United India Insurance Co. Ltd. vs Harish Chander Aggarwal (Through ...
2013 Latest Caselaw 5632 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 5th December, 2013.

+                                   RFA 104/2008

       UNITED INDIA INSURANCE CO. LTD.              ..... Appellant
                     Through: Mr. Pankaj Seth, Adv.

                                    Versus

    HARISH CHANDER AGGARWAL
    (THROUGH LRS)                              ......Respondent
                  Through: Mr. P.S. Bindra, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and decree dated 10 th December,

2007 of the Court of Additional District Judge (ADJ) in Suit No.128/2006

filed by the respondent, decreeing the suit of the respondent/plaintiff in the

sum of Rs.2,66,400/- on account of arrears of rent and in the sum of

Rs.9,80,000/- as mesne profits/damages for uses and occupational charges

for the period from 1st July, 2006 to 8th July, 2007 with interest @ 6% per

annum from the date of institution till realization and costs against the

appellant/defendant.

2. Notice of the appeal was issued, though no stay of execution granted.

It appears that the decretal amount was recovered from the

appellant/defendant by attachment of its bank account and was deposited

with the Executing Court. Vide order dated 17th March, 2008, the Executing

Court was restrained from releasing any amount to the

respondent/plaintiff/decree holder. By subsequent order dated 23rd April,

2008, the appeal was admitted for hearing and out of the decretal amount

lying deposited with the Executing Court, 50% was ordered to be released in

favour of the respondent/plaintiff/decree holder and the balance amount

directed to be invested in a term deposit earning interest for the benefit of

the successful party.

3. The respondent/plaintiff died during the pendency of this appeal and

vide order dated 31st July, 2012 his legal heirs substituted. One of the said

legal heirs being a senior citizen, the appeal was vide order dated 5th August,

2013, ordered to be listed in the category of 'Regular Matters of Senior

Citizens'. None appeared for the appellant/defendant when the appeal came

up for hearing on 21st November, 2013 and the appeal was directed to be

listed with 'notation in the cause list of this Court of notice of default to the

counsel for the appellant'. The counsel for the appellant/defendant has

appeared today. The counsels have been heard.

4. The undisputed position which emerges from the evidence,

documentary and oral, on the Trail Court record, is:

(i) that the appellant/defendant had taken on lease a portion of the

second floor of Commercial Complex/Building No.AB-8, Shopping

Complex, near Kamal Cinema, Safdarjang Enclave, New Delhi from

the respondent/plaintiff vide registered Lease Deed dated 14th

February, 2001 at a monthly rent of Rs.30,000/- for a period of three

years from 21st July, 2000;

(ii) that it was a term of the said registered Lease Deed that the

appellant/defendant shall have the option to renew the tenancy for a

further period of three years with 20% increase i.e. @ rent of

Rs.36,000/- with effect from 21st July, 2003 and for which period a

fresh Lease Deed was to be executed;

(iii) that it was yet further a term of the Lease that thereafter also,

the appellant/defendant shall have the option to renew the lease for

another term of three years at a further 20% increase in rent;

(iv) that besides the said Lease Agreement, a registered Hire

Agreement also dated 14th February, 2001 was entered into between

the appellant/defendant and the respondent/plaintiff, whereunder the

respondent/plaintiff had furnished the premises with furniture and

fittings etc. as detailed therein and the appellant/defendant had agreed

to pay a sum of Rs.7,000/- along with the rent of Rs.30,000/- per

month to the respondent/plaintiff for three years of the Lease; it was

the term of the said Hire Agreement also that in the event of the

renewal of the lease, the hire charges will also be increased by 20%

with effect from 21st July, 2003 and by another 20% for the three

years period thereafter;

(v) that though the appellant/defendant continued in possession of

the premises and used furniture and fixtures provided therein after

expiry of three years from 21st July, 2003 but neither started paying

the increased rent and hire charges nor was any fresh lease deed

executed or any step taken by the appellant/defendant for execution

thereof;

(vi) that the respondent/plaintiff instituted the suit from which this

appeal arises claiming, besides the relief of ejectment of the

appellant/defendant, also the relief of recovery of Rs.2,66,400/- and

of mesne profits with effect from 1st July, 2006 at the rate of

Rs.80,000/- per month, which was claimed to the then prevalent

market letting value of the property; recovery of Rs.2,66,400/- was

claimed pleading that the appellant/defendant for the period 21 st July,

2003 to 20th July, 2006 had continued to pay rent and here charges at

the old rate of Rs.30,000/- and Rs.7,000/- respectively when it had

agreed to pay at the rate increased by 20%;

(vii) a decree for ejectment on admissions, was passed and in

pursuance thereto the appellant/defendant was ejected from the

premises on 9th July, 2007 and the suit continued for recovery of

Rs.2,66,400/- and for mesne profits.

5. The counsel for the respondent/plaintiff has argued that the

appellant/defendant having itself agreed to pay rent and hire charges for the

period 21st July, 2003 to 20th July, 2006 at a rate 20% over and above the

rate for the previous three years, the decree for the agreed amount cannot be

found fault with. He has further contended that the respondent/plaintiff, by

leading cogent evidence of other lettings in the vicinity and on the basis of

the evidence of letting of the subject property itself immediately after

vacation as aforesaid by the appellant/defendant at the rent of Rs.1,05,000/-

per month, has justified the claim for mesne profits at the rate of Rs.80,000/-

per month for the period from 20th July, 2006 till 9th July, 2007, when the

premises were vacated and the decree of the learned ADJ upholding the said

claim also, cannot be found fault with.

6. The counsel for the appellant/defendant on the contrary has contended

that since as per the registered Lease Deed and the Hire Agreement, the

appellant/defendant, for the period after 20th July, 2006 also, was entitled to

continue in the premises at a rate further increased of 20%, the

appellant/defendant at best can be liable for the said period also at a rate

further increased by 20% and the decree of mesne profits at the rate of

Rs.80,000/- per month for the said period, is unjustified and in

contravention of the basis/principle applied by the respondent/plaintiff

himself and upheld by the Court for the award of mesne profits for the

period 21st July, 2003 to 20th July, 2006.

7. The counsel for the respondent/plaintiff in rejoinder has contended

that the tenancy of the appellant/defendant was terminated by notice dated

31st May, 2006 and the principle earlier applied for the period prior thereto,

cannot be applied to the period after the termination of the tenancy.

8. The counsel for the appellant/defendant besides the aforesaid

argument has also reiterated the other ground taken in the memorandum of

appeal viz. of the Leases on the basis of which mesne profits of Rs.80,000/-

have been awarded, having not been proved in accordance with law.

9. I have considered the rival contentions and am unable to find any

merit in the appeal.

10. As far as the first of the aforesaid arguments of the counsel for the

appellant/defendant is concerned, the appellant/defendant was liable to pay

at the rates specified in the registered Lease Deed/Hire Agreement between

the parties for the period after the expiry of the term thereof, only upon the

condition of having a fresh Lease Deed/Agreement executed and by

complying with its own part thereof i.e. of tendering the increased rent and

hire charges to the respondent/plaintiff. The appellant/defendant failed on

both these accounts. In fact, the lease between the parties being registered,

it was open to the respondent/plaintiff to, for the period after 20 th July, 2003

also, claim mesne profits at the prevalent market rate and not confined to the

formula/rate of increase agreed between the parties. Merely because the

respondent/plaintiff for the said period limited its claim to the formula/rate

prescribed in the Lease/Hire Agreement, is no ground to deny to the

respondent/plaintiff mesne profits at a rate, the true measures whereof is the

prevalent letting value of the premises. The appellant/defendant cannot be

permitted to, on the one hand not comply with its part of the agreement i.e.

of not paying the increased amount and on the other hand insist on

compliance by the respondent/plaintiff of his part of the agreement. The

same is contrary to the principles of specific performance of contracts.

11. As far as the second contention of the counsel for the

appellant/defendant is concerned, though undoubtedly the registered Leases

of the premises in the vicinity and on the basis of rent provided wherein,

mesne profits for the period 20th July, 2006 to 8th July, 2007 at the rate of

Rs.80,000/- per month have been awarded to the respondent/plaintiff, were

proved by the respondent/plaintiff in his own evidence and without

examining any of the parties to those Leases but no objection as to the mode

of proof, was taken by the counsel for the appellant/defendant at the time

when the said Leases were admitted into evidence. In fact, a perusal of the

Trial Court record shows that the counsel for the appellant/defendant had

hardly cross-examined the respondent/plaintiff on the aspect of mesne

profits which was the only aspect remaining for adjudication in the suit,

except for giving a suggestion that the claim for mesne profits at the rate of

Rs.80,000/- per month was incorrect. The sole witness examined by the

appellant/defendant also did not controvert that the Leases proved by the

respondent/plaintiff in support of his claim for mesne profits did not reflect

the position at site or that the lessee thereunder was not in possession of the

premises or was not paying the rent mentioned in those Leases.

12. The appellant/defendant having thus led the respondent/plaintiff to

believe that no objection was being taken to the mode of proof of the

Leases, cannot subsequently be heard to urge otherwise.

13. Moreover, the rate of rent of Rs.80,000/- per month is also

substantiated from the rent fetched by the premises immediately after

vacation thereof by the appellant/defendant. Even if the formula of 20%

increase every three years, were to apply and to which the

appellant/defendant had itself agreed, the rent for the period immediately

proceeding, would not have been less than Rs.80,000/- per month.

14. No merit is thus found in the appeal, which is dismissed. However in

the circumstances, no order as to costs.

15. The balance 50% of the decretal amount lying deposited with the

Executing Court, with interest accrued thereon, be now released forthwith

to, as per the instructions of the counsel for the respondent/plaintiff, only in

the name of the widow Mrs. Sneh Lata Aggarwal of the deceased

respondent/plaintiff.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

DECEMBER 05, 2013/bs