Shriram Pistons & Rings Ltd vs Basant Khatri
2012 Latest Caselaw 1534 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.568/2011

%                                                         5th March, 2012

SHRIRAM PISTONS & RINGS LTD                    ..... Appellant
             Through: Mr. T.K.Ganju, Sr. Adv. with
                      Mr. Jayant K. Mehta, Mr. Sukam Vikram &
                      Mr. Aditya Ganju, Advs.

                      versus


BASANT KHATRI                                                 ..... Respondent

Through: Mr. Bharat Depak, Adv.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

CM No.22041/2011(exemption)

Allowed, subject to all just exceptions.

Application stands disposed of.

RFA 568/2011 & CM No.22973/2011(u/O.41 R. 27 CPC)

1. In this Regular First Appeal (RFA) filed under Section 96 of the

Code of Civil Procedure, 1908(CPC), the judgment and decree dated

8.11.2011 was challenged whereby the suit of the respondent/landlord/plaintiff

was decreed for possession and mesne profits with respect to the suit premises

being flat no. E-35, Third Floor, Himalaya House, 23, Kasturba Gandhi Marg,

New Delhi-110001. At the time of issuing of notice in this appeal on

19.12.2011, limited to the aspect of mesne profits, a detailed judgment was

passed dismissing the challenge so far as the same pertained to the issue of

termination of lease and possession. The detailed judgment passed on

19.12.2011 dismissed the appeal by holding that the

respondent/plaintiff/landlord was entitled to possession of the suit premises.

The learned senior counsel for the appellant/defendant states that as of today,

there is no challenge to the judgment dated 19.12.2011.

2. On 19.12.2011, notice was issued in the appeal on the aspect of

the issue of mesne profits. At the time of issuing of notice with respect to the

mense profits, I observed as under:-

"10. There are however crucial aspects with respect to the issue of mesne profits, and with respect to which there prima facie is a case for issuance of notice in this appeal. I agree with the learned senior counsel for the appellant that once the Trial Court discarded the evidence which was led on behalf of the respondent/plaintiff being the lease deeds, Ex.PW1/18 to PW1/20, then, there was no other evidence to hold that the mense profits should be `155/- per month. Of course, I am only expressing a prima facie view, inasmuch as, I feel that possibly the lease deeds, Ex.PW1/18 to PW1/20 can be looked as evidence inasmuch as there is no cross-examination with respect to these lease deeds that these documents are bogus documents or that they are fabricated

documents. Further, no objection as to exhibition of the documents has been taken at the stage at which the documents were exhibited, i.e. before including of cross-examination. In the present case, since there is no challenge to the exhibition to these documents before the cross- examination began, or possibly even later, therefore in view of the judgment of the Supreme Court reported as R.V.E. Venkatachala Gounder vs. Arulmignu Viswesaraswami & V.P. Temples & Anr., 2003 (8) SCC 752 any objection to the exhibition and proof of documents is therefore deemed to have been waived by the appellant/defendant.

11. The argument of the learned senior counsel for the appellant that the appellant is also entitled to adjustment of security deposit is also an argument which has to be accepted in a limited manner. A security deposit is given to ensure that at the time of vacation of the premises, there are no dues of the appellant/defendant/tenant towards respondent/plaintiff/landlord therefore, if on the date of handing over of the possession by the appellant/defendant to the respondent/plaintiff/landlord, there are no dues either towards rent, or mesne profits as per today's order, or towards electricity or water charges or other maintenance charges, or other charges in terms of the lease deed, then the respondent/plaintiff will be bound to give adjustment with respect to the amount of security deposit towards the total claim of the respondent/plaintiff under the subject money decree, and as amended by today's orders.

12. I have held in the case of M/s. M.C.Agarwal HUF vs. M/s. Sahara India & Ors.2011 (183) DLT 105 that even if a landlord has failed to lead evidence with respect to prevalent rents, yet in such circumstances, this Court can take judicial notice of increase in rent of metropolitan cities, more so in commercial areas. In M/s. M.C.Agarwal HUF(supra), the premises were also situated in Connaught Place and in fact on the same road, i.e. Kasturba Gandhi Road like in the present case. In M/s. M.C. Agarwal HUF (supra) case I have held that a 15% increase of rent every year should be payable by a tenant to a landlord. In the present case, lease commenced, though unregistered, for 3 years w.e.f. 1.7.2005. The so-called period of lease expired on 30.6.2008, therefore from 15.8.2008, the date of termination of tenancy, the mesne profits would become 15 % more than the agreed rate of rent `44/- sqr. per feet. For each year thereafter as per the judgment of the M/s. M.C.Agarwal HUF (supra) there will be a 15% increase over the last paid rent. Accordingly, while directing that the impugned judgment and decree so far as mesne profits are concerned, will remain stayed at

`155/- per sqr. feet, however subject to further orders, the judgment and decree will operate for mesne profits commencing from 1.9.2008 with a 15% yearly increase cumulatively, i.e. 15% increase which will be payable from second year, third year, fourth year etc after the termination of tenancy will be 15% increase of the mesne profits on the total of mesne profits which are payable at the end of the first year, second year etc respectively.

At this stage, learned senior counsel for the appellant states that at the admitted rate of `44/- per sqr. ft., the dues/charges have already been deposited in the trial court which the respondent/plaintiff can withdraw and the appellant agrees that the arrears of the difference of mesne profits which are payable from 1.9.2008 till date in terms of today's order, and future mesne profits in terms of today's judgment month-to-month would be paid to the respondent/plaintiff till the possession is handed over to the respondent/plaintiff. On payment to the respondent/plaintiff of such amount operation of the impugned judgment and decree qua mesne profits is stayed till further orders unless varied by the Court. This is however, without prejudice to the rights of the appellant/defendant inasmuch as, the appellant/defendant is aggrieved with respect to granting of a decree for possession with respect to the tenanted premises.

13. Accordingly, limited to the aspect of mesne profits, and in terms of the prima facie observations made above qua the mesne profits, let notice issue to the respondent on filing of process fee, both in the ordinary method as well as by registered AD post, returnable on 5th March, 2012. Trial Court record be requisitioned. The amount in terms of today's judgment be paid by the appellant/defendant to the respondent/plaintiff within a period of 4 weeks from today."

3. Learned senior counsel for the appellant/defendant argued the

appeal on the issue of rate of mesne profits to be awarded under the following

three heads:-

i) The reasoning as given by the Trial Court for granting mense

profits is faulty inasmuch as once the lease deeds, Ex.PW1/18 to

Ex.PW1/21 are taken out of consideration, then, the impugned

judgment granting mense profits at `155/- per square feet per month is

incorrect and needs to be interfered with.

ii) The respondent/plaintiff/landlord, at best, is entitled to the

contractual increase, and which was 15% more than the rent prevalent

on the date of commencement of the lease on 1.7.2005.

iii) The appellant/defendant has filed an application under Order 41

Rule 27 CPC, to lead additional evidence with respect to various lease

deeds which are attached with the application, and which application

deserves to be allowed and consequently, the impugned judgment be set

aside by permitting the appellant/defendant to lead additional evidence.

4. The detailed facts have already been adverted to by me while

passing judgment on 19.12.2011 dismissing the appeal so far as the relief of

possession is concerned, and I need not reproduce the same herein, however,

para 2 of the said judgment dated 19.12.2011 encapsulates the facts and which

reads as under:-

"2. The facts of the case are that the appellant/defendant/lessee vide a lease deed dated 3.8.2005 took on lease the premises being E-35, Third Floor, Himalaya House, 23, Kasturba Gandhi Marg, New Delhi-110001 admeasuring 994 sqr. ft. from the then owner/landlord-Mrs. Usha Lall. This lease deed was for a period of 3 years from 1.7.2005 to 30.6.2008. This lease deed is not a registered document, and therefore, the tenancy would obviously be only a monthly tenancy. The so-called period of lease

expired on 30.6.2008. The original owner/landlord, Mrs. Usha Lall in the meanwhile on 11.6.2008 had entered into an agreement to sell of this property with the present respondent/plaintiff. This agreement to sell dated 11.6.2008 was subsequently registered on 11.2.2009, after payment of the requisite stamp duty and registration charges. Since the appellant/defendant failed to vacate the property in spite of termination of the tenancy by legal notice dt.14.7.2008, the subject suit for possession and mesne profits came to be filed."

5. In the present case, I have to determine mense profits after expiry

of lease by efflux of time, i.e. with effect from 15.8.2008, the date from which

the possession of the appellant/defendant became unauthorized. Since the

premises have not been vacated, the mesne profits, which are granted, would

continue to be payable till the possession of the premises are handed over to

the respondent/plaintiff/landlord. I may, at this stage, advert to the fact that

the respondent/plaintiff has in the Registry of this Court filed cross-objections

seeking enhancement of mense profits, as also praying enhancement of

interest, however, learned counsel for the respondent/plaintiff states that the

same are not being pressed and the appeal be heard.

6. The respondent/plaintiff/landlord before the trial Court filed lease

deeds of the same area where the suit premises are located, i.e. Connaught

Place, being lease deeds, Ex.PW1/18 to Ex.PW1/21 to prove the prevalent rate

of rent. These four lease deeds are dated 23.5.2008, 21.5.2008, 7.3.2008 and

9.6.2008. Since I have to determine the mense profits with effect from

August, 2008, the lease deeds, Ex.PW1/18 dated 23.5.2008, Ex.PW1/19 dated

21.5.2008 and the lease deed Ex.PW1/21 dated 9.6.2008 would be

contemporaneous and therefore would be relevant, if the same can be looked

into for determining the rate of mesne profits.

7. The two aspects which are adverted to by me in para 10 of the

judgment dated 19.12.2011 are in fact the arguments urged on behalf of the

respondent/plaintiff urging that the Trial Court has erred in discarding the

lease deeds, Ex.PW1/18 to Ex.PW1/21. Learned senior counsel for the

appellant/defendant could not dispute the fact that there is no challenge to the

lease deeds, Ex.PW1/18 to Ex.PW1/21 by cross-examining the witnesses of

the respondent/plaintiff that these lease deeds are bogus or fabricated

documents. Learned senior counsel for the appellant/defendant also could not

dispute that no objection as to exhibition of the lease deeds, Ex.PW1/18 to

Ex.PW1/21 was taken on behalf of the appellant/defendant when these lease

deeds were exhibited. I have already referred to the judgment in the case of

R.V.E.Venkatachala Gounder vs. Arulmignu Viswesaraswami &

V.P.Temples & Anr. 2003(8) SCC 752 in my judgment dated 19.12.2011, and

which judgment holds that unless objection is taken to the proof and

exhibition of the documents at the time of exhibiting the documents, the right

to questioning the documents is waived, inasmuch as, if objection was taken at

the relevant time, at the time of exhibition, the documents would not have

been exhibited and therefore, then the person who seeks to exhibit documents

would have led additional evidence/other evidence to prove the documents

which have been objected to. Once there is no objection, the party which

exhibits the documents, is lulled into a sense of belief with respect to lack of

challenge to the exhibition and proof of the documents. In my opinion,

therefore once there is no cross-examination of the lease deeds being bogus or

fabricated, and no objection was raised to the exhibition of these lease deeds,

i.e. taking them into evidence, the Trial Court erred in discarding these lease

deeds, Ex.PW1/18 to Ex.PW1/21.

8. In the lease deed, Ex.PW1/18, the rate of rent is `450/- per square

feet per month for the period of three years from 1.3.2008. The premises in

question which is subject matter of the lease deed, Ex.PW1/18 is a flat in the

building situated at 23, Barakhamba Road, New Delhi and which premises is

on the adjacent road/parallel road to the road in which the suit flat is situated.

So far as the lease deed, Ex.PW1/19 is concerned, the same pertains to a flat in

the premises Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi, i.e. the

same road where the suit flat is situated. The rate of rent in this lease deed is

`200/- per square feet per month besides a security deposit of three months'

rent. The lease deed, Ex.PW1/21 is of a flat situated again at 16, Barakhamba

Road, New Delhi, i.e. the adjacent/parallel road where the suit flat is located.

The rate of rent as per this lease deed is `235/- per square feet per month for a

period of three years from 15.5.2008. Though, the rent with respect to the

lease deed, Ex.PW1/20 is of about four months prior to August, 2008, from

when the mesne profits have to be calculated, one can keep in mind the rate of

rent fixed in a sum of `250/- per square feet per month, without of course

taking the same rate as prevalent with effect from August, 2008.

Therefore, during the period from March, 2008 to May, 2008,

lease deeds in the same area, including road on which the subject flat is

situated in Connaught Place, were let out at rent ranging from `200/- per

month to `450/- per month. The Trial Court has been more than conservative

in granting a sum of `155/- per square feet per month, i.e. lower than the

lowest rent of `200/- per square feet per month which was payable under the

lease deed, Ex.PW1/19 dated 21.5.2008. I, therefore, concur with the

conclusion given by the Trial Court, though not on the reasoning given by the

Trial Court, but for the reasoning which I have given above. In every case for

determining mesne profits some amount of honest guesswork is always called

in. As long as the guesswork is based within legal parameters, and is

supported by relevant evidence, such a conclusion can be adopted by the

Courts for determining the mense profits. This Court is a Court of First

Appeal under Section 96 CPC, therefore, this Court can reappraise both

findings of fact and findings of law, and can also give additional reasoning in

support of the findings and conclusions given by the Trial Court.

Accordingly, I hold that the respondent/plaintiff/landlord is entitled to mesne

profits of `155/- per square feet per month from 15.8.2008, the date which I

have held, to be the date from which mesne profits are payable, by my

judgment dated 19.12.2011.

9. So far as the application of the appellant/defendant under order

41 Rule 27 CPC is concerned, to lead additional evidence with respect to lease

deeds, I may state that the law in this regard is well settled. The object of

Order 41 Rule 27 CPC is not to assist litigants to have a second round for

leading evidence. This principle of Order 41 Rule 27 CPC will apply

aforetiorrari where the litigants are not small litigants or illiterate persons, and

are gigantic companies such as the appellant/defendant namely, M/s. Shriram

Pistons & Rings Ltd. If a litigant is allowed to reopen evidence, merely

because it has not led the evidence at the requisite point of time, there will be

no finality to any litigation. It is not and could not be the case of the

appellant/defendant that the lease deeds which are now sought to be relied

upon and led in evidence were not available or exiting at the time when

evidence was led by the appellant/defendant. I, therefore, hold that there is no

sufficient reason to allow the application under Order 41 Rule 27 CPC. CM

No.22973/2011 is accordingly dismissed.

I have also had a look at the lease deeds which are sought to be

relied upon on behalf of the appellant/defendant to satisfy my judicial

conscience. A reference to lease deeds, which are now sought to be relied

upon, show that they are either of the year 2011 or of the year 2009 whereas

the mesne profits are to be determined w.e.f. August, 2008. For two of the

lease deeds of the year 2009, which are sought to be relied upon, and which

are serial nos. 7 and 8 given in para 3 of the application under Order 41 Rule

27 CPC, the rate of rent was `120/- per square feet per month, for a flat in the

same very suit premises where the suit flat is located. With respect to two

lease deeds of the year 2009, the rent is `105/- and `112/- per square feet per

month, again for flats in the same building. The leases which are serial nos. 1

and 2 in the chart are of the year 2011 and therefore, the same can have no

bearing for rent which was prevalent in August, 2008. Therefore, I do not find

that there is such a huge difference with respect to the rates which are stated in

the lease deeds now sought to be filed and proved, and the rate of mesne

profits which are given by the Trial Court. Of course, I must hasten to add

that I am making this observation keeping in view the fact that for the

contemporaneous period of May, 2008, the lease deeds filed by the

respondent/plaintiff, i.e. Ex.PW1/18, Ex.PW1/19 and Ex.PW1/21, show that

the rates of rent were between `200/- per square per month feet to `450/- per

square feet per month. Of course, rate of rent at `450/- per square feet per

month is for some reason abnormally high, and therefore, cannot be referred

to, however, the other lease deeds proved and exhibited show the rates of rent

of `200/- per square feet per month, `250/- per square feet per month and

`235/- per square feet per month. Honest estimations therefore even on the

basis of the lease deeds which are now sought to be relied upon, with the lease

deeds as have been filed and proved by the respondent/plaintiff, show that the

grant of mesne profits at `155/- per square feet per month cannot be said to be

totally illegal or irrational or perverse.

10. So far as the argument urged on behalf of the appellant/defendant

that the rate of mesne profits should only be the contractual increase which

was already agreed upon between the respondent/plaintiff and the

appellant/defendant, all I need to state is that the said rate being a contractual

rate would have been only applicable if the contract itself comes into

existence, i.e. a contract post May, 2008, and which contract did not fructify.

Once the contract does not fructify, the mesne profits, which are to be

calculated, are as per the market rate of rent as prevalent in the area. This

argument as advanced on behalf of the appellant/defendant is accordingly

rejected.

11. So far as the security deposit given by the appellant/defendant to

the respondent/plaintiff is concerned, the parties will be bound by the

directions in this regard made by me in the judgment dated 19.12.2011

12. In view of the above, I dismiss the appeal so far as the same

challenges the mense profits which have been granted by the Trial Court.

Parties are left to bear their own costs. Appeal and the application are

disposed of accordingly.

CM No.4071/2012(under Section 151 CPC)

13. This application is allowed and the appellant/defendant is granted

a period of one week to comply with the order of payment/deposit of costs.

CM stands disposed of.

CM No.22040/2011(stay), C.M. No.22042/2011 (for placing additional documents on record), CM No.22043/2011(grant of time for depositing deficient Court fees) and CM No.22972/2011(delay in filing Court fees)

14. No orders are required to be passed on these applications as the

main appeal itself has been heard and disposed of and Court fees have been

filed.

15. CMs stand disposed of.

VALMIKI J. MEHTA, J MARCH 05, 2012 ak