Delhi High Court
The Karnataka Handloom ... vs M/S S.L. Associates Pvt. Ltd on 16 July, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 538/2018
% 16th July, 2018
THE KARNATAKA HANDLOOM DEVELOPMENT
CORPORATION LTD. ..... Appellant
Through: Mr. Hem C. Vashisht, Advocate
with Mr. Rahul Malik,
Advocate.
versus
M/S S.L. ASSOCIATES PVT. LTD. ..... Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
C.M. No.27511/2018 (exemption)
1. Exemption allowed subject to just exceptions.
C.M. stands disposed of.
C.M. No.27512/2018 (for condonation of delay)
2. For the reasons stated in the application delay of 140 days
in re-filing the appeal is condoned.
C.M. stands disposed of.
RFA No. 538/2018 and C.M. Nos.27510/2018 (stay) & 27528/2018
(under Order XX Rule 6 CPC)
3. By this Regular First Appeal under Section 96 of Code of
Civil Procedure, 1908 (CPC), the defendant in the suit, impugns the
judgment of the Trial Court dated 25.9.2017 by which trial court has
decreed the suit for mesne profits filed by the
respondent/plaintiff/landlord against the appellant/defendant/tenant. It
may be noted that the suit was for possession and mesne profits, and
that the possession of the suit premises is already received by the
respondent/plaintiff/landlord on 12.7.1996, in execution of the decree
for possession obtained by the respondent/plaintiff/landlord.
4. The facts of the case are that the predecessor-in-interest
of the respondent/plaintiff/landlord let out the suit property bearing no.
2707, Bank Street, Karol Bagh, New Delhi to the
appellant/defendant/tenant vide registered Lease Deed dated
7.11.1986. The suit premises comprised of 600 sq feet. The
registered lease was admittedly w.e.f 1.1.1986 and which expired on
31.10.1989. Since the appellant failed to vacate the suit premises
therefore a notice dated 7.10.1989 was sent asking the
appellant/defendant/tenant to vacate by 31.10.1989, and since the
appellant/defendant/tenant failed to do so, the subject suit was filed
after serving a legal notice dated 11.1.1990. It is not disputed on
behalf of the appellant/defendant/tenant that
appellant/defendant/tenant was inducted as a tenant pursuant to the
lease agreement dated 7.11.1986 at rent at Rs.15,000/- per month. It
was argued that there was an oral understanding that the lease would
be renewed after the expiry of three years, and therefore, the suit was
prayed to be dismissed.
5. As already stated above, this Court only has to decide the
aspect of mesne profits as possession has already been received by the
respondent/plaintiff/landlord on 12.7.1996. The period in question for
which mesne profits had to be determined by the trial court was from
1.11.1989 till 12.7.1996.
6. Trial court has held that since in terms of the lease deed
dated 7.11.1986(Ex.P15), the rent was to be increased by 10% every
three years, and taking that factum as a guide, and since rents have
otherwise increased, trial court hence granted 20% increase in the rent
after every three years i.e first enhancement was granted of 20% w.e.f
1.11.1989 and the second increase on 1.11.1992. The relevant
discussion in this regard by the trial court is contained in para 14 of
the impugned judgment and this para 14 reads as under:-
"14. The plaintiff has claimed mesne profits/damages for the
wrongful use and occupation of suit premises by the defendant.
Although in para 12 of the plaint, the plaintiff has stated that
the prevalent rate of rent is Rs.42/¬ per square feet per month
i.e. Rs.25,200/¬ per month, however, though the plaintiff has
examined PW2 to show that it was Rs.42/¬ sq. feet per month,
but the same remains only a verbal contention and is not
supported by any document.
In his testimony, PW1 has stated that the plaintiff had
issued letter dated 07.10.1989 which is Ex.P1 and another
letter dated 31.10.1989 terminating the lease deed and
thereafter, it also sent a legal notice dated 11.01.1990 which is
Ex.PW1/2, which all communication was regarding
non extension of the period of lease after expiry of initial
period of three years and the plaintiff has not demanded
damages in case of occupation of suit premises by the
defendant after expiry of initial period of three years.
The perusal of lease deed dated 07.11.1986 which is
Ex.P15 shows that the suit premises was let out to the
defendant at the rate of Rs.25/¬ per sq. feet and area of suit
premises is 600 sq. feet and hence, its monthly rent
was Rs.1500/¬.
Clause (3) of the said lease deed provides that this lease can be
renewed at the option of both the parties for a period of three
years only. Clause (4) provides that in case both the parties
agree to renew the lease after initial period of three years, the
rent shall be increased by 10%.
From the terms and conditions of lease deed Ex.P15,
it is clear that after expiry of initial period of three years, if the
period of lease was to be extended, it would have been with
consent of both the parties and could not have been a unilateral
act of one of the parties.
The plaintiff before expiry of initial period of three years had
shown its intention not to renew the lease of suit premises after
initial period of three years as evident from the letters Ex.P1,
Ex.P6 and legal notice Ex.PW1/2. Hence, it is clear that
the plaintiff was not interested to extend the period of
lease of suit premises and it is also clear that stay of the
defendant in the suit premises after agreed period of three
years was not consented by the plaintiff.
Although, the lease deed provides for enhancement in
rent by 10% in case the period of lease is extended,
but it was only with the consent of both the parties and as
already discussed, consent of the plaintiff is missing for
extension of the lease period after expiry of agreed period and
hence, in the given facts and circumstances and on the basis of
the material as placed on the record, in considered opinion of
the court, the plaintiff is entitled for damages/mesne profits
after expiry of initial agreed period i.e. w.e.f. 01.11.1989.
It would be pertinent to mention even at the cost of repetition
that the plaintiff has not led any direct or appropriate
evidence with respect to rate for mesne
profits/damages, however, in opinion of the court, if the stay of
the defendant in suit premises was with consent of
the plaintiff, then undoubtedly, the rent would have
been enhanced by 10% on the previously paid rent.
It may be mentioned that there can be a reason that the
plaintiff was not interested to extend the period of lease
and without taking consent of the plaintiff, the defendant
continued remaining in the suit premises and hence, in
the given facts and circumstances, the plaintiff is
certainly entitled to enhanced damages more than 10%
in the previously paid rent. Accordingly, in view of
the facts and circumstances of the case, the plaintiff is
entitled for damages/mesne profits with enhancement of 20%
on the previously paid rent which comes to Rs.30/- per sq. feet
per month (20% enhancement of Rs.25/¬ per sq. feet). Hence,
rate of damages/mesne profits comes to Rs.18,000/¬ per
month for a period of three years w.e.f. 01.11.1989 to
31.10.1992.
Further, similarly the plaintiff is also entitled to enhancement
of 20% on Rs.30/¬ per sq. feet per month for the period
beyond three extended years of initial three years, i.e. w.e.f.
01.11.1992 till the date of handing over the possession of the
suit premises to the plaintiff by the defendant, which comes to
Rs.36/- per sq. feet (20% of Rs.30/- per sq. feet).
Thus, the plaintiff is held entitled for damages of Rs.30/¬
per sq. feet per month for 600 sq. feet w.e.f.
01.11.1989 to 31.10.1992 and at the rate of Rs.36/¬ per sq. feet
per month for 600 sq. feet i.e. Rs.21,600/¬ per month w.e.f.
01.11.1992 to 30.04.1996 as in the month of May, 1996, PW1
in his cross-examination has admitted that the plaintiff
had sold the suit premises.
The defendant shall also be entitled for adjustment of
amount paid by it to the plaintiff during pendency of
the case.
Accordingly, in view of totality of facts and
circumstances of the case and on the basis of
material as placed on record, Issue No. 1 is decided
in favour of the plaintiff and against the defendant."
(underlining added)
7. In fact, in my opinion, the appellant/defendant/tenant is
lucky in having been granted increase of 20% after every three years
because it has been held by this Court in the judgment in the case of
M.C. Aggarwal vs. M/s Shahra India & Ors. 2011 (183) DLT 105
that unless evidence to the contrary is led, courts are justified in
drawing a presumption as to increase of rent, and for which ordinarily
a court can grant increase between 10% to 15% every year on a
cumulative basis. In the present case as against the
appellant/defendant/tenant the increase was only of 20% after three
years as stated above.
8(i) Learned counsel for the appellant/defendant/tenant
argued that although the witness of the appellant/defendant/tenant
failed to appear for complete cross-examination, however the
documents which were already exhibited in the affidavit by way of
evidence of the witness of the appellant/defendant/tenant, should be
looked into (witness was Sh. A.K. Gupta).
(ii) The law is well settled, and I need not elaborate on the
same, that evidence of a witness cannot be looked into unless the
witness is brought by the person who wants to lead his evidence for
his complete cross-examination. Once cross-examination is not
completed, then therefore it has to be held that there is no evidence led
on behalf of the appellant/defendant/tenant, and counsel for the
appellant/defendant/tenant is not correct in arguing that the documents
exhibited in support of the witness can be looked into although the
witness admittedly did not appear and his cross-examination was not
completed.
9. In view of the above, I do not find any merit in the
appeal. Dismissed.
JULY 16, 2018/Ne VALMIKI J. MEHTA, J
