The New India Assurance Co. Ltd. vs M/S M. Gulab Singh & Sons P. Ltd.
2018 Latest Caselaw 605 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          RFA No. 67/2018

%                                     Reserved on: 22nd January, 2018
                                    Pronounced on: 25th January, 2018

THE NEW INDIA ASSURANCE CO. LTD.           ..... Appellant
                  Through: Mr. D.D. Singh and Ms. Seerat
                           Deep Singh, Advocates.
                           versus

M/s M. GULAB SINGH & SONS P. LTD.                        ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J

1. This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the defendant/tenant

impugning the judgment of the trial court dated 9.5.2017 by which the

trial court has decreed the suit for possession and mesne profits filed

by the respondent/plaintiff/landlord with respect to mesne profits. The

suit premises is an area of 11276 sq. ft. in the first floor (rear wing) of

the building known as Gulab Bhawan, 6, Bahadurshah Zafar Marg,

New Delhi. It may be noted that the appellant/defendant/tenant has

already vacated the suit premises on 30.6.2010 and the only issue

decided by the impugned judgment is the mesne profits which are

payable by the appellant/defendant to the respondent/plaintiff for the

period from 1.1.1999 to 30.6.2010.

2. With respect to the issue at hand of the mesne profits

payable by the appellant/defendant to the respondent/plaintiff, and

which is the subject matter of issue no.7, trial court has awarded

mesne profits at the following rate:-

"44. The result is that the plaintiff shall be entitled to damages/mesne profits-at the rate of Rs.26 per square foot per month for the year 1999 (from January 1999 to December 1999); at the rate of Rs.30 per square foot per month from January, 2000 to December, 2002; at the rate of Rs.35 per square foot per month from January 2003 to December 2005; at the rate of Rs.40 per square foot per month from January 2006 to December 2008; and at the rate of Rs.46 per square foot per month from January 2009 to June 2010 for the entire suit premises measuring 11276 square feet in area." (emphasis added)

3. The aforesaid rate of mesne profits for different periods

have been arrived at by the trial court by placing reliance upon the

lease deeds proved and exhibited by the respondent/plaintiff as

Ex.PW1/8 and Ex.PW1/9. Ex.PW1/8 is a lease deed dated 4.11.2005

with respect to the second floor, front block, of the very same building

and the rate of rent was Rs.35 per sq. ft. per month. The rent which

was payable in terms of the lease deed Ex.PW1/8 dated 4.11.2005 was

to be increased by 15% every three years. Ex.PW1/9 is the lease deed

dated 11.1.2006 for the fourth floor, front block, again of the very

same building, at rent of Rs.38 per sq. ft. per month. Since the period

in question is from 1.1.1999 to 30.6.2010, trial court has reduced the

figure of rent of Rs. 35 per sq. ft. as contained in Ex.PW1/8 dated

4.11.2005 and also fixed the rate of rent from 1.1.1999 by taking

agreed rate of rent of Rs.15 per sq. ft. per month payable under the

original lease entered into between the parties on 1.1.1993 and

increasing the agreed rate of rent of Rs.15 per sq. ft to Rs. 26 per sq.

ft. as on 1.1.1999. It may be noted that since the period in question for

determining mesne profits is the period from 1.1.1999 to 30.6.2010,

the lease deeds proved and exhibited by the respondent/plaintiff as

Ex.PW1/8 and Ex.PW1/9 are relevant because these lease deeds are

not only with respect to the very same premises but are with respect to

around 50% of the period for calculating the mesne profits viz from

the years 2005 to 2010.

4. As held by this Court on numerous occasions, some

amount of honest calculation and guess work is always in built in the

process of determining the mesne profits and courts are entitled on the

basis of evidence on record of the suit, and more particularly

documentary evidences, to arrive at honest and fair rate of rent which

is payable as mesne profits. Obviously, there cannot be too many

identical situations in almost overwhelming number of cases, and

therefore, calculation of mesne profits on the basis of rate of rent

payable by taking the rate of rent of the premises in question or rate of

rent of the premises in the same area or nearby areas always involves

an honest assessment by a civil court inasmuch as a civil court decides

an issue in the suit on the basis of preponderance of probabilities.

5. In view of the aforesaid discussion, I do not find any

illegality whatsoever in the impugned judgment of the trial court

determining the mesne profits payable for different periods from

1.1.1999 to 30.6.2010 from Rs. 26/- per sq. ft. to Rs. 46/- per sq. ft.

whereby effectively the rate of rent is fixed for the first period

commencing from January 1999 and thereafter increased at 15% every

three years. In fact, in my opinion, appellant/defendant is lucky

because it has been held by this Court in the case of M.C. Agrawal

HUF Vs. Sahara India and Ors. 183 (2011) DLT 105 that courts are

also empowered to grant mesne profits in the absence of any evidence

to the contrary by increasing the mesne profits payable compounding

the same and increasing it by 10% every year, whereas in the present

case enhancement is only granted at 15% every three years.

6. Learned counsel for the appellant/defendant sought to

argue that the appellant/defendant is in possession of the rear portion

of the building, and therefore, the trial court has committed an error in

relying upon the lease deeds Ex.PW1/8 and Ex.PW1/9 with respect to

the front block of the very same building, however, trial court has

rightly rejected this argument by observing that the leases are for

office purposes and really therefore it would not make much

difference whether the office is situated at the front portion of the

premises or at the back of the premises. Obviously, the trial court is

correct in so observing because the issue of the front portion would

arise with respect to any showroom on the ground floor especially in

the front, but an office which is used not as a showroom but for

administrative work of the appellant/defendant/tenant company will

result in the fact that it does not make too much difference of the

office premises being situated at the front or the back of the building.

7. Learned counsel for the appellant/defendant then argued

that the trial court has illegally granted compound rate of interest,

however this argument is misconceived because reference to the

discussion and the operative para of the impugned judgment shows

that what has been granted is only simple interest at 8% per annum

and not compound interest. This becomes clear from para 51 of the

impugned judgment and which para reads as under:-

"51. The plaintiff shall also be entitled to simple interest @ 8% per annum on the amount of damages/mesne profits payable for each month (after adjustment of the amount already paid) from the date of expiry of the month for which such damages/mesne profits were payable till the date of actual payment/realization."

8. In view of the above, I do not find any merit in the

appeal, and the same is therefore dismissed.

JANUARY 25, 2018                                VALMIKI J. MEHTA, J
godara/ib