Chander Kirti Rani Tandon vs M/S Vxl Lodging N Boarding ...
2013 Latest Caselaw 451 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           CS(OS) 2591/2011

                                       Reserved on:           14.12.2012
                                       Date of decision:      31.01.2013


IN THE MATTER OF:
CHANDER KIRTI RANI TANDON                            ..... Plaintiff
                    Through: Ms. Deepika V. Marwaha, Advocate
                    with Ms. Jibran Tak, Advocate

                   versus


M/S VXL LODGING N BOARDING SERVICES PVT LTD                ..... Defendant
                    Through: None


CORAM
HON'BLE MS.JUSTICE HIMA KOHLI



HIMA KOHLI, J.

1. The plaintiff has instituted the present suit against the defendant

for possession of the first and second floors of the residential premises

bearing No.S-20, Greater Kailash-I, New Delhi, and for recovery of

arrears of rent to the tune of `7,25,000/-, apart from future damages

w.e.f. October, 2011, for the illegal use and occupation of the demised

premises alongwith interest thereon.

2. The brief facts of the case are that the plaintiff is the

owner/landlady of premises bearing No.S-20, Greater Kailash-I, New

Delhi, and is residing on the ground floor. As per the plaintiff, Shri

Ajay Kapoor, Director of the defendant/company had approached her

through a property broker in December, 2009 for taking on lease the

first and second floors of the demised premises, to which the plaintiff

was agreeable. As a result, a Lease Deed dated 24.12.2009 was

executed between the parties (Ex.PW1/1).

3. As per Clause-1 of the Lease Deed, the first and second floors of

the demised premises were let out by the plaintiff to the defendant on

a monthly rent of `1,45,000/-, exclusive of the electricity and water

charges and the rent was payable in advance on the seventh day of

each calendar month. The tenure of the Lease Deed was for a period of

three years, commencing from 01.01.2010 and ending on 31.12.2012.

The defendant had paid one month‟s rent in advance to the plaintiff

after deducting the TDS. As per Clause-4 of the Lease Deed, the

plaintiff received a sum of `2,90,000/- towards interest free security

deposit, which was refundable at the time of handing over vacant

physical possession of the demised premises by the defendant.

Clause-25 of the Lease Deed stipulated that if the defendant/lessee

failed to pay the monthly rent, as agreed upon for a period of one

month, the lease would stand automatically terminated without any

notice and the plaintiff/lessor would be entitled to take over the

possession of the demised premises. Clause 25 of the Lease

Agreement also stipulated that in case the rent cheques bounce, the

lessee would be liable to pay a penalty of ₹10,000/- per day, in

addition to the monthly rent.

4. The plaintiff has averred that the defendant had issued her

advance cheques towards the monthly rent for the period till

December, 2012 but when the said cheques were presented for

encashment, they were dishonoured on a number of occasions. It was

submitted that upon the commencement of the lease, the first cheque

which was for the month of January, 2010, when presented by the

plaintiff on 08.01.2010, was dishonoured by the defendant‟s banker

with the remarks, "insufficiency of funds" and thereafter, the

defendant had paid the rent for the said month in cash. Similarly, for

the next month also, the second cheque of the defendant, when

presented by the plaintiff, was dishonoured and this pattern was

repeated for the subsequent months as well.

5. Learned counsel for the plaintiff submitted that from the

beginning of the year 2011, the defendant became very irregular in

the payment of rent and as a number of cheques issued by it were

dishonoured by its banker upon being presented and for every such

cheque, charges were levied on the plaintiff by her banker, she started

depositing the cheques only after verifying from the staff of the

defendant as to whether the same ought to be presented to the bank

or not. The details of the manner in which the plaintiff had presented

the rent cheques on receiving instructions from the defendant for the

period from January, 2011 till April, 2011, have been set out in para 7

of the plaint.

6. Counsel for the plaintiff further submitted that not only did the

defendant fail to make timely payment of the rent, but it also

defaulted in issuing a TDS certificate to the plaintiff for the period

w.e.f. 01.04.2010 to 31.03.2011 and it was only after the present suit

was instituted and summons were issued to the defendant, did it

deposit the TDS for the aforesaid period with the Income Tax

Department in February, 2012, except for one month for which, TDS

has still not been deposited. When the defendant failed to pay the

rent for the month of May, 2011, the plaintiff was constrained to

address a letter at their registered office, terminating the lease of the

premises. Upon receiving the said notice, officers of the defendant

assured the plaintiff of timely payment, but even after giving the said

assurance, none of the post dated rent cheques issued by the

defendant were honoured by its banker and all the cheques w.e.f. May,

2011 till August, 2011 were dishonoured on being presented. It was

thus submitted by learned counsel that the defendant was in arrears of

rent for the months of May, 2011 to September, 2011.

7. To establish the status of the cheques of rent issued by the

defendant and presented for encashment, the plaintiff has filed a copy

of her bank statement maintained with the Punjab National Bank,

Greater Kailash Branch, marked as Ex.PW1/A and enclosed with her

affidavit by way of evidence (Ex.PW1/X). The original cheques issued

by the defendant towards payment of rent for the months of June and

July, 2011, which were dishonoured, have also been filed by the

plaintiff and exhibited as Ex.PW1/B and Ex.PW1/C. The original return

memos of the aforesaid cheques issued by the bank are exhibited as

Ex.PW1/D and Ex.PW1/E.

8. Counsel for the plaintiff contended that the defendant had not

even cleared the arrears of the electricity charges of the two meters

installed on the first and second floors of the demised premises and as

per the demand letter dated 10.01.2012, issued by the BSES for the

first floor of the demised premises, a sum of `37,540/- was shown as

outstanding (Ex.PW1/2) and similarly, another demand letter dated

10.01.2012 for the second floor showed an outstanding amount of

`17,180/- (Ex.PW1/3). The electricity bills of the first and second

floors of the demised premises have been filed and marked as

Ex.PW1/4 and Ex.PW1/5. Finally, on account of a threat of

disconnection, the plaintiff was constrained to make the payment of

the aforesaid outstanding electricity bills. The payment receipts dated

09.02.2012, issued by the BSES have been marked as Ex.PW1/6 and

PW1/7. Similarly, the plaintiff has claimed that the defendant had not

cleared the outstanding water charges with respect to the second

floor. A copy of the bill dated 31.01.2012 for a sum of `15,857/- raised

by the DJB has been filed by the plaintiff and is marked as Ex.PW1/8.

The plaintiff has stated that as the said bill also remained unpaid by

the defendant, she had to clear the same by issuing a cheque for

`15,857/- dated 21.02.2012.

9. Finally, in view of non-payment of rent by the defendant and on

account of violation of other terms and conditions of the Lease Deed,

the plaintiff despatched a legal notice dated 06.09.2011 to the

defendant at its registered office situated at E-214, Greater Kailash-II,

New Delhi and also at the tenanted premises. The said notice was also

sent via e-mail to the defendant at the e-mail ID, as given on its

official website. A copy of the e-mail is filed and marked as

Ex.PW1/12. To establish the e-mail ID of the defendant, the plaintiff

has filed a print out of a page from its official website which is marked

as Mark „A‟ and „B‟. The carbon duplicate of the aforesaid legal notice,

which was dispatched by the plaintiff to the defendant is marked as

Ex.PW1/13. The aforesaid notices that were despatched at both the

aforesaid addresses of the defendant were however returned by the

postal authorities. The notice despatched at the registered office of

the defendant was returned with the remarks „premises locked‟ and

the one despatched at the tenanted premises of the defendant was

returned with the remarks 'unclaimed'. The AD Cards, envelopes and

postal receipts of the legal notice are marked as Ex.PW1/14 (colly). It

is however stated that the notice sent by e-mail was duly delivered to

the defendant but neither did it reply to the said notice, nor did it clear

the arrears of the rent/occupation charges.

10. Learned counsel for the plaintiff submitted that although the

plaintiff was not under an obligation to issue a legal notice to the

defendant for terminating the Lease Deed in terms of Clause 25 of the

Lease Deed, which stipulated that non-payment of the monthly rent

for a period of one month would result in an automatic termination of

the tenancy, the aforesaid legal notice was issued to the defendant by

way of abundant caution. She further stated that in view of the very

same Clause-25, which stipulated that in case the rent cheques given

by the defendant would bounce, it would be liable to pay a penalty of

`10,000/- per day in addition to the monthly rent, the plaintiff is

entitled to claim penalty @ `10,000/- per day from the defendant over

and above the outstanding monthly rent. As a result, the plaintiff has

prayed for a decree of possession of the demised premises which is

alleged to be under the unauthorized occupation of the defendant,

alongwith damages for use and occupation of the demised premises

@`4,45,000/- per month from the month of October, 2011 onwards till

vacation thereof, while confining her claim to `1,45,000/- per month

towards arrears of rent for the period from May, 2011 to September,

2011 alongwith interest thereon. Additionally, the plaintiff has sought

recovery of the electricity and water charges in respect of the demised

premises that had to be borne by her due to non-payment of the same

by the defendant during the pendency of the suit, apart from costs of

the suit.

11. The present suit was instituted by the plaintiff on 03.10.2011,

and was listed for admission on 17.10.2011. Summons were issued to

the defendants, returnable for 05.01.2012. On the aforesaid date, on

the interim application filed by the plaintiff, registered as

I.A.No.16644/2011, the defendant was directed not to part with the

possession of the demised premises. On 05.01.2012, Mr. Sayed

Hasan, Advocate, had appeared on behalf of the defendant and had

undertaken to file his Power of Attorney within three days. On the said

date, in his submission to the Joint Registrar he had stated that a

complete set of the paper book had not been furnished to him and

some papers from his paper book were missing, which were thereafter

furnished to him on the same date. The defendant was directed to file

a written statement within four weeks, whereafter the plaintiff was

directed to file the replication and the suit was adjourned to

17.04.2012 for the parties to conduct admission and denial of

documents.

12. Thereafter, the plaintiff had filed an application under Order XV-

A read with Section 151 CPC, registered as I.A. No. 1255/2012 stating

inter alia that the defendant had not filed the written statement and

further that it had locked the demised premises and that it owed her

arrears of rent to the tune of over `13,05,000/-, if calculated at the

rate of the last paid rent, i.e., @`1,45,000/- per month. By the

aforesaid application, the plaintiff sought directions to the defendant to

deposit the arrears of rent totalling to `13,05,000/- and continue

paying damages for the use and occupation of the demised premises

at the same rate. Despite service of the aforesaid application on the

defendant, none had appeared on its behalf. Consequently, vide order

dated 15.03.2012, the defendant was directed to deposit with the

Registrar General arrears of rent @ `1,40,000/- per month after

deducting the TDS w.e.f. May, 2011 till the date of passing of the

order, within four weeks. Besides the above, the defendant was also

directed to continue depositing the current rent @ `1,40,000/- per

month on a monthly basis, failing which the plaintiff was granted

liberty to file an application for striking off the defence of the

defendant.

13. A perusal of the order sheets reveal that the defendant had

failed to appear or contest the present suit and finally vide order dated

01.08.2012, it was proceeded against ex-parte and the plaintiff was

called upon to file an affidavit by way of evidence. On 27.09.2012, the

plaintiff had appeared before the Joint Registrar as PW1 and had

tendered her affidavit by way of evidence as her examinationin-in-

chief. The said affidavit is marked as Ex.PW1/X. The plaintiff identified

her signatures on the said affidavit and also tendered documents in

evidence that were exhibited as Ex.PW1/1 to PW1/14 and Mark-A & B.

After closing the said ex-parte evidence, the suit was placed before the

Court for final arguments.

14. The Court has heard the counsel for the plaintiff and has perused

the averments made in the plaint, the affidavit by way of evidence

filed by the plaintiff and the documents that have been placed on

record.

15. In view of the aforesaid unrebutted testimony of the plaintiff, as

discussed above and having regard to the evidence placed on record

both documentary and oral, it is held that the defendant is in

unauthorized occupation of the demised premises and has failed to

vacate the same in spite of a valid legal notice of termination of

tenancy, which was duly served upon it. The defendant is also held to

be in arrears of rent for a sum of `7,25,000/- w.e.f. May, 2011 to

September, 2011 calculated @ `1,45,000/- per month in terms of the

Lease Deed.

16. Though the plaintiff has claimed recovery of penalty from the

defendant @ `10,000/- per day for the unauthorized use and

occupation of the demised premises in terms of Clause 25 of the Lease

Deed, in addition to the monthly rent w.e.f. October, 2011, in the

course of arguments, learned counsel for the plaintiff had submitted

that the plaintiff does not insist on recovery of penalty at the above

rate. Instead, she had requested the Court to take judicial notice of

the increase of rentals in Delhi for purposes of determining the mesne

profits payable by the defendant as the plaintiff had not led any

evidence on this aspect.

17. There are a catena of decisions that have held that while

determining mesne profits, the Courts are well entitled to take judicial

notice of the increase of rentals of the area where the property is

situated under Sections 56 and 57 of the Indian Evidence Act, 1872.

Some of the decisions on the aforesaid lines are catalogued as below:-

(i) Bakshi Sachdev (D) by LRs vs. Concord; (I) 1993 (1) Raj LR

563.

(ii) Vinod Khanna and Ors. vs. Bakshi Sachdev (Deceased) through LRs and Ors; AIR 1996 (Delhi) 32 (DB)

(iii) Motor & General Finance Ltd. vs. Nirulas and Ors.; 92 (2001) DLT 97

(iv) Anant Raj Agencies Properties vs. State Bank of Patiala; 2002 IV AD (Delhi) 733 (DB).

(v) National Radio & Electronic Co. Ltd. vs. Motion Pictures Association 122 (2005) DLT 629 (DB)

(vi) State Bank of Bikaner and Jaipur vs. I.S. Ratta and Ors. 120 (2005) DLT 407 (DB)

(vii) M.R. Sahni vs. Doris Randhawa; 2008(104) DRJ 246

18. In the case of Anant Raj Agencies Properties (supra), a Division

Bench of this Court was considering a case where the suit premises

was situated in the heart of Delhi and on the basis of the evidence

placed on record, payment of mesne profits in respect of the suit

premises was allowed @ `50/- per sq.ft. per month. It was further

held that as the suit had remained pending for a period of nine years,

the trial court ought to have taken judicial notice of the manifold

increase of rents in the area in question. While making the aforesaid

observation, the Division Bench had placed reliance on the decision of

the Supreme Court in the case of D.C. Oswal vs. V.K. Subbiah and

Ors. reported as AIR 1992 SC 184.

19. Placing reliance on the very same judgment in the case of D.C.

Oswal (supra), a Division Bench had observed in the case of Vinod

Khanna (supra), that the trial court had not committed any illegality in

taking judicial notice of increase of rents and proceeded to determine

the compensation accordingly. The observations of the Division

Bench in this context are apposite and are reproduced hereinbelow:-

"21. The learned Counsel for the appellants also urged before us that the learned Trial Court was not justified in taking a judicial notice of the fact of increase of rents like the suit property and also in providing `10,000/- per month as fair amount towards damages/mesne profits in favour of the plaintiffs. It is true that no substantial evidence has been led by the plaintiffs in respect of the increase of rent in the properties like that of the suit property. However, it is a well known fact that the amount of rent for various properties in and around Delhi has been rising staggeringly and we cannot see why such judicial notice could not be taken of the fact about such increase of rents in the premises in and around Delhi which is a city of growing importance being the capital of the country which is a matter of public history. At this stage we may appropriately refer to the Court taking judicial notice of the increase of price of land rapidly in the urban areas in connection with the land acquisition matters. Even the Apex Court has taken judicial notice of the fact of universal escalation of rent and even raised rent of disputed premises by taking such judicial in case of D.C. Oswal v. V.K. Subbiah reported in AIR 1992 SC 184;

22. In that view of the matter we have no hesitation in our mind in holding that the Trial Court did not commit any illegality in taking judicial notice of the fact of increase of rents and determining the compensation in respect of the suit premises at `10,000/- per month w.e.f. 19.1.1989, in view of the fact that the rent fixed for the said premises was at `6,000/- per month as far back as in the year 1974.

We may, however, note here that the learned Counsel for the appellants did not seriously challenge the findings of the learned Judge that `10,000/- per month would be the fair market rent of the suit premises. Accordingly, in view of the aforesaid findings arrived at by us the submissions of the learned Counsel for the appellants in our view have no substance at all."

20. Similarly, in the case of S. Kumar vs. G.K. Kathpalia reported as

1991 (1) RCR 431, a Division Bench of this Court had noticed that

the landlord therein had not led any documentary evidence on the

prevalent market rates of other properties in the area and then gone

on to fix the damages/mesne profits by taking into consideration the

prime location of the suit premises, its proximity to the community

centre and the commercial activity.

21. The essence of the aforesaid decisions of the Supreme Court and

this Court is that judicial notice of the increase of rents in urban areas

can be taken note of by courts by applying the provisions of Sections

57 and 114 of the Evidence Act, 1872 and while calculating the mesne

profits, certain amount of guess work by the court, is inevitable and

acceptable.

22. In the present case, considering the fact that the demised

premises is situated in one of the prime residential localities in Delhi,

i.e., Greater Kailash-I, this Court is of the opinion that it would be just,

fit and proper if an increase of 15% per annum over and above the

contractual rent be awarded to the plaintiff for the first year

commencing w.e.f. 01.10.2011 till 30.09.2012. For the second year of

illegal occupation, i.e., w.e.f. 01.10.2012 onwards, the defendant is

held liable to pay an increase of 15% per annum, over and above the

original contractual rent plus an additional 15% rent that has been

found to be payable for the first year. Same would remain the

standard of calculating mesne profits for the subsequent period, till the

demised premises is vacated by the defendant and possession handed

over to the plaintiff.

23. As regards the claim of interest, the plaintiff has sought payment

of interest calculated @ 18 % per annum on the awarded amount.

However, given the facts and circumstances of the present case, the

Court is not inclined to award interest at the rate as claimed by the

plaintiff. Instead, it is deemed appropriate to award simple interest @

10 % per annum on the aforesaid amount for the period of

default/delay in making payment of rent/occupation charges, till

realization. The said interest shall be calculated on the outstanding

rent on a monthly basis, reckoned at the end of each month. The

plaintiff is also held entitled to recover the electricity and water

charges payable in respect of the tenanted premises. Besides the

above, the defendant is held liable to issue TDS certificates to the

plaintiff for the amounts deducted by it from the rent paid to the

plaintiff or in the alternate, pay to her amounts so deducted if not

deposited with the Income Tax Department.

24. The plaintiff is thus entitled to a decree in the following terms:-

(i) A decree of ejectment/possession is passed in favour of the

plaintiff and against the defendant in respect of the first and

second floors of the demised premises bearing No.S-20, Greater

Kailash-I, New Delhi, as detailed in the Lease Deed dated

24.12.2009 (Ex.PW1/1).

(ii) A decree of arrears of rent to the tune of `7,25,000/- for the

period w.e.f. May, 2011 till September, 2011.

(iii) A decree of mesne profits @ 15% over and above the

contractual rent calculated at the rate of `1,45,000/- w.e.f.

01.10.2011 till 30.09.2012 and @ 15% over and above the

original contractual rent plus additional 15% rent payable for the

first year, from 01.10.2012 till the date of handing over

possession of the demised premises.

(iv) Interest @ 10% p.a. is awarded on the aforesaid amount that

shall be payable by the defendant as mentioned in para 23

above, till realization of the awarded amount.

(v) The plaintiff shall also be entitled to a decree of `70,577/-

towards the electricity and water charges that were payable by

the defendant in respect of the demised premises.

(vi) The plaintiff shall also be entitled to receive TDS certificate(s) on

the amounts deducted by the defendant towards TDS and

deposited with the Income Tax Department, or in the alternative,

the plaintiff shall be entitled to recover the amount so deducted

by the defendant towards TDS.

(vii) Lastly, the plaintiff shall be entitled to costs of the suit apart

from counsel‟s fees that is quantified at `20,000/-.

Decree sheet be drawn accordingly. The suit is disposed of.

                                                         (HIMA KOHLI)
JANUARY 31, 2013                                             JUDGE
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