Intercraft Ltd. vs M/S Capital Boot House & Other
2011 Latest Caselaw 4518 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                          Judgment Reserved on:   13.09.2011
                           Judgment Pronounced on: 15.09.2011

+ Counter Claim No. 2878/1994 in CS(OS) 2199/1994

INTERCRAFT LTD.                                              ..... Plaintiff
              Through:                               None.

                                        versus

M/S. CAPITAL BOOT HOUSE & OTHER       ..... Defendants
                 Through: Mr. Rajesh Yadav, Advocate
                          & Ms. Ruchika, Advocate

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment? No

2. To be referred to the Reporter or not? No

3. Whether the judgment should be reported No in Digest?

V.K. JAIN, J

1. A suit for declaration and permanent injunction

was filed by M/s Inter Craft Limited against M/s Capital

Boot House and three others viz. S.Indrave Singh Mann,

S.Shivender Pal Singh Mann & S.Brijender Pal Singh

Mann, seeking a declaration that it is a lawful tenant of the

defendants in respect of shop No. B-24 Connaught Place,

New Delhi and is entitled to remain in its possession. A

permanent injunction restraining the defendants from

interfering in possession of the plaintiff qua the aforesaid

shop was also sought. The defendants in the suit filed

Written Statement contesting the suit and also filed a

Counter Claim against the plaintiff. It was alleged in the

Written Statement that shop in question was taken on rent

by M/s Capital Boot House and other defendants were its

partners. It was alleged that plaintiff had obtained forcible

unauthorized occupation of the suit premises on 3rd

October, 1994. The suit became infructuous since the suit

premises was vacated by the plaintiff on 31 st March, 2000

pursuant to order dated 6th September, 1999 passed by a

Division Bench of this Court. The defendants, in their

Counter Claim have sought (a) a sum of Rs.10 lac from the

plaintiff for the injury to their peace of mind, health and

running of their business on account of the plaintiff having

taken forcible possession of shop, in question, from them on

3rd October, 1994, (b) restoration of articles mentioned in

Annexure „A‟ to the Counter Claim alleged to have been

stolen from shop in question on that day and (c)

Rs.5,40,984/- towards damages for use and occupation

from the period 3rd October, 1994 to 7th December, 1994.

They have also sought damages for use and occupation at

the same rate from the date of filing of the counter claim till

the date they were able to enter into the suit property along

with interest on that amount @ 18% p.a.

2. The following issues were framed in the Counter

Claim on 18th April, 2001

1. Whether the defendant is entitled to mesne profits/damages? If so, for which period and at what rate? - OPD

2. Whether the defendant is entitled to recovery of the items as per details given in para-9 (Annexure A) to the Written Statement or in the alternative value thereof which is claimed to be Rs.5 lac? - OPD

3. Whether the defendant is entitled to recover the amount of Rs.10 lac as stated in para-8 of the Written Statement? - OPD

4. Relief.

3. The plaintiff M/s Inter Craft Limited was proceeded

ex parte in the Counter Claim on 19th July, 2007. The

defendants have filed affidavit of S.Indrave Singh Mann by

way of ex parte evidence. Mr. Mann has stated that after

the Agency Agreement had come to an end on 18 th

September, 1994, the plaintiff illegally entered in shop in

question and took its possession on 3rd October, 1994. He

has further stated that the plaintiff was in illegal occupation

of the shop in question from 3rd October, 1994 to 31st

March, 2000. According to him, the market rent of the

premises varied from Rs.153/- per sq. foot p.m. in the year

1996 to Rs.200/- per sq. foot p.m. in the year 1999.

4. Exh. DW-1/1 is the certified copy of the lease deed

dated 29th July, 1997 executed by Gopal Das Estates &

Housing Private Limited in favour of Bank of Nova Scotia

with respect to the ground floor of a multistory building

known as Dr. Gopal Dass Bhawan at 28, Barakhambha

Road, New Delhi. A perusal of document would show that

vide this lease deed the rent of the premises measuring

5000 sq. feet of super area was increased to Rs.7,68,750/-

p.m. Clause 3 of the lease deed shows that initially the

premises was taken on rent vide lease deed 20 th May, 1994

which provided for increase in rent by 25% after three years

from the date of letting out. The rent per sq. foot, in terms

of these lease deed comes to Rs.153.75 p.m. w.e.f. 29 th July,

1997. Since this rent was worked out after an increase of

25%, it is obvious that the rent agreed at the time of

creation of tenancy vide lease deed 20th May, 1994 would

come to about Rs.123/- per sq. foot p.m.

Exh. DW-1/2 is another lease deed dated 29th

July, 1997 executed by Gopal Das Estates & Housing

Private Limited in favour of Mashreq Bank in respect of

commercial premises measuring about 8000 sq. feet of

super area on the upper ground floor of Gopal Dass Bhawan

at 28, Barakhambha Road, New Delhi. The aforesaid

premises was let out at the monthly rent of Rs.200/- per sq.

foot p.m. for a period of 03 years w.e.f. 1st June, 1996. Exh.

DW-1/3 is the lease deed dated 5th June, 1997 executed in

respect of ground and mezzanine floor of property No. D-10

Connaught Circus, New Delhi and pertained to an area

measuring 1912 sq. feet on the ground floor and 1844 sq.

feet on the mezzanine floor besides space measuring about

200 sq. feet on the terrace. The agreed rent was more than

Rs.200/- per sq. foot p.m. Exh. DW-1/4 is the lease deed

dated 12th August, 1999 executed in respect of some

premises at the rent of about Rs.200/- per sq. foot p.m.

Relying upon the aforesaid lease deeds, it was

contended by the learned Counsel for the defendants that

the damages for use and occupation should be awarded to

the plaintiff at least @ Rs.120/- per sq. foot p.m. w.e.f. 13th

October, 1994 to 28th July, 1997 and @ Rs.153.75 per sq.

foot p.m. w.e.f. 29th July, 1997. I, however, find that for the

period from 3rd October, 1994 to 7th December 1994 the

defendants have claimed damages amounting to

Rs.5,40,984/-, comes to about Rs.90 per sq. foot p.m. since

the area in shop in question is said to be 2740 sq. feet. I,

also notice that in the Counter Claim, the defendants have

claimed pendent lite and future damages (mesne profits) at

the same rate at which they have claimed damages for use

and occupation from the period from 3rd October, 1994 to

7th December, 1994. Irrespective of the rate of rent

prevailing at the relevant time the defendants cannot be

awarded damages for use and occupation at a rate higher

than at which they have claimed in their counter claim.

5. With respect to the calculation of interest on

mesne profits, Supreme Court in Ramnik Vallabhdas

Madhvani and others v. Taraben Pravinlal Madhvani,

(2004) 1 SCC 497 observed as under:-

"9. A mistake has been committed by the High Court in calculation of interest on mesne profits. Interest has to be calculated on yearly basis because the amount of mesne profits on which

interest is to be awarded has to be arrived at on year-to-year basis. Mesne profits for the first year would be from 5- 5-1969 to 4-5-1970, for the second year it will be from 5-5-1970 to 4-5-1971 and so on. It keeps adding on from year to year. The total amount of mesne profits found due by the High Court on the basis of the Commissioner‟s report comes to Rs.38,41,920. This amount is the total of mesne profits calculated on yearly basis. Interest cannot be allowed on the whole amount from the beginning. Interest had to be worked out on amounts falling due towards mesne profits on yearly basis i.e. on the amount of mesne profits which could be taken to be due to the plaintiff at the end of each successive year."

In Mahant Narayana Dasjee Varu and Others v.

Board of Trustees, Tirumalai Tirupathi Devasthanam,

AIR 1965 SC 1231, Supreme Court while dealing with

computation of interest on mesne profits, inter alia, held as

under:-

"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 wrongful possession appropriating income from the property himself gets the benefit of the interest on such income."

6. The plaintiff came in unauthorized occupation of

shop in question on 3rd October, 1994. Therefore in view of

decision of Supreme Court in Ramnik Vallabhdas

Madhvani (supra), mesne profits have to be calculated on

yearly basis i.e. for the period from 3 rd October, 1994 to 2nd

October, 1995, 3rd October, 1995 to 2nd October, 1996 and

so on. In the facts and circumstances of the case and

taking into consideration the provision contained in Section

34 of Code of Civil Procedure, I am of the view that interest

should be awarded to the defendants @ 6% p.a. The

defendants would therefore be entitled to interest on the

amount of damages for use and occupation for the period

from 3rd October, 1994 to 2nd October, 1995 w.e.f 3rd

October, 1995 on the amount of damages for the period

from 3rd October, 1995 to 2nd October, 1996, w.e.f. 3rd

October, 1996 on the amount of damages for the period

from 3rd October 1996 to 2nd October, 1997, w.e.f 3rd

October, 1997 on the amount of damages from 3rd October,

1997 to 2nd October, 1998, w.e.f 3rd October, 1998 on the

amount of damages from 3rd October, 1998 to 2nd October,

1999, w.e.f 3rd October, 1999 on the amount of damages

from 3rd October, 1999 to 31st March, 2000.

The issues are decided accordingly.

7. These claims were given up by the learned Counsel

for the defendants during the course of arguments. I,

therefore, hold that the defendants are not entitled to any

amount either as damages for the mental agony alleged to

have been caused to them or towards cost of the articles

alleged to have been stolen from shop in question on 3 rd

October, 1994.

The issues are decided accordingly.

ORDER

In view of my findings on the issues, a decree for

recovery of damages @ 90/-per sq. foot p.m. for the period

from 3rd October, 1994 to 31st March, 2000 with

proportionate costs is hereby passed in favour of the

defendants and against the plaintiff. The defendants will

also be entitled to interest @ 6% p.a. on the damages for use

and occupation for the period from 3rd October, 1994 to 2nd

October, 1995, w.e.f 3rd October, 1995 on the amount of

damages from 3rd October, 1995 to 2nd October, 1996, w.e.f

3rd October, 1996 on the amount of damages from 3 rd

October, 1996 to 2nd October, 1997, w.e.f 3rd October, 1997

on the amount of damages from 3rd October, 1997 to 2nd

October, 1998, w.e.f 3rd October, 1998 on the amount of

damages from 3rd October, 1998 to 2nd October, 1999 w.e.f

3rd October, 1999 and on the amount of damages from 3rd

October, 1999 to 31st March, 2000 w.e.f 1st April, 2000 till

making of the payment to them. The defendants are

directed to deposit deficient Court fees in terms of this

judgment within four weeks failing which the Counter Claim

except to the extent of Rs.5,40,984/- shall stand rejected.

Decree sheet be drawn accordingly.

(V.K. JAIN) JUDGE September 15, 2011 vn