Delhi District Court
Shri Mahabir Prasad Jindal vs Algoquant Financials Llp on 9 December, 2023
IN THE COURT OF SHRI NEERAJ SHARMA,
ADDITIONAL DISTRICT JUDGE-04 (CENTRAL)
TIS HAZARI COURTS: DELHI
RCA DJ NO. 73/23
CNR NO. DLCT01-007433-2023
1) Shri Mahabir Prasad Jindal
S/o Sh. Shiv Ram Jindal
R/o Jindal Niwas, Delhi Road,
Model Town, Hisar, Haryana.
2) Shri Ravinder Kumar Jindal
S/o Sh. Shiv Ram Jindal
R/o Jindal Niwas, Delhi Road,
Model Town, Hisar , Haryana.
3) M/S Ravindra Tubes Limited
(now Ravindra Tubes Pvt. Ltd.)
B-4/21, Asaf Ali Road,
New Delhi- 110002. .....Appellants
VERSUS
M/S. ALGOQUANT FINANCIALS LLP
Having its Office At - Second Floor,
4/11, Asaf Ali Road,
New Delhi 110002.
Through Mr. Devansh Gupta, Partner ......Respondent
Date of institution : 29.05.2023
Order Reserved On : 21.10.2023
Date of Judgment: : 09.12.2023
Decision : Appeal Dismissed
Appeal under section 96 CPC against judgment and decree
dated 20.04.2023 passed by Ms. Neha Garg, Ld CJ-01,
(Central) Tis Hazari Courts, Delhi in civil suit
no.593707/2016 titled as "Algoquant Financials LLP Vs.
Shri Mahabir Prasad Jindal & Ors, wherein the plaint of
the plaintiff/respondent has been decreed against the
defendants/appellants".
RCA DJ NO. 73/23
(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 1 of 55)
ORDER
1. The present appeal has been preferred by the appellants/defendants against the judgment and decree dated 20.04.2023 (hereinafter referred to as the "impugned judgment") passed by the Ld. Civil Judge-01, Central District, Tis Hazari Courts, Delhi (hereinafter referred to as "trial court"), in a suit titled as "Algoquant Financials LLP Vs. Shri Mahabir Prasad Jindal & Ors., bearing suit no. 593707/2016"
(hereinafter referred to as the "suit").
2. At the outset it is noticed, that initially the present suit was filed Sh. Swapan Banerjee, Sh. Supriya Banerjee, Sh. Saurav Banerjee and Sh. Sujoy Banerjee (hereinafter referred to as the "original plaintiffs") against Shri Mahabir Prasad Jindal, Shri Ravinder Kumar Jindal and Ravinder Tubes Limited (hereinafter referred to as the "appellants/defendants") for recovery of possession, recovery of arrears of rent and mesne profits/damages with respect to the property bearing No. B- 4/21-22, situated at Ajmeri Gate Scheme, Asaf Ali Road, New Delhi comprising of two 'L' shaped halls (one at the front and one at the rear side of the building), two WCs and half courtyard and half front Verandah with common use of two front and rear stairs and the common passages which are stated to be used only as passage and kept free from any obstruction measuring about 2655 sq. ft. fully described in red colour in the site plan annexed with the plaint is now exhibited as Ex. PW1/1 (hereinafter referred to as the 'suit property'). However, during the pendency of the suit before the trial court, the present RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 2 of 55) respondent/plaintiff i.e. ALGOQUANT FINANCIALS LLP ( hereinafter referred to as the "respondent/plaintiff") came to be substituted in place of original plaintiffs vide order dated 07.09.2022 on the ground that the suit property has been purchased by the respondent/plaintiff and as such the present suit came to be decreed in favour of the respondent/plaintiff and against the appellants/defendants.
3. As per plaint, the case of the original plaintiffs was as under :-
i. That one Sh. Soami Nath Banerjee was owner of the building known as "Banerjee Buildings", bearing No. B-4/21 and 4/22, Ajmeri Gate Scheme, Asaf Ali Road, New Delhi and he died on 08.02.1987 leaving behind his last Will and Testament dated 28.09.1985, which was probated by the Hon'ble High Court of Delhi.
ii. By virtue of the said Will, Sh. Swapan Banerjee, Sh. Supriya Banerjee, Sh. Saurav Banerjee and Sh. Sujoy Banerjee (original plaintiffs) became owners and landlords of the aforesaid suit property.
iii. Vide a registered Lease Deed dated 23.07.1980, Late Sh. Soaminath Banerjee had inducted appellant no. 1 and 2 /defendant No.1 and 2 as tenants in the suit property and duration of the aforesaid lease deed was for a period of five years only starting from 23.07.1980 and the said lease deed had expired on 23.07.1985 and no renewal was made thereafter. Thus, the tenancy of appellants/defendants came to an end by efflux of time under Section 111 of Transfer of Property Act and the appellants/defendants became contractual tenant under late RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 3 of 55) Shri Soaminath Banerjee.
iv. That appellant no.3/defendant No.3 is in occupation of the suit property in which the appellant no.1 &2/defendant No.1 and 2 are the directors.
v. On the death of Shri Soaminath Banerjee on 08.02.1987, the appellants/defendants became tenants under the original plaintiffs and the appellants/defendants duly attorned them as their landlords and owners of the suit property. vi. That the original plaintiffs served first legal notice dated 11.01.1989 upon the appellants/defendants under Section 6A of The Delhi Rent Control Act for enhancing the rent by 10% i.e. Rs. 2,800/- plus Rs. 280/- i.e. Rs. 3080/- w.e.f. 01.03.1989.The rent stood enhanced from Rs. 2800/- per month to Rs.3080/- per month w.e.f. 01.03.1989, but the appellants/defendants failed to pay the enhanced rent and consequently original plaintiffs filed a suit for recovery of Rs. 12,970/- against the appellants/defendants bearing Suit No. 200/91 titled as 'Swapan Banerjee & Ors. vs. Shri Mahabir Prasad Jindal and Ors'. The said suit was decreed by the Court of Sh. N.P. Kaushik, the then Ld. Civil Judge, Delhi for Rs. 8680/- at the monthly rent of Rs. 3080/- along with interest @ 18% per annum from 30.09.1991, till realization besides Rs. 250/- as notice charges and Rs. 2221/- as costs of the suit.
vii. The appellants/defendants preferred no appeal against the said judgment and decree and hence the said judgment and decree became final and binding upon the appellants/defendants.
viii. Thereafter, original plaintiffs served second legal notice dated 06.02.1992 upon the appellants/defendants for further RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 4 of 55) enhancement of the rent from Rs. 3080/- plus Rs. 280 (10% of the agreed rent of Rs. 2800/-) thereby the monthly rent stood enhanced to Rs.3360/- per month. The appellants/defendants sent their reply dated 13.02.1992 to the said notice dated 06.02.1992.
ix. Thereafter, the original plaintiffs filed an eviction petition against the appellants/defendants under Section 14(1) (a) (b) (c)
(j) of the Delhi Rent Control Act on 31.01.1992 being case No. 30/92 titled as 'Swapan Banerjee & Ors. vs. Shri Mahabir Prasad Jindal & Ors'. By order dated 08.02.1995, the Court of Sh. R.S.Khanna, the then Addl. Rent Controller, Delhi directed the appellants/defendants to pay the arrears of rent from 01.03.1989 onwards @ Rs. 3,080/- within one month from the date of passing the order and the case was fixed for 18.09.1995 for the evidence of the original plaintiffs.
x. During the pendency of the said eviction case, the original plaintiffs served the third legal notice dated 21.02.1995 upon the appellants/defendants for further increase in rent by 10% of the agreed rent i.e., Rs. 3,360/- plus Rs. 280/- and monthly rent stood enhanced from Rs. 3360/- per month to Rs. 3,640/- per month. Consequent, there on , the jurisdiction of the Rent Controller, Delhi got ousted when the rent exceeded Rs. 3500/- per month. The above case No. 30/92 was adjourned from time to time and was finally fixed for 09.05.1997 in the Court of Ld. Addl. Rent Controller, Delhi in which counsel of both the parties were present and the defendant's counsel Shri R.K. Dhawan had clearly admitted that the appellants/defendants have been duly served with the legal notice dated 21.02.1995 served on behalf of the original RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 5 of 55) plaintiffs and the rent was enhanced to Rs.3,640/-. xi. Thus as the rent was increased to Rs. 3,640/- per month and the appellants/defendants lost protection of the Delhi Rent Control Act. The tenancy of the appellants/ defendants start from 23rd day of English calendar month and ends on the mid night of 22nd day of the following month according to English calendar month.
xii. The appellants/defendants are in arrears of rent from 01.06.1997 to 22.11.1999 i.e., two years five months and two days at Rs. 3640/- per month amounting to Rs. 1,08,230/-. The appellants/defendants deposited arrears of rent in the Court of Ld. Addl. Rent Controller, Delhi at Rs. 3,080/- per month instead of Rs.3,640/- per month.
xiii. Original plaintiffs served final legal notice dated 14.10.1999 upon the appellants/defendants terminating the tenancy of the defendant Nos.1. and 2 in respect of the suit property. Appellant no.3/defendant no. 3 was also served with the said legal notice dated 14.10.1999. Appellants/Defendants have duly received the said notice and they have sent their reply dated 12.11.1999.
xiv. In terms of registered lease deed dated 23.07.1980 vide clause No. 13, the appellant/defendant No.1 and 2 are under legal obligations to deposit the payment of electricity, power and water charges etc. with the concerned authorities for the meters under their use.
xv. The original plaintiffs understand that there is a huge outstanding amount of electricity dues for K. No. 2782359 and K. No. 278231. It is further stated that now there is no lease in respect of the suit property in force between the parties. The RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 6 of 55) monthly tenancy of the appellants/defendants also stood terminated by a valid notice dated 14.10.1999 from the mid night of 22.11.1999.
xvi. The original plaintiffs have become entitled to receive vacant and peaceful possession of the suit property. The original plaintiffs claim damages @ Rs. 50,000/- per month from the appellants/defendants for the period from 23.11.1999 to 10.12.1999 @ Rs. 50,000/- amounting to Rs. 30,000/-. The original plaintiffs also claim future damages at the rate of Rs. 60,000/- per month which is the prevailing market rate, till the disposal of the present suit. The original plaintiffs claim a sum of Rs. 1,47,386/- from the appellants/defendants as per details given below:-
Arrears of rent from 01.06.1997 to 22.11.1999 @ Rs. 3,640/- (29 months and twenty-two days as claimed in para no. 14 of Rs.1,08,230/-
the plaint.
Add: Difference in rate of rent Rs. 3,640/-
minus Rs. 3080/- = Rs. 560/- less
received from 01.09.1996 to 31.05.1997
(nine months) as claimed in para no. 14
of the plaint. Rs.5,040/-
__________
Rs. 1,13,270/-
Interest on the above
amounts @ 18% per annum
from the date of receipt of
the notice dated 14.10.1999
(duly received by defendants
on 18.10.1999) till the filing
of the present suit from 18.10.1999
to10.12.1999 i.e 54 days Rs.3016
Damages for use and
RCA DJ NO. 73/23
(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 7 of 55)
occupation from
23.11.1999 to 10.12.1999
i.e., till the date of filing
the present suit at
Rs. 50,000/- per month. Rs.30,000/-
Notice charges Rs. 1,100/-
___________
Rs. 1,47,386/-
xvii. The original plaintiffs are also entitled to recover interest on the above amount @ 18% per annum from the date of service of the final legal notice. The appellants/ defendants have no legal right to retain the suit property for an indefinite period as the contractual tenancy has already stood terminated by the original plaintiffs.
4. The appellants/defendants filed a joint written statement before the Ld. Trial Court wherein they defended the suit on the following grounds:
i. That the trial court has no jurisdiction to entertain, try and adjudicate the suit in view of the fact that the agreed rent of the property is Rs. 3,080/- per month.
ii. The suit is not maintainable as no cause of action has arisen in favour of original plaintiffs and against the appellants/defendants.
iii. The present suit is bad on account of non-joinder of necessary party and also bad on account of joinder of different causes of action. Original plaintiffs have not made M/s Hisar Metal Industries Ltd., a party to the present suit who is in possession of let out property in accordance with the terms of lease deed executed in the year 1980.
iv. That in accordance with clause 7 of the lease deed RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 8 of 55) executed between the parties, the defendants No.1 and 2 have right to use the suit property by two companies named in the lease deed and also to a limit of four more registered companies in which either of the appellant no.1 &2/defendant no. !&2 is one of is a director or directly connected with these companies. v. That original plaintiffs have not come to court with clean hands and have concealed the material facts from this court. Original plaintiffs have an ulterior motive to get the property vacated even by alleging those facts which are wrong even to the knowledge of the original plaintiffs. vi. That the lease of the suit property has been renewed from time to time and by virtue of holding over, the appellants/defendants are entitled to use and occupation of suit property and which has been assented by Sh. Soami Nath Banerjee and the original plaintiffs. vii. The agreed rate of rent was previously Rs. 2,800/- per month.
viii. The notice sent by Sh. R.B. Mathur on behalf of original plaintiffs was illegal and the appellants/defendants accordingly called upon the original plaintiffs to withdraw the said notice and desist from proceeding further in matter vide reply dated 13.2.92.
ix. At no time the appellants agreed and paid the rent of Rs. 3,360/- per month and therefore question of any further enhancement by the plaintiffs does not arise.
x. The rent of property is Rs. 3,080/- per month only. The last rent paid was only Rs. 3,080/- and therefore question of admission of increased rent to Rs. 3,640/- by the appellants/defendants does not arise.
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 9 of 55) xi. That vide letter dated 09.08.1997, original plaintiffs were apprised that the rent of the leased property is only Rs. 3,080/- per month, which is well within the knowledge of the original plaintiffs. After dismissal of petition, rent of Rs. 3,080/- has been given to the original plaintiffs, which were refusing to accept the agreed rent of Rs. 3,080/- per month therefore the rent had been sent by cash orders to the original plaintiffs by the appellants/defendants.
xii. Appellants/defendants have tendered and are willing to pay the agreed rent of Rs. 3,080/- per month but the original plaintiffs are refusing the accept the same.
xiii. Original plaintiffs were duly apprised about the illegal demand notice dated 07.08.1999 served through M/s S.R. Yadav and company. The said notice was duly replied on 30.08.1999 and the original plaintiffs were apprised that the appellants/defendants were neither the defaulters in payment of water or electricity charges. Original plaintiffs were also apprised of the fact that the appellants/defendants have not deposited any rent in the Court of Addl. Rent Controller, Delhi and the appellants/defendants have paid agreed rent of Rs. 3,080/- per month which fact had been admitted by original plaintiffs in notice dated 07.08.1999 and has also been clarified specifically in reply dated 30.08.99.
xiv. That original plaintiffs' notice and demands are illegal and they are not entitled to claim any damages from the appellants/defendants. The appellants/defendants are occupying the suit property as tenants on monthly rent of Rs. 3,080/- only. Appellants/defendants are lawfully occupying the suit property and are making payment of agreed rate of rent i.e., Rs. 3,080/-
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 10 of 55) per month to the originals plaintiffs.
xv. The suit of the plaintiffs is without any cause of action and is liable to be dismissed under Order VII Rule 11 of CPC. xvi. This Court has no jurisdiction to try and adjudicate the present matter.
5. Replication on behalf of the original plaintiffs was filed to the written statement filed on behalf of appellants/defendants, wherein all the averments made in the plaint were reaffirmed and contents of written statement filed on behalf of appellants/defendants were denied.
6. From the pleadings of the parties, following issues were framed by the Ld. Trial court on 18.02.2002, which are as under:-
1. Whether the rate of rent is Rs. 3640/- per month or Rs. 3080/- per month? OP Parties
2. Whether the plaintiff is entitled to relief of possession as claimed in the plaint? OPP
3. Whether the plaintiff is entitled to damages at the rate of 50,000/-per month or at what rate/for what period? OPP
4. Relief.
7. In support of their case, original plaintiffs have examined PW1 Sh. Sorabh Banerjee and PW2 Sh. Ajay Saxena and appellants/defendants in support of their case examined DW1 Sh. J.C.Jain and DW2 Shri Thomas Cherian.
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 11 of 55)
8. That vide an order dated 07.09.2022 application under order 22 Rule 4 CPC and order 1 Rule 10 CPC (treated as an application under order 22 Rule 10 CPC) of the M/s ALGOQUANT FINANCIALS LLP (Applicant)was allowed by the Ld Trial Court as it has purchased the suit property from the plaintiffs vide registered Sale Deed dated 21.02.2022 and amended memo of parties was taken on record. Accordingly the suit was allowed to be continued by M/s ALGOQUANT FINANCIALS LLP as plaintiff in place of Sh. Swapan Banerjee, Sh. Supriya Banerjee, Sh. Saurav Banerjee and Sh.Sujoy Banerjee.
9. That vide an order dated 27.02.2023, Ld Trial Court framed the additional issues as under:
Issue No.4: Whether plaintiff is entitled to decree of recovery of arrears of rent, as prayed for? OPP Issue No.5: Whether the present suit is bad for non-joinder of necessary party i.e. M/s Hisar Metal Industries Ltd? OPD
10. After framing of additional issues no evidence was led by either of the party.
11. Vide impugned judgment and decree dated 20.04.2023, ld. trial court decreed the suit and the operative part of same reads as under:
"In light of foregoing discussion and findings on the aforesaid issues, the present suit is decreed in favour of plaintiff and against the defendants in the following terms:-
(a) A decree of possession in respect of the left side half of the entire first floor of the property known as "Banerjee RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 12 of 55) Buildings" No.B-4/21 and 22, Asaf Ali Road, New Delhi situated at main Asaf Ali Road, New Delhi comprising of two 'L' shaped halls (one at the front and one at the rear side of the building), two WCs and half courtyard and half front verandah with common use of two front and rear stairs measuring about 2655 sq. ft. as shown in Red colour in the site plan Ex.PW1/1 is passed in favour of plaintiff and against the defendants.
(b) A decree of recovery of arrears of rent at the rate Rs.
560/- per month from 01.06.1997 till 22.11.1999 is passed in favour of plaintiff and against the defendants.
(c) A decree of recovery of mesne profits/damages for unauthorized use and possession of the suit property is passed in favour of the plaintiff and against the defendants @ 15% compounded increase every year from the rate of rent which was due and payable on 22.11.1999 i.e., Rs.43,680/- p.a. (Rs.3,640/-p.m.) from 23.11.1999 till the time the possession of the suit property is handed over by the defendants to the plaintiff.
Plaintiff is entitled to the aforesaid amount after adjustment of Rs. 3,080/- per month already paid by the defendants till February 2022 Costs of the suit are awarded in favour of plaintiff to be paid by the defendants.
Decree sheet be drawn up accordingly.
12. That being aggrieved by the impugned judgment and decree dated 20.04.2023, the appellants/defendants have preferred the present appeal on the following grounds:
i. That the impugned judgment and decree dated 20.04.2023 are bad in law and are based on surmises and conjectures as the respondent(s)/plaintiff(s) have filed the suit without any cause of action.
ii. The ld. trial court failed to appreciate the fact that suit of the respondent/plaintiff was liable to be dismissed for non- joinder of necessary parties as at the time of execution of the lease deed dated 23.07.1980, there were two companies under RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 13 of 55) the tenancy i.e M/s Ravindra Tubes Ltd and M/s Niraj Tubes Pvt Ltd (now M/s Niraj Jindal Ispat Udyog Pvt. Ltd) and it was agreed that appellants/defendants are also entitled to use and occupy the said suit property apart from the said two companies for another four companies to be incorporated later. iii. The trial court has further failed to appreciate that all the tenants were not served any termination notice of tenancy and they have not been impleaded as parties to the suit and no legal notice sent to other tenants i.e M/s Niraj Tubes Pvt Ltd and M/s Hisar Metal Industries Ltd.
iv. The trial court has further failed to appreciate the fact that both the above said companies were not the sub-tenant/sub- lessees and they were main tenants and occupied the suit property in their personal capacity, as per clause-7 of the lease deed and Ld. trial court failed to appreciate the fact that the present suit is totally based on mis-joinder of the parties, as the necessary parties.
v. Ld. trial court failed to appreciate the chief examination as well as cross-examination of PW1 who has categorically admitted in his cross-examination that as per the terms of the lease deed, the appellants/defendants were entitled to use and occupy the suit property upto six companies. In view of the statement, the other companies are to be made as party to the suit by the respondent(s)/plaintiff(s). However, the said companies have not been made party, hence the suit was liable to be rejected for non-joinder of necessary parties. vi. The Trial Court failed to appreciate the fact that PW1 has categorically admitted the fact that the last agreed rate of rent was Rs. 3080/- per month and till February 2022 the RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 14 of 55) original plaintiffs continued to receive the rent from the appellants/defendants and signed the receipt and original plaintiffs have never denied the said fact and kept on receiving the rent which was agreed between the parties and never enhanced the rent amount to Rs. 3640/-.per month. vii. The trial court failed to appreciate that the property in question/suit property is situated in the Slum Area, which was later on taken over by the Delhi Development Authority as per own admission of PW1 and the judgment M.C.Aggarwal Vs. Sahara India is not applicable to the facts of the present case as the said judgment was related to a property situated in Connaught Place, New Delhi wherein the suit property in the present appeal located at Asaf Ali Road, Delhi which is quite very far away.
viii. Further, the trial court failed to appreciate that new respondent/plaintiff i.e M/s ALGOQUANT FINANCIALS LLP has not proved on record its ownership documents in respect of the suit property and no evidence was recorded in this respect as to when they had purchased the suit property and the documents allegedly filed on record are not proved in evidence. ix. The trial court failed to appreciate that as to how the property was sold vide sale deed registered in the name of the new plaintiff without payment of arrears of property tax/clearance/permission of the concerned department/authority as the property was sealed by the North Delhi Municipal Corporation in the year 2018 due to non-payment of the property tax by the erstwhile plaintiffs.
x. The trial court while awarding the annual compounded rate of rent has cited and compared the rent RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 15 of 55) pertaining to Connaught Place, New Delhi whereas property is situated at Asaf Ali Road, New Delhi which has been constructed more than 60 years ago.
xi. The Trial Court failed to appreciate that no evidence has been led by the plaintiffs in respect of the alleged damages/mesne profit and only on the basis of judgment M.C. Aggarwal Vs. Sahara India and Ors, Ld. trial court increase of rent by 15% compounded annually is quite unjustified and without any reasonable cause.
13. Notice of the appeal has been sent to the respondent and trial court record has also been requisitioned. However, no reply was filed on behalf of respondent(s)/plaintiff(s). Ld. Counsels for the parties were heard at length.
14. During the course of arguments, Ld. Counsel for the appellants/defendants reiterated all the grounds for assailing the impugned judgment which have been mentioned in the memo of appeal. Per contra Ld. Counsel for the respondent(s)/plaintiff(s) also reiterated all his grounds in support of the impugned judgment which are mentioned in the judgment and decree dated 20.04.2023.
15. This Court has carefully perused the impugned judgment and decree dated 20.04.2023, trial court record, memorandum of appeal and considered and deliberated over the submissions advanced by Ld. Counsels for the parties respectively.
16. The respondent/plaintiff has filed the suit for recovery of RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 16 of 55) possession of the suit property apart from other reliefs. In this regard, it is the settled law that in suit for possession/ejectment in respect of property situated in Delhi, only three issues arise for consideration which are as under:
a. Whether there exists a landlord-tenant relationship between the parties;
b. Whether the tenancy has expired by efflux of time or stands determined by a valid notice to quit or the tenant has otherwise forfeited the right under the lease agreement; and c. Whether the rent of the tenanted property is more than Rs.
3500/- per month, as the Delhi Rent Control Act, 1958 protects tenants of demised premises in the notified area paying rent up to Rs. 3500/- per month from ejection, save except by an order passed by a Rent Controller on the grounds specified under section 14 of the Delhi Rent Control Act, 1958.
17. This Court believes that determination of the rent of the suit property when the suit came to be filed is pivotal to the entire controversy as the same is having direct bearing on the jurisdiction of the trial court to decide the present suit inasmuch as if the rent of the suit property is held to be less than Rs. 3500/- per month than the jurisdiction of the trial court being civil court gets ousted. As such this court proceeds to decide the said issue in the first place.
18. The ld. trial court while deciding the issue no. 1 which pertains to the determination that whether the rent of the suit RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 17 of 55) property was Rs. 3080/- per month or Rs. 3640/- per month, held that at the time of filing of suit the rent of the suit property was Rs. 3640/- per month and not Rs. 3080/- per month as claimed by the appellants/defendants. The ld. counsel for the appellants/defendants has contended that the ld. trial court wrongly decided the said issue of rent in favour of the respondent(s)/plaintiff(s) by holding that the rent in respect of suit property stood enhanced to Rs. 3640/- per month by virtue of legal notice dated 21.02.1995 ( Ex. PW1/ ) . It is contended that since there is admission of the PW1 in his cross examination as regards the last agreed rent of suit property being Rs. 3080/- per month and further it has been proved on record that till February, 2022, the original plaintiffs continued to receive the agreed rate of Rs. 3080/- per month from the appellants/defendants against the duly signed receipt and since this fact of receiving rent was never denied by the original plaintiffs, the rent of the suit property neither stood enhanced to Rs. 3640/- per month nor the alleged enhanced rent is ever paid by the appellants/defendants to the original plaintiffs.
19. In the present case, it is the case of respondent/ plaintiff that rent of the suit premises stood enhanced to Rs.3640/- per month by virtue of legal notice dated 21.02.1995. On the other hand, it is the case of appellants/defendants that they continued to be tenants in the suit property at the rate of Rs.3080/-per month. It is an admitted case between the parties that initial rent at which appellants/defendants were inducted as tenants in the suit property by virtue of a registered lease deed dated 23.07.1980 (Ex. PW1/6) was Rs. 2800/- per month for a period RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 18 of 55) of five years, and which period expired on 23.07.1985. It is also admitted between the parties that subsequent to the expiry of the lease deed (Ex.PW1/6), appellants/defendants continued in the suit property as tenants at the rent of Rs.2800/- per month and the original plaintiffs were also attorned as landowners and tenants of the suit property after the death of Sh.Soaminath Benerjee (original lessor) on 08.02.1987. However, controversy between the parties arose when the original plaintiffs vide legal notice dated 11.01.1989 (Mark A) under Section 6A of the Delhi Rent Control Act, 1958 (in short 'the DRC Act') called upon the appellants/defendants to pay the increased rent of Rs.3080/- per month with effect from 01.03.1989. It is further the case of the respondent(s)/plaintiff(s) that when the appellants/defendants did not pay the enhanced rate in terms of the legal notice (Mark A), the original plaintiffs instituted a suit bearing No.200/91 titled as 'Swapan Banerjee & Ors. vs. Shri Mahavir Prasad Jindal and Ors.' for the recovery of Rs. 12,970/- as arrears of rent and the said suit came to be decreed in favour of the original plaintiffs for Rs. 8,600/- ( at the rate of monthly rent of Rs. 3080/-along with the interest @ 18% per annum from 30.09.1991 till realization). The original plaintiffs further claimed to have served a second legal notice dated 06.02.1992 (Mark B) upon the appellants/defendants for further enhancement of the rent from Rs. 3080/-per month to Rs. 3360/- per month. It is further the case of the respondent(s)/plaintiff(s) that subsequent to giving of legal notice dated 06.02.1992 (Mark B), the original plaintiffs thereafter filed an eviction petition against the appellants/defendants under Section 14(1)(a)(b)(c)(j) of the RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 19 of 55) DRC Act on 31.01.1992 being the case No. 30/92 titled as 'Swapan Banerjee & Ors. vs. Shri Mahabir Prasad Jindal & Ors'. In the said proceedings the appellants/defendants were directed to pay arrears of rent from 1.03.1989 onwards @ 3080/- per month. During the pendency of the said eviction case, original plaintiffs served a third legal notice dated 21.02.1995 on the appellants/defendants, enhancing the rent from 3360/- to Rs.3640/-.per month in respect of the suit property. It is further stated by the respondent(s)/plaintiff(s) that since by virtue of legal notice dated 21.02.1995, the rent of the suit property stood enhance to Rs. 3640/- per month, the rent being more than Rs. 3500/- per month, the suit property went out of the domain of the DRC Act and the jurisdiction of the Rent controller got ousted and as such the said suit no. 30/92 finally got dismissed in view of the statement of the Ld, counsel for the appellants /defendants wherein they admitted the fact of receiving the notice dated 21.02.1995 and further that in view of said notice the rent of the suit property stood enhanced to Rs. 3640/- per month and the jurisdiction of the Court stands ousted.
20. At this stage, it is noticed at all these notices were given by the original plaintiffs under section 6A of DRC Act, 1958 as for the increase of 10% from the base rent (initial rent of Rs. 2800/per month). The appellants/defendants have never denied the receipt of these notices and in fact admitted in their written statement the receipt of that legal notices dated 11.01.1989 (Mark A), 06.02.1992 (Mark B) and 21.02.1995.
Appellants/defendants in fact also replied to legal notice (Mark RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 20 of 55) B) by their reply dated 13.02.1992 which is (Mark C). The factum of receiving notice dated 21.02.1995 was also duly admitted by the appellants/defendants' counsel who gave an statement in suit no.30/92 wherein he clearly admitted that the appellants/ defendants have been duly served with the legal notice dated 21.02.1995 served by Shri R.B. Mathur, Advocate for the original plaintiffs thereby the rent was increased to Rs.3640/-. The said statement and the corresponding order of the ld. Addl. Rent controller dismissing the suit vide order dated 09.05.1997 pursuant to that statement has been proved on record as Ex.PW/8 and Ex. PW/9 respectively as the certified copies of the proceedings.
21. Ld. trial court while discussing the scope of section 6A and section 8 of the DRC Act and further relying on the judgment in M/s. Shalimar Paint Ltd. vs. Bani Jagtiani Trust & Ors. 2004 (1) RCR 137, analyzed the effect of admission made by the appellants/defendants as regards the service of legal notices as well considering the admission made by the ld. counsel of appellants/defendants in suit no. 30/92 held that the rent of the suit property stood enhanced to Rs. 3640- per month. At this stage a brief reference to the relevant provisions is apposite which read as under:
"6A. Revision of rent.- Notwithstanding anything contained in this Act, the standard rent, or, where no standard rent is fixed under the provisions of this Act in respect of any premises, the rent agreed upon between the landlord and the tenant, may be increased by ten per cent every RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 21 of 55) three years.
8. Notice of increase of rent.- (1) Where a landlord wishes to increase the rent of any premises, he shall give the tenant notice of his intention to make the increase and in so far as such increase is lawful under this Act, it shall be due and recoverable only in respect of the period of the tenancy after the expiry of thirty days from the date on which the notice is given.
1. (2) Every notice under sub-section (1) shall be in writing signed by or on behalf of the landlord and given in the manner provided in section 106 of the Transfer of Property Act, 1982 (4 of 1882).
22. A conjoint joint reading of aforesaid sections of Delhi Rent Control Act, it is observed by this court that the standard rent or agreed rent between the landlord and tenant may be increased by ten percent every three years and if the landlord wishes to increase the rent he shall give the tenant notice of his intention to increase the rent and such increase rent then shall be recoverable after the expiry of thirty days from the date on which the notice is given. In view of said provisions the receipt of notice by the defendant is conditions precedent for increase of rent under the Delhi Rent Control Act.
23. In the present case, keeping in view of the notice dated 11.01.1989 (Mark A), the rent of the suit premises stood enhanced to Rs. 3,080/-, and vide legal notice dated 06.02.1992 (Mark B), which has also been admitted by the appellants/ defendants, the rent of the suit property further stood enhanced RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 22 of 55) to Rs. 3,360/- with effect from 01.03.1992, and further with the giving of notice dated 21.02.1995, the rent was enhanced to Rs. 3640/-. Therefore, the requirement of sections 6A and 8 of the Delhi Rent Control Act, 1958, for the enhancement of rent stood satisfied. Besides that, there were clear and unequivocal admissions by the counsel for the appellants/defendants that rent was enhanced to Rs. 3640 per month. It is quite firmly established that the rent of the suit property was enhanced to Rs. 3640 per month, and the ground raised in the memorandum of appeal that the rate of rent of the suit property was not legally enhanced is not sustainable and is accordingly rejected.
24. The Ld. counsel for the appellants/defendants has focused a great deal of attention on the statement made by PW1 during the cross-examination on July 15, 2002, in which PW1 specifically deposed that the "last agreed rent is only Rs. 3080/- per month." Upon closer examination of the aforementioned statement made in cross-examination, it has been desposed by PW1 that he had indeed received the payment of Rs. 3080/. Besides that it is also deposed that it is correct that rent of Rs. 3080/- was being tendered to the plaintiff and the same was refused by us. It was voluntary stated that the last agreed rent was Rs. 3640/-. It has further been stated that defendant had agreed in court that the rate of rent of the suit property is at the rate of Rs. 3640//-. Additionally, he refuted the claim that the appellants/defendants had ever consented to pay rent in excess of the Rs. 3080/-agreed rent. On January 21, 2003, during PW1's cross-examination, a particular question was posed to the witness that:-
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 23 of 55) Question:-the agreed rent of Rs. 3080 which was tendered earlier on monthly basis has been paid to you on your refusal in court. Is it correct?
Ans. It is wrong to suggest that we have accepted rent of Rs. 3080/- as rent.
25. From the above examination of the evidence of the PW1, it is quite evident that original plaintiffs never admitted that the rent of the suit property is Rs.3080/- per month. It is settled law that admission of witness cannot be read in isolation devoid of the context in which it was made. A sentence or two culled out from the pleadings, examination or cross examination of a particular witness cannot be used to impute a particular fact to him. The entire evidence of the witness has to be read holistically in the light of the pleadings as well as the documents duly proved. From the perusal of the plaint, examination in chief and cross examination of PW1, it is quite evident that PW1 has categorically stated that though the last agreed rate was Rs. 3080/-, but the same stood enhanced to Rs. 3640/- per month in terms of the notice dated, 21.02.1995 and also on account of admission made by the Ld, counsel for the appellants/defendants. Therefore, the ground raised by the appellants/defendants in memo of appeal with regard to the admission/statement of PW1 in respect of last admitted rate of rent being 3080/- cannot be accepted and hence, the same is hereby rejected.
26. Considering the abovementioned discussion, it may RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 24 of 55) safely be concluded that the factum of sending the legal notices dated 11.01.1989 (Mark A), 06.02.1992 (Mark B), and further dated 21.02.1995, respectively, for enhancing the rent from Rs 3080/- to Rs 3360 and further to Rs 3640 have been duly proved before the Ld. Trial Court. Moreover, it is pertinent to mention that the receipt of same was never denied by the appellants/defendants. In earlier proceedings before the Ld. ARC, the Ld. Counsel for the appellants/defendants had duly admitted that the rent has been enhanced so that the Ld. ARC has no jurisdiction to entertain the eviction petition bearing no. 30/92. The said admission fact is reflecting in order dated 09.05.1997 of Ld. ARC which is exhibit PW1/9 in the trial court record. Therefore, Ld. Trial Court rightly decided the issue no.1 that "whether the rate of rent is Rs. 3640/- per month or Rs, 3080/- per month".
Appellant/Defendants, are not allowed to say one fact at one place and denied at other place. When it has specifically been admitted by the defendant before the Ld. ARC about the factum of the rent then they may not retract from their earlier statement and allowed to challenge the factum of the rate of the rent here in the present appeal. Hence, the ground raised by the Appellants/Defendants in memo of appeal with regard to the agreed rent as well as enhancement of agreed rent are liable to be rejected. This court is of the considered opinion that the Ld. Trial Court righty decided the said issue in favour of respondent/plaintiff and against the appellants/defendants because as per the provisions of section 6A and 8 of the DRC Act, the enhancement of rent to Rs. 3640/- shall be effected from the expiry of 30 days from the notice dated 21.02.1995.
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 25 of 55)
27. Once the factum of the giving the notices for enhancement of rent are proved and even the same were duly acknowledged to have been received by the appellants/defendants and the same were also admitted to have been duly replied by the appellants/defendants, then the rent in respect of the suit property got enhanced by operation of law in terms of section 6A and 8 of the Delhi Rent Control Act, 1958 and the contentions of appellants/defendants that the said enhanced rent of Rs. 3640/- per month has never been admitted or paid or tendered by the appellants/defendants to the respondent(s)/plaintiff(s) or that the original plaintiffs had received the rent of Rs. 3080/- per month till February 2022 from the appellants/defendants has no significance and will not make any difference to the legal position as regards the enhancement of rent in respect of the suit property. In the light of foregoing discussions, the contentions of the appellant/defendant are hereby rejected and the finding of the Ld. trial court in this regard is upheld.
28. As regards the issues of landlord-tenant relationship between the respondent(s)/plaintiff(s) and appellants/defendants and termination of tenancy under section 106 of Transfer of Property Act, 1882 is concerned, there is no denial by the appellants/defendants that lease deed dated 23.07.1980 was executed between the father of the original plaintiffs and appellant/defendant nos. 1 and 2 which was for a period of five years. Rather it is admitted case as there are clear and unequivocal admissions in the pleadings. It is further an RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 26 of 55) admitted case that thereafter, no lease deed was executed between the parties. The fact of enhancement of rent from Rs. 3080/- to 3640 also stands proved. After the rent was enhanced to Rs. 3640/- the jurisdiction of the DRC Act stood ousted and the tenancy becomes month to month between the parties to the suit. The appellants/defendants have not denied the receipt of legal notice dated 14.10.1999 (Ex. PW1/2) whereby their tenancy stood terminated from the mid night of 22.11.1999. In fact the said notice was duly replied by appellant/ defendant vide reply dated 12.11.1999 (Ex. PW1/5). The tenancy being month to month could be terminated under section 106 of Transfer of Property Act, 1882 by giving notice. In the present case as the receipt of the notice is not denied therefore, the tenancy stood terminated. Further appellants/defendants admitted in written statement that present plaintiff, Algoquant Financials LLP refused to accept the rent of Rs.3080/-from the February 2022 meaning thereby the appellants/defendants also attorned the landlordship of present plaintiff, Algoquant Financials LLP. In view of aforesaid facts, the jural relationship between the respondent(s)/plaintiff(s) and appellants/defendants and the termination of the tenancy by the originals plaintiffs vide notice dated 14.10.1999 vide Ex PW1/2 stands proved. Hence all the three aspects, which are required to be proved in eviction suit i.e. (i) Landlord - Tenant relationship, (ii) Termination of Tenancy and (iii) Rent being more than Rs. 3500/- per month stand satisfied in the present case.
29. Ld. Counsel for the appellants/defendants has further contended that no cause of action has ever accrued in favour of RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 27 of 55) the plaintiff(s)/respondent(s) to file the present suit for possession, arrears of rent and mesne profits/damages in respect of the suit property. In this regard, it is observed that the appellants/defendants did not vacate the suit property despite having received the notice dated 14.10.1999 Ex PW1/2 under section 106 of Transfer of Property, Act, 1882. The cause of action may be summarized as the reason behind the legal action or the set of facts which gives a right to the plaintiffs for preferring the legal action. In the present case, respondent(s)/plaintiff(s) having duly terminated the tenancy of the appellants/defendants in respect to the suit property, became entitled to get the suit property evicted. However, since appellants/defendants did not vacate the suit property and continued in the use and occupation of the same, their right to remain in suit property having become contumacious, certainly the right to get them evicted along with relief of mesne profits accrued to the respondent(s)/ plaintiff(s). Therefore, the respondent(s)/plaintiff(s) were well within their rights to institute the present suit for possession, arrears of rent and mesne profits/damages and it cannot be said that the suit was without any cause of action. Hence, the contention of the Ld. Counsel for the appellants/defendants has no force and is accordingly rejected.
30. Ld. Counsel for the appellants/defendants has strenuously argued that the suit is liable to be dismissed for non-joinder of necessary parties. It is contended by the Ld. counsel that at the time of execution of the lease deed dated 23.07.1980 (Ex.PW1/6), there were two companies under the tenancy i.e. RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 28 of 55) M/s Ravindra Tubes Ltd and M/s Niraj Tubes Pvt. Ltd (now M/s Niraj Jindal Ispat Udyog Pvt. Ltd) and it was agreed that besides these two companies/firms, appellants/defendants were also entitled to use the suit property for four other registered limited companies which were yet to be incorporated and in which either of the appellant no.1 & 2/defendant no.1 & 2 would be the director or directly connected to them. As the contention of the Ld. counsel hinges upon the terms of the lease deed dated 23.07.1980 (Ex.PW1/6), it is apposite to refer to relevant paras along with para 7 of the said lease deed which are reproduced as under:
" THIS LEASE DEED made on 23rd July 1980, at New Delhi between Soaminath Banerjee, sonof Late Jognath Banerjee, owner of Banerjee Buildings, Asaf Ali Road, New Delhi, hereinafter called "The Lessor" of the one part AND Shri Mahabir Prasad Jindal & his brother Mr. Ravinder Kumar Jindal both sons of Shri Shiv ram Jindal both residents of 'Jindal Niwas', Delhi Road, Model Town, Hissar (Haryana) hereinafter called "The Lessee" which expression unless repugnant to the context shall mean heirs, executors, successors and legal representatives, of the Lesser and the Lessee.
WHEREAS the Lessor is the owner of the building known as Banerjee Buildings on Plot Nos. B-21 & B-22 Block No. 4, Ajmere Gate Scheme, New Delhi. And whereas, the Lessee wants to take on lease the half of the first floor (described in the schedule attached hereto) of the above said buildings on a monthly rent of Rs.
2,800/- (Rupees Two Thousand Eight RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 29 of 55) Hundred only) which is mutually agreed and accepted as the fair, proper and reasonable rent of the premises taking into consideration the situation, valuation and the prevailing rent in the same locality as well as the cost of improvements and alterations etc. made by the Lessor at the request of the Lessee to suit the requirements of the Lessee "7. That the Lessee shall not sub-let, assign or otherwise part with the possession of the premises without the previous written consent of the Lessor. However, the Lessee will have the right to use the premises by the following firms and companies and to a limit of four more Registered Limited Companies in which Mr. Mahabir Prasad Jindal or Mr. Ravinder Jindal is a director and directly connected with such firms.
(i) M/s. Ravindra Tubes Limited.
(ii) M/s. Niraj Tubes Pvt. Limited.
(iii) To be incorporated.
(iv) To be incorporated.
(v) To be incorporated.
(vi) To be incorporated.
31. From the bare perusal of the introductory clauses and the clause-7, in particular, of the lease deed dated 23.07.1980 (Ex.PW1/6), it is ex facie evident that the lease in respect of the suit property was executed between Shri Soami Nath Banerjee (father of the original plaintiffs as lessor) in favour of Shri Mahabir Prasad Jindal (appellant no.1/defendant no.1 and Mr. Ravinder Kumar Jindal (appellant no.2/defendant no.2) both sons of Shri Shiv Ram Jindal. As per clause 7 of the said lease deed, the appellant no. 1 & 2/ defendant no.1 & 2 were entitled to use suit property for four more registered limited companies to be incorporated later, other than M/s Ravindra Tubes Limited RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 30 of 55) and M/s. Niraj Tubes Pvt. Limited in which either the appellant no.1/defendant no.1 or appellant no.2/defendant no.2 would be director or related thereto. In terms of clause 19 of said lease deed dated 23.07.1980 (Ex.PW1/6), Mr. Mahabir Prasad Jindal (appellant no.1/defendant no.1) and his brother Mr. Ravinder Kumar Jindal (appellant no. 2/defendant no.2) were jointly and severally responsible to pay the Lessor the monthly rent and other dues. The clause 19 of the said lease deed dated 23.07.1980 (Ex.PW1/6) is reproduced as under:-
19.That Mr. Mahabir Prasad Jindal and his brother Mr. Ravinder Kumar Jindal son of Mr. Shiv Ram Jindal will be jointly and severally responsible to pay the Lessor the monthly rent and any other dues, damages or claims etc.
32. Since the aforesaid lease deed was executed only between Shri Soami Nath Banerjee (as Lessor) who was the father of the original plaintiffs and Shri Mahabir Prasad Jindal(appellant no.1/defendant no. 1) and Mr. Ravinder Kumar Jindal (appellant no.1/defendant no. 2) as lessees and rent was also payable by said appellant no. 1 & 2/ defendant Nos. 1 and 2 to the lessor, therefore, it quite apparent that appellant no.1 & 2/ defendant no. 1 and 2 were the only lessees in the suit property in terms of lease deed (Ex.PW1/6) and the occupation/possession of M/s. Ravindra Tubes Ltd or M/s Niraj Tubes Pvt. Ltd. or M/s Hisar Metal Industries Limited, if any, in the suit property was under or through appellant no.1 & 2 /defendant no. 1 and 2 only and they have no separate, independent, autonomous and distinct legal right, title and interest in the suit property apart from the rights of the appellant RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 31 of 55) no. 1 & 2 /defendant no. 1 and 2. Therefore, this court is of the opinion that M/s Ravindra Tubes Ltd, M/s Niraj Tubes Pvt. Ltd or M/s Hisar Metal Industries Limited is not the lessees in the suit property and therefore, they are not necessary parties to decide the lis between the Respondent(s)/plaintiff(s) and appellants/defendants. From the literal interpretation of the clause-7, it is explicit that the possession of the companies/firms was not that of tenant in the independent capacity as claimed by the appellants/defendants and only appellant no.1 & 2/defendant no.1 & 2 were the tenants in the suit property. In Importers and Manufactures Ltd. Vs Pheroze Framroze Taraporewala, 1953 AIR 73, it has been observed by Hon'ble Supreme Court that under ordinary law a decree for possession passed against a tenant in a suit for ejectment is binding on a person under or through that tenant and is executable against such person whether or not he was party to the suit.
33. A necessary party is one in whose absence no effective decree can be passed. However, as observed in the above judgment, the person who claims under or through tenant is not required to be made party and the decree against the tenant would be binding upon him, As such, he is not a necessary party. Applying the said principle of law to the facts of the present case, the obvious result would be that companies/ firm in the suit property in terms of the clause 7 of the lease deed having no independent rights, are not necessary party and their non impleadment would not make the suit bad for non joinder of necessary parties. However, at this stage, it is noted that in RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 32 of 55) Importers and Manufactures Ltd.(supra), it was further observed by the Hon'ble Supreme Court that though the person through or under the tenant is not a necessary party, but nonetheless they are proper party as their presence would help in effective adjudication of the controversy involved and would prevent multiple litigations. In the present case these companies/firms could have been proper party, but non impleadment of proper party does not make the suit bad and as such, the present suit is not bad for non joinder of all the companies and firms in the suit property as claimed by the appellants/defendants.
34. The ld. counsel of the appellants/defendants has argued with vehemence that PW-1 in his cross examination, conducted on 15.07.2002, has admitted that the let out property (suit property) is in the possession of M/s. Hisar Metal Industries Limited and Ravindra Tube Limited and that they (original plaintiffs) have not made M/s. Hisar Metal Industries Limited the party in the present suit which is also tenant in the premises (suit property). However, the said statement, made by the PW-1 during the cross examination would not be of any assistance to the appellants/defendants for reason that it has never been the case of the appellants/defendants that M/s Hisar Metal Industries Ltd. is the tenant in the suit property. In para 4 of the preliminary objections and para 4 of the reply on merits of the written statement by the appellants/defendants, it has specifically been pleaded that the M/s Hisar Metal Industries Ltd. is in the possession of the suit property in terms of the clause 7 of lease deed (Ex.PW-1/6) and as held in the preceding RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 33 of 55) para, going by the literal interpretation of the clause-7 of lease deed dated 23.07.1980 (Ex.PW1/6) in conjunction with the other clauses, it is explicit that only appellant no. 1 & 2/defendant no. 1 and 2 were inducted as tenants in the suit property and the possession of the other companies, if any, as mentioned in the lease deed (Ex.PW1/6) or which came to occupy the suit property in terms of clause- 7 of Ex- PW1/6 was through and under appellant no. 1 & 2/defendant no. 1 and 2 only inasmuch as only they were allowed to use suit property for the purpose of those companies and there was no privity of contract between the father of the original plaintiffs and the said companies. The assertion of the appellants/defendants that M/s Hisar Metal Industries Ltd. was in the possession of the suit property as tenant falls specifically within the ambit of the unambiguous and clear intent of the clause-7 of lease deed (Ex.PW1/6) and accordingly rejected. Therefore, arguments of the ld. counsel for the appellants/defendants that PW1 in his cross examination admitted that let out (suit property) property are in the possession of M/s. Hisar Metal Industries Limited, Ravindra Tube Limited and that he has not made M/s. Hisar Metal Industries Limited as the party in the present suit which is also tenant in the property cannot be read and appreciated being the evidence beyond the case of the appellants/defendants in the pleadings.
35. At this stage, it is noted that ld. trial court also dealt with the issue whether M/s. Hisar Metal Industries Limited is a necessary party to the present suit for eviction between the respondent(s)/Plaintiff(s) and appellants/defendants. It was held RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 34 of 55) by the ld. trial court that the status of the M/s. Hisar Metal Industries Limited is that of sub-lessee and by placing reliance on judgments in Roop Chand Gupta Vs Raghuvnshi Private Limited & Ors MANU.SC.0296/1964 and S Rajdev Singh and Ors Vs Punchip Associates Private Limited and Ors.
MANU/DE/8627/2007, it was further held that sub- lessee is not the necessary party and as such non impleadment of them in suit is does not bad for non joinder of necessary party. It was also observed by the ld. trial court when the interest of sub lessee is duly secured by its directors i.e. defendants no.1 & 2, there is no requirement to implead them in the suit. Ld. counsel for the appellants/defendants has assailed the finding of Ld. trial court by contending that it is not the case of appellants/defendants that said companies and in particular M/s. Hisar Metal Industries Limited are the sub lessees in the suit property and no such evidence in this regard has been ever led by any party to the suit. It is contended that the finding of the ld. trial court that the M/s Hisar Metal Industries Ltd. is sub lessee and therefore, not necessary party is not justifiable being based on no evidence and even beyond the case of the parties to the suit and as such is liable to be set aside. This court is in agreement with the contention of the Ld. counsel for the appellants/defendants that it is nobody's case that M/s Hisar Metal Industries Ltd.or any other companies/firms in the suit property are sub tenant and in fact, there is no evidence on record to support this finding. At this stage, it also relevant to point out that though appellants/defendants have vehemently argued the issue of non impleadment of M/s Hisar Metal Industries limited, but, the said company never bothered to get RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 35 of 55) impleaded in the matter nor any details in respect of that company did ever find place either in pleadings or during the evidence. In the absence of M/s Hisar Metal Industries limited before the trial court, there was no occasion for the court to adjudge the status of the company, which admittedly was not into being when Ex. PW1/6 was executed. Admittedly, any company/firm other than the appellant no.1 & 2/defendant no.1 & 2 in the suit property could only be by the virtue of clause-7 of lease deed (Ex.PW1/6) and as held earlier by construing the said clause, which even explicitly bars the sub letting, the occupation of the companies/firms is under appellant no.1 &2/defendant no.1&2 only and they do not have any distinct and separate right. Therefore it cannot be said that M/s. Hisar Metal Industries Limited is sub tenant in the suit property and occupation of M/s. Hisar Metal Industries Limited in the suit property, if any is by virtue of defendants nos. 1 and 2 being lessee in terms of lease deed dated 23.07.1980 only. Therefore, M/s. Hisar Metal Industries Limited neither needed to be served eviction notice under section 106 of TPA nor is liable to be made party in the suit in terms of Hon'ble Apex Court judgment passed in Importers and Manufactures Ltd. Vs Pheroze Framroze Taraporewala (supra). In view of foregoing discussion this court hereby set aside the finding of the trial court to the extent that M/s. Hisar Metal Industries Limited is a sub tenant and hold that M/s. Hisar Metal Industries Limited was neither tenant nor sub tenant in the suit property and the occupation of M/s. Hisar Metal Industries Limited in the suit property, if any, is by virtue of defendants nos. 1 and 2 being lessees of the suit property. In view of this observation, this RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 36 of 55) court hereby holds that neither the M/s Hisar Metal Industries Limited was required to be served eviction notice under section 106 of Transfer of Property Act nor is liable to be made party in the suit as its presence is not at all required for the effective and final adjudication of the present litigation and therefore its impleadment is not imperative as it is not the necessary party.
36. Ld. counsel for the appellants/defendant has raised a further contention that M/s Ravindra Tubes Ltd. and M/s Hisar metal industries limited were on the same footing inasmuch as the same were occupying the suit property by virtue of clause -7 of lease deed (Ex. PW-1/6) and as the respondent(s)/plaintiff(s) have made M/s Ravindra Tubes Ltd. a party in the present suit then M/s Hisar metal industries limited should have also been made party. However, the said contention is not tenable for the reason that once this court has held that nobody other than the appellant no.1 & 2/defendant no.1 & 2 are the tenants in the suit property and the possession of the other companies, if any, in terms of the clause -7 of lease deed (Ex. PW-1/6) is under and through appellant no.1 & 2/defendant no.1 & 2 only and such companies/firms do not have independent right apart from the rights of appellant no.1&2/defendant no.1&2 and as such they were not necessary parties. In such scenario, even if the respondent(s)/plaintiff(s) have made M/s Ravindra Tubes Ltd. a party as a abundant caution, it does not have the effect of accruing of any right in favour of other companies or firms to get impleaded in the suit. At this stage, it is noted that in plaint Respondent(s)/Plaintiff(s) in para 4 have pleaded that the M/s Ravindra tubes in which the appellant no. 1 & 2/ Defendant no.
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 37 of 55) 1 & 2 are directors is in occupation of the suit property. As such, M/s Ravindra Tubes Ltd. at best can be pleaded as proper party, but that does not make it or other companies as necessary parties in the suit. Respondent(s)/plaintiff(s) being master of the suit are at liberty to choose parties against whom they intend to seek relief and non impleading of other parties who are not necessary parties is not fatal to the suit and no one can claim impleadment in suit as a matter of right against the wishes of the plaintiff unless the court directs or they are the necessary party. As such the present contention of the appellants/defendants is also rejected.
37. Another objection taken by the appellants/defendants in memo of appeal is that the other companies in the suit property and in particular, Neeraj tubes pvt. Ltd. and M/s Hisar metal industries ltd, who are in possession of the suit property have not been served with the notice of termination of tenancy and as such there possession in the suit property is legal. It is contended that no notice of termination of tenancy was given to all the parties who were in possession of the suit property before filing of the suit or during the pendency of the suit and that no notice was given or sent to other companies and their directors who were in possession of the property and as such the tenancy of M/s Neeraj Tube Pvt. Ltd. and M/s Hisar Metal Industries Ltd. had never been terminated at any point of time. However, as held in the preceding paras that it was only appellant no. 1 &2 /defendant no. 1&2 who are the tenants in the property in terms of the lease deed (Ex.PW1/6 ) as the same was executed between the father of the original plaintiffs and RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 38 of 55) defendant nos. 1 and 2 and any one other than defendant no. 1 and 2 who is in occupation of the said suit property, then in that eventuality also as per clause 7 of the lease deed dated (Ex. PWI/6), it can only be said that they are in occupation of the suit property under or through defendant no.1 & 2 and the same can never be treated as creation of any new tenancy and or sub tenancy. They are not the necessary parties and will remain bound by the proceedings and decision as against the defendant no.1 & 2. Hence, this ground of objection is also hereby rejected.
38. Moving on to the issue of awarding of mesne profits/damages, it is observed that Ld. Trial Court while deciding the issue pertaining to mesne profits/damages, held that respondent/ plaintiff had not lead any independent evidence to substantiate his claim of mesne profits and in those circumstances after placing reliance on various decisions where in courts have taken judicial notice of escalation of rental prices in urban areas and in particular taking cue from the decision of the Hon'ble High Court of Delhi in MC Agarwal HUF vs. M/s Sahara India and Ors. 2011(183) DLT 105 passed a decree for recovery of mesne profits/damages for unauthorized use and possession of the suit property in favour of the respondent(s)/plaintiff(s) and against the appellants/defendants @ 15% compounded increase every year from the rate of rent which was due and payable on 22.11.1999 i.e. Rs.43,680/- p.a. (@Rs.3,640/-p.m.) from 23.11.1999 till the time the possession of the suit property is handed over by the appellants/defendants to the respondent(s)/plaintiff(s). Ld. Trial allowed the deduction RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 39 of 55) of Rs. 3080/- per month as the rent which was proved to have been paid by the appellants/defendants to the original plaintiffs till February, 2022.
39. The finding of the Ld. trial court as regards the determination of mesne profit/damages has been assailed by the appellants/defendants primarily on the ground that no evidence was led on behalf of the respondents/plaintiffs with respect to the mesne profits/damages and the Ld. trial court by wrongly placing reliance upon the decision of the Hon'ble High Court of Delhi in MC Agarwal HUF vs. M/s Shahara India (supra) awarded mesne profit/damages @ 15% increase on the last agreed rate of Rs. 3640/- per month compounded annually. The Ld. counsel of the appellants/defendants has taken exception to the said finding on the ground that the said judgment pertains to property situated in Connaught Place, New Delhi, whereas the property in the present case is situated on Aruna Asaf Ali road, Delhi and by any stretch of imagination both the areas cannot be compared on any aspects therefore, the said judgment is not at all applicable in the facts of the present case and the reliance placed on the said judgment by the Ld. trial court is wholly misplaced. It has been further contended by appellants/defendants that though no evidence was led by the respondents/plaintiffs in support of their claim of mesne profits/damages or increase of rental value in respect of the suit property or the properties in the vicinity, but the ld. trial court having wrongly taken judicial notice as regards the increase in rental value of the suit property by placing reliance on various decisions went on to fix the mesne profits/damages in the RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 40 of 55) present case by relying on the judgment of Hon'ble High Court in MC Agarwal HUF vs. M/s Shahara India (supra).Ld. Counsel for the appellants/defendants has contended that Ld. trial court had no basis to take such judicial notice as regards the increase in rental value and as such the finding based there on is perverse. Finding of the Ld. trial court with respect to mesne profits has also been called in question on the ground that since the suit property belongs to slum area which was later on handed over to DDA and is in a dilapidated condition, the awarding of mesne profits by way of enhancement in the rate of rent was not at all justifiable. On the other hand, Ld. counsel for the respondent/plaintiff supported the trial court judgment as regards the mesne profits too.
40. Before dealing with the rival contentions on this aspect, it would be appropriate to refer to Section 2(12) of the CPC, which defines mesne profits and upon which provision the claim of the respondent/plaintiff is premised. The provision reads as under:-
" 2 Definitions In this Act, unless there is anything repugnant in the subject or context,-
xxxxxxx (12) "mesne profits" of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession;"
41. A bare perusal of the section 2 (12) CPC, which defines RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 41 of 55) mesne profits, makes it clear that mesne profits are those profits which a landlord is entitled to get from a tenant, who continues to occupy the tenanted property even after the tenancy has ended and are defined as the amount of rent that would have otherwise been collected on a tenanted property during the time when tenant was occupying it illegally/without authority. However, figuring out how much should be paid to the owner or landlord in relation to these mesne profits is a burden that the courts frequently bear. This process of determination of mesne profits begins with the landlord discharging the onus placed upon him to prove his claim for mesne profits in accordance with the law. After that, the appropriate mesne profits to be awarded by the Court by appreciating the evidence or making further enquiry, if required.
42. Now adverting to the facts of the present case, it is observed that in view of the finding of this court, that the tenancy in respect of the suit property stood duly terminated with effect from midnight of 22.11.1999 vide notice dated 14.10.1999 (Ex. PW1/2), the occupation of the suit property by the appellants/defendants after 22.11.1999 become wrongful and without any authority of law and the respondent(s)/plaintiff(s) were entitled to mesne profits/damages from the appellants/defendants for being in wrongful use and occupation of the suit property. The said mesne profits would obviously be the prevailing market rent of the suit property at the time when the occupation of the appellants/defendants become contumacious. To prove the prevailing market rent of the suit property at the relevant time RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 42 of 55) i.e. when the tenancy was terminated, it was incumbent upon the respondent(s)/plaintiff(s) to lead evidence to prove the rental value of the properties in the vicinity of the suit property or to bring forth any other positive evidence to substantiate their claim of mesne profits @ 50,000 per month for the period from 23.11.1999 to 10.12.1999 and at Rs. 60,000/-per month thereafter till the disposal of the suit as pleaded in the plaint. However, barring a simple statement in examination in chief of PW1, respondent(s)/plaintiff(s) failed to bring forth any other substantial evidence to prove the prevailing market rent of which the suit property was capable of being let out at the relevant time. However, just because the respondent(s)/plaintiff(s) failed to prove the prevailing market rate, this does not in any way limit the jurisdiction of the court to award reasonable mesne profits/damages and it is well established that in the absence of any direct evidence that could assist the court in determining the reasonable amount, the court may exercise its judicial discretion to estimate the amount of mesne profits in order to do justice and some amount of guess work is always involved in determining the mesne profits/damages. It is trite, that the exercise of this judicial discretion should not be arbitrary and must confirm to sound judicial principles. In the case in hand because no direct evidence was led by respondent(s)/plaintiff(s) in the form of a lease deed or any other document evidencing the rental value for any comparable properties in the vicinity of the suit property at the relevant time, which could have assisted the Ld. trial court in determining the amount of mesne profits, Ld. trial court correctly used its discretion to determine a reasonable amount RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 43 of 55) of mesne profits. In the exercise of its discretion, the Ld. Court rightly drawn support from the various decision of the Hon'ble Supreme court and Hon'ble High courts and in particular the decision of the Hon'ble High Court of Delhi in M/s. M.C. Agarwal HUF vs. M/s. Sahara India & Ors.2011 (183) DLT 105 to arrive at the conclusion that there has been general increase in the rental value of the properties in the urban areas and judicial notice of the said fact could be taken without there being any formal proof of the same by the party who is obliged to prove the same and by way of judicial precedents the said legal proposition has been reiterated time and again. Notably, finding of the Ld. Tial court with respect to determination of mesne profits, has also been objected to by the appellants/defendants, contending that the ld. trial court has improperly and without justification taken judicial notice of the rising prices for the properties. In order to deal with the objections raised by the Ld. Counsel for the appellant/defendants, this court, at this stage may profitably refer to the decision of Hon'ble High Court of Delhi in the matter titled as 'Hindustan Petroleum Corporation Ltd. vs Mohanjit Singh (Deceased) Through Legal Heirs' 2019 SCC Online Del 9419, (2019) 263 DLT 192 wherein reference was made to various precedents where in it was specifically held judicial notice of rise in rental values in urban areas can certainly be made by the courts. The relevant para (Para- 41) reads thus:
41. Further reference may be made to paragraphs 31 -33 of the decision in RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 44 of 55) National Radio (supra), on which reliance has been placed by the appellant itself, where the Division Bench has, after referring to some of the earlier decisions of this Court, observed as under:
"31. We find that this Court has in several cases taken judicial notice of the factum of increase of rent and made awards of mesne profits and damages. Noteworthy in this behalf is a judicial pronouncement of the Division Bench reported at (supra) entitled Vinod Kumar v. Bakshi Sachdev. This judgment was delivered by a Division Bench of which one of us (Dr. M.K. Sharma, J.) had delivered the judgment. It was held as under:
"21. The learned Counsel for the appellants also urged before us that the learned Trial Court was not justified in taking a judicial notice of the fact of increase of rents like the suit property and also in providing Rs. 10,000/- per month as fair amount towards damages/mesne profits in favor of the plaintiff. It is true that no substantial evidence has been led by the plaintiff in respect of the increase of rent in the properties like that of the suit property. However, it is a well known fact that the amount of rent for various properties in and around Delhi has been rising staggeringly and we cannot see why such judicial notice could not be taken of the fact about such increase of rents in the premises in and around Delhi which is a city of growing importance being the capital of the country which is a matter of public history. At this stage we may appropriately refer to the Court making judicial notice of the increase of price of land rapidly in the urban areas in connection with the land acquisition matters. Even the Apex Court has taken RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 45 of 55) judicial notice of the fact of universal escalation of rent and even raised rent of disputed premises by taking such judicial notice in case of D.C. Oswal v. V.K. Subbiah.(emphasis supplied)
22. In that view of the matter we have no hesitation in our mind in holding that the Trial Court did not commit any illegality in taking judicial notice of the fact of increase of rents and determining the compensation in respect of the suit premises at Rs. 10,000/- per month w.e.f. 19.1.1989, in view of the fact that the rent fixed for the said premises was at Rs.
6,000/- per month as far back as in the year 1974. We may, however, note here that the learned Counsel for the appellants did not seriously challenge the findings of the learned Judge that Rs. 10,000/- per month would be the fair market rent of the suit premises.
Accordingly, in view of the aforesaid findings arrived at by us the submissions of the learned Counsel for the appellant in our view have no substance at all."
43. In the above noted case, various precedents have been referred to emphasize that in areas in and around Delhi which is a metropolitan area, rentals have significantly increased and there is no reason why the judicial notice of the said fact could not be taken. As such the contention of the appellants/defendants that Ld. Trial court has nothing before it to take judicial notice is without merit and is accordingly rejected.
44. Having taken the judicial notice of the rise in rental values in the urban areas, the only task the ld. trial court was RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 46 of 55) left with to assess the quantum of the prevailing rental value of the suit property. As no evidence was forthcoming from the respondent(s)/plaintiff(s) side, the Ld. trial court after taking cue from the decision in MC Agarwal HUF vs. M/s Shahara India (supra) fix the mesne profits/damages @ 15% increase on the last agreed rate of Rs. 3640/- compounded annually which was to be effected from the month of November 1999 after adjusting the rent @ Rs. 3080/- per month which has been paid till February, 2022. The contention raised by the ld. counsel for the appellants/defendants that it was not justified on the part of trial court to compare the properties at Connaught Place and Aruna Asaf Ali Road by placing reliance on MC Agarwal HUF vs. M/s Shahara India (supra). At this juncture, to meet the contention of the ld. Counsel for the appellants/defendants, suffice is to refer to the judgment of the Hon'ble High court of Delhi in M/s Marudhar Services Ltd. & anr. Vs Ved Prakash & anr. RFA no. 374/2004 decided on 94.05.2012wherein the Hon'ble Court in para 12 has held as under:
"12.Now on the aspect as to whether the respondents are entitled to seek increase of mesne profits from `12,000/- as awarded by the trial Court for the period from 1.4.1998 till the date when the possession is handed over, which for the present, I am taking as March, 2001. In this regard, I find that except an oral evidence of a property dealer and a lease deed which has not been exhibited, there is no such evidence which can be accepted by me for increasing the rate of mesne profits. However, that is not the end of the matter, inasmuch as, I have in a recent RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 47 of 55) judgment of M/s. M.C. Agarwal HUF vs. M/s. Sahara India & Ors.2011 (183) DLT 105 held that even if there is no evidence led by the landlords for increase in the rents, the landlords can ordinarily be granted increase @15% per year cumulatively taking judicial notice of the fact that rents rise approximately at high rate in metropolitan cities, more so particularly in the capital. An SLP against this judgment has been dismissed by the Supreme Court being SLP No. 4104/2012 decided on 21.3.2012.
The premises in the case of M.C. Agarwal (Supra) was a commercial premises and, therefore, increase of 15% per year was granted, but considering that the subject premises are residential premises, I deem it fit that the cumulative increase of rent should be @10% per annum and not @15% per annum.
(Emphasis supplied)
45. From the bare perusal of the underlined portion of the above decision, it is quite evident that though in MC Agarwal HUF vs. M/s Sahara India and Ors.(supra), the suit property in respect of which Hon'ble High Court was called upon to assess mesne profits was situated in Connaught place area of New Delhi, but the increase in the mesne profits from the contractual rate of rent was in fact predicated on the judicial notice of the fact that there has been general increase in rental value of the properties in the urban areas and in particular metropolitan areas and in absence of any evidence to substantiate the claim of mesne profits, in case of commercial properties enhancement @ 15% compounded annually and in case of residential properties @10% enhancement compounded RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 48 of 55) annually in the contractual rate will balance the interest of justice. In view of the said ratio, the contention of the appellants/defendants that the judgment in MC Agarwal HUF vs. M/s Shahara India (supra) was given in particular fact situation of that case wherein the suit property was located in prime location of Cannaught Place and the same was wrongly relied by the Ld. trial court to quantify the mesne profits/damages in respect of suit property in the present case is rejected being misconceived and based upon the incorrect interpretation of the said judgment. It is true that the property concerned in the said judgment was situated in Connaught place area of New Delhi, but the ratio laid therein was applicable to the properties situated in urban areas, in general. Therefore, this court is of the considered opinion while determining the quantum of mesne profits the Ld. trial court rightly granted the mesne profit in terms of judgment of MC Agarwal HUF vs. M/s Shahara India (supra) and the said finding of ld. trial court is hereby uphold.
46. Additionally, it is the grievance of the appellants/defendants that the suit property being a slum property and in a dilapidated condition has been wrongly assessed for purpose of mesne profits at increased rates. This contention is noted only to be rejected for the reasons that as per the pleadings this has never been the case of the appellants/defendants nor the said contention has ever been raised before the Ld. Trial court and the same has surfaced for the first time before this court in the memo of appeal filed by the appellants/defendants. In view of this observation, the RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 49 of 55) present contention being beyond the pleadings and having not been taken before the trial court, could not have been taken before this court at this stage without being formally allowed by this court in appropriate proceedings. Pertinently, though, it is the contention of the appellants/defendants that the suit property is in dilapidated condition, but the appellants/defendants have continued to remain in possession of the suit property despite their tenancy having been duly terminated and since appellants/defendants continued as unauthorized occupant post their tenancy having been duly terminated, they are liable to pay mesne profits/damages and cannot wriggle out from the same just by taking pleas which ex facie appear to be afterthought.
47. Appellants/defendants have also assailed the finding of the ld. trial court in respect of determination of mesne profit/damages on the ground that there was no occasion for the trial court to award compounded increase every year @ 15 % from the rate of rent which was due and payable on 22 . 11.1999 i.e. Rs 43,680/- p.a. ( @ Rs. 3640/- p.m.). Ld. Counsel for the appellants/defendants has contended that the awarding of uniform compounded increase for all the years was not only arbitrary but also did not have any judicial precedent to support. At this stage, it would be apposite to note that admittedly, the suit property which is situated at Aruna Asif Ali Road, Delhi was rented on July 23, 1980 for commercial purpose and the suit was decreed in March 2023. Almost twenty-five years have passed since the respondent(s)/plaintiff(s) have terminated the tenancy of the appellants/defendants by giving notice to RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 50 of 55) appellants/defendants in the year 1999. Prices of immoveable property from the 1990s and the early 2000s cannot be compared to the cost of properties and the rate of inflation today. Consequently there has been exponential rise in the rental prices of the properties and as discussed in foregoing paras the said fact of staggering increase in rental values of the properties in urban areas and in particular the metropolitan area like Delhi being capital is taken notice of the by the courts time and again. As observed above, it is an admitted fact that despite termination of the tenancy on 23.11.1999, the appellants/defendants have been enjoying the suit property since last 24 years without any legal rights and merely paid a meagre amount of Rs. 3080/- till February 2022 to the respondent(s)/plaintiff(s) for a huge commercial suit property admeasuring about 2655 sq. feet. As such, this court believes, that ld. trial court rightly exercised its judicial discretion and correctly took judicial notice of the fact of the escalation of the prices in the properties in Delhi and therefore, after drawing support from the judgment of Hon'ble High court Delhi in MC Agarwal HUF vs. M/s Shahara India (supra) to meet the ends of justice,awarded mesne profits @ 15 % increase compounded annually from the last rate of rent. It is noteworthy here that once, the Hon'ble High court has formulated the general principle applicable across the board upon the properties in the Delhi, depending upon whether the same are being put to commercial or are in residential use, Ld, trial court was well within jurisdiction to apply the said principal and no fault can be find with that approach of the Ld. trial court in awarding mesne profit @ 15% increase on the last agreed rate of Rs.
RCA DJ NO. 73/23(Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 51 of 55) 3640/- compounded annually on the strength of the abovesaid judgment in respect of suit property which was admittedly given for commercial use.
48. Ld. counsel for the appellants/defendants has also raised question as regards the right of the respondent/plaintiff (M/s ALGOQUANT FINANCIALS LLP) to pursue the suit as the plaintiff on the ground that respondent/plaintiff has not proved the alleged sale deed 12.02.2022 whereby he claimed to have purchased the suit property. It is further contended that suit property could not have been sold vide registered sale deed registered in the name of the respondent/plaintiff ( M/s ALGOQUANT FINANCIALS LLP) without payment of arrears of property tax/clearance/permission of the concerned department/authority as the property was stated to be sealed by the North Delhi Municipal Corporation in the year 2018 due to non-payment of the property tax by the original plaintiffs. The said argument on behalf of the appellants/defendants questioning the sale of suit property by the original plaintiffs to respondent/plaintiff i.e. M/S Algoquant Financials LLP pending the alleged arrears of property taxes dues or that plaintiff/respondent, M/s Algoquant Financials LLP has not proved on record its ownership documents in respect of the suit property or that no evidence was recorded in this respect as to when they had purchased the suit property and the documents allegedly filed on record are not proved in evidence can be addressed just by perusal of the trial court's record. It is observed that during the pendency of suit, the suit property was sold by the original plaintiffs and their legal heirs as the case RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 52 of 55) may be to M/s Algoquant Financials LLP by virtue of registered sale deed dated 12.02.2022 for a valuable consideration of Rs. 14 crores and on which a stamp duty of Rs.78 lac have been paid to the government. Copy of Certified copy of which is on record. As far as objections with respect to non clearance of Municipal dues or want of permission is concerned, the said issue is between the government authorities and the parties to the sale deed and does not pertain to the appellants/defendants and they have as such no right to raise the said issue. Once as property is sold by registered sale deed, there is a presumption as regards the due execution of the same and the same is presumed to be validly executed unless proved otherwise in the appropriate proceedings. On the basis of said sale deed, the respondent/plaintiff had filed the application under Order XXII Rule 4 Civil Procedure Code, 1908 and Order I Rule 10 Civil Procedure Code, 1908 for impleading himself as plaintiff instead of original plaintiffs. That vide order dated 07.09.2022 the Ld. trial court allowed the said application under Order XXII Rule 4 Civil Procedure Code, 1908 and Order I Rule 10 Civil Procedure Code, 1908 (Considering the same as an application under Order XXII Rule 10 Civil Procedure Code, 1908) and amended memo of parties was taken on record. Accordingly the suit was allowed to be continued by M/S Algoquant Financials LLP as plaintiff in place of Sh. Swapan Banerjee, Sh. Supriya Banerjee, Sh. Saurav Banerjee and Sh.Sujoy Banerjee (Original Plaintifs). That the appellants/defendants did not challenge the said order and even in the present appeal the said order has not been assailed and accordingly the said order has attained finality. In view of the RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 53 of 55) forgoing discussions, argument objecting the sale of suit property and impleadment of new plaintiff in place of original plaintiffs is hereby rejected.
49. Ld. trial court while deciding the issue no. 4 which pertains to the enquiry as regards the entitlement of respondent(s)/plaintiff(s) for arrears of rent held that since the rent of the suit property stood enhanced to Rs. 3640/- vide legal notice dated 21.02.1995 and further in view of the admission of the appellants/defendants that during the period 01.06.1997 to 22.11,1999 appellants/defendants have paid rent at the rate of Rs. 3080 per month/- , the respondent(s)/plaintiff(s) are entitled to arrears of rent @ Rs. 560/- per month ( being the difference between the actual rate of rent i.e. Rs. 3640/- per month minus the rate of rent paid @ Rs. 3080/- per month) from 01.06.1997 till 22.11.1999. This court in agreement with the conclusion of the Ld. trial court with regards to entitlement of respondent(s)/plaintiff (s) for the arrears of rent and the same is accordingly upheld.
50. Keeping in view the above discussion this court holds that the Ld. Trial Court properly decreed the suit for possession of the suit property because, as the respondent(s)/plaintiff(s) has satisfactorily proven all the three elements that which are required to be proved in a suit for eviction, i.e., (i) landlord- tenant relationship, (ii) due termination of tenancy, and (iii) the rent being more than Rs. 3500 per month. As observed in the preceding paragraphs the conclusions of the Ld. trial court regarding the mesne profits and rent arrears are likewise RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 54 of 55) supported by the proper application of the duly proved facts. As a result, this court finds that the Ld. Trial Court did not err in fact or law when it issued the contested judgment and decree. For the reasons that were previously discussed, the Ld. trial court's ruling that M/s Metal Hisar Metal Industries Ltd. is not a necessary party is likewise upheld. Therefore, this court finds no reason to interfere with the findings or conclusions of the Ld. trial court, as it believes that the trial court properly decreed the suit in favour of the plaintiff/respondent and against the appellants/defendants.
51. In view of forgoing discussion, the appeal being devoid of any merit is hereby dismissed and the impugned judgment and decree passed by the Ld. Trial court is upheld. The appellants/defendants shall bear the cost of appeal.
52. Trial Court Record file be returned to the Ld. Trial Court after due compliance.
53. Copy of this order be sent to Ld. Trial Court.
54. Appeal file be consigned to Record Room.
Announced in the open Court On 09.12.2023.
(NEERAJ SHARMA) ADDL. DISTRICT JUDGE-04 (CENTRAL) TIS HAZARI COURT: DELHI RCA DJ NO. 73/23 (Shri Mahabir Prasad Jindal & Ors Vs. ALGOQUANT FINANCIALS LLP ) (Page no. 55 of 55)