Uco Bank vs Ram Sarup Kapur And Ors.
2013 Latest Caselaw 4851 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 23rd October, 2013

+                               RFA 306/2012
       UCO BANK                                              ..... Appellant
                          Through:      Mr. Rajesh Rattan, Adv.

                                Versus

    RAM SARUP KAPUR AND ORS.                ...Respondents

Through: Mr. Anil K. Kher, Sr. Adv. with Mr. Rishi Manchanda, Adv.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The appeal impugns the judgment and decree, dated 02.04.2012 in CS

No.102/2010 (Unique Case ID No.02401C0321682007) of the Court of

Additional District Judge (3), North, Tis Hazari Courts, Delhi, of recovery of

mesne profits / damages for use and occupation against the appellant bank.

2. Notice of the appeal was issued and vide ex parte ad-interim order

dated 25.07.2012, subject to the appellant bank depositing the entire decretal

amount along with interest and costs in this Court within two weeks, the

execution of the impugned judgment and decree was stayed. Vide

subsequent order dated 30.10.2012, the appeal was admitted for hearing and

the earlier ex parte ad-interim order made absolute till the disposal of the

appeal. The respondents / plaintiffs filed CM No.1142/2013 for release of

the decretal amount deposited by the appellant bank. During the pendency

of the said application mediation between the parties was attempted but

which was unsuccessful. Thereafter when CM No.1142/2013 was listed for

consideration, with the consent of the counsels, the arguments on the appeal

itself were heard and judgment reserved; however since the Trial Court file

had not been requisitioned till then, the same was called for.

3. The respondents / plaintiffs on 29.03.2007 instituted the suit from

which this appeal arises, for ejectment of the appellant bank from the first

floor of property No.1/2, Desh Bandhu Gupta Road, Paharganj, New Delhi

earlier in the tenancy of the appellant and after determination of the said

tenancy and for recovery of arrears of rent and for mesne profits / damages

for use and occupation with effect from 01.11.2006 at the rate of

Rs.1,50,000/- per month.

4. The appellant bank contested the suit by filing a written statement and

to which a replication was filed by the respondents / plaintiffs; along with

the replication an application under Order 12 Rule 6 of the CPC for a decree

for ejectment on admissions was also filed.

5. The learned ADJ vide order dated 19.10.2010 allowed the said

application under Order 12 Rule 6 of the CPC and passed a decree on

admissions of ejectment of the appellant bank from the premises aforesaid,

keeping the suit alive qua the claim of the respondents / plaintiffs of arrears

of rent and mesne profits / damages for use and occupation.

6. The appellant bank preferred RFA No.46/2011 to this Court against

the said decree for ejectment. The said appeal came up for consideration

first on 21.01.2011 when the counsel for the appellant bank instead of

challenging the decree of ejectment stated that the appellant bank was not

pressing the appeal on merits but only seeking six months time to vacate the

premises and was without prejudice to the rights and contentions offering to

pay a sum of Rs.50,000/- per month as charges for use and occupation from

the date of the impugned judgment and till 31.07.2011, time till which date

was sought to vacate the premises. The said statement of the appellant bank

was accepted even though the respondents/landlords were not represented on

that day and the appeal dismissed giving such time to the appellant bank to

vacate the premises. On application of the appellant bank the time for

vacation of the premises was extended till 30.10.2011, this time in presence

of respondents/landlords and subject to payment of use and occupation

charges for said three months @ Rs.55,000/- per month, without prejudice to

determination of mesne profits. The appellant bank is informed to have so

vacated the premises

7. The learned ADJ, qua the claim surviving of the respondents /

plaintiffs vide order dated 16.12.2010 framed the following issues:

"1. Whether the plaintiff is entitled to receive arrears of rent in respect of the suit property. If so, for which period? OPP

2. Whether the plaintiff is entitled to mesne profits / damages for use and occupation of the suit premises. I so, at what rate and for which period? OPP

3. Whether the plaintiff is entitled to pendente-lite and future interest. If so, at what rate? OPP.

4. Relief."

8. The respondents / plaintiffs besides examining one of themselves,

examined the witness from the Union Bank of India (UBI) in occupation of

premises No.2/2, Desh Bandhu Gupta Road, Paharganj, New Delhi. The

appellant bank examined Senior Manager of the concerned Branch and the

draftsman of the site plan of the premises as its witness.

9. The learned ADJ, vide the impugned judgment has decreed the suit of

the respondents/plaintiffs against the appellant bank for recovery of, i) rent

for the month of September, 2006 of Rs.3,327/-, ii) rent for the month of

October, 2006 of Rs.3,659.70p, iii) mesne profits / damages for use and

occupation from 01.11.2006 till 31.08.2009 at Rs.85,000/- per month, iv)

mesne profits / damages for use and occupation with effect from 01.09.2009

till delivery of possession of Rs.1,10,000/- per month; and, v) interest on the

entire aforementioned amount at 10% per month from 01.11.2006 till

realization and costs, holding / observing / finding:

(i) that the rent for the months of September and October, 2006 as

aforesaid were due;

(ii) that the appellant bank having failed to vacate the premises

inspite of determination of its tenancy from the midnight of 31st

October, 2006 was liable to pay mesne profits / damages for use

and occupation w.e.f. 1st November, 2006;

(iii) that it was the uncontroverted testimony of the respondents /

plaintiffs that the first floor of property No.2/2, Desh Bandhu

Gupta Road, Paharganj, New Delhi having an area of 2395 sq.

ft. was occupied by UBI at a monthly rent of Rs.1,18,590/-;

(iv) that the suit premises were in the vicinity of the premises

occupied by UBI;

(v) that it was not challenged that the construction of the two

properties was done approximately at the same time and thus

the suggestion given by the appellant bank to the

respondents/plaintiffs in cross-examination that the premises in

their tenancy was not in a good condition was of no

consequence;

(vi) that the admission of the respondents / plaintiffs that they had

not carried out any repair in the premises after the same were let

out was also of no consequence since it was never the case of

the appellant bank that the property was in a dilapidated

condition or required urgent repairs or was not capable of

fetching a rent similar to that being fetched by other properties

in the locality; this plea was taken only as an afterthought for

the first time at the stage of evidence;

(vii) that mere cracks in plaster as was deposed by the witness of the

appellant bank neither makes the building dilapidated nor the

same reduces the market value or rental value of the property;

had the suit property been in a dilapidated condition, the

appellant bank could not have operated therefrom; and,

(viii) that since UBI was paying rent of Rs.1,18,590/- with effect

from 01.09.2008, the mesne profits of the suit property for the

period from 01.11.2006 till 31.08.2009 were assessed at

Rs.85,000/- per month.

10. The counsel for the appellant bank has argued:

(a) that the subject premises were initially taken on rent by the

appellant bank in the year 1970;

(b) that Sh. Mahinder Kumar Kapur one of the respondents /

plaintiffs in his cross-examination admitted that the respondents

/ plaintiffs had not carried out any repair to the premises after

the same were let out;

(c) that there is a distance of 1 Km. between the subject premises

and the premises in the tenancy of the UBI and the impugned

judgment wrongly proceeds on the premise that because of the

municipal number of subject premises being 1/1, Desh Bandhu

Gupta Road, Paharganj, New Delhi and of the premises in the

occupation of UBI bearing No.2/2, Desh Bandhu Gupta Road,

Paharganj, New Delhi they were in vicinity;

(d) that the lease in favour of the UBI was dated 30.03.2009;

(e) no leases of any other properties in the vicinity had been

proved;

(f) that there were inconsistency in paras No.23 & 24 of the

impugned judgment; with para No.23 recording that the UBI

was paying rent at the rate of Rs.49.41p per sq. ft. till

31.08.2008 when the rent was enhanced and para No.24

recording that the rent was enhanced with effect from

01.09.2009;

(g) Reliance is placed on Union of India Vs. M/s Banwari Lal &

Sons (P) Ltd. AIR 2004 SC 1983 noticing different methods of

valuation of property; and,

(h) that no valuation report of the said property had been proved.

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

argued:

(I) that in RFA No.46/2011 filed by the appellant bank against the

decree for ejectment, no notice was issued to the respondents /

plaintiffs and the same was dismissed granting time to the

appellant bank to vacate the premises;

(II) that the appellant bank neither in response to the notice of

termination of tenancy nor in the written statement stated that

the premises were dilapidated or were in need of any repair or

that the respondents / plaintiffs were not entitled to damages for

use and occupation at the rate of Rs.1,50,000/- per month for

the said reason and no issue also to the said effect was framed;

and,

(III) that none of the arguments raised before this Court has any

basis in evidence and the sole witness of the appellant bank had

also not deposed so.

12. I have perused the Trial Court record and find:

(A) The respondents / plaintiffs in the plaint had claimed mesne

profits / damages for use and occupation at Rs.1,50,000/- per

month without reference to any particular letting in the vicinity

at the said rate. The appellant bank in its written statement

merely denied the claim of the respondents / plaintiffs for

mesne profits at the rate of Rs.1,50,000/- per month without

giving any reason therefor. The respondents / plaintiffs in their

replication also are not found to have given any instance of

letting in the vicinity in support of the claim for mesne profits at

the rate of Rs.1,50,000/- per month;

(B) Sh. Mahinder Kumar Kapur one of the respondents / plaintiffs

in his affidavit by way of examination-in-chief deposed, i) that

the area of the subject premises was approximately 2400 sq. ft.;

ii) that the premises were situated in a highly commercial

locality; iii) proved the site plan of the subject premises which

though does not contain the area of the premises but shows the

dimensions thereof; iv) that similar premises situated at first

floor of property No.2/2, Desh Bandhu Gupta Road, Paharganj,

Delhi on the same road having an area of 2395 sq. ft. was

occupied by UBI at a monthly rent of Rs.1,18,590/-; v) that the

construction of the subject premises and the premises in

occupation of UBI was similar and of the same time and

quality; and, vi) proved as Ex.PW1/2 the letter issued by UBI

certifying that they were paying Rs.1,18,590/- towards monthly

rent of premises having covered area of 2395 sq. ft. on first

floor of 2/2 Desh Bandhu Gupta Road, Paharganj, New Delhi;

(C) In his cross-examination, a) though he was given a general

suggestion that the site plan proved by him was incorrect but

without suggesting as to what was wrong with the site plan and

without showing any correct site plan; b) he admitted that no

repairs had been carried out of the premises since letting; c) he

denied the suggestion that the premises could not be let out at

Rs.1,50,000/- per month; d) he admitted that he had not filed

any document regarding the rent of similar premises at the time

of filing of the suit; and, e) he was suggested that the area of the

premises mentioned/deposed by him was incorrect, again

without mentioning as to what was the correct area.

(D) The Assistant Manager of the UBI examined by the respondents

/ plaintiffs proved the Rent Receipt of payment of rent of the

first floor of premises No.2/2 Desh Bandhu Gupta Road,

Paharganj, New Delhi in occupation of the said bank as

Ex.PW2/1 and the registered lease deed in favour of the said

bank as Ex.PW2/2 and deposed that the area of the premises in

its occupation was 2395 sq. ft. In cross-examination by the

appellant bank, he was suggested that the rent being paid by

UBI was not the prevalent rent but which suggestion was

denied.

(E) A perusal of the lease deed Ex.PW2/2 of the premises in

occupation of UBI shows:

(i) the same to be of mezzanine and first floor ad-measuring

2395 sq. ft. of property No.2/2, Desh Bandhu Gupta

Road, Paharganj, New Delhi and the UBI to have agreed

to pay rent from 01.09.2008 to 31.08.2013 at the rate of

Rs.1,18,590/- per month;

(ii) UBI to have agreed to reimburse to the landlord 50% of

the municipal tax; and,

(iii) a site plan annexed to the said lease deed shows the

nature of the premises to be the same as in the site plan

filed by respondents/plaintiffs of the subject premises.

(F) The Senior Manager of the appellant bank in his affidavit by

way of examination-in-chief, i) though deposed that the site

plan of the premises filed by the respondents / plaintiffs was not

correct and the measurements mentioned therein were also not

correct but neither proved any site plan of his own nor stated as

to what were the correct measurements; ii) stated that the

respondents / plaintiffs had never repaired the premises since

the inception of the tenancy; iii) stated that the premises were

very old and in a dilapidated condition due to non maintenance

by the respondents / plaintiffs; iv) stated that the prevalent rent

in the locality was not Rs.1,50,000/- per month; and, v)

purported to prove a report regarding the condition of the

premises but which was not admitted into evidence.

(G) In cross-examination, he deposed that, a) though there were

more than 20 banks in Paharganj but he had not made enquiry

about the rent being paid by any of them; b) he had not made

any enquiries from the UBI also; c) that he could not say what

rent the suit premises could fetch; and, d) that the subject

premises were in possession of the appellant bank since the

year 1970.

(H) A draftsman examined by the appellant bank proved the report

prepared by him on the condition of the premises with

photographs and the site plan and which site plan though gives

dimensions, does not mention the area of the property. The

dimensions given in the site plan of the appellant bank however

are near about the same as in the site plan of the respondents /

plaintiffs. In cross-examination, he admitted that he was not an

architect and save for a diploma in draftsmanship has no other

qualification.

13. In the aforesaid state of evidence, no basis is found for the arguments

raised by the counsel for the appellant bank, i) of the rent being paid by UBI

being not a true measure of the rate of mesne profits for the reason of the

two premises being situated at a distance of 1 Km.; neither is there any

suggestion to the witnesses of the respondents / plaintiffs in this regard nor

has the witnesses of the appellant bank deposed so; ii) of there being any

other difference in the two premises; again there is no evidence thereof. I

may record that though the counsel for the appellant bank had objected to

the proof of the lease deed of the UBI as to the mode of proof but the same

is found to be a photocopy certified by the Manager of the UBI as the true

copy of the certified copy of the registered lease deed. The least which the

appellant bank could have done to discredit the same, if there was any doubt

with respect thereto, was to make enquiries from the UBI and which

admittedly was not done. The respondents / plaintiffs in any case

independently of the said lease deed also have proved the factum of the rate

of rent and the area of the premises in occupation of UBI from the oral

testimony of the Assistant Manager of the UBI and of which there is no

contradiction.

14. I may mention that there indeed is some inconsistency in the

impugned judgment as to the date from which UBI is paying the rent of

Rs.1,18,590/- for the premises in its occupation and the Learned ADJ in the

impugned judgment has awarded mesne profits to the respondents / plaintiffs

on the basis of the said rate with effect from 01.09.2009 only. However a

perusal of the lease deed shows the said rate to be effective with effect from

01.09.2008. On the basis thereof the respondents / plaintiffs ought to have

been entitled to mesne profits at the said rate from 01.09.2008 and not from

01.09.2009. The prejudice if any caused by the said inconsistency in the

judgment is to the respondents / plaintiffs only and not to the appellant bank

and the appellant bank has no cause to make a grievance with respect thereto

and if heard to make a grievance, would be to its own detriment only.

15. No error can thus be found in the impugned judgment and decree

insofar as, on the basis of rent being paid by another nationalized bank for

comparable premises, awarding mesne profits at the rate of Rs.1,10,000/- per

month to the respondents / plaintiffs with effect from 01.09.2009 till the date

of vacation.

16. The only question which remains for adjudication is whether the

learned ADJ, on the basis thereof was correct in assessing mesne profits

from 01.11.2006 till 31.08.2009 at the rate of Rs.85,000/- per month. With

respect to the said period also, as aforesaid, there could be no grievance for

the mesne profits from 01.09.2008 till 31.08.2009 for which period UBI was

paying rent at Rs.1,18,590/- only for similar premises and qua which the

error aforesaid has occurred in the judgment to the prejudice of the

respondents / plaintiffs. The grievance if any is thus found to be for the

period 01.11.2006 to 31.08.2008 only i.e. for about 22 months.

17. Though the learned ADJ has not given any reason for arriving at a

figure of Rs.85,000/- per month but a mathematical calculation shows the

same to be 29.4% lower than the rate awarded from 01.09.2009. No error

can be found therein also as judicial notice can be taken of at least 15%

increase in rent of commercial properties every three years.

18. As far as the reliance by the counsel for the appellant bank on the

judgment cited is concerned, the same is in the context of determination of

compensation under the Land Acquisition Act, 1894. The observations

therein, of there being no claim for mesne profits for the period for which

time was given by the Court to vacate the premises can have no application

to the facts of the present case. It cannot be lost sight of that the appeal

preferred by the appellant bank against the decree for ejectment was

dismissed and time to vacate the premises without issuing even notice of the

appeal to the respondents / plaintiffs was granted on compassionate grounds

and without affecting the right of the respondents / plaintiffs to mesne

profits. This is abundantly made clear in subsequent order dated 29 th July,

2011 in RFA No.46/2011.

19. The impugned judgment thus calls for no interference.

20. However the award of interest at the rate of 10% per annum on the

arrears of mesne profits from 01.11.2006 till realization is not apposite. The

interest should be on the arrears of mesne profits for each month from the

end of the month from which the mesne profits are due and till the date of

payment. Save for the said modification, the appeal is dismissed with costs

in favour of the respondents / plaintiffs. Counsel fee assessed at Rs.20,000/-

21. Decree sheet be drawn up.

22. The amount deposited by the appellant bank in this Court be forthwith

released to respondents/plaintiffs/decree holders.

RAJIV SAHAI ENDLAW, J OCTOBER 23, 2013 'gsr'