Delhi District Court
M/S Hkd Laboratories vs ) Estate Officer on 13 July, 2018
IN THE COURT OF MS. POONAM A. BAMBA
DISTRICT & SESSIONS JUDGE
NEW DELHI
In the matter of :
PPA No. 255/16
M/s HKD Laboratories
Through its Proprietor Mr.Rajesh Saigal
Shop No.36, Main Shopping Arcade
Hotel The Ashok,50B, Chanakyapuri
New Delhi110021.
Also at:
8C/4, Rajpur Road, Civil Lines
Delhi110054. ...... Appellant
Versus
1.) Estate Officer
Indian Tourism Corporation Ltd.
1st Floor, Jeevan Vihar Bldg,
3 Sansad Marg, New Delhi.
2.) Indian Tourism Development Corporation
A company incorporated under the Company's
Act, having its registered office at Scope Complex
Core8, Lodhi Road, New Delhi110003
and Unit: The Ashok,50B Chanakyapuri
New Delhi. ..... Respondents
APPEAL UNDER SECTION 9 OF THE PUBLIC PREMISES (EVICTION OF UNAUTHORIZED OCCUPANTS) ACT, 1971, ON BEHALF OF THE PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 1 of 26 APPELLANT AGAINST THE ORDER DATED 03.08.2012 Date of filing of appeal : 16.08.2012 Arguments concluded on : 13.07.2018 Date of judgment : 13.07.2018 J U D G M E N T 1.0 Vide this judgment, I shall dispose of the appeal of M/s H.K.D. Laboratories, under section 9 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 ("the PP Act" in short) against the order dated 03.08.2012 under sub sections (1) & (2A) of Section 7 PP Act,passed by the Estate Officer ("the impugned order" in short) directing the appellant to pay the damage charges of Rs. 17,50,000/ for the period w.e.f. 26.02.2009 to 30.09.2009 and further damages @Rs.500/ per sq. ft. per month for the subsequent period w.e.f. 01.10.2009 to 09.03.2010, together with the interest on the outstanding amount @18%p.a. from the date of its accrual till its final payment, with respect to the premises i.e. air conditioned space of 500 sq. ft. of Shop No. 36, Main Shopping Arcade, Ashok Hotel, 50B, Chanakya Puri, New Delhi110 021, ("the said premises" in short).
2.0 The facts in brief as per the appeal are that:
(i) vide license deed dated 01.09.2006, the PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 2 of 26 appellant was granted license to run and operate a Chemist Shop at the said premises for three years w.e.f. 01.09.2006 to 31.08.2009 at the license fee of Rs.3,72,000/p.a. i.e. Rs.31,000/p.m/Rs.62per sq.ft. p.m.;
(ii) on 07.08.2008, in an illegal and arbitrary manner, a show cause notice was issued to the appellant to explain within three days time, as to why its license be not terminated in view of alleged violation of subclauses 3 & 11 of the Clause VII of the License Deed. As the proprietor of the appellant was unwell, the said notice could not be responded within three days. Yet another notice dated 13.08.2008 was issued to the appellant giving him a final opportunity to appear on 14.08.2008 and show cause as to why action should not be initiated against it;
(iii)the above notice was responded to by the appellant vide its reply dated 16.08.2008, duly explaining that the area alleged to be used for PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 3 of 26 office, was actually being used to offer to the customers and particularly hotel guests, a place to sit in comfort; and that the area was also being used for storage of medicines that are kept in stock or for the medicines which were yet to be placed on display. Thus, the misunderstanding was cleared and the appellant had even offered to appear in person, if required to clarify the matter.
As there was no response from the respondent's side, the appellant was under the impression that the matter stood explained. Accordingly, after six months, it applied for renewal of the license on 02.02.2009;
(iv) within two weeks of its request for renewal, the respondent no.2, with the fraudulent intention not to renew the License Deed, on 18.02.2009 convened a meeting of the License Committee. In this meeting, a reference was made to the note dated07.09.2007 of Senior Manager(V&S) which mentioned that the appellant was utilizing only one fourth of the area of the licensed premises/ PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 4 of 26 the said premises as Chemist Shop with only basic medicines and is also selling chocolates, candies, deodorants, chips, cigarettes etc. and the rest of the area seems to have been given to M/s NOGA. The Committee noted that on inspection, it came to their knowledge that only one fourth of the area (91.46sq. ft.) was being used as a chemist and the rest of the area (418.24sq.ft.) for Office use. The Committee also noted that they did not find the appellant's reply as satisfactory and recommended termination of the License Deed. Pursuant to the recommendations of the said Committee, the respondent no.2 on 24.02.2009, directed termination of the License Deed;
(v)on 26.02.2009, the respondent no.2 terminated the License Deed arbitrarily and illegally. On 09.03.2009, the appellant replied to termination letter mentioning that the grounds for termination were absolutely false and frivolous. The show cause notice did refer to the violation of PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 5 of 26 Clauses(of License Deed) relating to subletting but neither any specific allegation in this respect was made nor was any evidence placed on record, to show that the said premises was sublet to anyone. Thus, the allegations in the show cause notices dated 07.08.2008, 13.08.2008 and even in the termination letter dated 26.02.2009, were vague and did not convey the specific allegations/grounds for cancellation of license;
(vi) after the expiry of the initial license period on 31.08.2009, on 14.10.2009, the respondent no.2 filed before the Estate Officer, two applications seeking order of eviction and damages, respectively;
(vii) appellant had duly replied to the same and had inter alia, placed on record, a letter dated 04.05.2009 addressed by respondent no.2 establishing that renovation work in the Hotel had commenced and was to end by September 2009.
But, the renovation had not ended even by PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 6 of 26 February 2010 which caused hindrance to ingress and egress to the said premises. The said fact had come on record before the Estate Officer by way of a notarial Inspection Report dated 16.02.2010(proved by Sh.Prem Lal, Public Notary/RW2, Sh.Arun Gupta/RW3, Pradeep Kumar Dogra/RW4 and the appellant/RW1). The appellant had also filed an application for appointment of a Local Commissioner to inspect the said premises on 17.02.2010, but the same was dismissed by the Estate Officer. Respondent no.2 examined a single witness, who admitted that he had no personal knowledge whereas, the appellant examined four witnesses. Despite that the Estate Officer proceeded to pass the impugned order, in utter disregard of the material placed on record.
3.0 The appellant has challenged the impugned order inter alia on the grounds that:
(i) the Estate Officer passed the impugned order without determining the validity of termination of PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 7 of 26 the License Deed; and even made contradictory observations. On one hand, he noted that the appellant had challenged the termination of license and on the other hand, he mentioned that the termination was not challenged. Thereafter, he arrived at a finding that the termination was valid since the license was not renewed;
(ii) the Estate Officer failed to appreciate that the respondent no.2 under clause IV(1) of the License Deed had the discretion to either terminate the license without notice or to terminate the same by giving three month's notice. Having exercised the option to terminate the license by way of notice, notice issued to the appellant could come into effect only after expiry of three months period; the appellant however was not given sufficient time. The license therefore, was terminated in gross violation of the terms and conditions of the License Deed;
(iii) the Estate Officer has failed to appreciate the material placed on record and the impugned order suffers from nonapplication of mind;
PPA No. 255/16M/s HKD Laboratories vs Estate Officer & Anr. Page No. 8 of 26
(iv) the reasoning adopted and quantum of damages awarded by the Estate Officer are illegal and misconceived as no evidence at all about the quantum of damages was led before the Estate Officer. The Estate Officer failed to consider the criteria for determining damages laid down under Section 7 PP Act and Rule 8 The Public Premises (Eviction of Unauthorised Occupants) Rules, 1971 ("PP Rules" in short). Further, the concept of penalty is alien to the principles laid down in these provisions and therefore, the Estate Officer erred in taking the same into account as one of the criteria in assessment of damages. The Estate Officer even ignored the testimony of the appellant's witness that the rental of the similar shop is not more than Rs.60/per sq.ft;
(v) the Estate Officer awarded not only disproportionate damages but also interest @ 18% p.a. without any evidence on record and disregarding the fact that the area surrounding the PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 9 of 26 said premises was under renovation since May 2009 and that the said premises could not have been rented out by the respondent no.2. Thus, there was no opportunity loss to the respondent. The impugned order is therefore, a nonspeaking order;
(vi) the Estate Officer also failed to consider that the respondent no.2 was bound by PPE Guidelines dated 30.05.2002. As per paras 2(iv), 2(v) & 3 of the said guidelines, he was to satisfy himself that the respondent no.2 being the instrumentality of State was duty bound to act fairly. But he failed to do so;
4.0 The respondent on the other hand, sought dismissal of this appeal with heavy cost. It was submitted that the License Deed in favour of the appellant was rightly terminated, as the appellant was using only one fourth of the said premises for running the chemist shop and the remaining major portion i.e. 418.24 sq.ft., for running an office, in violation of the terms of the License Deed. Even otherwise, the License Deed stood terminated by efflux of time on 31.08.2009; and the same was not renewed any further. In view of the same, the appellant became an unauthorized occupant of PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 10 of 26 the said premises after 31.08.2009. The appellant vacated the said premises on 09.03.2010 and therefore, no order of eviction was required to be passed by the Estate Officer. With regard to damages, the respondent submitted that the appellant being in unauthorized occupation of the said premises w.e.f. 01.09.2009, it became liable to pay damages with effect therefrom i.e. 01.09.2009. The Estate Officer after duly considering the nature of premises and its location etc. has rightly awarded the damages.
5.0 I have heard Sh.Anupam Singh & Sh.Siddharth Joshi, Advocate for the appellant and Sh. Deepak Thukral, Advocate for the respondents and have perused the record carefully.
6.0 Admittedly,the said premises measuring approximately 500 per sq.ft. was given on license to the appellant for a period of three years w.e.f 01.09.2006 to 31.08.2009 vide License Deed dated 01.09.2006. It is also not in dispute that the said License Deed was terminated with immediate effect vide letter dated 26.02.2009 in view of violation of sub clauses 3(subletting) & 11(used as godown) of clause VII of the License Deed, calling upon the appellant to hand over the vacant and peaceful possession as per the terms.
PPA No. 255/16M/s HKD Laboratories vs Estate Officer & Anr. Page No. 11 of 26 6.1 The appellant has contended that the Estate Officer did not properly consider his challenge to the validity of cancellation of License Deed. He has pleaded that the notices issued to him were vague and did not specify as to how the appellant was in violation of the terms of the License Deed. There was no breach of the above terms and conditions of the License Deed; he vide his reply dated 16.08.2008 duly explained that the area alleged to be used for office, was actually being used to offer to the customers and particularly hotel guests, a place to sit in comfort; and that the area was also being used for storage of medicines that were kept in stock or for the medicines which were yet to be placed on display. But without considering its explanation, the respondent had arbitrarily terminated the License Deed much later and only after he applied for renewal of the same vide his letter dated 02.02.2009. The Estate Officer, without assigning any reason, simply noted that the termination was valid.
6.1.1 In response, the respondent submitted that the appellant was using only one fourth of the area for the purpose of running a chemist shop. It is further submitted that in its own reply to the show cause notices as well as in the evidence filed by way of PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 12 of 26 affidavit before the Estate Officer, the appellant has admitted that he was using approximately three fourth portion of the said premises as storage area and for purposes other than running the business of chemist although, it has wrongly stated that the said area was being used for customer waiting area. The respondent further submitted that the matter was duly considered by the License Committee consisting of Regional Manager, Senior Manager(Civil), CAO and Manager(BMC). The Committee did not find the reply furnished by the appellant as satisfactory and found that the appellant had been in continuous violation of subclauses 3 &11 of Clause VII of the License Deed; it had been using area of 418.24 sq.ft. as office out of 500 per sq.ft. allotted to him for running the chemist shop at subsidized rate and recommended termination of the license. GM(Ashok) after duly considering the same directed termination of the license. Accordingly, the license was terminated vide letter dated 26.02.2009. The Estate Officer after duly considering these facts found that the license was validly terminated. Moreover, as the appellant vacated the said premises on 09.03.2010, the said issue may not have been dealt with in detail.
6.2 It is a matter of record that vide note dated 07.09.2007, Senior Manager(V&S) brought to the notice of the organization that PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 13 of 26 the appellant was utilizing only one fourth of the area of the said premises as chemist Shop with only basic medicines and was also selling chocolates, candies, deodorants, chips, cigarettes etc. and noted that the rest of the area seems to have been given to M/s NOGA. In view of violation of subclauses 3&11 of clause VII of the License Deed, a notice dated 07.08.2008 was issued to the appellant to show cause why action for termination of the License Deed be not initiated as the appellant was running an office in area measuring 418.24 sq.ft. out of the total area of approximately 500 per sq.ft. licensed to him for running the chemist shop. Said notice is not in dispute. Admittedly, as the said notice was not responded to by the appellant within the given time of three days, another notice dated 13.08.2008 was issued to the appellant giving him final opportunity. The appellant then replied to the same vide letter dated 16.08.2008 mentioning that the area identified by respondent as being used for an office is the area that is being used to offer customers and particularly hotel guests who come in with large prescriptions or are otherwise in discomfort and liked a place to sit, keeping in mind that the shop is in a five star hotel. The said reply further mentioned that in addition, the area is used for storage of medicines that are kept in stock or for medicines that are yet to be placed on display.
PPA No. 255/16M/s HKD Laboratories vs Estate Officer & Anr. Page No. 14 of 26 6.2.1 From the appellant's own reply, it is evident that the appellant was not using an area of 418.24 sq.ft. (out of total area of approximately 500 per sq.ft.) for the chemist shop/selling of medicines, for which the said premises was licenced. The said area was also being used for storage of medicines. It is strange that the appellant did not use the major portion of the said premises for his core business/chemist shop for which it was licensed and rather, used it for providing comfort to the visiting customers. Further, the appellant admittedly also used the area for storage purposes although, clause VII(11) of the License Deed prohibited use of licensed space for godown. The said clause reads as under :
VII.COVENANTS OF THE LICENSEE
11. The Licensee shall use the licensed space for the purpose of sale of the above items and business(as per annexure "A") only and not as godown nor as living quarters not for lodging or any other purpose whatsover, nor shall be licensee allow any other individual or party to display, sell or advertise any goods or items in the licensed space.
6.3 The explanation furnished by the appellant was not found satisfactory by the License Committee and the General Manager(Ashok), who then directed termination of license. The PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 15 of 26 appellant has contended that the allegations were false and that the findings recorded by the Committee were not true. Let me mention here that subclause 1 of clause IV of the License Deed provides that the opinion of the General Manager, The Ashok/ his nominee shall be final and binding with respect to breach of any of the terms and conditions of the License Deed. The said clause reads as under:
"IV TERMINATION OF LICENCE
1. It is hereby agreed that the Licensor shall be entitled to forthwith terminate this license without notice in the event of any breach of the terms & conditions of the Agreement, notwithstanding the waiver of any previous right of termination or in the event of a Petition being presented in the Court for declaring the licensee as insolvent or otherwise. In all such cases the opinion of the General Manager of The Ashok, New Delhi and /or his nominee shall be final and binding on the point whether or not breach has been committed.
6.4 Considering the above facts and circumstances in entirety, the appellant has failed to demonstrate that the License Deed was wrongly terminated.
6.5 It would also not to be out of place to mention here that even otherwise the License Deed came to an end on 31.08.2009, by PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 16 of 26 efflux of time, in absence of any further renewal. This fact is even categorically incorporated in subclause 4 of clause I of the License Deed, which mentions that if fresh License Deed is not executed for any reason, whatsoever, thirty days prior to the expiry of the initial period of three years, it will be presumed that the license has not been renewed and the use of the premises by the licensee shall be considered as unauthorized.
6.6 It may be mentioned that in Dr.K.R.K.Talwar vs Union of India and another AIR 1977 Delhi 189, Hon'ble High Court held that where the lease of a tenant is terminated or the allotment is cancelled, the authority under which he was allowed to occupy disappears and he becomes a person in 'unauthorized occupation of the premises. It is also a settled position of law that the onus is upon the occupant to show his authority to occupy the public premises after expiry of license (UOI vs S.M.Agarwal & Ors., 1995(II) AD(Delhi) 293 (Division Bench). The appellant has failed to demonstrate its authority to occupy the said premises after 26.02.2009, when the license of the said premises was terminated.In view of the same, I find no infirmity in the finding of the Estate Officer that the appellant became unauthorized occupant of the said PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 17 of 26 premises w.e.f.26.02.2009.
6.7 Admittedly, the appellant has already vacated the said premises on 09.03.2010.
7.0 The appellant also contended that the impugned order can also not be sustained as the proceedings for eviction initiated against it were malafide and were in contravention of the Govt.
guidelines/resolution dated 30.05.2002, which clearly mentioned that a lawful occupant of any public premises cannot be termed as an unauthorized occupant merely on service of notice of termination of tenancy. The respondent was bound by the said guidelines.
7.1 It may be mentioned that the Hon'ble High Court in Uttam Prakash Bansal and Ors. Vs LIC & Ors. 100(2002) DLT 497(DB), while dealing with the similar plea against LIC, held that the Government Guidelines cannot override the specific provisions of PP Act. The Hon'ble High Court, relying upon the judgment of Hon'ble Supreme Court in AIR 1990 SC 166 and AIR 1996 SC 2710 had observed that the Government guidelines, in view of clear statutory provisions, would not stand as a bar to initiation of proceedings under PP Act. In view of the same, the appellant's contention is bereft PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 18 of 26 of any merit.
DAMAGES 8.0 The Estate Officer has awarded damages @ Rs.500/per sq.ft.p.m. The appellant has contended that unreasonable and exorbitant damages have been awarded by the Estate Officer without any basis; the Estate Officer failed to consider the criteria as laid down in Section 7 PP Act and Rule 8 PP Rules and also in total disregard of the fact that due to renovation work in the hotel, access to the said premises was hampered and the same could not have fetched the damages as awarded. Appellant has also contended that no shop in the lower shopping arcade is fetching more then Rs.62/per sq.ft.per month. The Estate Officer even ignored the evidence led by the appellant. It is also contended that the Estate Officer also erred in observing that penalty charges need to be imposed in case of unauthorized occupation; the concept of penalty is alien to the principles laid down in PP Act/PP Rules.
8.1 The respondent on the other hand, submitted that the damages @ 500/per sq.ft. have been correctly awarded by the Estate Officer after duly considering all the criteria laid down under PP Act/PP Rules and taking into account the nature of the property and its prime location. Ld. Counsel for the respondent also submitted that renovation PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 19 of 26 work in The Ashok hotel was undertaken with effect from 10.02.2010, in view of Commonwealth Games which were to be held in India. No obstruction due to renovation work was caused to the appellant's business. Ld. Counsel for the respondent also submitted that the damages are compensatory/punitive payment awarded by the court for the loss suffered by unauthorised use of public premises and has placed reliance upon the judgment in H.S.Gupta vs Union of India And Others,ILR(1983) I Delhi, in support.
8.2 Before examining the rival contentions, let me refer to sub sections (2) and (2A) of Section 7, which talk about assessment of damages. Same read as under :
"7.Power to require payment of rent or damages in respect of public premises. (2)Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order.
[(2A)While making an order under subsection (1) or subsection (2), the estate officer may direct that the arrears of rent or, as the PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 20 of 26 case may be, damages shall be payable together with simple interest at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978 (14 of 1978).] 8.2.1 As per section 7(2) of PP Act, the damages have to be assessed as per the principles prescribed in that respect. Rule 8 of The Public Premises(Eviction of Unauthorised Occupants)Rules,1971( "PP Rules" in short), lay down the matters which may be taken into consideration while assessing the damages for unauthorized use & occupation of any public premises. Rule 8 of PP Rules reads as under "8.Assessment of damagesIn assessing damages of unauthorised use and occupation of any public premises the estate officer shall take into consideration the following matters, namely :
(a) The purpose and the period for which the public premises were in unauthorised occupation,
(b) The nature, size and standard of the accommodation available in such premises;
(c) The rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person;
(d) Any damage done to the premises during the period of unauthorised occupation;
(e) Any other matter relevant for the purpose of assessing the PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 21 of 26 damages."
8.2.2 Thus, while assessing damages, the purpose, nature, size,standard of the accommodation and the rent it would have fetched etc. need to be taken into account while arriving at the quantum of damages for unauthorized occupation of public premises.
8.3 Now, let me examine whether the Estate Officer kept in mind the above criteria while awarding damages @ Rs.500/ per sq.ft. per month. Perusal of the impugned order shows that after referring to the evidence led by both the sides and the arguments advanced by them, the Estate Officer awarded damages @ Rs.500 per sq.ft. per month w.e.f.26.02.2009, observing as under :
.....In support of its applications, the applicant examined one witness namely Shri A.M.Jha, Manager(F&A) of the applicant's hotel who tendered his affidavit into evidence and was cross examined by the counsel of the respondent. On the other side, the respondent in its defence examined four witnesses. These witnesses are Mr. Prem Lal, Advocate and Notary Public, Mr. Rajesh Saigal, Proprietor of respondent firm, Mr.Arun Gupta and Mr.Pradeep Kumar Dogra. All the witnesses were crossexamined by the counsel for the applicant.
This Forum heard both sides at length and written arguments were also submitted by both sides. The counsel for the applicant during PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 22 of 26 the course of arguments submitted that the statement of Mr. Prem Lal is not trustworthy as he allegedly inspected the license premises without informing or giving any notice to the applicant and is biased. The applicant further argued that the witness of the respondent Mr.Arun Gupta in his cross examination had stated that during the period w.e.f.May 2009 to March 2010, he had visited the shop in question about 20 times and this shows that the respondent was running its chemist shop very smoothly during that period and thus the submission of the respondent that its shop was closed during that period is not substantiated. The applicant further argued that even the respondent has not produced any evidence in support of its alleged claim of suffering business loss on account of renovation work of the applicant.
On the other side, the respondent contended during the arguments that the applicant's former application became infructuous since the respondent had peacefully vacated and handed over possession of the premises on 09.03.2010. The respondent further contended that the respondent's decision to vacate the premises was not willful and was made under the circumstantial pressure created by the applicant by blocking the ingress and egress of the premises from May 2009 to March 2010 causing business losses to the respondent and which has been proved by the witnesses examined by it. The respondent further argued that the termination notice of the applicant is in violation of the Guidelines published in the Gazette of India dated 08.06.2002. The respondent further argued that the applicant has failed to show the basis for its claim for the damages @ Rs.500/per sq.ft.per month.PPA No. 255/16
M/s HKD Laboratories vs Estate Officer & Anr. Page No. 23 of 26 I have gone through the entire record of the case and heard both the parties at length. ............. However, the claim of the Applicant towards damages/outstanding under section 7 is under question. Now the period of unauthorized occupation and determination of damage charges are required to be determined by this Forum. It should be understood that for determination of amount of damages, the aspect of opportunity loss as well as penalty for unauthorized occupation need to be looked in to. Imposition of higher rates of damage charges will act as a deterrent factor otherwise it would be a general trend for the licencee to hold on the Public Premise for a longer period after expiry or termination of the period of licence.
On the basis of ongoing discussions, documents etc. and evidence led before this Court, I, therefore, hereby in exercise of the powers conferred upon me under the Public Premises(Eviction of Unauthorized Occupants) Act, 1971 hold the respondent unauthorized occupant from 26.02.2009 and order that the respondent is liable to pay the damage charges of Rs.17,50,000/ for the period 26.02.2009 to 30.09.2009 and damage charges @ Rs.500/per sq.ft.per month for the subsequent period from 01.10.2009 to 09.03.2010 i.e. the day of vacation of premises. The respondent is further liable to pay interest on the outstanding amount @ 18% p.a. from the date of its accrual till its final payment.
Rule 8 of the Act provides for assessment of damages for unauthorized use and occupation of any public premises. It is observed that the area where the said public premises occupied by the respondent is located in prime land in Delhi and in the vicinity of PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 24 of 26 diplomatic mission of various countries as well as in the close proximity to the Prime Minister's House. The applicant is the Flagship Five Star Deluxe Hotel in the location and is thus the trend setter for determination the rental value in and around.
I therefore,................................................................... "
8.4 From the above, it is apparent that the Estate Officer after mentioning about the witnesses produced by both the sides and noting the arguments advanced by both the parties,proceeded to award damages @ Rs.500/per sq.ft.per month without appreciating the evidence led by both the sides and recording specific reasons for accepting/ rejecting such evidence; and thereafter, he simply went on to mention that the location of the said premises was in a prime locality. The impugned order is therfore, a nonspeaking order and cannot be sustained.
9.0 In view of the above, the impugned order under Section 7(1)&7(2A) PP Act qua quantum of damages is set aside. Matter is remanded back to the Estate Officer for determining the damages after duly considering evidence led by both the parties and recording its reasons for arriving at the quantum so determined and the rate of interest awarded.
9.1 Both the parties shall appear before the Estate Officer PPA No. 255/16 M/s HKD Laboratories vs Estate Officer & Anr. Page No. 25 of 26 on 19.07.2018 at 2 PM. No further notice shall be issued by the Estate Officer.
10.0 The appeal is disposed of accordingly.
11.0 Estate Officer's record be returned alongwith copy of this judgment.
12.0 Appeal file be consigned to record room.
Digitally signed by POONAM POONAM A BAMBA
A BAMBA Date: 2018.07.13
16:41:16 +0530
Announced in the open Court (Poonam A. Bamba)
on 13.07.2018. District & Sessions Judge
New Delhi
PPA No. 255/16
M/s HKD Laboratories vs Estate Officer & Anr. Page No. 26 of 26