M/S. Basant & Co. vs M/S. Osram India Pvt. Ltd.
2018 Latest Caselaw 1652 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         CS(OS) No.2362/1999

%                                                      12th March, 2018

M/S. BASANT & CO.                                          ..... Plaintiff
                          Through:       Mr. Shankar Vaidialingam,
                                         Advocate with Mr. Shivain
                                         Vaidialingam, Advocate.
                          versus
M/S. OSRAM INDIA PVT. LTD.                                ..... Defendant
                   Through:              Mr. Anil Kumar Airi, Senior
                                         Advocate with Mr. Dinesh
                                         Mathur, Advocate, Mr. R.S.
                                         Mathur,     Advocate,        Ms.
                                         Priyanka Bharti, Advocate and
                                         Ms. Sukanya Lal, Advocate and
                                         Ms.      Sadhana         Sharma,
                                         Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)

1.

Plaintiff M/s Basant & Company which is the sole

proprietorship of Sh. Basant Misra has filed this suit against the

defendant M/s Osram India Pvt. Ltd. for possession and mesne profits

with respect to the suit premises bearing no.1/95, Market Road, New

Delhi comprising of an area of 3630 sq. feet. The possession of the

suit property has since been delivered by the defendant to the plaintiff,

though there is no dispute as to whether possession is delivered on

10.2.2000 pursuant to the order dated 9.2.2000 passed by this Court or

the possession is deemed to have been given to the plaintiff by the

defendant in February, 1998. There is also no dispute that there was a

relationship of landlord and tenant between the parties.

2. In this suit, the following issues were framed on

20.11.2006:-

"1. Whether the plaintiff committed breach of the agreement dated 25th December, 1993 for provision of air conditioning unit and fixtures and fittings and if so, to what effect? OPD

2. Whether the defendant is not liable to pay any rent, A/c hire charges and charges for fixtures and fittings after 1st December, 1997 for the reasons as claimed in the written statement? OPD

3. Whether the plaintiff is entitled to recover from the defendant damages/mesne profits in respect of the suit premises and if so, to what rate and for what period? OPP

4. Whether the plaintiff is entitled to recover from the defendant, the amounts claimed at items 2-7 in Annexure B to the plaint? OPP

5. Whether the plaintiff is entitled to recover interest from the defendant on amounts which may be found due? If so, at what rate and for what period? OPP

6. Relief."

3. Counsels for the parties agree that this Court is called upon

to only decide issue nos.3 and 5 and which are being decided hereinafter.

4. The admitted facts of the case are that plaintiff is the

owner/landlord and the defendant is the tenant. Parties entered into

three agreements on 25.12.1993 first agreement is Ex.P1 being the

lease deed for the premises comprising an area of 3630 sq. ft. The

second agreement is the agreement dated 25.12.1993 Ex.P2 for

providing fixtures and fittings. The third agreement Ex.P3 executed

between the parties is an agreement of letting out of the air

conditioning equipments on hire by the plaintiff to the defendant.

Under the three agreements, the charges which were payable by the

defendant to the plaintiff were Rs.40,000/-, Rs.20,000/- and

Rs.15,000/- respectively i.e totaling to a sum of Rs.75,000/- per

month. It is also not in dispute that the lease period was for three

years commencing from 1.11.1993 to 31.10.1996. This Court has to

therefore decide the following aspects which are argued by the

counsels for the parties before this Court:-

(i) What is the period for which mesne profits are payable by the

defendant to the plaintiff i.e whether the mesne profits are payable from

1.11.1996 to February, 1998 as contended by the defendant or till

10.2.2000 as contended on behalf of the plaintiff?

(ii) What is the rate and amount of mesne profits which the

plaintiff has to be granted for the period as found by this Court to be

illegal occupation of the suit premises by the defendant?

5. On behalf of the plaintiff, it is argued that physical

possession of the suit property was delivered by the defendant to the

plaintiff only on 10.2.2000 and which is pursuant to the order of this

Court dated 9.2.2000 which reads as under:-

"I.A. 1420/2000 (S.151 CPC) in S. No.2362/99 It has been agreed by the learned counsel for the parties that the defendant will remove his goods from the suit premises tomorrow during 10 a.m. to 12 a.m. and hand over the keys to the plaintiff without prejudice to the rights and contentions of the parties in the suit.

Put up this application on 8th March, 2000."

6. On behalf of the defendant it is argued that in February

1998, the employees of the plaintiff physically prevented the

agents/employees/staff of the defendant from removing its

items/goods from the suit premises and therefore since the defendant

was physically prevented from handing over possession by removing

its goods therefore it should be held by this Court that plaintiff has

taken deemed possession from the defendant from 13.2.1998 when the

letter of this date Ex.P9 was written by the defendant to the plaintiff.

Learned senior counsel for the defendant has argued by placing

reliance upon the last para of internal page 5 of the letter of the

plaintiff to the defendant dated 20.2.1998/Ex.PW1/15 that the monthly

tenancy of the defendant did continue till 30.4.1998, and that if

damages have to be awarded against the defendant then the same have

to be only w.e.f 1.5.1998. Learned senior counsel for the defendant

has finally placed reliance upon the letter dated 12.5.1999/Ex.P12

written by the defendant to the police station at Mandir Marg, New

Delhi whereby the defendant had filed a complaint against the plaintiff

that the employees/staff etc of the defendant company have been

obstructed from ingress/egress to/from the suit premises and therefore

it should be held that defendant should be taken to have deemed to

have vacated the suit premises in May, 1999 on account of the

defendant being forcibly prevented from ingress and egress to the suit

premises.

7.(i) In response to the arguments of the defendant, the learned

counsel for the plaintiff has argued that the letter of the defendant

Ex.P9 dated 13.2.1998 was appropriately replied to by the plaintiff

vide his letter dated 20.2.1998/ Ex.PW1/15, and thereby clarifying that

there was no obstruction caused by the plaintiff to remove the goods

of the defendant from the suit premises and all that was required by

the staff of the plaintiff was that since the plaintiff had given valuable

fittings and AC equipments etc therefore the personnel of the

defendant were only asked to keep a proper list of the goods being

removed.

(ii) It is also argued by the counsel for the plaintiff by placing

reliance upon the letter of the defendant dated 9.3.1998/Ex.P10 that

the last para of this letter makes it clear that the defendant as in March,

1998 is admittedly in possession of the suit premises because the

defendant by this letter dated 9.3.1998 had revoked its letter dated

13.2.1998 by stating that the tenancy/possession of the defendant

continues.

8.(i) In my opinion it has to be held that there was no deemed

surrender of possession by the defendant either in February, 1998 or

even later and it has to be held that possession of the suit premises was

handed over by the defendant to the plaintiff only on 10.2.2000

pursuant to the order dated 9.2.2000 passed by this Court.

(ii) Reliance placed by the defendant upon its letter dated 13.2.1998

for arguing that it has to be held that the defendant is deemed to have

vacated possession in February, 1998 is a completely misconceived

and misplaced argument because handing over of possession is a

physical act or any other act showing the handing over of possession

of a tenanted premises by the tenant to the landlord including by

handing over of the keys of the tenanted premises. In this letter dated

13.2.1998 I do not find any language talking of handing over of the

keys or possession being handed to the plaintiff in some other manner

and all that is stated in this letter is that physical possession can be

taken by the plaintiff after seeking prior appointment with the

defendant. Therefore the last part of this letter makes it clear that

physical possession remained with the defendant and that possession

was not handed over to the plaintiff. The only issue therefore which

has to be examined is that whether the plaintiff physically prevented

the defendant from removing the goods of the defendant from the suit

premises and that such stopping of removal of goods should be taken

as equivalent to surrendering of possession by the tenant to the

landlord.

9. I would like to note that on behalf of the defendant

reliance was also placed upon cross-examination of the plaintiff/PW-1

conducted on 31.7.2013 in which answers were given, that plaintiff

had stated that he had never written any letter asking for vacant

possession of the property from November 1996 to January 1998; and

that the plaintiff admitted that the defendant had taken another

property on lease in November, 1997; and finally that the plaintiff was

mentioning the telephone numbers which the defendant was allowed

to use on the letter of the plaintiff dated 20.2.1998/Ex.PW1/15, and

that for all the aforesaid reasons, the defendant should be taken to

have handed over possession in February, 1998.

10. In my opinion, any doubt with respect to the defendant

continuing in possession from 1.11.1996, and not having vacated in

February, 1998 as claimed by the defendant, is removed once we refer

to the letter of the defendant itself dated 9.3.1998/Ex.P10. In the last

para of this letter at internal page 3 it is specifically written by the

defendant that on account of what is stated in this letter Ex.P10 the

defendant's earlier request for refund of security and taking over of

vacant possession stands revoked. Obviously this would not have been

so written by the defendant if the defendant was not continuing in

physical possession of the suit premises as on 9.3.1998. Also, in my

opinion, the plaintiff was well justified in questioning removal of

goods from the suit premises because the plaintiff had in some way

interest with respect to the goods being removed because the plaintiff

besides the main lease agreement Ex.P1 had also supplied to the

defendant fixtures and fittings as per agreement Ex.P2 and AC

equipments as per agreement Ex.P3. Of course plaintiff cannot be

completely justified in objecting to removal of goods, but once there

was some reasonable basis to question the removing of goods by the

staff of the defendant, this act of plaintiff of questioning removal of

goods by itself cannot be held to be an act of the defendant of having

surrendered possession of the tenanted premises to a landlord, and this

is all the more so because of what is stated by the defendant itself in

the last para of its letter dated 9.3.1998/Ex.P10, as discussed above. I

therefore hold that contention of the defendant of possession of the

tenanted premises having been handed over to the plaintiff in

February, 1998 is clearly a false and a dishonest stand.

11.(i) Learned senior counsel for the defendant sought to place

reliance upon the cross-examination of the plaintiff conducted on

31.7.2013 at internal page 3 to argue that plaintiff has admitted that he

cannot produce bills for purchase of AC plant mentioned in Ex.P3 or

for installation of AC or for fittings and fixtures providing and

therefore there cannot be paid charges with respect to the AC and

fixtures and fittings which are not supplied.

(ii) Once again it is obvious that that defendant wants to resort to

downright falsehood to deny the valid charges which the plaintiff had

claimed on the basis of admitted agreements Ex.P1 to Ex.P3. In law

once a written agreement between the parties is admitted and/or

proved, then Sections 91 and 92 of the Indian Evidence Act, 1872 bars

any oral evidence being led to contradict the terms of the documents.

Ex.P2 and Ex.P3 are the written agreements with respect to fixtures,

fittings and supply of AC by the plaintiff to the defendant, and these

are admitted documents, and therefore I fail to understand as to how

the defendant can contend on account by referring to oral evidence

(and that too in the cross-examination of plaintiff) that the agreements

Ex.P2 and Ex.P3 did not contain the correct facts. Defendant is

therefore legally barred from contending that the agreements Ex.P2

and Ex.P3 are not valid as regards the facts stated therein.

12. Reliance placed by the defendant on complaint to the

police dated 12.5.1999/Ex.P12 of possession being handed over to

plaintiff is neither here nor there because this letter Ex.P12 does not

show that defendant had handed over physical possession of the

tenanted premises to the plaintiff and which is to be taken with the fact

that all that is written in this police complaint is that the defendant

complained that it has suffered loss on account of its employees being

obstructed by the plaintiff and his henchmen from ingress and egress

to the suit premises. In fact last line of para 1 of this letter dated

12.5.1999/Ex.P12 admits in so many clear terms that defendant

company is in occupation of the suit premises as on 12.5.1999. I

therefore reject any argument placed by the defendant upon this letter

Ex.P12 to contend that the defendant was not in possession because in

fact defendant admits by this letter/complaint to be in possession of

the suit premises on 12.5.1999.

13. It is therefore seen that there is no evidence whatsoever

led by the defendant of the defendant handing over of the physical

possession of the tenanted premises to the plaintiff. At best there was

an issue of plaintiff seeking to interfere in the removal of goods by the

employees of the defendant, but interference in removal of the goods

by the employees of the defendant cannot be equated in the facts of

the present case for holding that the defendant had surrendered

possession of the tenanted premises to the plaintiff/landlord in

February, 1998. Any doubt in this regard is cleared and removed from

the last para of the defendant's own letter dated 9.3.1998 that

defendant had revoked all that was stated by in its earlier letter dated

13.2.1998 and consequently the defendant was continuing in

possession as further indubitably reiterated in terms of the last line of

para 1 of the defendant's own letter dated 12.5.1999/Ex.P12 to the

plaintiff.

14.(i) At this stage I would like to consider and deal with

another argument raised on behalf of the defendant that defendant

should be taken as a tenant by holding over till 30.4.1998 in view of

the alleged admission of the plaintiff in last para at internal page 5 of

the plaintiff's letter dated 20.2.1998/Ex.PW1/15 to the defendant. For

the sake of convenience this para which is relied upon reads as under:-

"........Kindly take notice that by way of abundant caution, although your tenancy expired and terminated by efflux of time on Oct 31st 1996, since you are still illegally occupying the premises, your monthly tenancy if any (though not admitted) shall stand terminated at midnight of April 30th 1998. I am stipulating a longer notice period as a gesture of courtesy. If according to you, your tenancy month expires on any other day, then the same shall stand terminated on such day next occurring fifteen days after receipt of this notice by you. Till you vacate and hand over the peaceful and vacant physical possession of the premises and the items hired, you shall continue to be liable to pay damages for the use and occupation of the same at the present rate of.........." (underlining added)

(ii) In my opinion the argument raised by the defendant in this

regard is completely misconceived because by this para the plaintiff

clearly has stated that the tenancy had already expired by efflux of

time on 31.10.1996 and that monthly tenancy was "if any (though not

admitted)". The plaintiff was therefore only acting as a matter of

abundant caution by seeking termination of monthly tenancy of the

defendant with effect from 30.4.1998, but by such acting in abundant

caution will not change the factual position of the lease not continuing

on account of original lease period having expired on 30.10.1996 and

thereafter there being no written agreement between the parties for any

specific further period of lease, much less by a registered document.

Also it is an undisputed fact that defendant did not pay any charges

whatsoever towards monthly rent from 1.11.1996 to the plaintiff and

the defendant only deposited charges of use and occupation pursuant

to the order dated 30.9.2005 passed by this Court in I.A. No.

11222/1999 filed by the plaintiff. By this order without prejudice to

the respective contentions the defendant was directed to pay arrears of

rent/use and occupation charges at Rs.75,000/- per month from

1.11.1996 to 8.2.2000 after adjusting security deposit of Rs.3,50,000/-

with the plaintiff in terms of the agreements Ex.P-1 to Ex.P-3 dated

25.12.1993. Therefore, I fail to understand how does it lie in the

mouth of defendant to claim continuation of tenancy after 1.11.1996

when even the first basic obligation of a tenant of payment of rent has

not been complied with and in fact admittedly there is not even any

tender of rent by the defendant to the plaintiff from 1.11.1996.

Clearly, therefore, the argument of the defendant has no legs to stand

upon that the defendant continued as a monthly tenant from 1.11.1996

to 30.4.1998, and which argument is therefore rejected.

15. Sequitur of the aforesaid discussion is that it is held that

the defendant has handed over possession of the suit premises to the

plaintiff only on 10.2.2000 and that defendant is liable to pay mesne

profits to the plaintiff from 1.11.1996 to 10.2.2000.

16. Now comes the question as to what should be the rate of

mesne profits which should be paid by the defendant to the plaintiff

for the further period from 1.11.1996 to 10.2.2000. Admittedly, the

plaintiff has led no documentary evidence with respect to rents of

similar premises in around the same area. Though counsel for the

plaintiff is justified in arguing that the suit premises are the lone

premises in the area which otherwise has no residential premises, and

therefore the plaintiff could not prove the rate of rent, however this

aspect would not discharge the plaintiff from showing the rate of rent

in nearby areas of a similar or same premises, and which the plaintiff

has failed to do.

17. Learned senior counsel for the defendant has argued by

placing reliance upon the letter dated 7.3.1995/Ex.P-7 of the plaintiff

to the defendant, sub-para (c) of this letter, that plaintiff had stated that

rent of the area of the tenanted premises plus another area of about

1000 sq. feet was to be let out to defendant with effect from 1.11.1996

at Rs.75,000/- per month and therefore it should be held that as on

1.11.1996 there was no increase from 1.11.1996 when it was

Rs.75,000/- per month. However this argument of the defendant is

misconceived because sub-para (d) of this letter Ex.P-7 talks of the

plaintiff being paid an additional security deposit of Rs.3,50,000/- if

the fresh lease period of 18 months was agreed upon, and which

payment would have therefore covered some increase in rent on

account of plaintiff getting benefit of interest free security deposit of

Rs.3,50,000/-, but admittedly the terms as mentioned in the letter

Ex.P-7 of a fresh lease of 18 months till 30.4.1998 did not become a

reality, and therefore the terms of this document will not help the

defendant to contend that as on 1.11.1996 the rent would still be only

Rs.75,000/- per month.

18. In view of the aforesaid facts of no evidence of rents in

the area etc being led by the plaintiff it has to be decided what should

be the mesne profits which should be awarded in favour of the plaintiff

and against the defendant for the period from 1.11.1996 to 10.2.2000.

In this regard, the observations made by this Court in the case of M/s

M.C. Agarwal HUF Vs. M/s. Sahara India and Ors. 183 (2011) DLT

105 will become relevant and these observations lay down that courts

can take judicial notice of increase of rent and depending on the

locality, Courts can grant, subject to any other evidence to the

contrary, a 15% cumulative increase every year. Para 8 of this

judgment reads as under:-

"8. What is now therefore to be determined is that what should be the mesne profits which should be awarded to the landlord in the absence of any evidence having been led by the landlord with respect to the rents prevalent in the area. Though it has not been argued on behalf of the landlord, I would like to give benefit to landlord of various precedents of this Court and the Supreme Court which take judicial notice of increase of rent in the urban areas by applying the provisions of Sections 114 and 57 of the Evidence Act, 1872. In my opinion, considering that the premises are situated in one of the most centrally located commercial localities of

Delhi, situated in Connaught Place, an increase of 15% every year should be awarded (and nothing has otherwise been shown to me for the increase to be lesser) during the period for which the tenants have over stayed in the tenanted premises. Putting it differently, for the first year of illegal occupation, the tenant will pay 15% increased rent over the contractual rent. For the second year of illegal occupation, 15% increase will be over the original contractual rent plus the additional 15%. It will be accordingly for all subsequent years of the illegal occupation till the premises were vacated on 3.4.2005. I rely upon and refer to a Division Bench judgment of this Court in the case of S. Kumar Vs. G.R. Kathpalia 1999 RLR 114, and in which case the Division Bench has given benefit to the landlord and has taken judicial notice of increase in rent, and has accordingly allowed mesne profits at a rate higher than the contractual rate of rent."

19.(i) In the present case, the premises in question are situated

in a very posh locality of Delhi i.e NDMC area. The suit premises are

very near to Gol Dakkhana main Post Office and St. Columbus

School, as is stated on behalf of the plaintiff before this Court. The

NDMC area is the best area of this city, and surely therefore there

would be no illegality in granting to the plaintiff 15% cumulative

increase every year, inasmuch as there is no evidence to the contrary

led on behalf of the defendant that rent has not increased for the period

in question for which mesne profits has to be paid. I may state that

there would be no issue of any equities in favour of the defendant for

not awarding 15% increase every year, inasmuch as a recalcitrant

tenant who obdurately refuses to vacate must be appropriately

proceeded against.

(ii) Accordingly in the facts of the present case by applying the

ratio of the judgment in the case of M/s M.C. Agarwal HUF (supra)

the plaintiff will be granted increase of 15% cumulative every year

from the rate of Rs.75,000/- per month. To clarify it is stated that rent

would stand increased every year by 15% cumulative on 1.11.1996,

1.11.1997, 1.11.1998 and 1.11.1999. The decree sheet with respect to

mesne profits however will be drawn up on the plaintiff making

payment of additional court fees.

20.(i) That takes us to the issue of rate of interest to be awarded

with respect to mesne profits payable by the defendant to the plaintiff

and which is subject matter of issue no. 5. Related to this issue will

also be the period for which rate of interest has to be awarded.

(ii) In law, interest is awarded on account of denial of user of

principal amount to the person who is entitled to the principal amount

vide South Eastern Coalfileds Ltd. Vs. State of M.P. and Others

(2003) 8 SCC 648. Also Section 2(12) CPC which defines mesne

profits states that interest is payable on mesne profits. Interest

therefore it is held would be payable from the end of each month for

which mesne profits would be payable in terms of the present

judgment. For example, for the month of November, 1996 interest

will be calculated in favour of the plaintiff and against the defendant

from 1.12.1996 and so on and till date of payment or the deposit by

the defendant of the amount in this Court in terms of the order dated

30.9.2005 passed by a Learned Single Judge.

(iii) As regards what should be the rate of interest, in my opinion in

the facts of the present case interest at 12% per annum in favour of the

plaintiff and against the defendant will meet the ends of justice

because if the plaintiff had to take loan from a bank in this relevant

period plaintiff would have to pay interest at least at 12% per annum.

Plaintiff, therefore, is awarded interest at 12% per annum simple, and

with respect to the period which is already stated above.

RELIEF

21. Suit of the plaintiff is therefore decreed against the

defendant by directing the defendant to pay mesne profits from

1.11.1996 to 10.2.2000. Rate of mesne profits would be a sum of

Rs.75,000/- plus 15% as on 1.11.1996, with further increases of 15%

cumulative thereafter on 1.11.1997, 1.11.1998 and 1.11.1999.

Plaintiff will also be entitled to interest against the defendant at 12%

per annum simple from the end of the month for which mesne profits

are payable till the amount is paid to the plaintiff or till the amount is

deposited by the defendant in this Court pursuant to the order dated

30.9.2005. Defendant will be entitled to adjustment with respect to

any amount which the defendant has deposited in this Court and

plaintiff will have to give adjustment as on 1.11.1996 by reducing its

claim by a sum of Rs.3,50,000/- on account of this amount which the

plaintiff has as a security deposit from the defendant. Plaintiff will

also be entitled to costs of the suit. Decree sheet be prepared.

22. In case any security bond or any title papers have been

submitted by the plaintiff for withdrawing of the amount deposited in

this Court by the defendant pursuant to the order dated 12.9.2006 in

FAO (OS) No.416/2005 upholding the order of the Learned Single

Judge of this Court dated 30.9.2005, the same will stand discharged

and be released to the plaintiff.

MARCH 12, 2018                                VALMIKI J. MEHTA, J
Ne/ak