Union Of India vs M/S. Claridges Hotel Pvt. Ltd. & ...
2011 Latest Caselaw 116 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI
 +                      RFA No.303/1982
 %                                                 10th January, 2011


UNION OF INDIA                                     ...... Appellant
                                   Through:   Mr. B.V.Niren,
                                              Advocate.
                       VERSUS

M/S. CLARIDGES HOTEL PVT. LTD. & ORS.         ...... Respondents

                               Through:       Mr. Sameer Anand,
                                              Advocate with Mr.
                                              Dibya Nishant,
                                              Advocate.

 CORAM:
 HON'BLE MR. JUSTICE VALMIKI J.MEHTA

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

VALMIKI J. MEHTA, J (ORAL)

1. By means of the present first appeal under Section 96 of

the Code of Civil Procedure, 1908 (CPC), the Union of India challenges

the impugned judgment and decree dated 30.9.1981 whereby the trial

Court has decreed the suit of the respondents/plaintiffs and held that

the appellant/Union of India is disentitled to a higher ground rent of

Rs.2, 33,444/- per annum.

2. The facts of the case are that the premises being the land

at 12, Aurangzeb Road, New Delhi was let out to the predecessor in

interest of the respondent and whereafter it is the respondent as per

the agreement between the parties who became lessee of the subject

plot of land.

3. It appears that there were some breaches of excess

coverage/construction as alleged by the appellant/defendant from the

year 1958 onwards. Disputes and differences arose because the

respondents/defendants denied the allegations of the appellant of

excess coverage and violation of the terms of the lease.

4. The trial Court by the impugned judgment has held that

the appellant failed to prove excess coverage and there is a finding of

fact that there is no excess coverage and the coverage is only in terms

of a sanctioned plan.

5. Before this Court, the learned counsel for the appellant has

argued that the trial Court has committed a clear cut illegality in

ignoring the letters dated 15.6.1976 (Ex.P3) and 28.6.1976(Ex.P4)

issued by the appellant to the respondents whereby higher ground rent

was claimed on account of the breaches by the respondents of the

terms of the lease. The learned counsel for the appellant has further

drawn my attention to the letter dated 9.7.1976 (Ex.PX1) whereby

respondents/plaintiffs accepted the terms and conditions of the letters

dated 15.6.1976 and 28.6.1976 and prayed for cancellation of the re-

entry ordered with respect to the leased plot on their paying the

amount claimed pursuant to the letters dated 15.6.1976 and

28.6.1976.

6. In response the learned counsel for the

respondents/plaintiffs has drawn the attention of this Court towards

the letter dated 4.8.1976 (Ex.P5) written by the appellant to the

defendant which reads as under:-

"Sir,

With reference to your letter No.G-001/13/A.O./76 dated 8.7.1976 on the above subject, I am to inform you that the lessor has been pleased to withdraw re-entry exercised by him vide this office letter No.LI-9/12(5)/67 dated 13.7.1973. Your ownership and titles in the premises mentioned above are hereby restored to you. You are now bound by the covenants of the original perpetual lease.

Yours faithfully,

(U.N. BHUYAN) DY. LAND & DEVELOPMENT OFFICER for and on behalf of the President of India."

It is argued that the last line of this letter clearly shows

that the parties would henceforth be bound by the original covenants

of the original perpetual lease i.e. the respondents were liable only to

pay the lease rent and not the enhanced rent stated in the letters

dated 15.6.1976 and 28.6.1976.

7. In my opinion, the argument as raised by the learned

counsel for the appellant deserves acceptance and the argument as

raised by the learned counsel for the respondents merits rejection.

This is for the reason that the entire issue hinges with respect to the

claim of the higher ground rent per annum which is dependent upon

not only on the existence of breaches, but on the fact that the factum

of breaches were accepted by the respondents/plaintiffs when it sent

the letter dated 9.7.1976 (Ex.P1) unconditionally accepting the terms

and conditions of the letters dated 15.6.1976 (Ex.P3) and 28.6.1976

(Ex.P4) written by the appellant to the respondents. Of course, it was

open to the respondents/plaintiffs to urge that the contents of the

letter dated 15.6.1976 and 28.6.1976 were incorrect and were

disputed and the facts stated in the same are challenged. The

respondents/plaintiffs, however, did not do so and on the contrary

unconditionally accepted the terms and conditions of the two letters

dated 15.6.1976 and 28.6.1976. Consequently, it does not lie in the

mouth of the respondents/plaintiffs who got the benefit of cancellation

of re-entry orders which was otherwise proposed by the appellant but

was agreed not to be enforced subject to the respondents paying of

the amounts as stated in the letters dated 15.6.1976 and 28.6.1976.

For the respondents to now contend that though they got benefit of

cancellation of the re-entry, yet, they should not be held to be bound

by the terms and conditions of the letters dated 15.6.1976 and

28.6.1976 would be to allow them to back out of the agreement of

which they took benefit of. The argument of the respondents with

reference to the last line in the letter dated 4.8.1976 (Ex.P5) that the

respondent was bound by the covenants of the original perpetual

lease, was actually and only with respect to the general covenants of

the lease deed and not touching the aspect of enhanced ground rent

per annum. In fact, that the argument of the learned counsel for the

respondents/plaintiffs is misconceived is clear from the fact that the

parties even before the issuance of the letters Ex.P3 and Ex.P4 were

not paying the original ground rent as stated in the original perpetual

lease but was paying a higher ground rent because subsequent to the

grant of the original perpetual lease, the purpose of land use was

converted from residential to commercial and it was a higher ground

rent being paid after conversion of the use of the land from residential

to commercial. If the argument of the respondents is accepted that

ground rent as stated in the original lease deed is payable then it

would mean that the enhanced ground rent on conversion of land use

to commercial cannot be claimed by the appellant and which therefore

shows the absurdity of the argument.

8. In view of the above, the impugned judgment and decree is

clearly erroneous and causes grave injustice to the appellant. The

impugned judgment and decree wrongly holds that the appellant is not

entitled to claim and that the respondent is not bound to pay the

enhanced ground rent per annum as mentioned in the letters Ex.P3

and Ex.P4 dated 15.6.1976 and 28.6.1976, respectively. Accordingly,

the appeal is accepted and the impugned judgment and decree dated

30.9.1981 is set aside. The suit of the respondent/plaintiff accordingly

disputing the claim of higher ground rent per annum stands dismissed.

Decree sheet be drawn up accordingly. Trial Court record be sent

back. Parties are left to bear their own costs.

JANUARY 10, 2011                                  VALMIKI J. MEHTA,J
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