rs. 100 per sq.ft. Due to the non-

renewal of the said lease by the respondent, the tenancy period of the

petitioner in respect of the leased premises came to an end on 30 th

November, 1996, but the petitioner did not vacate the tenanted

premises on the expiry of the said lease period. The respondent LIC

sent a legal notice under Section 106 of the Transfer of Property Act

thereby terminating the tenancy of the petitioner w.e.f. 31 st May,

1997. But as the petitioner did not vacate the premises even despite

the termination of the tenancy, the respondent initiated proceedings

against the petitioner under Sections 5 and 7 of the Public Premises

(Eviction of Unauthorized Occupants) Act, 1971 for recovery of

possession and for recovery of damages and a show cause notice

under Section 4(b) (ii) & 7(3) dated 17th October, 1997 was issued by

the Estate Officer. During the pendency of the proceedings before the

Estate Officer, the petitioner handed over vacant and peaceful

possession of the tenanted premises on 15.10.2003 but the petitioner,

however, did not make any payment towards the damages, and

therefore, the learned Estate officer passed an order under Sub-

Section 3 of Section 7 of the Public Premises Act, requiring the

appellant to pay a sum of Rs.2,91,54,728.00 vide order dated

5.1.2004. The said order of the learned Estate Officer was challenged

by the appellant in appeal and vide order dated 6.7.2007, the learned

Additional District Judge dismissed the appeal filed by the appellant.

Feeling aggrieved with the same, the petitioner has preferred the

present petition.

3. Arguing for the petitioner, Mr. Rajiv Virmani, Sr. Advocate

strongly contended that the learned Estate Officer has wrongly and

illegally assessed the damages after taking into consideration the

amount of rent agreed between the respondent and one Bank of Tokyo

Mitsubishi Ltd. vide lease deed dated 24th April, 1997, which

premises, as per the petitioner, were totally incomparable with the

premises under the occupation of the petitioner. The contention

raised by counsel for the petitioner was that the said Bank of Tokyo

Mitsubishi Ltd. was let out an area of approximately 30/40 sq.ft. by

the respondent LIC on the ground floor and, therefore, the rent

settled between the parties for such a small area could not have been

compared to determine the amount of damages for larger area of

4587 sq.ft. under the occupation of the petitioner that too on the

second floor. Counsel thus urged that only comparable lease to assess

the amount of damages payable by the petitioner could be the lease

executed by the respondent LIC with CMC Ltd. dated 20th January,

2000 wherein the rate of rent for the relevant period for tenanted

premises on the second floor was settled at Rs. 25 per sq.ft per

month. Counsel thus took an exception to the approach adopted by

the learned Estate Officer and by the Appellate Court in assessing the

amount of damages in respect of the leased premises of the petitioner

@ Rs. 70 per sq.ft. Counsel for the petitioner also contended that the

learned Estate Officer sought to have given a fresh notice to the

petitioner before finally deciding the application filed by the

respondent under sub Section 3 of Section 7 of the Public Premises

Act as the petitioner remained under the bona fide belief that with the

handing over of the possession of the tenanted premises on

15.10.2003, the proceedings before the Estate Officer must have

come to an end. Counsel for the petitioner also argued that the

petitioner was declared as a sick industry under the provisions of Sick

Industrial Companies (Special Provisions) Act, 1985 and in view of the

provisions of Section 22 of the said Act, no recovery proceedings

could lie against the petitioner. Counsel for the petitioner also

submitted that the petitioner was a bonafide tenant of the respondent

and by initiating eviction proceedings against the petitioner the

respondent flouted the guidelines issued by the Ministry of Urban

Development which prohibits eviction of bona fide tenants. In support

of his arguments, counsel for the petitioner placed reliance on the

following judgments :-

1. Hari Singh (deceased) (Through LRs) -vs- S.S.Jogi Etc.102 (2003) DLT 215 (DB)

2. National Radio and Electronic Co.Limited -vs- Motion Pictures Association 122(2005) DLT 629 (DB)

3. Niader Mal Amar Nath and Others -vs- Rukmani Devi Jaipuria Charitable Trust & Others 2009 X AD(Delhi) 623.

4. Dipti Bikash Sen & Another -vs- India Automobiles (1960) Limited 1978 AIR Cal

454.

4. Opposing the present petition, Mr. Kamal Mehta, learned

counsel for the respondent LIC submitted that the tenancy of the

petitioner was terminated by the respondent under Section 106 of the

Transfer of the Property Act and in the said notice the petitioner was

called upon to pay damages @ Rs. 100/- per sq.ft. per month w.e.f.

1.6.1997. Counsel also submitted that in awarding the damages @ Rs.

70/- per sq.ft. the learned Estate Officer took into consideration the

lease deed date of the relevant period executed between the LIC with

Bank of Tokyo Mitsubishi Ltd. which premises leased out by the

respondent in favour of the bank, if not exactly but was closely

comparable to the leased premises under the occupation of the

petitioner. Counsel for the respondent also refuted the contention of

the petitioner that a smaller area was leased out by the respondent in

favour of the said bank but in fact the premises let out in favour of the

said Bank of Tokyo Mitsubishi Ltd. was 3516 sq.ft for a period of 3

years commencing from 18.2.1997. Counsel also argued that the lease

deed between the respondent LIC and CMC wherein rate of rent

agreed was @ Rs. 25/- for an area admeasuring 7074 sq.ft. was as a

result of mutual negotiations between the two Government bodies.

Counsel also submitted that the premises let out by one Government

Corporation to another Government body even had a lower rate but

the same cannot create any ground to determine the same amount of

rent/damages for a private body, which is engaged in profit earning

and for total commercial motives. Counsel for the respondent also

submitted that the petitioner also failed to adduce any evidence

before the learned Estate Officer about the rate of damages and,

therefore, the petitioner cannot be allowed to raise any grievance to

dispute the findings of the learned Estate Officer on the determination

of rate of damages, that too after having taken into consideration the

amount of rent settled by the respondent with another tenant for the

relevant period and for comparable premises. Counsel for the

respondent also argued that the petitioner kept on dragging the

matter before the Estate Officer by seeking repeated adjournments

and was proceeded ex parte thrice and, therefore, the petitioner was

not entitled to any fresh notice by the learned Estate Officer as has

been claimed by the petitioner in the present petition. Counsel further

submitted that damages as awarded by the learned Estate Officer are

on evidence and the learned Appellate Court after having gone into all

the issues as have been raised by the petitioner in the present petition

upheld the decision of the Estate Officer with cogent and justifiable

reasons and the decision given by the learned Appellate Court can

neither be termed as illegal, perverse or unreasonable in any manner

warranting any interference by the writ Court. In support of his

arguments counsel for the respondent placed reliance on the

following judgments:-

1. Jiwan Dass -vs- Life Insurance Corporation of India & Anr 1994 Suppl (3) SCC 694

2. Iyer & Son Private Limited -vs- LIC & Anr. 2007(10) AD (Del) 643

3. Saraswati Marketing Co. Ltd. vs. LIC CM(M) 304/2003 (Delhi High Court)

4. K.T.Corporation & Another -vs- India Tourism Development Corporation and Another 2009 VI AD(Del) 115.

5. Dr.Yash Pal Dhawan vs. the Commssioner, Ferozepur Division 1983 RLR 290(P&H)

6. Life Insurance Corporation of India -vs- Narender Nath Gauba & Ors 158(2009) DLT

98.

7. Siemons Public Communication Pvt. Ltd. -vs- Union of India & Ors.AIR2009SC1204.

8. DTC vs Pradeep Kumar & Anr. 146(2008) DLT 40

9. Smt. Murli Devi Vs. UOI ( LPA No.3/2010) Delhi High Court.

10. Batliboi & co. Ltd. Vs. LIC (CM(M) No.1349/2007)

5. I have heard learned counsel for the parties at considerable

length and have given my thoughtful consideration to the pleas raised

by them.

6. Admittedly, the petitioner is no more in occupation of the said

premises leased out by the respondent in its favour in the year 1963

as peaceful possession of the same was handed over by the petitioner

to the respondent on 15.10.2003 during the pendency of the

proceedings before the learned Estate Officer. The only dispute raised

by the petitioner before this Court as well as before the Appellate

Court is with regard to the liability of the petitioner towards payment

of damages for the period it remained in unauthorized occupation of

the said premises. It is also not in dispute that the tenancy of the

petitioner was determined in accordance with the law in terms of

Section 106 of the Transfer of Property Act and the petitioner became

unauthorized occupant of the said leased premises w.e.f. 1st June

1997. It is also not in dispute that the petitioner failed to lead any

evidence before the learned Estate Officer to dispute or counter the

documentary evidence placed on record by the respondent i.e. lease

deed dated 24th April 1997 executed between the respondent and M/s

Bank of Tokyo Mitsubishi Ltd to calculate the damages payable by the

petitioner. The Estate Officer in calculating the damages payable by

the petitioner kept the said lease dated 24.4.1997 as a benchmark

wherein the rent was approx Rs. 70/sq ft and allowed an interest of

10% p.a alongwith the said damages.

7. The guiding principle for calculating the damages under the

Public Premises (Eviction of Unauthorized Occupants)Act, 1971, is

Rule 8 of the of the Public Premises (Eviction of Unauthorized

Occupants) Rules, 1971, which for better appreciation is reproduced

as under:-

"8. Assessment of damages.- In assessing damages of unauthorised use and occupation of any public premises the estate officer shall take into consideration the following matters, namely :

(a) The purpose and the period for which the public premises were in unauthorised occupation-,

(b) The nature, size and standard of the accommodation available in such premises;

(c) The rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person;

(d) Any damage done to the premises during the period of unauthorised occupation;

(e) Any other matter relevant for the purpose of assessing the damages."

As would be manifest from the above, the learned Estate Officer has

to take into account the nature, size and standard of the premises in

question and also as to what rent the premises would have fetched

had it been let out for the period of unauthorized occupation to any

private party. The contention of the counsel for the petitioner herein

was that the learned Estate Officer should have calculated the

damages payable keeping the lease between the respondent LIC and

CMC dated 20.1.2000 wherein the rent was @Rs. 25 sq ft as the area

is more comparable according to the premises in question than the

area being let out under the lease with Bank of Tokyo Mistubishi Ltd.

Admittedly, the company CMC is not a private person and the same is

also a Government Company as the respondent and, therefore, a

comparison between two Government Corporations for settling the

amount of rent can certainly be different vis-à-vis the amount of rent

determined by a Government Corporation with a private entity. There

is thus basic fallacy in the argument of counsel for the petitioner that

learned Estate Officer ought to have taken into consideration the rate

of rent as was settled between the respondent LIC with CMC to assess

the amount of damages for the premises under the occupation of the

petitioner. In my considered view the Estate officer has correctly

placed reliance on the lease of the respondent with Bank Of Tokyo

Mitsubishi Ltd. which is a private party and as per the principle

envisaged under rule 8 of the PP Rules reproduced hereinabove. It is

no more res integra that the Government and the Government

Corporations have indefeasible right to let out their premises at rent

prevailing in the market so as to derive legitimate profits and

earnings by letting out their premises and to ask for periodical

increase in the rents. It would be useful to refer to the judgment of

the Apex Court in the case of Jiwan Dass vs. LIC 194 Supp(3)

SCC694 which has been reiterated time and again and the relevant

para of which is reproduced as under:

"An owner is entitled to deal with his property in his own way profitable in its use and occupation. A public authority is equally entitled to use the public property to the best advantage as a commercial venture. As an integral incidence of ejectment of a tenant/licensee is inevitable. So the doctrine of livelihood cannot discriminately be extended to the area of commercial operation."

Thus in the aforesaid conspectus, it cannot be said that the

respondent being a Government Corporation must claim the same

amount of rent as they had settled with other Government bodies as it

certainly has every legal right to ask for the rent, which has been

agreed by a private party. In the facts of the present case, no illegality

or perversity can be found in the order of the learned Estate Officer

accepting the rate of rent settled between the respondents and Bank

of Tokyo Mitsubishi Ltd., for the relevant period for calculating

damages and the said order of the learned Estate Officer found

credence from the learned Appellate Court. The judgments on which

reliance has been placed by the petitioner canvass the legal position

that in case no evidence is led by the party to the claim for calculating

the amount of mesne profits than the court cannot take judicial notice

of the prevalent rent based on no material. There is no dispute with

regard to the said legal position but in the facts of the case at hand

the learned Estate Officer has based the damages on the lease

between Bank of Tokyo Mitsubishi Ltd. and the respondent and is

based on material evidence and hence the said judgments would not

be of any help to the case of the petitioner.

8. Admittedly, the petitioner had every right to dispute the

amount of damages but such course was available to the petitioner

only before the Estate Officer, which is the first Court of finding of

facts where it could have led evidence to demolish the case set up by

the respondent before the Estate Officer. The petitioner having not

availed that opportunity despite taking several adjournments cannot

now reagitate to find fault with the order of the Estate Officer with

regard to the assessment of damages when it failed to dispute the

same even after the grant of ample opportunities by the Estate

Officer. It has not been disputed by the petitioner that before the

Estate Officer it was proceeded ex parte at least thrice and now to say

that the petitioner ought to have given another opportunity before

passing of final order by the Estate Officer would amount to giving a

premium on the negligent conduct of the petitioner. The extremely

naïve contention of the counsel for the petitioner that he assumed that

the proceedings before the Estate Officer had ended with the handing

over the possession of the premises by the petitioner on 15.10.2003 is

unrealistic and a mere pretence to prolong the proceedings.

9. Another contention raised by the counsel for the petitioner

was that the guidelines of the Ministry of Urban Development

stipulate that the Public Authorities should not resort to the provisions

of the PP Act for the eviction of bonafide tenants. The said contention

of the counsel for the petitioner cannot be acceded to in the light of

the pronouncement of the Apex Court in the case of Syndicate Bank

vs. Ramchandra Pillai 2011(1)SCALE 368 wherein the court has

held that the provisions of the PP Act cannot be set at Naught by

relying upon the said guidelines which are not statutory in character.

10. The contention of the counsel for the petitioner that the

operation of Section 22 of the SICA will bar any proceedings against

the petitioner as it has been declared sick under the Act is devoid of

any force as has been rightly held by the learned Trial Court that the

eviction proceedings do not fall within the ambit of the proceedings

referred to in section 22 of SICA. Reliance has been placed on the

Constitution Bench judgment of the Apex Court in the case of Shree

Chamundi Mopeds Ltd. vs. Church of South India Trust

Association, Madras (1992)3SCC1 by the learned trial court which

position has been reiterated till recently by the Apex Court in the case

of Dunlop India Limited vs. A.A Rahna (2011)5SCC 778 .

11. In my considered view, the learned trial Court has already

minutely dealt with all the issues raised by the petitioner before this

Court and after having discussed all the issues meticulously a

reasoned order has been passed by the Appellate Court. The

impugned order does not warrant any interference of this Court in the

exercise of its writ jurisdiction when nothing perverse or illegal in the

reasoning of the appellate Court or Estate Officer has been justifiably

canvassed before this Court.

12. In the light of the above, there is no merit in the present

petition and the same is accordingly dismissed.

December 19,2011                     KAILASH GAMBHIR, J
rkr