Delhi High Court

S & G Company & Ors vs Indica Trades Pvt Ltd on 9 April, 2012

Author: Valmiki J. Mehta

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             RFA No. 61/2012

%                                                          9th April, 2012

         S & G COMPANY & ORS                         ..... Appellants
                      Through:            Mr. Ashim Vachher, Adv.

                      Versus


         INDICA TRADES PVT LTD                        ..... Respondent

Through: None.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. As per the service report, the respondent/defendant/tenant has

refused to accept service of notice of the appeal.

Respondent/defendant/tenant is therefore accordingly proceeded ex parte. I

may note that the respondent/defendant/tenant was also ex parte in the Trial

Court.

2. The challenge by means of this Regular First Appeal filed under

Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned

judgment of the Trial Court dated 10.1.2012 which decreed the suit of the

appellants/plaintiffs for possession and mesne profits with respect to the

tenanted premises being the ground floor portion admeasuring 7000 square

feet in the property bearing no.365, village Sultanpur, Mehrauli, New Delhi,

urging that the Trial Court has erred in granting mesne profits only at

`70,000/- per month (`10 per square feet). In the plaint and in the present

appeal prayer is made for granting of mesne profits at the rate of `50/- per

square feet, i.e. an amount of `3,50,000/- per month.

3. The facts of the case are that the appellants/plaintiffs/landlords

let out the suit premises to the respondent/defendant under two oral

agreements of June, 2006 and January, 2008. In June, 2006 an area of 3500

square feet was given. Another area of 3500 square feet was given by the

agreement of January, 2008, thus making the leased area as 7000 square feet.

The leased area is coloured as green in the site plan exhibited as Ex.PW1/3.

The monthly rent of the total premises came to `30,000/-. The tenancy being

a monthly tenancy was terminated by the appellants/plaintiffs by issuing a

legal notice dated 19.4.2011, Ex.PW1/4, with effect from 15.5.2011. As the

respondent/defendant failed to vacate, the subject suit for possession and

mesne profits came to be filed.

4. As already stated above, the challenge by means of this appeal is

limited to the prayer seeking enhancement in the rate of mesne profits from

`70,000/- per month to `3,50,000/- per month. Trial Court has denied the

mesne profits as prayed for by the appellants/plaintiffs/landlords although,

three lease deeds with respect to the adjoining suit premises were filed and

proved on record as Ex.PW1/11 (colly.), inasmuch as, the Trial Court found

that there is no proof of the lease having been created for commercial

purposes. The relevant observations of the Trial Court are contained in Paras

5.1 to 5.4 of the impugned judgment and which read as under:-

"5.1 The areas of premises is 7000 sq. feet and the agreed monthly rent was `30,000/- per month i.e. `4.28 psqf. Pm. The three lease deeds (Ex.Pw-1/11) are in respect of properties in the same area of village and post office of Sultanpur, Mehrauli, New Delhi, the first lease deed is of area of 6000/- sq. feet fetching monthly rent of `3,40,000/- (i.e. `50.60 psqf. Pm), the second lease is in respect of 13,000/- sq. feet area fetching monthly rent of `5,80,000/- (i.e. `44.60 p psqf. Pm) and third lease deed is in respect of area of 10,000/- sq. feet (covered area of 6000 sq feet) fetching monthly rent of `15,00,000/- (i.e. `150/- psqf. PM). The plaintiff claims mense profit of `3,50,000/- per month in respect of the premises, on the basis of such sale deeds as well as the prevailing rent.

5.2 There is an occasion to go through Sohan Singh Anand vs. State Bank of Patiala 102 (2003) DLT 1 that while considering and assessing the damages or mesne profits, the Court may taken into consideration or take the judicial notice of average market value of rent of the premises. Union of India vs. Banwari Lal 2004 5 SCC 304, wherein held that right to mesne profit pre-supposes a wrong notion, whereas right to rent proceed on the basis of contract. When the possession was not wrongful to be begin with but it assumes such character when unauthorisedly retained, the owner of property is not entitled to claim mesne profit but only fair rent.

5.3 Now the situation emerged is that on the one hand, defendant is occupying the suit premises after determination of tenancy on 15.5.2011 and in the meantime, there is increase in prevailing market rent of the properties, in the vicinity/area/neighbor of the suit premises. Further in the first two lease deeds (of Ex.PW-1/11), the premises were let out for business and commercial purposes and the first two lease deeds are in respect of the same property but different floors and the rate of lease is of `50.60 psqft. PM and `44.60p psqf. PM, despite the premises are part of the same building. The third lease deed is with regard to the property let out as an office space. To say, the properties mentioned in the three lease deeds were let out for business, commercial purposes and for office space purposes. Whereas, it has not been mentioned either in the plaint nor in the legal notice Ex.PW-1/4 nor in the evidence of plaintiffs' witnesses PW-1 and PW-2 as to for what purpose the suit premises was let out to the defendant. Therefore, considering totality of circumstances inclusive of dearness and fluctuations in the rents in the market vis-à-vis t meet all ends of justice, rate @ `10 psqf. Pm(i.e. `70,000/- pm) is the reasonable amount for use and occupation charges of the premises, after determination of tenancy, w.e.f. 16.5.2011.

5.4 Accordingly, plaintiffs are entitled for mesne profits @ `70,000/- per month for the period 16.5.2011 to 31.8.2011, which comes to `2,45,000/-, out of which, `63,000/- received in advance is required to be deducted, the balance amount of mesne profits recoverable is `1,82,000/- uptil the date of filing the suit. The plaintiffs are also entitled for mesne profits at the same rate of `70,000/- per month from 1.9.2011 till receipt of possession from the defendant."

(underlining added)

5. Learned counsel for the appellants/plaintiffs/landlords has drawn

the attention of this Court to the lease deed created in favour of the

appellants/plaintiffs by the owner of the premises, M/s Consumer Service

Corporation being the indenture of lease dated 8.11.2000. This lease

agreement dated 8.11.2000 has been proved and exhibited before the Trial

Court as Ex.PW1/2. Under this lease agreement, Ex.PW1/2, the

appellants/plaintiffs were entitled to sub-lease of the premises, and under such

powers, the premises were in fact sublet to the respondent/defendant, and

thereby there came into existence a relationship of landlord and tenant

between the appellants/plaintiffs and the respondent/defendant/sub-tenant.

Learned counsel has drawn attention of this Court to Para 4(ii) of the lease

deed dated 8.11.2000, Ex.PW1/2, and which reads as under:-

"4. The Lessor hereby covenants with the Lessee as under:

(i) .........

(ii) That under the municipal zoning/user rules, the demised premises are capable of being used for institutional and commercial purposes."

6. It is therefore argued that the Trial Court fell into an error in

holding that the premises in question have not been proved to be capable of

being used for commercial/office purposes by wrongly ignoring this clause

4(ii) of the lease deed dated 8.11.2000.

7. Learned counsel for the appellants/plaintiffs has also invited the

attention of this Court to para 4 of the affidavit by way of evidence filed by

Sh. Suresh Goel on behalf of the appellants/plaintiffs, and as per which para

4, the respondent /defendant is said to have its office in the suit premises.

Para 4 reads as under:-

"4. That the defendant is a company registered under the Companies Act, 1956 and having its office at 365, ground floor, Sultanpur, Mehrauli, New Delhi-110030. The Defendant is having one of its offices also at 369, 3 rd Floor, CRC Building, Sultanpur, Mehrauli-Gurgaon Road, New Delhi-110030. The Defendnat is a sub-Lessee with respect to the entire ground floor of the said building situated at 365, Sultanpur, Mehrauli, New Delhi-110030."

(underlining added)

8. I have already stated above that the respondent/defendant was ex

parte in the Trial Court and is also ex parte before this Court. There is no

cross-examination to the averments made in para 4 of the affidavit by way of

evidence filed by Sh. Suresh Goel on behalf of the appellants/plaintiffs and

which leads to the conclusion that the respondent/tenant was using the

premises for office purposes. Any doubt with respect to the entitlement or

user for commercial/office purposes is removed by a reference to para 4(ii) of

the main lease deed dated 8.11.2000, Ex.PW1/2. I, therefore, hold that the

three lease deeds which were proved and exhibited in the Trial Court as

Ex.PW1/11 (colly.) can be looked into to arrive at a rate of mesne profits. As

per the three lease deeds filed as Ex.PW1/11 (colly.), the rate of rent is `56.65

per square feet for the ground floor and basement portion in May, 2011 for

the adjoining premises being property no.369, village Sultanpur, Mehrauli,

New Delhi. The rate is `44.61 per square feet per month for May, 2011 for

the first floor, second floor and third floor of the same property No.369,

village Sultanpur, Mehrauli, New Delhi, as per the second lease deed. The

rate of rent is `150/- per month with effect from June, 2011 as per the third

lease deed for the property no. 382, village Sultanpur, New Delhi.