M/S Marudhar Services Ltd. & Anr. vs Ved Parkash & Anr.
2012 Latest Caselaw 2974 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                            RFA No. 374/2004

%                                                           4th May, 2012

M/S MARUDHAR SERVICES LTD. & ANR.         ..... Appellants
                 Through : Mr. Gurbaksh Singh, Advocate.


                    versus

VED PARKASH & ANR.                                      ..... Respondents
                 Through :               Ms. Mala Goel, Advocate.

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

To be referred to the Reporter or not?        Yes


VALMIKI J. MEHTA, J. (ORAL)

1. The respondent No.1/plaintiff No.1 has died during the pendency

of the appeal and an oral request of learned counsel for the parties is

accepted, whereby respondent No.2/plaintiff No.2 being the wife of

respondent No.1/plaintiff No.1 is substituted as a legal heir of respondent

No.1/plaintiff No.1. The name of respondent No.1 is, accordingly,

deleted from the array of parties. For the sake of convenience the original

plaintiffs are referred to as the respondents/plaintiffs.

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 16.4.2004 decreeing the suit

of the respondents/plaintiffs for arrears of rent and mesne profits. The

respondents/plaintiffs have also filed cross-objections in this appeal,

inasmuch as, the respondents/plaintiffs claim that the arrears of rent ought

to have been granted at `10,000/- per month and not `6,000/- per month,

and there should be enhancement in the rate of the mesne profits granted.

3. The facts of the case are that the appellant No.1/defendant No.1

became a tenant in the first floor portion of the property being C-52,

Soami Nagar, New Delhi - 110 017 under the respondents/plaintiffs in

the year 1993. The premises were let out for the residence of appellant

No.2/defendant No.2. There were two documents creating the

relationship of landlord and tenant between the parties. One was an

unregistered lease deed dated 26.8.1993 for a period of two years at rent

of `6,000/- per month, and another was an agreement of the same date for

hire charges of the fittings and fixtures @ `4,000/- per month.

Effectively, therefore, a sum of `10,000/- was payable as rent of the

premises. I may note that now as per innumerable judgments of this

Court, hire charges are taken as part and parcel of the rent, inasmuch as,

they are charges for use of the rented premises.

4. The tenancy being a monthly tenancy, was terminated by the

plaintiffs/respondents/landlords by a legal notice dated 2.3.1998, and

receipt of which is not disputed by the appellants/defendants. The said

notice was in fact replied to by the appellants/defendants vide reply dated

23.4.1998. In the notice, the respondents/plaintiffs claimed arrears of rent

@`10,000/- from 1.9.1995 to 31.3.1998 and mesne profits from 1.4.1998

till the date when physical possession of the tenanted premises is handed

over. During the pendency of the suit, which was filed for possession,

arrears of rent and mesne profits, the respondents/landlords filed an

application under Order 12 Rule 6 CPC with respect to the relief of

possession, and which application on being allowed, and the order being

upheld by this Court, the appellants/defendants handed over possession in

January, 2001. The respondents/plaintiffs, however, claimed that the

possession was handed over in March, 2001.

5. By the impugned judgment the trial Court has decided the issue of

whether arrears of rent were payable from 1.9.1995 to 31.3.1998, and if

yes at what rate. The impugned judgment also grants a decree for mesne

profits @ `12,000/- per month from 1.4.1998 till March, 2001, which is

the month which the trial Court found when the appellants/defendants

handed over physical possession of the suit premises. The counsel for the

respondents/plaintiffs state that possession was taken by the

respondents/plaintiffs in execution proceedings with the assistance of the

Court bailiff.

6. The issues before this Court, and which I am called upon to decide

in accordance with the arguments which have been so urged on behalf of

the respective parties are as under:-

(i) Whether the respondents/plaintiffs/landlords ought to be

allowed arrears of rent at `10,000/- per month and not `6,000/- per

month, as granted by the trial Court from 1.9.1995 to 31.3.1998 i.e.

not at `6,000/- per month as granted by the trial Court?

(ii) Whether the payment of `1,20,000/-, made by the

appellants/defendants by means of two pay orders dated 2.9.1997

and 18.11.1997, should be taken for payment of dues from

September, 1997 only as per the case of the appellants/defendants

or from 1.9.1995 as per the case of the respondents/plaintiffs?

(iii) Whether the respondents/plaintiffs are entitled to

enhancements in mesne profits from `12,000/- per month as

granted by the trial Court for the period from 1.4.1998 till

January/March, 2001?

7. So far as the first issue, as to what should be the rate of rent for the

period from 1.9.1995 to 31.9.1998, I find that the trial Court has arrived

at obviously inconsistent findings in the impugned judgment. This I say

so because, though, on the one hand the trial Court has found that the

total amount which was payable was `10,000/- per month i.e. `6,000/-

per month as rent and `4,000/- towards the alleged fixtures and fittings,

yet, the rent has been held payable only on `6,000/- per month. The trial

Court, in fact, in para 10 of the impugned judgment holds that really the

fittings and fixtures are no special fixtures and, therefore, were part of

rent, yet, surprisingly the figure of rent has been fixed only at `6,000/-

per month and not `10,000/- per month. Following are the observations

of the trial Court which show that the trial Court ought to have in fact

awarded the rent at `10,000/- per month and not at `6,000/- per month.

10. ...

Besides, the premises in question were let out w.e.f. st 1 September 1993 on rent at the rate of Rs.6000/- per month besides hire charges of Rs.4000/- per month for fittings and fixtures as mentioned in hire charges agreement PW1/2. The fittings and fixtures are electric chimney in Kitchen, gysers, tubes, fancy fittings, almirahs, showcase,

dining room, cubboard and various kinds of electrical and sanitary fittings. The said fittings and fixtures are normally provided by the landlord at the time of letting out the premises to a tenant. The fittings and fixtures do not include any special kind of fixtures. Therefore, the market rent for the suit property at the time of letting out in September 1993 till August 1995 was atleast Rs.10,000/- per month. ..."

8. Accordingly, I hold that once the appellants/defendants had

otherwise been paying `10,000/- per month for the suit premises, though

in two parts of `6,000/- per month called as rent and `4,000/- per month

as fittings and fixtures, the fact of the matter is that the rent which was

payable for the suit premises was `10,000/- per month. I, accordingly,

hold that the respondents/ plaintiffs would be entitled to charges of

`4,000/- per month from 1.9.1995 till 31.3.1998 in addition to the sum of

`6,000/- per month which has been granted by the trial Court for this

period from 1.9.1995 to 31.3.1998. I also deem it fit to grant interest at

12% per month from the end of the month from which such amount of

`4,000/- per month would become payable, in terms of the judgment of

the Supreme Court in the case of Indian Oil Corporation Vs. Saroj

Baweja 2005 (12) SCC 298.

9. I am not able to agree with the arguments as urged on behalf of the

appellants/defendants that the payment of `1,20,000/-, which was made

by means of two pay orders of `60,000/- each, should be taken towards

the payment of rent from September, 1997 onwards only, inasmuch as,

the appellants/defendants failed to prove before the trial Court that they

had paid any amount towards rent from 1.9.1995 to 31.3.1998. The trial

Court has given the correct finding that it is not possible to believe that

huge amount in cash of `1,45,000/- was paid by the appellants/defendants

without taking any receipt from the landlords. Following is the finding of

the trial Court, and which I, therefore, uphold.

"7. ... PW Ved Parkash in his cross-examination admitted to have received a sum of Rs.60,000/- by pay order bearing No. 123913 dated 02.09.1997 drawn on State Bank of Saurashtra. He also admitted to have received another pay order for a sum of amount of Rs.60,000/- bearing No.026649 drawn on HDFC Bank. However, PW Ved Parkash stated that the said payment or Rs.1,20,000/- vide aforesaid two pay orders was towards the period ending 31.08.1995. Perusal of the plaint shows that the receipt of that amount of Rs.1,20,000/- vide aforesaid two pay orders was not disclosed by the plaintiffs in their plaint. The defendants in their written statement claimed to have made the said payment of Rs.1,20,000/- vide aforesaid pay orders in lieu of the amount of the dishonoured cheque of `1,45,000/-. However, the plaintiff did not dispute this fact and in the replication the plaintiffs did not plead that the said payment of Rs.1,20,000/- vide aforesaid two pay orders of Rs.60,000/- each was towards rent for the period upto 31.08.1995 nor was disclosed in the plaint as already stated above. Therefore, the plea of the plaintiffs for the first time in

his cross-examination added voluntarily is certainly an after thought and cannot be believed. It is not believable that the plaintiffs would have remained silent from 01.09.1995 till March, 1998 and not served even a notice of demand for such a long time. All these facts goes to show that the said payment of Rs.1,20,000/- by aforesaid two pay orders is for the period from 01.09.1995 onwards. If that payment is adjusted at the rate of Rs.6000/- per month it covers rent for the period upto April 1997. The defendants claimed to have paid dues for the rest of the period upto 31.03.1998 by cheque/drafts/cash. Hence onus stands shifted to the defendants to prove that they have paid dues for the period May 1997 to 31.03.1998 at the rate of Rs.6000/- per month i.e Rs.66,000/-. It is found that no other cheque or draft or pay order showing any payment or that period is proved on record by the defendants. There is no cogent evidence by the defendants to prove to have paid that amount of Rs.66,000/- in cash. Dates of payments of that amount are not pleaded not proved. In the absence of cogent evidence the defendants are deemed to have failed to prove the said payment of Rs.66,000/- towards period from May 1997 to 31.03.1998. Therefore, for the said period from May 1997 to 31.03.1998 the plaintiffs are entitled to recover arrears of rent at the rate of Rs.6000/- per month i.e., Rs.66,000/-."

(underlining added)

I, therefore, hold that it cannot be held as is being argued by the

appellants/defendants, that the appellants/defendants have paid rent up to

September, 1997 and the amount of two pay orders totaling to `1,20,000/-

should be taken towards adjustment of dues only from September 1997

instead of 1.9.1995.

10. Before proceeding to deal with the issue of the rate at which the

respondents/plaintiffs are entitled to mesne profits, there are two issues

which I must deal with at this stage and which are whether the

appellants/defendants are liable to pay mesne profits till March, 2001 and

not till January, 2001, and whether the respondents/plaintiffs are liable to

give adjustments on the security deposit of `30,000/- which was taken at

the time of commencement of tenancy.

11. So far as the aspect of `30,000/- received as advance, the counsel

for the respondents does not dispute this position and states that

adjustment of this amount will be given from the decretal amount. So far

as the issue of the date of vacation of premises, I find that unfortunately

there are only oral statements in this regard, although this aspect could

well have been proved by the documentary evidence, inasmuch as, if the

respondents/plaintiffs have taken possession through Court bailiff in

execution proceedings, such documentary evidence will show the date

when possession was taken. There is otherwise no documentary evidence

on record of the admitted handing over of the possession and taking over

the suit property.

Inasmuch as, remanding the matter for this small period of two

months i.e. for February and March, 2001, is not feasible I direct that, in

case, the respondents file in this Court, within a period of eight weeks

from today, certified copy of the possession proceedings through the

bailiff to show that the possession was taken in March, 2001, then mesne

profits will be payable till March, 2001, failing which, the mesne profits

will only be payable till January, 2001.

12. Now on the aspect as to whether the respondents are entitled to

seek increase of mesne profits from `12,000/- as awarded by the trial

Court for the period from 1.4.1998 till the date when the possession is

handed over, which for the present, I am taking as March, 2001. In this

regard, I find that except an oral evidence of a property dealer and a lease

deed which has not been exhibited, there is no such evidence which can

be accepted by me for increasing the rate of mesne profits. However, that

is not the end of the matter, inasmuch as, I have in a recent judgment of

M/s. M.C. Agarwal HUF vs. M/s. Sahara India & Ors.2011 (183) DLT

105 held that even if there is no evidence led by the landlords for increase

in the rents, the landlords can ordinarily be granted increase @15% per

year cumulatively taking judicial notice of the fact that rents rise

approximately at high rate in metropolitan cities, more so particularly in

the capital. An SLP against this judgment has been dismissed by the

Supreme Court being SLP No. 4104/2012 decided on 21.3.2012.

The premises in the case of M.C. Agarwal (Supra) was a

commercial premises and, therefore, increase of 15% per year was

granted, but considering that the subject premises are residential

premises, I deem it fit that the cumulative increase of rent should be

@10% per annum and not @15% per annum.

13. The issue, then, is that what should be the rate of mesne profits

taken as on date of termination of tenancy i.e on 1.4.1998, for grant of

enhancement thereon. Admittedly, the rate of rent was `10,000/- per

month from the year of commencement of tenancy, in 1993. In 1998,

therefore, the rate of rent would be at least approximately 50% more and,

therefore, I take the rate of rent as on 1.4.1998 to be `15,000/- per month.

On this rate of rent of `15,000/- per month respondents/plaintiffs are

granted cumulative increase of 10% per annum cumulative i.e. they will

be granted further increase at 10% every year from 1.4.1998 till the time

possession is handed over in January/March, 2001. Post the period from

1.4.1998 the increase will have to be cumulative increase every year,

inasmuch as, the appellants/defendants have deliberately failed to vacate

the suit premises and had continuously stayed in the suit premises inspite

of their tenancy being terminated. I, therefore, hold the mesne profits

which would be payable should be of a sum of `15,000/- per month from

1.4.1988 and after every twelve months period i.e. on 1.4.1999 there will

be increase of 10% on this amount of `15,000/- per month which is fixed

as payable as on 1.4.1998 and on 1.4.2000 there will be a 10% increase

on `16,500/- per month.

14. The issue now is the rate of interest to be awarded on the arrears of

rent payable as also on the mesne profits payable, and the date from

which it becomes payable. In the aforesaid judgment of M.C. Agarwal

(Supra) I have held that interest will be payable @12% per annum from

end of the month from which the mesne profits would become payable,

inasmuch as, ordinarily if such amount would have been received by the

landlords at the end of the tenancy, they would have been able to earn

interest on such amounts till the date the same are actually paid. The trial

Court in this case has granted interest @ 15% per annum from the date

the payment became due without mentioning the date from which the

payment becomes due. I, therefore, clarify that the date at which the rent

and mesne profits would become due would be the end of the month of

occupation of the suit premises. The rate of interest, however, granted by

the trial Court of 15% per annum is, in my opinion, excessive, and I

reduce the same to 12% per annum simple in accordance with the ratio of

the judgment in the case of M.C. Agarwal (Supra).

15. In view of the aforesaid discussion, the appeal and the cross-

objections are disposed of by making the following directions:-

(a) The respondents/plaintiffs/landlords, and now who are

represented by respondent No.2/plaintiff No.2, will also be entitled

to an amount of `4,000/- per month from 1.9.1995 till 31.3.1998

alongwith interest @12% per annum simple from end of the month

from which said amount became payable. It is clarified that the

respondents/plaintiffs/landlords will be entitled to an amount of

`10,000/- per month and not `6000/- per months from 1.9.1995 till

31.3.1998, after adjusting from that amount a sum of `1,20,000/-

which has been paid in September, 1997. Interest @ 12% per

annum every month from the end of the month will be paid from

1.9.1995 till payment in September, 1997 and adjustment will be

granted of payments which have been made by the

appellants/defendants of `1,20,000/- by first adjusting this amount

towards arrears of interest and only thereafter towards the arrears

of rent payable.

(b) The respondents/plaintiffs/landlords will be entitled to

mesne profits @`15,000/- per month from 1.4.1998 till 31.3.1999

alongwith interest at 12% per annum simple from the end of the

month from which the mesne profits are payable. From 1.4.1999

mesne profits will be 10% more, i.e `16,500/- per month and from

1.4.2000, the mesne profits will become 10% more than `16,500/-

per month. On all the arrears of mesne profits, interest will be

payable, as stated above, at 12% per annum simple from the end of

the month of months of occupation of the suit premises.

(c) Mesne profits will be payable till March, 2001, subject of

course, to the respondents/defendants filing in this Court

documents of the execution proceedings showing that the

possession of the premises was taken in March, 2001, failing which

the mesne profits will be payable only till end of January, 2001.

(d) The appellants/plaintiffs will be entitled to adjustment as on

March, 2001 or January, 2001, as the case may be, for the deposit

of `30,000/- lying with the respondents/plaintiffs/landlords,

inasmuch as, the deposit is payable at the date of handing over of

the possession of the tenanted premises.

16. In accordance with the ratio of the Supreme Court in the case of

Ramrameshwari Devi and Others v. Nirmala Devi and Others, (2011) 8

SCC 249 and by virtue of Volume V of the Punjab High Court Rules

and Orders (as applicable to Delhi,) Chapter VI Part I Rule 15, which

entitles me to impose actual costs, the appeal and the cross-objections are

disposed of by allowing costs of `50,000/- to the respondents/landlords

who have been unnecessarily forced by the appellants to enter into

litigation for recovery of their legitimate dues.

17. At the conclusion of arguments, learned counsel for the

respondents/landlords has brought to the notice of this Court that the

residential address of appellant No.2, and who is all in all so far as the

appellant No.1-Company is concerned has not been filed. It is stated that

it would be difficult to execute the decree unless the actual residential

address of the appellant No. 2 is known, inasmuch as, the appellant

No.1/company is stated to have almost no assets which can be

appropriated for recovery of the decretal amount. I may note that under

Order 6 Rule 14A CPC it is necessary for parties to file their latest and

current addresses, inasmuch as, the object of law is that a decree if passed

can be executed against the judgment debtor at the address which is found

in the judicial record. Accordingly, both the appellants are directed to file

in this Court within a period of two weeks from today their current

addresses alongwith proof thereof of unimpeachable record such as a

passport, ration card, or something equivalent. In case, the appellants fail

to file such addresses, the rate of interest which has been awarded above

shall be 15% per annum simple and not 12% per annum simple, however,

if the addresses are filed, the rate of interest will continue to remain 12%

per annum simple.

18. The security given by the respondents for withdrawing of the

amount deposited by the appellants in this Court will stand discharged

forthwith and the Registry is directed to return the same to respondent

No.2 within a period of two weeks from today.

19. The present appeal is disposed of with the aforesaid observations.

Decree sheet be prepared. Trial Court record be sent back.

VALMIKI J. MEHTA, J.

MAY 4, 2012 AK