Surender Kumar Singh Luthra & Ors vs State Bank Of Patiala
2015 Latest Caselaw 8019 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      RFA 489-491/2005

%                            Date of Decision: 19th October, 2015

       SURENDER KUMAR SINGH LUTHRA & Ors...... Appellants
                      Through: Mr. Raman Kapur, Sr. Adv.
                               with Mr.Aviral Tiwari, Mr. R.P.
                               Singh, Mr. Varun Kapur, Mr.
                               Ali Anwar, Advs.
               versus

       STATE BANK OF PATIALA            ..... Respondent
                    Through: Mr. S.N. Relan with Mr.
                             Abhinav Thareja, Advs.

       CORAM:
       HON'BLE MR. JUSTICE J.R. MIDHA

                               JUDGMENT

1. The appellants have challenged the impugned judgment and decree whereby the learned Trial Court declined to award the mesne profits to the appellants.

2. The appellants were the joint owners of property bearing no.192, Block L, Naiwala Estate bearing Municipal No.2694, Desh Bandhu Gupta Road, Karol Bagh, New Delhi - 110005.

3. On 8th August, 1991, the appellants inducted the respondent bank as a tenant in respect of basement measuring 1552.25 sq. ft., ground floor measuring 1402.44 sq. ft., mezzanine measuring 416.87 sq. ft and first floor measuring 1830.16 sq. ft (hereinafter referred to as

"the suit property") at a monthly rent of Rs.58,532.25/- calculated @ Rs.11.26 per sq. ft. per month.

4. Vide notice dated 25th September, 1996, the appellants terminated the respondent's tenancy w.e.f. 30th November, 1996. The appellants demanded mesne profits @ Rs.3,00,000/- per month (Rs.57.70 per sq. ft. per month) w.e.f 1st December, 1996.

5. On 30th January, 1997, the appellants instituted a suit for recovery of possession and mesne profits against the respondent.

6. During the pendency of the suit, the respondent vacated the suit property on 28th February, 2003 and therefore, the suit was continued only with respect to the appellants' claim for mesne profits for the period 1st December, 1996 to 28th Febraury, 2003.

7. On 11th June, 2004, the appellants let out the basement and ground floor of the suit property measuring 3383.52 sq. ft to Punjab and Maharashtra Co-operative Bank Limited at a monthly rent of Rs.1,59,749/- per month (Rs.60 per sq. ft. per month for the ground floor and Rs.30 per sq. ft. per month for the basement).

8. The respondent bank after vacating the suit property shifted to 5/34 W.E.A Road, Karol Bagh, New Delhi inside a lane at a monthly rent of Rs.72,000/- per month in respect of area measuring 2200 sq. ft. on the ground floor @ Rs.35 per sq. feet per month.

9. The appellants proved four lease deeds before the Trial Court in support of their claim for mesne profits as per details given hereunder:

(i) Ex.P-6 - Lease deed dated 1st October, 1997 of ANZ Grindlays

Bank Ltd., 13/37, Arya Samaj Road, New Delhi - 110005 for the period 1st October, 1997 to 31st July, 2006 at a monthly rent of Rs.30 per sq. ft. per month for the basement, Rs.60 per sq. ft. per month for the ground floor and Rs.40 per sq. ft. per month for the first floor with 25% increase every three years. This property is at a distance of 183 meters from the suit property.

(ii) Ex.P-7 - Lease deed dated 5th November, 1996 of Citibank, B-4 & B-4A, Barmi Chambers, 62/2191, Gurudwara Road, Karol Bagh, New Delhi for the period 20th July, 1996 to 19th July, 2002 in respect of 275 sq. ft. area at a monthly rent of Rs.18,000/- @ Rs.65.45 per sq. ft. per month with 20% increase every three years. This property is at a distance of 125 meters from the suit property.

(iii) Ex.P-8 - Lease deed dated 22nd December, 1997 of Bank of India, 13/38, Arya Samaj Road, Karol Bagh, New Delhi for the period 1st February, 1997 to 31st January, 2007 in respect of 4340 sq. ft. area at a monthly rent of Rs.1,82,810/- @ Rs.42.12 per sq. ft. per month with 15% increase every five years. This property is at a distance of 186 meters from the suit property.

(iv) Ex.P-9 - Lease deed dated 26th July, 2001 of Ratnakar Bank Ltd., 17-A/53, W.E.A Road, Karol Bagh, New Delhi - 110005 for the period 1st July, 2001 to 30th June, 2010 in respect of 1999 sq. ft. area at a monthly rent of Rs.1,39,500/- at the rate of Rs.70 per sq. ft. per month with 15% increase every 3 years. This property is at a distance of 245 metres from the suit property.

10. The respondent proved three lease deeds before the Trial Court

particulars whereof are given hereunder:

(i) Ex.DW-1/1 - Lease deed dated 19th April, 1994 of State Bank of India, 5/75, Padam Singh Road, Karol Bagh, New Delhi for the period 1st July, 1992 to 30th June, 1997 in respect of 7790 sq. ft. on the ground floor at a monthly rent of Rs.90,000/- @ Rs.11.50 per sq. ft. per month. This property is at a distance of 243 metres from the suit property.

(ii) Ex.DW-1/2 - Lease deed dated 9th January, 1994 of State Bank of India, 2704/16, Ajmal Khan Road, Karol Bagh, New Delhi for the period 31st March, 1993 to 28th February, 1998 in respect of 5020 sq. ft on the first and second floor at a monthly rent of Rs.38,430/- @ Rs.7.65 per sq. ft. per month. This property is at a distance of 51 metres from the suit property.

(iii) Ex.DW-1/3 - Lease deed dated 11th July, 2000 of State Bank of India, 5/75, Padam Singh Road, Karol Bagh, New Delhi for the period 1st July, 1997 to 30th June, 2002 in respect of 7790 sq. ft on the ground floor at a monthly rent of Rs.1,12,500/- @ Rs.14.44 per sq. ft. per month. This property is at a distance of 243 metres from the suit property.

11. Mr. Raman Kapur, learned senior counsel for the appellants submitted that the appellants duly proved the market rent of the suit property by proving the four relevant lease deeds of the area in question and therefore, the appellants are entitled to the mesne profits at the rate of Rs.58 per sq. ft. per month. Learned senior counsel for the appellants submits that the law with respect to the award of mesne

profits is well settled. It is submitted that the Court can take judicial notice for the increase of rent in the urban areas. Learned senior counsel referred to and relied upon M.C. Agrawal HUF v. Sahara India &Ors, 183 (2011) DLT 105 in which this Court has taken judicial notice of increase of rent in the urban areas and awarded mesne profits @ 15% compounded increase every year from the contractual rate of rent. Learned senior counsel further referred to and relied upon M/s Priya Exhibitors (P) Ltd. v. Oriental Bank of Commerce, MANU/DE/5157/2012 in which this Court has awarded mesne profits at 50% of the rate proved through the lease deed of that area and 15% cumulative increase every year. Reliance is further placed on Lt. Col. Jaspal Singh v. National Thermal Power Corporation Ltd., ILR(2011) Supp (5) in which this Court took judicial notice of increase of rent and granted mesne profits at the rate proved through the lease deeds of the prevailing market rent. Reliance has also been placed on M/s. Anant Raj Agencies Properties v. State Bank of Patiala, 167(2010) DLT 138.

12. Learned counsel for the respondent submitted that the property in question is an old building constructed in the year 1976. No renovation has been undertaken by the appellants since then. There is no parking space in the suit property. In fact, it is not permissible to park the vehicle on the entire Desh Bandhu Gupta Road. With respect to the lease of ANZ Grindlays Bank Ltd. (Ex.P-6), there is an authorized parking near the premises. With respect to the lease of Citibank (Ex.P-7), there is a parking on both sides of Gurudwara Road. With respect to the lease of Bank of India (Ex.P-8), there

is an authorized parking on the side of the road. With respect to the lease of Ratnakar Bank Ltd. (Ex.P-9), there is a parking on both sides of the road. It was submitted that there was no parking space available for the staff members, customers/account holders in the suit property due to which the bank business could not grow, rather the bank lost much of the business due to the non-availability of the parking. Learned counsel for the respondent referred to and relied upon the lease deeds of State Bank of India (Ex-DW-1/1) which was fetching rent @ Rs.11.50 per sq. ft. per month, State Bank of India (Ex.-DW- 1/2) which was fetching rent @ Rs.7.65 per sq. ft. per month and State Bank of India (Ex.DW-1/3) which was fetching rent @ 14.44 per sq. ft. per month. It is further submitted that the respondent bank took premises @ Rs.35 per sq. ft. per month in a fully renovated building in which there was enough parking space outside the branch. It is further submitted that parking is a very important criteria for banking activities and therefore, the business of the respondent bank increased from Rs.15 crores to Rs.240 crores by shifting to the new building.

13. Mr. Raman Kapur, learned senior counsel for the appellant, submitted that lease deeds proved by the respondent do not reflect the market rent. It was submitted that Ex.DW-1/1 relates to the lease of a property for the period 01st July, 1992 to 30th June, 1997. It was further submitted that lease deed Ex.DW-1/2 is a renewal of a prior lease deed and, therefore, it does not reflect the market rent of the property. Ex.DW-1/3 is the renewal of Ex.DW-1/1 and it also does not reflect the market rent of the property.

14. On careful consideration of the rival contentions of the parties, this Court is of the view that though the four lease deeds Ex.P-6, Ex.P- 7, Ex.P-8 and Ex.P-9 proved by the appellants relate to the same area but there are material differences between the suit property and the properties mentioned in Ex.P-6 to Ex.P-9 with respect to the parking space. There was no parking space available in the suit property. That apart, the suit property is situated at Desh Bandhu Gupta Road on which it is not even permissible to park the vehicle on the road. This Court is of the view that the parking is a very important criteria for banking business and non-availability of the parking space in the suit property is an important criteria for determining the market rent. Another important aspect is that the suit property is an old building constructed in 1976 and no renovation has been carried out since then. This Court is of the view that the market rent of the suit property cannot be taken to be Rs.58/- per sq. feet per month as claimed by the appellants. However, the Court also does not agree with the view taken by the Trial Court that the market rent of the suit property would not be more than the agreed rent @ Rs.11.26 per sq. feet per month. The rent of Rs.11.26 per sq. feet per month at the time of institution of the tenancy on 08th August, 1991 cannot be taken to be the market rent from 01st December, 1996 to 28th February, 2003. Ex.DW-1/1 relied upon by the respondent relates to a property in which rent was fixed in the year 1994 and, therefore, it does not reflect the market rent in the year during the period 1996 to 2003. Ex.DW-1/3 is the renewal of Ex.DW-1/1 and, therefore, it also does not reflect the market rent during the relevant period.

15. Taking all the relevant factors into consideration, this Court is of the view that the market rent of the suit property during the period 01st December, 1996 to 28th February, 2003 would be Rs.23/- per sq. feet per month. The respondent has already paid the damages at the agreed rate of Rs.11.26 per sq. feet per month and therefore, the appellant would be entitled to enhancement of Rs.11.74/- for the period 01st December, 1996 to 28th February, 2003. The appellant is also entitled to interest at the bank rate of 9% per annum on the arrears of the mesne profits w.e.f. 01st March, 2003. The mesne profits for the period 01st December, 1996 to 28th February, 2003 would be Rs.45,80,114.46/- (Rs.11.74 x 5201.72 x 75). The interest for the period 01st March, 2003 to October, 2015 would be to the tune of Rs.52,21,330.48/-. The total liability of the respondent including interest would be Rs.98,01,444.94/-.

16. The appeal is allowed and a decree for mesne profits of Rs.45,80,114.46/- along with interest thereon @ 9% per annum from 01st March, 2003 upto the date of its realisation is passed in favour of the appellants and against the respondent.

J.R. MIDHA (JUDGE) OCTOBER 19, 2015 dk