Sh. Inder Sain Bedi vs M/S Chopra Electricals
2012 Latest Caselaw 5922 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           CS(OS) No.519/1994

%                                                       3rd October, 2012

SH. INDER SAIN BEDI                                       ...... Plaintiff
                            Through:     Mr. Rajan Sabharwal with
                                         Ms. Seema Singh, Advs.


                            VERSUS



M/S CHOPRA ELECTRICALS                                          ...... Defendant
                  Through:                   Mr. Ashish, Adv.



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

    To be referred to the Reporter or not?      Yes


VALMIKI J. MEHTA, J (ORAL)

1.

The subject suit has been filed by the plaintiff/landlord for

recovery of possession of (i) the leased area, and (ii) the area in occupation

of the defendant/tenant beyond the leased out area. I may state that the

plaintiff/landlord had separately filed a suit for possession of the leased

premises, and which suit was decreed in terms of the judgment dated

23.4.1993 passed by Sh.P.K.Bhasin, ADJ (as his Lordship then). This

judgment has been upheld right till the Supreme Court, and therefore the

possession of the leased premises has already been taken back by the

plaintiff/landlord. The plaintiff in execution of the said judgment has also

taken back possession of the encroached areas.

2. The facts of the case are that the plaintiff is the owner/landlord

of the property bearing No. B-59/1, Naraina Industrial Area, Phase-II, New

Delhi-28. A portion of this building comprising of one main hall on the

ground floor, three office-cum-store rooms, two mezzanine halls and toilets

for workmen as stated in the deed of license dated 26.5.1980 was let out to

the defendant. Though the document is titled as a deed of license the

admitted position is that there was a relationship of landlord and tenant

between the parties. The rate of rent fixed under the deed dated 26.5.1980

was Rs.4,500/- per month. In the present suit, the following aspects are to

be decided:

i) The mesne profits which would be payable by the

defendant/tenant to the plaintiff/landlord for the leased premises from

1.2.1991 till 31.1.2005. While on this aspect, I must note that it is an

admitted case of the parties that the lease was terminated by the legal

notice dated 6.3.1989 (proved as Ex.P1 in the suit of 1989) with effect

from 31.5.1989 i.e the defendant became an unauthorized occupant

from 1.6.1989. Since the suit however was filed only in February,

1994, and arrears can only be claimed for a period of three years prior

to filing of the suit, hence the period for which the mesne profits are to

be calculated are from 1.2.1991 till 31.1.2005, the latter date being the

date when the landlord/plaintiff received possession of the tenanted

premises and the encroached areas.

ii) What is the area encroached by the defendant, i.e. what is the

extent of the area beyond the areas/portions stated in the deed of

license, Ex.P6, dated 26.5.1980, and which were illegally occupied by

the defendant.

3. The defence on behalf of the defendant, as argued before me

today is two fold:-

i)There is no encroached area and whatever area was with the

defendant/tenant was actually part of the leased area.

ii) Alternatively it is argued that the area encroached is not 3193

sq.ft. as stated by the plaintiff/landlord, but only 2068 sq.ft, inasmuch

as, 1125 sq.ft. of alleged encroached area is nothing but mezzanine

floors constructed within the portions leased out to the defendant/tenant

under the deed dated 26.5.1980.

4. The following issues were framed in this suit on 21.5.1999:-

"1. Whether the plaintiff is entitled for recovery of possession of the suit premises? OPP

2. Whether the present suit is barred by res judicata? OPD

3. Whether the present suit is pre-matured? OPD

4. Whether Delhi Vidyut Board is the necessary party?

OPD

5. Whether the suit property was part of the agreement executed between the parties? OPD

6. Whether the present suit is filed on the basis of agreement/lease deed? OPD

7. Whether the plaintiff is entitled for mesne profit and if so, then at what rate? OPP

8. Whether the suit is barred under Order II Rule 2 of the CPC? OPD

9. Whether notice under Section 106 of the Transfer of Property Act was given for the termination of the alleged encroached portion of the tenancy? OPP

10. Whether there are any addition/alteration or encroachment done by the defendant as alleged by the plaintiff? OPP

11. Relief."

5. Issue nos. 2, 3, 4 and 8 are not pressed by the defendant and are

therefore decided in favour of the plaintiff. That leaves for decision issue

nos. 1, 5, 6, 7, 9 and 10. These issues are being dealt with together

inasmuch as they would basically fall under two heads, as to, firstly, the

entitlement of the plaintiff/landlord to the mesne profits with respect to the

leased premises from 1.2.1991 till 31.1.2005 and secondly of the claim of

mesne profits to be granted for the encroached area and which head will

include the aspect as to what is the extent of the encroached area.

6. In order to prove the rate of rent the plaintiff/landlord relies

upon four documents: the lease deed dated 15.1.1999 (Ex.P-21) with respect

to 10,000 sq.ft. of area in the premises bearing no.B-48, Naraina Industrial

Area, Phase-II, New Delhi; a lease deed dated 10.12.1998(Ex.P-20) with

respect to 8650 sq.ft. area once again in the aforesaid premises bearing No.

B-48, Naraina Industrial Area, Phase-II, New Delhi; a lease deed dated

6.2.1999(Ex.P-22) for a commercial area of 2400 sq.ft. situated at A-1,

Community Centre, Naraina Industrial Area, Phase II, New Delhi; and lastly

a lease deed also dated 6.2.1999(Ex.P23) for an area of 800 sq.ft. again with

respect to the same commercial premises A-1, Community Centre, Naraina

Industrial Area, Phase II, New Delhi.

7. Reliance is also placed on behalf of the plaintiff to three

valuation reports, Ex.P-33 to Ex.P-35, of one Sh. Virender Cambow, for

arriving at rate of rent on the basis of cost of construction and the area on

which construction is made.

8. So far as the valuation reports Ex.P-33 to Ex.P-35 are

concerned, I cannot look into the same inasmuch as, the defendant right at

the inception of cross-examination objected to exhibiting of these documents

on the ground of mode of proof. When we refer to the additional affidavit

by way of examination-in-chief dated 4.5.2006 on behalf of the plaintiff-

Sh.Ram Prakash Malhotra, PW1, it becomes clear from para 2 of this

affidavit that exhibit marks have been given to the valuation reports without

proving the same in terms of Section 47 of the Indian Evidence Act,

1872. There is no deposition that the signatures existing on these valuation

reports of Sh. Virender Cambow are identified as they were put in the

presence of the witness or that the other conditions as stated under Section

47 of the Evidence Act, 1872 are satisfied. Therefore, these valuation

reports do not stand proved as required by law, and thus they cannot be

referred to.

Even assuming the reports can be referred to as evidence, the

fact that they are evidences is different from the aspect as to the weight

which should be attached to the same. The valuation reports are in a way

theoretical because what is the rent of premises is best known by means of

actual rentals in area. Plaintiff has failed to file any documents of actual

rentals in the area, with respect to the years 1994-95, 1999-2000 and 2003-

04 and for which the valuation reports, Ex.P-33 to Ex.P-35 are relied upon.

I, therefore, hold that very very little weight can be attached to these

valuation reports. In any case, as already held above, the same have not

been proved in accordance with law for the same to be taken/referred to as

evidence in the present case.

9. So far as the lease deeds, Ex.P-22 and P-23, both dated

6.2.1999, it could not be seriously disputed on behalf of the plaintiff that

these lease deeds are with respect to commercial premises in a Community

Centre and rents of such commercial premises are therefore definitely higher

than industrial areas where the suit premises are situated. Ex.P-22 and Ex.P-

23 therefore cannot be referred to in order to decide the rate of rent of the

suit premises which is in an industrial area.

10. That leaves us with two documents being Ex.P-21 and Ex.P-20,

and which are two lease deeds dated 15.1.1999 and 10.12.1998 with respect

to the same area where the leased premises are situated inasmuch as the

leased premises are B-59/1, Naraina Industrial Area, Phase-II, New Delhi

and the subject matter of the lease deeds Ex.P-21 and Ex.P-20 are portions

of the property situated at B-48, Naraina Industrial Area, Phase II, New

Delhi. However, whereas the mesne profits are to be awarded from 1.2.1991

till 31.1.2005, both these lease deeds Ex.P-21 and Ex.P-20, are of the year

December 1998/January1999, and therefore they can be looked at for

determining the rent only in around the year 1998-99 and not for the entire

period from 1.2.1991 till 31.3.2005. These lease deeds are therefore

relevant evidence and will be considered for awarding the mesne profits,

although for a part of the period, out of the total period from 1.2.1991 till

31.3.2005.

11(i). The admitted last rent paid was Rs.4,500/- per month for the

leased area of 2609 sq.ft. This translates to about Rs.1.75 per sq.ft. at the

time of granting of the lease in around the year 1980. Since I have to

calculate the mesne profits payable firstly as on 1.2.1991, I can safely take

the rate of rent on 1.2.1991 at Rs.5/- per sq. ft. because though there is no

evidence with respect to rate of rent from 1980 till 1991 as filed by the

plaintiff/landlord, a Division Bench of this Court in the case of S.Kumar vs.

G.R.Kathpalia, 1999 RLR 114; 77(1999) DLT 266 has held that Courts are

entitled to take judicial notice of increase in rents. I have also in the

judgment reported as M.C. Agrawal (HUF) vs. Sahara India Pvt. Ltd. 183

(2011) DLT 105 held that in the absence of any evidence one can take 15%

increase of rent every year with respect to non-residential premises.

(ii) In every determination of mesne profits, some amount of honest

guesswork is always involved, and therefore, on the basis of the evidence led

in this case, the admitted fact of rate of rent being of Rs.1.75 per sq.ft in

1980, and judicial notice being required to be taken of increase in the rent, I

hold that as on 1.2.1991, the prevalent rate of rent would be Rs.5/- per sq.ft.

and which would be the rate from 1.2.1991 till 31.1.1992.

(iii) For the period from 1.2.1992 till 31.12.1998, in accordance

with the aforesaid judgment in the case of M.C.Agrawal (supra), I grant an

increase of 15% cumulative every year i.e the rent payable from 1.2.1992 till

31.1.1993 will be 15% more than Rs.5/- per sq. ft, and the rent payable for

1.2.1993 till 31.1.1994 will be 15% more than Rs.5.75/- per sq.ft. and so on

till 31.12.1998.

(iv) From 1.1.1999 till 31.12.1999 in view of the documents Ex.P-

21 and Ex.P-20, plaintiff will be entitled to rent at Rs.12/- per sq.ft.

(v) From 1.1.2000, the rate of rent will be 15% more cumulative

every year as detailed above in sub-para (iii) till the date of vacation of the

premises on 31.1.2005.

I may reiterate that this rate of mesne ptofit is being given with

respect to the leased premises and not for the encroached area/portion, and

which subject I will deal with hereinafter.

12. Though there is no issue framed qua grant of interest on arrears

of mesne profits, the same is only a natural corollary and in fact forms a part

of the mesne profits payable, and therefore, in accordance with the judgment

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

Baweja 2005(12)SCC 298 interest at the rate of 12% per annum simple will

be payable from the end of the month for which mesne profits are payable

till the time that such arrears of mesne profits are actually paid.

13. Now the aspect which has to be determined is whether the

defendant has encroached upon an area beyond the area granted by the deed

of license, Ex.P-6 dated 26.5.1980, and if there is encroachment, then, what

is the area encroached, and what should be the mesne profits payable for this

encroached area.

14. The encroached area is stated by the plaintiff in para 8 of the

plaint and which para 8 reads as under:-

"8. That the portion encroached upon by the defendants comprised of an area measuring about 20‟ x 16.8‟ where they had put up a Parchhatti/Mezannine, on the left hand side. On the right side also they have encroached upon a portion measuring about 20‟ x 30‟ where Parchhatti/Mezannine had been put up by them. The defendants have also put up another Mezannine on the left side on an area of 15‟ x 13‟. On the rear side there is a lawn on a portion of which shed had been constructed by the plaintiff and the said portion too have been encroached upon by the defendants. This portion measures 1068 square feet. In the open space (Gallary) also encroachment has been made by the defendants

which portion measures about 1,000 square feet. The total area encroached upon by the defendants measures about 3193 square feet. A plan of the property is filed in this Hon‟ble Court in which the encroached portions have been shown in „red‟ colour while the portions which stood rented to the defendants have been shown in „green‟ colour."

15. A reading of the aforesaid para 8 shows that the three areas of

20‟ x 16.8‟, 20‟ x 30‟ and 15‟ x 13‟ are actually only additional mezzanine

portions constructed by the defendant within the area of the leased premises

granted under Ex.P-6. It is not disputed on behalf of the plaintiff that these

three mezzanine areas are in the main ground floor hall, and which main

ground floor hall forms part of the leased premises as per Ex.P-6. Once that

is so, it cannot be said that the defendant has encroached an area beyond the

leased area so far as these three mezzanine areas are concerned, and

therefore, no mense profits can be granted for the total of these three areas of

195 sq.ft. + 330 sq.ft. + 600 sq.ft. i.e a total of 1125 sq.ft. The encroached

area therefore will only be 1068 sq.ft. forming part of the premises on the

rear side and 1000 sq.ft. of the open space (gallery) in the premises which

are owned by the plaintiff/landlord.

16. So far as the encroached area of 2068 sq.ft. is concerned the

same will be divided in two parts. One part will be of 1068 sq.ft. and which

is a shed (admitted as not to be a full fledged construction) which was

constructed by the plaintiff and the other part will be of an open area of 1000

sq.ft.

So far as the shed of 1068 sq.ft. in the rear side portion, considering

that there is no evidence as to what is the type of construction, but there is an

indication on record that the construction is not a normal full fledged pucca

construction, interest of justice will suffice if for this area of 1068 sq.ft.,

mesne profits are granted at exactly half the rate of the leased premises as

determined above. Accordingly, the mesne profits granted for this

encroached area of 1068 sq. ft. will be at 50% of the rate of mesne profits

granted for leased portion for the entire period from 1.2.1991 till 31.1.2005

and for which the mesne profits are held to be payable.

17. So far as the open area of 1000 sq.ft. is concerned, since there

are no specified parameters as to how rent for this open area should be

granted, interest of justice will suffice if for this open area, mesne profits are

granted at 25% of the rate for which the mesne profits have been granted for

the leased area. Therefore, from 1.2.1991 to 31.1.2005 the mesne profits

which would be granted for the open area of 1000 sq.ft. will be 25% of the

mesne profits granted for the leased portion from 1.2.1991 till 31.1.2005.

18. I further hold that interest at 12% per annum simple in terms of

the Supreme Court judgment in Indian Oil Corporation (supra) case will be

granted on the mesne profits awarded for the shed area of 1068 sq.ft. and an

open area of the 1000 sq.ft.

19. While on the aspect of encroachment, I may state that the fact

that encroachment has taken place cannot be disputed by the defendant

inasmuch as the plaintiff in para 5 of the plaint has specifically referred to

the encroached area as shown in green colour in the plan filed in the earlier

suit, and in the written statement in reply to para 5 of the plaint, the

defendant does not dispute this and only states that the same is only a matter

of record. Therefore, the fact that encroachment has taken place, cannot be

disputed by the defendant.

20. In view of the aforesaid, issue nos. 1, 5, 6, 7, 9 and 10 are

decided by holding that the plaintiff/landlord is entitled to mesne profits for

the leased portion from 1.2.1991 till 31.1.2005 at the rates as stated above.

The plaintiff/landlord will also be entitled to the mesne profits for the

encroached area of 2068 sq.ft. as stated above. The plaintiff/landlord will

also be entitled to interest on the mesne profits commencing from the end of

the month of unauthorized occupation till the payment is actually made at

12% per annum simple. It is also held that the encroached area is beyond

the leased premises as specified in Ex.P-6 and the same did not form part of

the leased premises in Ex.P-6. It is also held that once there is an

encroached area, there is no need to serve notice under Section 106 of the

Transfer of Property Act, 1882 inasmuch as under Section 106 of the

Transfer of Property Act, 1882 notice is served with respect to a tenanted

portion and not for a portion in which a person is an unauthorized occupant.

So far as the issue no. 10 is concerned, I have held that within the leased

premises where the mezzanine portion has been constructed by the

defendant no mesne profits would be payable and mesne profits will only be

payable for the total of 2068 sq.ft. and that too in two parts of 1068 + 1000

sq.ft. as stated above.

Relief

21. In view of the above, the suit of the plaintiff for mesne profits is

decreed by granting to the plaintiff the following mesne profits for the leased

portion, the encroached area, and also interest thereon: -

(A)(i) Plaintiff is granted mesne profits at Rs.5/- per sq.ft. from

1.2.1991 till 31.1.1992. The mesne profits payable would become

Rs.5.75/-per sq.ft. per month from 1.2.1992 till 31.1.1993.

ii) From 1.2.1993 till 31.1.1994, the mesne profits would be 15%

more than Rs.5.75/- per sq.ft. per month and which rate of rent will be

cumulatively increase every year at 15% till 31.12.1998.

iii) Plaintiff is granted mesne profits for the leased portion at

Rs.12/- per sq.ft. per month from 01.01.1999 till 31.12.1999. From

1.1.2000 till 31.12.2000, the mesne profits which would be payable for

leased portion would be 15% more than Rs.12/- per sq.ft per month i.e.

Rs.13.80 from 1.1.2000 till 31.12.2000 and cumulatively 15% increases

so on every year till 31.1.2005.

iv) On all the aforesaid amounts interest at 12% per annum simple

will be payable from the end of the month for which the mesne profits

are payable, till the amounts are paid by the defendant to the plaintiff.

v) For the encroached area of 1068 sq.ft., mesne profits from

1.2.1991 till 31.1.2005 will be 50% of what is calculated for the leased

portion.

vi) In the encroached area of 1000 sq.ft., the mesne profits will be

25% of what is calculated for the leased premises from 1.2.1991 till

31.1.2005.

vii) Even on the mesne profits granted for this total encroached area

of 2068 sq.ft., interest will be payable at 12% per annum simple from

the end of the month for which mesne profits would be payable till

actual payment.

(B) If for the period for which mesne profits have been granted

above, any payments have been made by the defendant to the plaintiff, then,

to the extent of payments made, such amounts will be deducted, and

deduction will take place for that month for which payment has been made,

meaning thereby, interest will only be payable on the remaining portion of

the mesne profits which will remain due and payable. These aspects of such

calculations are left to be determined, if so necessitated, in execution

proceedings.

(C) Plaintiff will also be entitled to costs in terms of the Rules of

the Court.

Decree sheet be prepared on the plaintiff filing court fees with respect

to the mesne profits decreed.

VALMIKI J. MEHTA, J OCTOBER 03, 2012 ak