Parshottam Sarup ... vs Dena Bank
2013 Latest Caselaw 932 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CS(OS) 398/2010

       PARSHOTTAM SARUP AGGARWAL(H.U.F) ..... Plaintiff
                   Through Mr. Amit Khemka with Mr. Rishi
                           Sehgal and Ms. Sanorita D. Bharali,
                           Advocates
                   versus

       DENA BANK                      ..... Defendant
                          Through     Mr. Arun Aggarwal, Advocate

%                     Date of Decision: 25th February, 2013
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
                             JUDGMENT

MANMOHAN, J I.A. 10162/2012 IN CS(OS) 398/2010

1. Present application has been filed by the plaintiff under Section 151 read with Order 12 Rule 6 CPC.

2. The relevant facts of the present case are that plaintiff is the owner and landlord of the suit property bearing No. M-36, Connaught Circus, New Delhi admeasuring 3362 sq. ft. approx. consisting of ground floor and mezzanine.

3. A lease deed dated 11th May, 2001 was executed between the parties and registered on 15th May, 2001 at a monthly rent of Rs. 2,35,340/- that means Rs. 70 per sq.ft. per month plus two-third share of property tax plus all taxes. The aforesaid lease was renewable for a further period of five

years that means, w.e.f. 1st January, 2005 to 31st December, 2009, subject to increase of rent by 25%. The relevant terms of lease deed are reproduced hereinbelow:-

"NOW THIS INDENTURE OF LEASE WITNESSES AS FOLLOWS:

1. In consideration of the rent hereby reserved and the performance of the covenants on the part of the Lessee hereinafter contained, the Lessor does hereby demise upto the Lessee all that portion consisting of ground floor and mezzanine floor in shop No.M- 36, Connaught Circus, New Delhi admeasuring approximately 3362 square feet and other conveniences in the said portion AND TOGETHER ALSO WITH THE RIGHT for the Lessee, its servants, employees, visitors, customers and all other persons authorised by the Lessee (hereinafter for the sake of brevity referred to as „demised premises‟ more particularly described and delineated in the site plan annexed to and forming part of this lease deed) TO HAVE AND TO HOLD the demised premises unto the Lessee from the 1st day of January 2000 for a period of 5 (five) years i.e. 01.01.2000 to 31.12.2004 subject to payment of rent @ Rs.2,35,340.00 (Rupees two lacs thirty five thousand three hundred and forty only) per month for the period from 01.01.2000 to 31.12.2004 with an option of renewal of the lease on enhancement of rent by 25% (twenty five per cent) for a further period of 5 (five years) i.e. 01.01.2005 to 31.12.2009, all other terms and conditions remaining the same.

                  xxxx           xxxx           xxxx          xxxx

     4.   THE LESSOR AND                  LESSEE      BOTH      MUTUALLY
     COVENANT AS FOLLOWS:
            xxxx       xxxx                    xxxx          xxxx

     c)       The Lessor shall unconditionally renew the lease for a period

of 5 (five) years from 01.01.2005 on the same terms and conditions except that the rent shall increase by 25%. The parties hereto shall execute fresh lease deed on renewal on the same terms and conditions.

4. Before expiry of the aforesaid Lease Deed on 31st December, 2009, the plaintiff issued two notices dated 15th September, 2009 and 26th

November, 2009 clearly expressing its intention of not willing to continue with the tenancy.

5. However, the defence which the defendant-Bank has set up in its written statement is that the defendant-Bank had been depositing/paying the rent in the personal account of the Karta of the plaintiff and, therefore, Section 116 of the Transfer of Property Act, 1882 (for short 'TP Act') is attracted. The relevant portion of the written statement is reproduced hereinbelow:-

"3. It is submitted that the defendant responded to the letter dated 26.11.2009 vide electronic mail dated 18.12.2009. As a matter of fact, the plaintiff and the defendant have been in a constant state of negotiations on the upward revision of rent for the purpose of renewing the lease for further period. The plaintiff was earlier demanding increased rent at the rate of Rs.300.00 per square feet, as reflected in its letter dated 26.11.2009. However, on personal visit to the defendant‟s branch by Mr. Arun Aggarwal, the representative of Mr. Parshottam Sarup Aggarwal, Karta of the plaintiff, he agreed to increased rent at the rate of Rs.250.00 per Sq. Feet. Thereafter, the parties have been in constant touch for crystallizing the new contractual privities by concluding the negotiations and formalizing the same by execution of appropriate documents and deeds. In such circumstances, the notice/communication dated 26.11.2009 not only stood waived by the plaintiff but also remained inconsequential ab initio.

4. It is submitted that the defendant has been regularly paying rent to the plaintiff at the rate of Rs.2,94,175.00 per month after deducting tax at source amounting to Rs.32,447.00. The defendant has also been paying a sum of Rs.30,300.00 per month towards payment of Service Tax to the plaintiff. Thus, a sum of Rs.2,92,028.00 is being continuously deposited in the savings accounts of the plaintiff even after 31.12.2009 and is being paid punctually ever since.

5. It is pertinent that the aforesaid account of the plaintiff is a Savi - Fix Deposit Account and as per the plaintiff‟s mandate, the amount is excess of Rs.25,000.00 is automatically kept in a Fixed Deposit earning interest at the applicable rates. The plaintiff is

enjoying the interest accruing on such fixed deposits as also the monthly rent subsequent to the allege date of determination of lease on 31.12.1999. Thus, the defendant is entitled to the statutory benefit of Section 116 of Transfer of Property Act, 1882."

6. Mr. Amit Khemka, learned counsel for the plaintiff states that the Karta of the plaintiff and his wife had requested the defendant-Bank for closure of its bank account and the Karta of the plaintiff had given a cheque to the defendant-Bank's officials so that the balance payment could be made through a pay order in his name.

7. Mr. Khemka further states that recorded conversation and affidavit of the wife of the Karta of the plaintiff and Manager as well as Assistant Manager of the defendant-Bank would clearly prove that instruction had been given by the Karta of the plaintiff to close the account. He points out that the said bank account had not been utilised by the plaintiff at all from 29th December, 2009 till January 2011 except two ECS deposits over which the plaintiff had no control. He contends that no consent of the plaintiff was taken for depositing of the alleged rentals in the account by the defendant- Bank especially when clear cut instruction had been given by the Karta of the plaintiff to close the account. Mr. Khemka contends that in any case the defendant-Bank had no right to pay/deposit the rent in the account without the consent of the Karta of the plaintiff especially after issuance of the notice to quit.

8. On the other hand, Mr. Arun Aggarwal, learned counsel for defendant-Bank submits that present application is not maintainable as despite issuance of the termination notice, the account of the plaintiff as per practice had been credited with the amount of rent. He contends that even

though the Karta had issued instruction to the defendant-Bank to close its account but as the joint account holder had never approached the defendant- Bank for its alleged closure, the defendant-Bank cannot be faulted with for non-closure of the bank account. He submits that the plaintiff having made use of the TDS certificate and having reaped profits by earning huge interest in its Flexi Fixed Deposit (for short 'FFD') account, is estopped from contending that there was no revival of the tenancy.

9. According to Mr. Aggarwal, the plaintiff by its own express conduct having agreed for continuation of tenancy, cannot now seek eviction of the defendant-Bank. He submits that Section 116 of the TP Act is clearly attracted to the present case as not only the tenancy had been renewed but the plaintiff had also reaped the benefits of increased rate of interest in its FFD account as well as collected the amount remitted by way of ECS instruction and used TDS certificate.

10. Mr. Aggarwal relies upon a judgment of Mohammad Ahmad & Anr. Vs. Atma Ram Chauhan & Ors., (2011) 7 SCC 755 wherein it has been held as under:-

"21. According to our considered view majority of these cases are filed because the landlords do not get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. So before saying omega, we deem it our duty and obligation to fix some guidelines and norms for such type of litigation, so as to minimise landlord-tenant litigation at all levels. These are as follows:

(i) The tenant must enhance the rent according to the terms of the agreement or at least by ten per cent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently.

(ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only.

(iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord.

(iv) But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties.

v) If the present and prevalent market rent assessed and fixed between the parties is paid by the tenant then the landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus for a period of 5 years the tenant shall enjoy immunity from being evicted from the premises.

(vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter.

(vii) The rent so fixed should be just, proper and adequate, keeping in mind the location, type of construction, accessibility to the main road, parking space facilities available therein, etc. Care ought to be taken that it does not end up being a bonanza for the landlord."

11. Having heard learned counsel for the parties and having perused the pleadings, this Court is of the view that admittedly, the plaintiff is the owner and landlord of the suit property which had been leased to the defendant bank by way of lease deed dated 11th May, 2001, which has now expired by efflux of time. Further, admittedly, the plaintiff had issued notices expressing its intention not to extend the period of tenancy.

12. Consequently, the three ingredients of (i) existence of relationship of landlord-tenant; (ii) rent in excess of Rs. 3,500/- per month and (iii) determination of tenancy, entitling the plaintiff to a decree for ejectment, are

made out on defendant's own admission.

13. Moreover, the defendant's plea that the termination notices issued by the plaintiff stood waived on the ground that a representative of Karta of the plaintiff had agreed to increase the rent at the rate of Rs.250 per square feet is vague and contradictory inasmuch as according to the defendant itself, the said increase in rental was part of an unconcluded contract.

14. This Court is also of the opinion that unless a fresh tenancy is pleaded and established to have come into existence, no benefit under Sections 113 and 116 of the TP Act can be said to accrue to the defendant/tenant.

15. This Court is further of the view that unilateral deposit of rent, without the consent of the plaintiff, is not enough to attract the provisions of Section 116 of the TP Act. The Supreme Court in Sarup Singh Gupta v. S. Jagdish Singh & Ors. AIR 2006 SC 1734 has gone to the extent of holding that mere acceptance of rent does not amount to waiver of notice to quit. The relevant portion of the said judgment is reproduced hereinbelow:-

"8. In the instant case, as we have noticed earlier, two notices to quit were given on 10th February, 1979 and 17th March, 1979. The suit was filed on June 2, 1979. The tenant offered and the landlord accepted the rent for the months of April, May and thereafter. The question is whether this by itself constitutes an act on the part of the landlord showing an intention to treat the lease as subsisting. In our view, mere acceptance of rent did not by itself constituted an act of the nature envisaged by Section 113, Transfer of Property Act showing an intention to treat the lease as subsisting. The fact remains that even after accepting the rent tendered, the landlord did file a suit for eviction, and even while prosecuting the suit accepted the rent which was being paid to him by the tenant. It cannot, therefore, be said that by accepting rent, he intended to waive the notice to quit and to treat the lease as subsisting. We cannot ignore the fact that in any event, even if rent was neither tendered nor accepted, the landlord in the event of success would be entitled to the payment of the arrears of rent. To avoid any controversy, in the event of termination of lease the

practice followed by the courts is to permit the landlord to receive each month by way of compensation for the use and occupation of the premises, an amount equal to the monthly rent payable by the tenant. It cannot, therefore, be said that mere acceptance of rent amounts to waiver of notice to quit unless there be any other evidence to prove or establish that the landlord so intended. In the instant case, we find no other fact or circumstance to support the plea of waiver. On the contrary, the filing of and prosecution of the eviction proceeding by the landlord suggests otherwise."

(emphasis supplied)

16. Consequently, this Court is of the view that unilateral deposit of rent in the present case does not amount to waiver of notice to terminate the tenancy. In fact, there is not even an averment in the written statement that rent had been accepted by the plaintiff after termination of the lease.

17. The defendant's argument that the plaintiff had not issued proper and complete instruction to close its bank account is irrelevant and contrary to facts. A landlord does not have to close all his bank accounts before filing a suit for eviction against his tenant! In any event, a perusal of the record shows that the plaintiff had not withdrawn or utilised any money from the account where the defendant bank had unilaterally deposited the alleged rental till the same was allowed by this Court vide order dated 20 th December, 2010.

18. The judgment of Mohammad Ahmad & Anr.(supra) referred to and relied upon by learned counsel for the defendant is clearly inapplicable to the facts of the present case. It is pertinent to mention that Mohammad Ahmad & Anr.(supra) dealt with a case under the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (13 of 1972) and not under the TP Act. Under the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (13 of 1972), the tenancy of the tenants is

protected unlike the TP Act. Consequently, the observations made by the Apex Court in Mohammad Ahmad & Anr.(supra) offer no assistance to the defendant.

19. This Court is also of the opinion that the defendant by persisting with the present case despite this Court repeatedly observing that the defendant's written statement did not disclose any triable issues has shown that the defendant has scant regard for either the law or the courts. In this context, orders dated 20th December, 2010, 15th February, 2011, 13th September, 2011 and 10th February, 2012 are reproduced hereinbelow:-

A. Order dated 20th December, 2010 The plaintiff seeks a decree of possession and damages for use and occupation of premises being No. M-36, Connaught circus, New Delhi, measuring approximately 3362 Sq. Fts. It is submitted that the plaintiff had granted a lease to the defendant w.e.f. 1.1.1990, initially for a period of five years at a monthly rent of Rs.1 Lakh; agreement was extended through another registered sale deed dated 5.1.1995, and subsequently again it was been extended. It is submitted that the defendant enjoyed the tenanted premises in these terms till 31.12.2009. At that time, the rent paid by the defendant was Rs.2,93,750/-. The plaintiff contends that after expiry of the said lease deed on 31.12.2009, there has been no fresh agreement and that the defendant continues to enjoy and occupy the premises as a tenant holding over. The plaintiff relies upon a notice issued to the defendant on 15.9.2009 intimating the defendant that there was no intention to continue with the arrangement and requesting for vacation of the premises. A similar notice/reminder of 26.11.2009 is relied upon.

The defendant does not dispute about entering into of the Lease agreements with the plaintiff, their registration and its tenure. It also does not contest the submission that the term of registered lease ending on 31.12.2009. Its case, however, is thereafter too, the plaintiff continued to accept rents unreservedly as they were deposited in the plaintiff‟s account maintained by it. It is submitted, in these circumstances, that the plaintiff cannot maintain the present suit.

The plaintiff relies upon several rulings of this Court to submit that once notice is issued to the lessee, expressing the intention not to continue with the arrangement, there is no further requirement of another notice and even if amounts are accepted, the same are without prejudice. It is further contended that the filing of the suit itself has to be construed as a notice to the defendant/lessee.

Prima facie, this Court is of the opinion that written statement does not disclose any triable defence so far as the relief of decree for possession is concerned. At this stage, the defendant‟s counsel Shri Arun Aggarwal sought for some time to obtain instructions and make a suitable statement.

List before the Court on 15th February, 2011.

It is open to the plaintiff to withdraw the amounts deposited by the defendant without prejudice to his rights and contentions.

                                                        (emphasis supplied)

B.     Order dated 15th February, 2011.

1. This Court has already noted in the last order that a registered lease deed between the parties had been executed w.e.f. 1st January, 1990 for a period of five years which was extended by a registered deed dated 5th January, 1995 and thereafter once again till 31st December, 2009. The defendant was last paying rent of Rs.293,740/-. The lease has expired by efflux of time. It is also observed that the legal notice dated 15th September, 2009 as well as the notice dated 26th November, 2009 from the plaintiff requesting vacation have been duly received by the defendant.

2. So far as the plea of acceptance of rent by the defendant is concerned, in the afore-noticed notices on its behalf, the plaintiff has in anticipation disclosed the manner in which any payments by the defendant would be appropriated. The statement of account placed by the defendant on record clearly manifests the plaintiff‟s intention of discontinuing with the defendant‟s occupation of the subject premises. This Court was inclined to proceed to consider the matter in accordance with the provisions of Order 12 Rule 6 CPC on the last date.

3. However, learned counsel for the plaintiff has requested completion of the pleadings in order to obviate any technical objection in future......

                                                    (emphasis supplied)

C.     Order dated 13th September, 2011.

"1.An adjournment is requested by the defendant for placing documents which were directed to be placed as back as on 15th February, 2011 and 28th April, 2011 on record.

2.Learned counsel for the defendant has submitted that the records which are required to be produced are old records. This position is completely misconceived. The plaintiff has sued the defendant for possession of the property after termination of the defendant‟s tenancy by a legal notice dated 15th September, 2009.

3.The defendant has to show that it had been instructed by either of the plaintiffs to continue to pay or deposit rent into their bank account with the defendant bank, even after the termination of its tenancy.

4.The defendant bank cannot be permitted to assert that merely because the plaintiffs had the bank account in their branch, it was open to them to unilaterally go on depositing amounts despite the termination of the landlord tenant relationship, and urge that the deposits were rental.

5.In this background, the delay in placing the documents on record is unwarranted and clearly suggests the intention to perpetuate the possession of the suit premises despite the clear findings recorded by this court by the order dated 20th December, 2010 and 15th February, 2011. The defendant is therefore given a last opportunity to place the directed documents on record within a period of one week from today subject to payment of costs of Rs.20000/- to the plaintiff within one week from today. Proof of payment of costs shall accompany the documents.

List on 27th September, 2011."

(emphasis supplied)

D. Order dated 10th February, 2012 "On the request of the counsel for the defendant, this matter is being adjourned to 6th March, 2012 to enable the counsel for the defendant to positively obtain instructions from the bank, failing which it is clarified the suit shall be dealt with on merits on the next date of hearing. In case no decision is taken by the defendant on the next date, the Manager of the defendant-Bank from the Head Office shall be personally present in Court......"

(emphasis supplied)

20. Consequently, this Court is of the view that the stand of the bank in the present case is legally, morally and ethically unacceptable.

21. This Court is also not able to fathom as to why a public sector bank with huge paraphernalia of employees and law officers, did not take steps to act in time, i.e., to either get the lease deed mutually extended or to vacate the premises, especially when the bank knew at least five years ago that the lease was coming to an end. This Court is of the opinion that the premium on indecision has to come to an end. Time for accounting for loss to the Government is long overdue. Public sector banks cannot get away by generating frivolous litigations and by burdening the Courts. This Court is also of the view that 'no decision taken' by the public sector banks is more often than not to help the landlord as for the extended period of stay, the banks are bound to pay mesne profits at market rates, which is normally higher than the last agreed rate.

22. Thus as far as the relief of ejection is concerned, no trial is required and the plaintiff is entitled to a decree forthwith. Accordingly, a decree of possession is passed in favour of the plaintiff and against the defendant with regard to premises/Shop No. M-36, Connaught Circus, New Delhi

consisting of ground and mezzanine floors measuring approximately 3362 sq. ft. more particularly shown in red colour in the site plan annexed as Annexure P-1 to the present suit.

23. However, as the defendant is a bank having a large number of customers, defendant is granted two months to vacate the suit premises.

24. As far as the reliefs with regard to damages, mesne profits and compensation are concerned, this Court is of the view that the same will have to be adjudicated upon after recording of evidence.

25. With the aforesaid observations, present application is partially allowed and it accordingly, stands disposed of.

CS(OS) 398/2010

List before Court on 17th May, 2013 for framing of issues.

MANMOHAN, J FEBRUARY 25, 2013 rn/NG