Bank Of India vs Shanti Swaroop Aggarwal
2012 Latest Caselaw 3855 Del

       *      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Judgment delivered on 03.07.2012

+      RFA No.472/1998 & CM No.640/1999

       Bank of India                                          ...Petitioner

                                       Versus

       Shanti Swaroop Aggarwal                                ...Respondent


Advocates who appeared in this case:
For the Petitioner   : Mr. P.K. Mullick.
For the Respondent   : Mr. Jagjit Singh.

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

                            JUDGMENT

V.K. Jain, J. (ORAL)

1. This appeal is directed against the judgment and decree dated 07.08.1998

whereby a decree for recovery of possession of the basement and ground floor of

Property No. M-29, Greater Kailash, New Delhi was passed against the appellant

alongwith a decree for recovery of Rs.13,157.92/-. The plaintiff/appellant was also

held entitled to future mesne profits @ Rs.5263.17 per month from the date of

institution of the suit till the date of handing over of the possession of suit premises

to the respondent.

The facts giving rise to the filing of this appeal can be summarized as under:-

The respondent had let out the basement and ground floor of Property No.M-

29, Greater Kailash, New Delhi to the appellants at the rent of Rs.4,800/- for a

month, in the year 1977. No regular lease deed was executed and registered and

the appellant was last paying rent @ Rs.5263.17 per month. Suit No.582/1993 was

filed by the respondent, Sh. Shanti Swaroop Aggarwal, seeking possession of the

aforesaid premises on the ground that the protection available to the appellant

against eviction had been taken away by amendment of Delhi Rent Control Act,

1988 with effect from 01.12.1988. The respondent also claimed to have terminated

the tenancy of the appellant vide notice dated 10.02.1990 which was served upon

the appellant on 12.02.1990. In the suit filed by him, the respondent also claimed

the damages for use and occupation @ Rs.44,938/- per month with effect from

01.03.1990 till the possession was handed over to him by the appellant.

2. Suit No.464/1993 was filed by the appellant before this court Bank of India.

It was alleged in the suit filed by Bank of India, that the suit premises were taken

on rent with effect from 10.02.1977 for a period of five years with an option

exercisable by the Bank for another five years. It was alleged that the Bank had

exercised an option of renewal for five years with effect from 09.02.1989. This

was also the case of the bank that pursuant to negotiations between the parties it

was agreed that the bank would be given lease for five years with effect from

10.02.1987 @ Rs.7894.76/- per month with two options for extension of five years

each @ Rs.9862.50 with effect from 10.02.1992 and Rs.12,335.60 with effect from

10.02.1997. The receipt of the legal notice was, however, not disputed by the

Bank.

3. The respondent before this Court, denied the alleged agreement for fresh

lease deed with effect from 10.02.1987 with two options for renewals of five years

each.

4. The following issues were framed on the pleadings of the parties in suit

No.582/1993:-

(1) Whether the plaintiff is entitled to a decree of possession of the suit property? OPP

(2) Whether the plaintiff is entitled to a decree in the sum of Rs.1,04,852/-? OPP.

(3) Whether the plaintiff is entitled to future mesne profits, if so, at what rate? OPP

(4) Whether the tenancy of the defendant has been validly terminated? OPP

(5) Whether there was any contract between the parties concluded by the letter dated 13.02.1989 as alleged by the defendant in his written statement, if so, its effect? OPD

(6) Relief.

In suit No.464/93, following issues were framed:-

(1)Whether the plaintiff is entitled to specific performance of the contract between the parties in terms of the correspondence exchanged between the parties

and which stood concluded by the letter dated 13.02.89? OPP

(2) Relief.

5. The learned trial Judge vide impugned judgment and decree dated

07.08.1998, dismissed the suit filed by the bank and passed a decree for possession

in respect of basement and ground floor of Property No. M-29, Greater Kailash,

New Delhi. He also awarded mense profits @ Rs.5263.17 per month. The decree

for recovery of Rs.13157.98 being arrears of rent was also passed.

6. Cross-objections have been filed by the respondent to the extent damages for

use and occupation @ Rs.44,938/- have been denied to him.

7. Admittedly, the suit premises has been vacated during pendency of the

appeal and the damages for use and occupation with effect from 08.08.1998 till the

date the premises were vacated have also been paid at the rate agreed between the

parties. It is also an admitted position that all arrears @ Rs.52,63.17 stands already

paid to the respondent. The learned counsel for the parties state that since the suit

premises have already been vacated by the bank and it is not pressing for specific

performance of the agreement set up by it in suit No.464/1993, the only dispute

which survives for adjudication in this appeal is with respect to the rate at which

damages for use and occupation are to be awarded to the respondent for the

Property No.M-29, Greater Kailash, New Delhi from 01.03.1990 to 07.08.1998.

8. Admittedly, no documentary evidence was led by the respondent during the

course of trial to prove the rent rates prevailing in this locality during the period

from 01.03.1990 to 07.08.1998. No lease deed of any premises in this locality or

even in surrounding localities was produced by the respondent in support of its

claim for damages for use and occupation @ Rs.44,938/- per month. Neither the

landlord nor the tenant of any premises in the locality in which the suit premises is

situated or an adjoining/nearby locality who may have let out/taken on rent any

premises during the period from 01.03.1990 to 08.08.1998 has been produced, to

prove the rents prevailing during this period. One property dealer namely Mr. H.

Bose was examined by the respondent Sh. Shanti Swaroop Aggarwal. However, he

could not give any specific instance of any lease deed having been executed in this

locality. Therefore, no reliance can be placed on the market rents given by this

witness in the certificate Exhibit PW2/1 issued by him.

9. On a perusal of the record of the trial court, I find that vide letter dated

24.11.1989, which the learned counsel for the appellant admitted on 03.01.1996,

subject to pleadings of the appellant, the bank offered rent of Rs.20,000/- per

month for five years with two options of extensions of five years each at 20%

increased rent. The rent offered was in respect of basement floor measuring 1012.4

sq ft, ground floor measuring 987.6 sq. ft. and first floor which measured 1100 sq.

ft. This offer was reiterated in the letter dated 25.11.1989 which was also admitted

by the learned counsel for the bank on 03.01.1996, subject to pleadings. Thus, the

bank was offering rent @ Rs.20,000/- per month in respect of area measuring 3100

sq. ft. The rent per feet offered by the bank to Sh. Shanti Swaroop Aggarwal

comes to Rs.6.45 per sq. ft. The learned counsel for the bank submits that the rent

of the basement ought to be lesser than the rent of the first floor and, therefore, it

would not be appropriate to award damages for use and occupation in respect of the

basement at the same rate of rent. Admittedly, not only the basement but also the

ground floor formed a part of the premises which were let out to the bank. If the

rent of the basement is lower than the rent of the first floor, it can hardly be

disputed that the rent of ground floor would be higher than the rent of the first

floor. Therefore, applying the law of averages, it would only be fair and

appropriate to conclude that the average market rent, of the basement and ground

floor, as evidenced from the offer made by the bank, was not less than Rs.6.45 per

sq. ft. for five years. The damages for use and occupation in respect of basement

and ground floor @ Rs.6.45 sq ft. comes to Rs.12,900/- per month. The Bank is

liable to pay damages for use and occupation @ Rs.12,900/- from 01.03.1990 to

28.02.1995. Since the Bank itself had offered increase in rent by 20% after five

years, it can hardly be disputed that the market rent prevailing in the locality with

effect from 01.03.1995 cannot be less than Rs.15,480/- per month, which is the

figure arrived at after adding 20% to the rent of Rs.12,900/- per month.

10. Since the bank has already paid damages for use and occupation at the rent

of Rs.5,263.17 per month, it is liable to pay a sum of (Rs.12,900-Rs.5,263.17)

Rs.7,636.83/- per month for the period from 01.03.1990 to 28.02.1995 and @

(Rs.15,480 - Rs.5,263.17) Rs.10,216.83/- per month for the period from 01.03.1995

to 07.08.1998. The total principal sum payable to the respondent comes to

Rs.6,96,199.84/-. Since the bank has utilized the aforesaid amount by not paying

damages for use and occupation at the rate prevailing in the market, there is no

reason for the bank not paying appropriate interest on the amount which has been

worked out in the aforesaid manner. I, therefore, award interest @ Rs.9% per

month to the respondent. The interest on the amount payable for the month of

March, 1990 would be paid with effect from 01.04.1990. The amount of interest

for the subsequent months shall also be calculated in the same manner.

The appeal as well as the cross-objections stand disposed of. Decree sheet

be drawn accordingly.

There shall be no order as to costs.

The Lower Court Record be sent back.

V.K.JAIN, J July 03, 2012 rb