Suman Verma & Ors. vs Sushil Mohini Gupta & Ors.
2013 Latest Caselaw 5804 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Date of decision: 17th December, 2013

+      RFA 384/2013, CM No.12718/2013 (for stay), CM No.12719/2013
       (for condonation of delay) & CM No.12720/2013 (for filing
       additional documents).
       SUMAN VERMA & ORS.                                 ..... Appellants
                  Through:            Mr. Salim Inamdar, Mr. Vedanta
                                      Varma & Mr. Vibhor Kush, Advs.

                                   versus

    SUSHIL MOHINI GUPTA & ORS.                .... Respondents

Through: Mr. Rajesh Yadav & Mr. Vishal Mahajan, Advs. for R-2 to 16 and 18 to 20 CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The appeal impugns the judgment and decree (dated 15 th March, 2013

of the Court of the Addl. District Judge, Central-09, Tis Hazari Courts, Delhi

in CS No.50/04 (UID No.02401C5982592004) filed by the respondents no.1

to 21 against the predecessor of the three appellants for the relief of

ejectment/mesne profits; the respondent no.22 was impleaded as the

defendant no.2 to the suit though no relief was claimed against her) of

ejectment of the appellants from the two and a half storeyed building

constructed on plot No.C-2/10, Vasant Vihar, New Delhi - 110 057 and for

recovery from the appellants of Rs.9,00,000/- for the period from 1st May,

2003 to 31st January, 2004 and mesne profits, @ Rs.1,25,000/- per month for

the period from 1st February, 2004 to 31st December, 2006 and @

Rs.1,50,000/- per month from 1st January, 2007 till the date of vacation of

the ejectment.

2. The appeal came up before this Court first on 21st August, 2013 when

though not prima facie agreeing with the challenge in the appeal, but to

obviate any technicalities, this being a first appeal, and for the reason that

the impugned judgment also imposed costs of Rs.50,000/- on each of the

respondents/plaintiffs and which did not appear to be justified in law, notice

of the appeal was issued and the Trial Court record requisitioned.

3. The counsel for the respondent no.1 and the counsel for the

respondents no.2 to 16 and 18 to 20 have appeared.

4. Though the respondents no.17, 21 & 22 remain unserved and the

counsel for the appellants/defendants on 3rd December, 2013 contended that

the appeal should be adjourned for service of the said respondents/plaintiffs

but it was the plea of the counsels appearing for the remaining

respondents/plaintiffs that all the respondents/plaintiffs have a common

interest and were represented by one counsel only throughout the suit from

which this appeal arises and they were not appearing for the unserved

respondents/plaintiffs only for the reason of non-availability of the

Vakalatnama and the same should not be allowed to come in the way of the

hearing of the appeal.

5. The counsel for the appellants/defendants and the counsel for the

respondents/plaintiffs were accordingly heard on the appeal and judgment

was reserved.

6. The respondents/plaintiffs instituted the suit from which this appeal

arises, pleading:-

(a) that the predecessor-in-interest of the appellants/defendants was

inducted as a tenant in the said property, sometimes in the year

1973 at a rent of Rs.2,400/- per month by the predecessor-in-

              interest   namely     Dr.    Sham     Lal     Gupta     of      the

              respondents/plaintiffs;

       (b)    that on the demise on 5th February, 1991 of Dr. Sham Lal

Gupta, the respondents/plaintiffs succeeded as co-owners and

landlords of the property

(c) that even during the lifetime of Dr. Sham Lal Gupta, there were

several litigations between him and the predecessor of the

appellants/defendants;

(d) that at the time of demise of Dr. Sham Lal Gupta, the petition

filed by him for eviction of the predecessor of the

appellants/defendants from the property on the ground under

Section 14 (1) (k) of the Delhi Rent Control Act, 1958 was

pending and which petition was also pending on 10th February,

2004 at the time of institution of the suit from which this appeal

arises;

(e) that in the aforesaid eviction petition an order under Section

15(2) of the Rent Act, directing the predecessor of the

appellants/defendants to pay/deposit rent had been made and by

subsequent orders from time to time in the said eviction

petition, on applications filed by respondents/plaintiffs/their

predecessor, the predecessor of the appellants/defendants had

been directed to increase the rent by 10% per month every three

years;

(f) that vide order dated 18th September, 2000, the rent was

directed to be deposited @ Rs.3,194.40p w.e.f. May, 2000;

(g) that the respondents/plaintiffs got served notice dated 15 th

March, 2003 on the predecessor of the appellants/defendants for

increase in rent by another 10% w.e.f. 1st May, 2003 under

Section 6(A) of the Rent Act;

(h) that upon the failure of the predecessor of the

appellants/defendants to so increase the rent, an application

dated 2nd June, 2003 was filed in the eviction petition for

direction to the predecessor of the appellants/defendants to

deposit/pay rent @ Rs.3,513.84p w.e.f. 1st May, 2003;

(i) that the predecessor of the appellants/defendants opposed the

said application contending that the Rent Controller before

whom the said eviction petition was pending had no jurisdiction

to direct payment of rent @ Rs.3,513.84p as the premises, the

rent whereof is in excess of Rs.3,500/- per month, are outside

the ambit of the Rent Act;

(j) that another petition for eviction of the predecessor of the

appellants/defendants under Section 14(1)(e) of the Rent Act on

the ground of personal requirement of the premises was also

pending at the time of institution of the suit from which this

appeal arises;

(k) that the protection from eviction under the Rent Act had ceased

to be available to the predecessor of the appellants/defendants

upon the rent of the premises becoming Rs.3,513.84/- w.e.f. 1st

May, 2003; and,

(l) that the tenancy of the predecessor of the appellants/defendants

had already been terminated vide notice dated notice dated 13th

April, 2000 w.e.f. 1st June, 2000.

Accordingly, the respondents/plaintiffs had become entitled to

recovery possession of the premises and mesne profits/damages for use and

occupation @ Rs.1,50,000/- per month which was the then letting value of

the property.

7. The predecessor of the appellants/defendants contested the suit by

filing a written statement on diverse grounds but need is not felt to burden

this judgment therewith as the counsel for the appellants/defendants has

confined his arguments to a few defences only.

8. Suffice it is to record, that on the pleadings of the parties, the

following issues were framed in the suit on 2nd August, 2005:-

"i) Whether the plaintiff is entitled to the relief of possession, against defendant no.1? OPP

ii) Whether plaintiff is entitled to recover the amount of arrears of damages? If so at what rate and for what period? OPP

iii) Whether the plaintiff is entitled to claim future damages. If so, at what rate? OPP

iv) Whether the plaintiff is entitled to claim interest.

If so, at what rate, on what amount and for what period? OPP

v) Whether the suit is not maintainable in view of pendency of an eviction petition before the ARC? OPD-1

vi) Whether the suit is bad for misjoinder of necessary parties? OPD-1

vii) What is the effect of the suit no.393/91(sic 293/91) filed by Ajit Singh Oberoi against Dr. S.L. Gupta which is pending disposal before the Hon'ble High Court? OPD-1

viii) Whether plaintiff no.8 had died prior to institution of this suit, if so, its effect? OPD-1

ix) Relief."

9. The learned Addl. District Judge, in the impugned judgment, has

found/observed/held:-

(i) that though one Shri Ajit Singh Oberoi claiming that the

predecessor-in-interest of the respondents/plaintiffs had in his

lifetime agreed to sell the property to him, had filed CS(OS)

No.293/1991 in this Court for specific performance of the said

Agreement to Sell and vide order dated 30th March, 2007 in the

said suit it had been directed that the decision in the present

proceedings will be subject to the decision in that suit, but the

same did not come in the way of the respondents/plaintiffs

maintaining the suit for recovery of possession/ejectment from/

of the appellants/defendants as tenants whose tenancy had been

determined.

(ii) that the appellants/defendants were not claiming any other

rights save rights as tenant in the property;

(iii) that the appellants/defendants were depositing Rs.3,514/- per

month in terms of the interim order in the suit from which this

appeal arises;

(iv) that the premises were outside the ambit of the Rent Act;

(v) that the respondents/plaintiffs had however not disclosed the

factum of the Agreement to Sell of the year 1989 by their

predecessor in the suit from which this appeal arises or of the

pendency of the suit for specific performance filed by Shri Ajit

Singh Oberoi and were guilty of suppression of material facts;

However the same did not come in the way of the

respondents/plaintiffs claiming the reliefs in the suit but the

respondents/plaintiffs were burdened with costs of Rs.50,000/-

each to be deposited with the Delhi Legal Services Authority

for having indulged in concealment of material facts;

(vi) that one of the respondents/plaintiffs appearing as witness had

deposed the letting value of the property at the time of

institution of the suit to be Rs.1,50,000/- per month on the basis

of enquiries from property dealers;

(vii) that the property was constructed over land ad measuring 400

sq. yds.;

(viii) that one of the appellants/defendants appearing as witness had

stated that the market value of the property may be Rs.2 to 3

lacs per sq. yds. and had admitted the size of the property to be

400 sq. yds. and the property to be situated in one of the poshest

area of New Delhi;

(ix) that the appellants/defendants appearing as witnesses were

however unable to say whether the property in question could

fetch Rs.5,00,000/- rent per month on the date of deposition;

(x) that the respondents/plaintiffs had not proved their entitlement

to interest;

(xi) that since the suit property was outside the Rent Act, issue

No.5 was decided in favour of the respondents/plaintiffs and

against the appellants/defendants;

(xii) the appellants/defendants had been unable to discharge the onus

of issue No.6; and,

(xiii) issue No.8 was also decided in favour of the

respondents/plaintiffs and against the appellants/defendants.

Accordingly, the decree of ejectment and for mesne profits as

aforesaid was passed.

10. The argument of the counsel for the appellants/defendants is twofold.

Firstly, it is contended that the rate at which the mesne profits against the

appellants/defendants have been awarded is not proper. It is contended that

there was no evidence whatsoever before the learned Addl. District Judge to

award mesne profits at the rate of Rs.1 lac per month, Rs.1,25,000/- per

month and Rs.1,50,000/- per month for different periods as done. Reliance in

this regard is placed on the judgment of the Division Bench of this Court in

National Radio & Electronic Co. Ltd. Vs. Motion Pictures Association 122

(2005) DLT 629. The only other contention of the counsel for the

appellants/defendants qua the decree for ejectment is that the civil suit for

ejectment/recovery of possession was not maintainable for the reason of, on

the date of institution thereof, petition for eviction under the Rent Act

pending consideration. Upon the attention of the counsel for the

appellants/defendants being drawn to the judgment of the Division Bench in

New United Automobiles Vs. Cycle Equipments Pvt. Ltd. 1997(1) RCR 69,

the counsel states that the said issue was not decided but left open in the said

judgment.

11. Per contra, the counsel for the respondents/plaintiffs has invited

attention to paras 19 to 22 of the dicta of the Supreme Court in Nopany

Investments (P) Ltd. Vs. Santokh Singh (HUF) (2008) 2 SCC 728 laying

down:-

A. that it is open to a landlord (of a premises governed by the

provisions of the Rent Act) to increase the rent by 10% after

giving notice under Section 6-A of the Rent Act during the

pendency of a petition for eviction and even if an order under

Section 15 of the Rent Act has been passed in such petition;

B. that once a notice under Section 6-A read with Section 8 of the

Rent Act has been given of intention to increase the rent by

10% and thereby the rent of the premises goes above Rs.3,500/-

per month, the Rent Act automatically ceases to apply to the

premises and the bar of Section 3(c) thereof comes into play;

C. that even if on that date a petition for eviction under the Rent

Act is pending, it is not necessary for a landlord to take leave of

the Rent Controller and the civil suit for ejectment can be filed

under the general law;

D. that the landlord is only required to serve the notice on the

tenant expressing the intention to make such increases;

E. it cannot be said that the civil suit could not be filed without the

leave of the Rent Controller;

F. it cannot be said that the notice of increase in rent and

termination of tenancy cannot be given simultaneously; and,

G. in any case, the filing of an eviction suit under the general law

itself is a notice to quit on the tenant.

12. The counsel or the respondents/plaintiffs has further drawn attention

to the cross examination of the appellants/defendants and has contended that

in the cross examination on 1st October, 2010, the appellant/defendant did

not deny that the letting value of the property was Rs.5 lacs per month and

merely stated that she could not say so; it is contended that the same is an

admission of the market rent being Rs.5 lacs per month. It is yet further

contended that though the mesne profits accrued to the respondents/plaintiffs

month by month but the learned Addl. District Judge has not given any

interest thereon to the respondents/plaintiffs and the said factor be kept in

mind while judging the rate at which the mesne profits have been awarded.

13. The counsel for the respondents/plaintiffs has further contended that

the costs of Rs.50,000/- per respondent/plaintiff imposed by the learned

Addl. District Judge are unjustified.

14. It is argued that the respondents/plaintiffs have been accused of

concealment of an affidavit purportedly executed by the respondent/plaintiff

no.1 stating that her father Dr. Sham Lal Gupta had executed a deal of the

property with Shri Ajit Singh Oberoi and confirming that the suit property

was the self acquired property of her father. It is contended that the said

affidavit was not of transfer of the property and there was no need for

disclosing the same in the suit against the tenant in which only the title as

landlord is relevant. Similarly, it is contended that non-mentioning of the

pendency of the suit for specific performance by third party was of no

relevance in the suit to invite imposition of such heavy costs. Reliance is

also placed on Sunil Kapoor Vs. Himmat Singh 2010 II AD (Delhi) 463 to

contend that mere Agreement to Sell does not create any rights in

immovable property till a decree for specific performance is passed and in

pursuance thereto a Conveyance Deed executed.

15. The counsel for the appellants/defendants in rejoinder has fairly

admitted that the challenge by the appellants/defendants is really not to the

decree for ejectment but to the decree for mesne profits. He further

contended that the respondents/plaintiffs having not filed cross appeal/cross

objections, in this appeal are not entitled to raise objections to the costs

imposed upon the respondents/plaintiffs.

16. The counsel for the respondents/plaintiffs in response to the same has

invited attention to Ravinder Kumar Sharma Vs. State of Assam 81 (1999)

DLT 795 (SC) to contend that with the introduction of Order 41 Rule 22(1)

in the CPC vide the 1976 amendment, it is open to a respondent to, without

filing cross objections, attack an adverse finding upon which a decree in part

has been passed against the respondent or the purpose of sustaining the

decree and that the filing of cross objections is purely optional and not

mandatory. Reliance in this regard is also placed on Anil Kumar Gupta Vs.

Municipal Corporation of Delhi (2000) 1 SCC 128.

17. The counsel for the appellants/defendants has contended that the

judgments relied upon are not relevant as the same are in the context of a

part decree. It is argued that the present is not a case of any part of the claim

of the respondents/defendants having been denied but of imposition of costs

on respondents/ plaintiffs for concealment.

18. I have considered the rival submissions.

19. As fairly admitted by the counsel for the appellants/defendants also,

there is really no ground for challenging the decree in so far as for the relief

of ejectment. The only argument urged in challenge thereto is fully met by

the dicta aforesaid of the Supreme Court in Nopany Investments (P) Ltd. I

may in this regard also refer to the judgment of this court in Consep India

Pvt. Ltd. Vs CEPCO Industries Pvt. Ltd. MANU/DE/0700/2010 also laying

down that there is no legal bar to a landlord availing the remedy of filing a

civil suit once the rent stood increased to more than Rs. 3500/- p.m. after

notice under section 6A read with section 8 of the Rent Act, even if a

petition for eviction under the Rent Act, earlier filed, is pending on that date

and there is no legal bar to availing two remedies. I also do not find merit in

the contention that the question was left open in New United Automobiles

supra.

20. I had in fact asked the counsel for the appellants/defendants whether

the appellants/defendants are willing to handover possession of the premises

in compliance of the decree to the respondents/plaintiffs.

21. The appellants/defendants are not so willing.

22. I do not find any merit in the challenge by the appellants/defendants to

the rate at which the mesne profits/damages for use and occupation have

been awarded, for the following reasons:-

(a) though undoubtedly the Division Bench of this Court in

National Radio & Electronic Co. Ltd. supra has held that

judicial notice, only of a general increase in rent in the city of

Delhi and not of the rates of rent, in the absence of proof

thereof can be taken but it cannot be lost sight of that the Courts

are for doing justice between the parties and not for, on hyper

technicalities, allowing the parties to suffer injustice.

(b). The property of the respondents/plaintiffs which the

appellants/defendants are admittedly in unauthorized

occupation of, is situated in one of the poshest colonies of the

city of Delhi, properties wherein fetch high rentals and which

only the elite, affluent, expats and foreigners are able to afford.

(c) the said property is a independent bungalow constructed over

400 sq. yd. of land and comprising of two and a half floors.

(d) the calculation of mesne profits always involves some amount

of guess work, as held by this court in International Pvt. Ltd.

Vs. Saraswati Industrial Sundictes Ltd. (1992) 2 RCR 6, M.R.

Sahni Vs. Doris Randhawa MANU/DE/0352/2008 and

reiterated in Consep India Pvt. Ltd. supra and applicability of

prevalent rents in the city and of which the Judges manning the

Courts and who are born and brought up in the same city, are

generally aware of.

(e) The Division Benches of this court in Vinod Khanna Vs.

Bakshi Sachdev AIR 1996 Delhi 32 and S.Kumar Vs. G.K.

Kathpalia 1991 (1) RCR 431, taking judicial notice, refused to

interfere with the rate of mesne profits even where the landlord

had not led any documentary evidence. Notice of such increase

has also been taken by the Supreme Court in Saradamani

Kandappan Vs. S. Rajalakshmi (2011) 12 SCC 18.

(f) applying the said principles, it can by no stretch of imagination

be said that the rate at which mesne profits have been awarded

is excessive; rather the same is on the lower side only; the rate

at which the mesne profits have been awarded is less than the

rate which each floor of the property in the said colony is

capable of fetching; the appellants/defendants are in possession

of two and a half floors.

(g) the counsel for the respondents/plaintiffs is correct in

contending that award of mesne profits as per definition in

Section 2 (12) of the CPC includes interest. Reference if any in

this regard can again be made to Consep India Pvt. Ltd. supra

where a large number of judgments are considered. The learned

Addl. District Judge has not awarded any interest. No proof of

such interest again is required as it is always safe to award

interest in such cases at the rates at which Nationalized Banks

give interest on deposits with them. Applying the said principle

interest at 10% per annum from the end of each month till the

date of payment could have been awarded; the same is reason

enough to not interfere with the rate of mesne profits.

(h) the appellants/defendants have been residents of the property

for the last more than four decades. They, rather than the

respondents/plaintiffs were in a better position to depose about

the prevalent rent in the locality. Had the claim for mesne

profits in the plaint at the rate of Rs.1,50,000/- per month been

preposterous, the appellants/defendants would have definitely

given instance of other properties in the locality and their rent.

Nothing of the sort was done. Even in the cross examination of

the respondents/plaintiffs and in the deposition of the

appellants/defendants, the appellants/defendants did not

mention a single property in the vicinity which may have been

fetching lesser rent. In fact the appellants/defendants shied from

even denying that the property was in 2010 capable of fetching

the rent of Rs.5 lacs per month.

(i) the evidence on record is thus sufficient to conclude that no

interference is required in the rate fixed by the learned Addl.

District Judge of mesne profits.

(j) it cannot also be lost sight of that the appellants/defendants,

taking advantage of the Rent Law which in Malpe Vishwanath

Acharya Vs. State of Maharashtra (1998) 2 SCC 1 and in

Raghunandan Saran Ashok Saran (HUF) Vs. Union Of India

MANU/DE/0014/2002 (DB) has been held to be archaic,

continued to occupy the property of the respondents/plaintiffs

for over four decades at a rate of rent which can best be

described as peanuts and obviously to the prejudice and

detriment of the respondents/plaintiffs. The

respondents/plaintiffs had no option but to keep on having the

rent increased by 10% every three years. The same is also

reason enough for not interfering with the rate fixed of mesne

profits.

(k) the conduct of the appellants/defendants even now of

notwithstanding the decree for ejectment against them and

admitting there to be no ground of challenge thereto still

refusing to handover possession, merely to coerce the

respondents/plaintiffs into agreeing to waive off the mesne

profits, also disentitles the appellants/defendants from any

relief.

23. As far as the challenge by the respondents/plaintiffs to the costs

imposed upon them is concerned, I do not deem it necessary to go into the

controversy whether the respondents/plaintiffs are required to prefer cross

objections/cross appeal for challenging the same. One of the reasons as

aforesaid for issuing notice of the appeal was the prima facie view that the

costs imposed are unjustified. Further the said costs have been imposed by

the learned Addl. District Judge on his own and are not payable to the

appellants/defendants. The said costs have been imposed not for any injury

caused to the appellants/defendants but to uphold the principle, of a party to

a lis being required to approach the Court with clean hands and to make full

disclosure. I thus enquired from the counsel for the appellants/defendants

whether not an Appellate Court in exercise of its appellate powers can on its

own interfere with the said costs, if found to be unjustified. The counsel for

the appellants/defendants has fairly chosen not to respond.

24. I do not find any justification whatsoever for the costs imposed by the

learned Addl. District Judge on the respondents/plaintiffs. The principle

aforesaid does not require a party approaching the Court to make disclosure

even of the irrelevant facts. The counsel for the respondents/plaintiffs is

again correct in contending that in a suit by the respondents/plaintiffs for

ejectment of the appellants/defendants as tenants, there was no need for the

respondents/plaintiffs to disclose the claim made by a third party of specific

performance of an Agreement to Sell by the respondents/plaintiffs. The said

claim of the third party did not come in the way of the respondents/plaintiffs

taking action for ejectment of the appellants/defendants as tenants. No case

of concealment of material facts or for punishing the respondents/plaintiffs

therefor is made out.

25. Accordingly, though the appeal is dismissed but the judgment/order of

the learned Addl. District Judge in so far as burdening the

respondents/plaintiffs with costs of Rs.50,000/- per respondent/plaintiff is

set aside.

26. The appeal having been disposed of expeditiously and the counsel for

the appellants/defendants having co-operated therein, no costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J

DECEMBER 17, 2013 'pp'.