Madras High Court
Mrs.Haima Sundaram vs /12 on 14 October, 2019
Author: P.Velmurugan
Bench: P.Velmurugan
C.S. No.894 of 2005
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment Reserved On 21.12.2024
Judgment Delivered On 02.01.2025
Coram:
THE HONOURABLE MR. JUSTICE P.VELMURUGAN
C.S. No.894 of 2005
Dr. (Mrs.). Kamakshi Sundaram (Deceased)
'The Canopy' Poes Garden,
97, Binny Road, Chennai - 600 086
represented by her Power of Attorney
Mr.C.A.Sundaram
(Amended as per order dated 14.10.2019 in
Appn. No.5388/2019)
1. Mrs.Haima Sundaram
'The Canopy' Poes Garden,
97, Binny Road, Chennai - 600 086
represented by her Power of Attorney
Mr.C.A.Sundaram
2. Mr.Skanda Sundaram
Apartment No.8B, '10 Downing'
No.132, Greenways Road
Raja Annamalaipuram, Chennai - 600 028 ... Plaintiffs
Vs.
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C.S. No.894 of 2005
1. Bharat Petroleum Corporation Ltd.
1, Ranganathan Gardens
Off 11th Main Road, Anna Nagar, Chennai - 600 040
Represented by its Regional Manager
2. G.Sitaraman & Co.
Dealer
Bharat Petroleum Corporation Ltd.
No.1, Sir Dr.C.P.Ramaswamy Road
Alwarpet, Chennai - 600 018 ... Defendants
Prayer: Amended Plaint filed under Order IV Rule 1 of O.S. Rules
read with Order VII Rule 1 of CPC., praying for a judgment and decree,
jointly and severally against the defendants on the following terms;
a. Directing the defendants to vacate and hand over
peaceful and vacant possession of the said property situate at
No.1, Sir Dr.C.P.Ramaswamy Road, Alwarpet, Chennai - 600
018, more fully described in the Schedule to the plaint to the
plaintiffs;
b. Directing the first defendant to pay past mesne
profits of a sum Rs.54,00,000/- (Rupees Fifty Four Lakhs
Only) from 25.09.2002 till date of this suit to the plaintiffs
together with interest thereon at 18% per annum;
c. Directing the first defendant to pay future mesne
profits of Rs.1,50,000/- (Rupees One Lakh and Fifty
Thousand Only) per month or at such other rate as this Court
may fix, in accordance with market value whichever is
higher from the date of plaint till the date of delivery of the
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vacant possession of the said property to the plaintiffs
together with interest thereon at 18% per annum; and
d. Directing the defendants to pay the costs of the suit.
For Plaintiffs : Mr.K.Manoj Menon
For Defendants : Mr.Krishna Srinivasan, Senior Counsel
for M/s.Ramasubramaniam & Associates
*****
JUDGMENT
This suit has been filed by the plaintiffs for recovery of possession and money.
2. The brief averments of the plaint is that the plaintiffs are the joint owners of the property situated at No.1, Sir Dr.C.P. Ramaswami Aiyar Road, Alwarpet, Chennai-600 018, ad-measuring an extent of 3 grounds and 1434 sq.ft or thereabouts and more fully described in the Schedule to the plaint hereunder (hereinafter referred to as 'the Said Property'). The first defendant is operating a Petrol Station in the said property. The second defendant is a retail dealer who is operating the Petrol Station on behalf of the 1st defendant.
2.1. M/s.Burmah-Shell Oil Storage and Distributing Company of India Ltd. (hereinafter in short referred to as 'Burmah Shell'), had entered 3/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 into an Indenture of Lease, dated 14.05.1954 with Late Mr.C.R.Sundaram and registered as Document No.677 of 1954 in the Office of the Sub- Registrar, Mylapore and had taken the said property (a vacant land) on lease for a period of 20 years with effect from 15.09.1953. Subsequently, on 24.04.1957, a fresh Indenture of Lease was entered into between the Late Mr.C.R.Sundaram and Burmah Shell, which was registered as Document No.904 of 1957, Book No.1, Volume 289, pages 214 to 218 on 03.07.1957 in the Office of the Sub-Registrar, Mylapore (hereinafter referred to as 'the Said Lease Deed'). The said Lease Deed provided for lease of the aforesaid property for a period of 20 years commencing from 15.04.1957.
2.2. Clause 2 of the said Lease Deed provided that the monthly rent of Rs.240/- shall be paid on or before 10th day of the month succeeding that, for which it is payable. As per Clause 3(iii) of the said Lease Deed, the Lessee agreed to yield up (hand-over) the said property on determination of the lease. Sub-Clause 4(iv) of the said Lease Deed, provided as follows:
"that the Lessor will on the written request of the Lessee made one month before the expiration of the term hereby created and if there shall not be at the time of such request any existing breach or non-4/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 observance of any of the covenants on the part of the Lessee herein before contained grant to it a Lease of the demised premises on the same rental for the further term of 20 years from the expiration of the said term and containing the like covenants and provisions as are herein contained with the exception of the present covenant for renewal."
2.3. In and around 1976, the Burmah-Shell was taken-over by the Central Government under the Burmah-Shell (Acquisition of Undertaking in India) Act, 1976. Subsequently, all the assets and liabilities of the said Burmah-Shell vested in the first defendant-Company. The first defendant- Company extended/renewed the Lease for a further period of 20 years with effect from 15.04.1977 and continued to pay the same rental of Rs.240/- per month. The said renewal of lease expired by efflux of time on 14.04.1997. The said lease was not renewed thereafter.
2.4. On 03.02.1997, the first defendant-Company had written to Late Mr.C.R.Sundaram, requesting renewal of lease for a further period of 20 years from 15.04.1997 on a mutually agreed rental. Mr.C.R.Sundaram having passed away on 03.11.1996, his legal heir and executor of his Estate, Mr.C.A.Sundaram, on 15.03.1997, wrote to the first defendant- Company informing the demise of Mr.C.R.Sundaram and that the joint owners of the said Property are the first and the second defendants and 5/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Mr.C.A.Sundaram. The first defendant-Company was asked to vacate and hand-over the peaceful possession of the said Property on 15.04.1997 and the 1st defendant's request for renewal was refused.
2.5. On 25.03.1997, the plaintiffs reiterated to the first defendant- Company that the lease will come to an end on 14.04.1997 and the remittance of the rent by the first defendant-Company to the account of late Mr.C.R.Sundaram would not be considered as acceptance of rent for lease of the said property and could not be taken as receipt of rent. It was also brought to the notice of the first defendant-Company that a separate Bank Account had been opened for collection of the dues of the Estate of Late Mr.C.R.Sundaram.
2.6. On 08.04.1997, the first defendant-Company had replied to the plaintiffs, alleging that as the death of Mr.C.R.Sundaram was not duly notified, they were not in a position to interact with his successors and required the copy of the Death Certificate and Will of Mr.C.R.Sundaram to be forwarded to them which was, in fact, done. The plaintiffs had, in fact, vide letters of 15.03.1997 and 25.03.1997, already notified the 1st defendant regarding the demise of Mr.C.R.Sundaram and the particulars of his legal heirs.
2.7. Subsequently, the 1st defendant contacted the legal heirs of 6/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Mr.C.R.Sundaram, both directly and through the second defendant to find out as to whether there was any possibility of them permitting the continued occupation by the 1st defendant of at least a part of the said property. Several discussions in this regard took place between the plaintiffs and the 1st defendant. Without prejudice to the plaintiffs' rights, and so as to amicably resolve the matter between the parties, a broad understanding vide letter dated 26.12.1997 was suggested, whereby the 1st defendant, would have to release 2 grounds of land in the said property and would continue as a Lessee for a period of 5 years on the balance area on payment of rental as may be mutually agreed. Thereafter, the 1st defendant's Officers informed the plaintiffs that they will be forwarding the papers to their Regional Office and Head Office, and the same would revert.
2.8. As there appeared to be no bona-fides in the conduct of the 1st defendant and the 1st defendant was needlessly protracting the issue so as to continue its illegal and unlawful occupation, the plaintiffs on 01.07.1998 wrote to the 1st defendant reiterating the factum of termination of Lease and the defendants' failure to vacate the said property. The plaintiffs, to ensure that no technical objections would be taken by the 1st defendant contesting on the succession of the said property, also forwarded to the 1st 7/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 defendant further copies of the Death Certificate of Mr.C.R.Sundaram and the Probate issued by this Court in O.P.No.564 of 1997. The 1st defendant was also called upon to hand-over the peaceful possession of the said Property to the plaintiffs by 01.08.1998.
2.9. On 19.08.1998, the 1st defendant wrote a letter, seeking for a copy of the Will of Mr.C.R.Sundaram for the purpose of "releasing the rental arrears". In the said letter, the 1st defendant had also reiterated the request for renewal of the lease from 15.04.1997 on rental basis to be mutually agreed. A copy of the Will was handed-over to the 1st defendant so as to ensure that no technical objection as to the ownership of Mr.C.R.Sundaram's share would be raised. Subsequently, on the 1st defendant's continued request, the plaintiffs by letter dated 25.11.1998, set down in writing, without prejudice and so as to resolve the matter on the possible basis of an understanding in terms of which, the defendants were required to release forthwith 1½ grounds of the said property to the plaintiffs as per the drawings and the balance area would be given on Lease for a period of 10 years on a rental of Rs.4,000/- per month. Thereafter, despite several discussions that took place between the plaintiffs and the 1st defendant, there was no progress on such discussions.
2.10. The only legal heirs of Late Mr.C.R.Sundaram are his wife and 8/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 daughter, the deceased plaintiff and 1st Plaintiff and, his son Mr.C.A.Sundaram. Further, Mr.C.A.Sundaram's interest/share in the said property had been settled in favour of his son, Mr.Skanda Sundaram, the 2nd Plaintiff. The Patta has been issued in respect of the said property as early as in April 1976 recording, the deceased plaintiff, the 1st Plaintiff, Late Mr.C.R.Sundaram and Mr.C.A. Sundaram, as owners of the Said Property.
2.11. The plaintiffs therefore, on 21.07.2005, wrote to the 1st defendant, informing them that they continue to be in unlawful occupation of the said property from 15.04.1997 without paying any compensation and putting the 1st defendant on notice of the determination/expiry of the Lease on and from 15.04.1997. The Plaintiff's therefore called upon by the defendants to hand-over the vacant and peaceful possession of the Said Property on or from 01.09.2005 and also called upon the 1st defendant to pay a sum of Rs.1,00,000/- (Rupees One Lakh only) per month as damages/mesne profits for unlawful use and occupation of the Said Premises from 15.04.1997. Despite receipt of the said notice, the defendants have not vacated and handed-over the peaceful possession of the Said Property and neither paid nor attempted to pay the damages for unlawful occupation of the said property. The plaintiffs are therefore 9/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 constrained to file this suit for recovery of possession and mesne profits for unlawful occupation and use of the Said Property by the defendants.
2.12. The Lease having expired/determined on 15.04.1997, the defendants' continued occupation itself is unlawful. It is therefore just and necessary that the defendants be directed to vacate and hand-over the peaceful possession of the said property forthwith to the plaintiffs. The provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act would not be applicable to the Said Property.
2.13. The said Property ad-measures an extent of 3 grounds and 1434 sq.ft. and is situated in a prime and valuable commercial locality in the city of Chennai. The Plaintiffs state that the possession of the said Property by the defendants after expiry/determination of the lease on 14.04.1997, being unlawful, the defendants are liable to pay damages for use and occupation and for mesne profits from 15.04.1997. The defendants are bound to pay mesne profits every month at the rate prevailing in the locality and also based on the market value of the said Property. The plaintiffs state that fair and reasonable rate will be approximately Rs.40/ per sq.ft. per month for the use and occupation of the said Property and on calculating the same at that rate, the defendants are liable to pay a sum of Rs.3,45,360/- per month towards mesne profits or damages for use and 10/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 occupation.
2.14. The plaintiffs states that in the Schedule to the Lease Deed dated 24.04.1957, the extent of the said property has been shown as 12782 sq.ft. or thereabouts. However, without prejudice to their rights to claim mesne profits on the actual extent of property occupied by the defendants, the plaintiffs, for the purpose of calculating the mesne profits, have adopted the extent of the said property as reflected in the Patta, namely, as 3 grounds and 1438 sq.ft. (8634 sq.ft.). The plaintiffs pray to claim enhanced mesne profits, on the actual extent of the Said Property being occupied by the defendants being ascertained/measured.
2.15. The market value of land in the locality where the said property situated is Rs.1,50,00,000/- per ground or Rs.6,250/- per sq.ft. On this basis, the value of the said property ad-measuring 3 grounds and 1434 sq.ft. (8634 sq.ft.) would be Rs.5,39,62,500/-. The annual rate of return worked out at 12% on the value of Said Property would be Rs.64,75,500/- per year, or Rs.5,39,625/- per month. Hence, the mesne profits or damages that would be payable for use and occupation of the said property at Rs.40/- per sq.ft., are reasonable and they were fairly assessed in respect of the value of a similar property in that locality. However, the plaintiffs, are restricting their claim for mesne profits at Rs.1,50,000/- per month. The 11/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 defendants would be liable to pay such compensation/damages from 15.04.1997 till the date of handing-over the vacant possession to the plaintiffs.
2.16. The plaintiffs are therefore filing this suit for recovery of possession of the said property and also for recovery of mesne profits or damages for use and occupation calculated at the rate of Rs.1,50,000/- per month for the immediate past 3 (three) years. The mesne profits from 25.09.2002 to 24.09.2005 is Rs.54,00,000/-.
3. The averments made in the written statement filed by the first defendant are that, the 1st defendant/Bharat Petroleum Corporation Limited, is a Government of India undertaking and a Public Sector Enterprise under the aegis of the Ministry of Petroleum and Natural Gas. The 1st defendant is a public utility engaged in the business of refining, manufacturing and marketing of petroleum products such as Petrol, Diesel, High Speed Diesel, motor spirit, lubes, LPG, Aviation Turbine Fuel etc. by serving the larger public interest by meeting out the fuel requirements of the public. The 1st defendant caters to the general public through a well established distribution network of retail outlets spread across the length and breadth of the Country.
12/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 3.1. The suit schedule property was taken on lease as vacant land by the 1st defendant's predecessor-in-interest, being the Burmah Shell Company in the year 1954 from Mr.C.R.Sundaram vide Indenture of Lease dated 14.05.1954 (registered as Document No.677 of 1954 in the Office of the Sub-Registrar, Mylapore). In the year 1957, a fresh indenture of lease dated 24.04.1957 was entered into between the parties for a period of 20 years from 15.04.1957 at a monthly rental of Rs.240/- per month, with an option under Clause 4(v) of he Lease Deed thereof for renewal for a further term of 20 years.
3.2. The suit schedule Property had been taken on lease for the purpose of operating a Retail Outlet for marketing the petroleum products to the general public and it has always been used for the said purpose and continues to be so used even as on date.
3.3. In the year 1976 i.e. on 24.01.1976, the Government of India acquired the entire equity shareholding of Burmah Shell Oil and Storage and Distribution Company of India Limited and as a result, the said entity became a Government Company named as Burmah Shell Refineries Limited. Similarly, from 24.01.1976 onwards, the right, title and interest and liabilities of Burmah Shell Oil Storage and Distribution Company of India stood transferred to and vested in the Central Government by virtue 13/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 of the Burmah Shell (Acquisition and Transfer of Undertakings in India) Act, 1976 (Act 2 of 1976). This was pursuant to a Notification in G.S.R.40 (E) issued under Section 7 of the said Act. Subsequently on 12.02.1976, the name of the Burmah Shell Refineries Limited was changed to Bharat Refineries Limited and on 01.08.1977, the name was again changed to Bharat Petroleum Corporation Limited. Thus by the aforesaid sequence of events, the 1st defendant Company came to be the successor-in-interest of the Burmah Shell Company in general with particular reference to the Indenture of Lease entered into with Mr.C.R.Sundaram.
3.4. After being vested with the business and undertaking of Burmah Shell, the 1st defendant herein continued to carry on the marketing and distribution of the petroleum products from the suit property. For this purpose, the 1st defendant developed the suit property and had also put up superstructures, concretized the entire suit property and also modified the same to meet out the growing commercial demands of the 1st defendant's Retail Outlet. The superstructures have been developed from time to time, maintained and repaired over the years on the sole cost of the 1st defendant in keeping with business requirements and in the process, the 1st defendant had incurred significant expenditure over a period of time. 14/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 3.5. Mr.C.R.Sundaram expired in the year 1996. The Lease expired on 14.04.1997. Thereafter, Mr.C.A.Sundaram claiming to be the legal heir and executor of Mr.C.R.Sundaram's Estate, had been corresponding with the 1st defendant Company. The 1st defendant had on 03.02.1997, requested lease in respect of the suit property to be renewed so as to enable it to continue to operate the Retail Outlet on the same property. This however, was initially negatived by Mr.C.A.Sundaram. Subsequently, however negotiations were held between the parties wherein, the possibilities of extension of Lease/purchase of the suit property were explored and discussed. Right from the year 1997, negotiations were held between the representatives of both parties, in order to arrive at an amicable settlement between the parties in respect of the dispute. However, the same were not successful. It is also pertinent to mention that, over the years, there have been numerous discussions between the parties, without prejudice to their rights regarding the suit schedule property and negotiations for purchase/continuance of lease of the same by the 1st defendant. However, such discussions and negotiations were not fruitful and no agreement could be arrived at by the parties, mainly due to the unreasonable and stubborn positions taken by the plaintiffs. 15/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 3.6. Upon negotiations reaching an impasse, after a gap of more than st 8 years, the 1 defendant received a Letter dated 21.07.2005 wherein, it was alleged that the 1st defendant was in unlawful occupation of the Suit Schedule Property and calling upon the 1st defendant to handover vacant and peaceful possession of the same. A further claim of Rs.1,00,000/- per month as damages/mesne profits for unlawful occupation was also made against the 1st defendant by the said Letter.
3.7. In this context, the present Suit came to be filed praying for a decree against the 1st defendant to vacate and handover the peaceful possession of the suit property, to pay mesne profits for a sum of Rs.54,00,000/- from 25.09.2002 and future mesne profits of Rs.1,50,000/- per month from the date of the plaint till the date of delivery of the vacant possession with interest @ 18% per annum.
3.8. Immediately upon receipt of the summons in the present Suit, the 1st defendant filed an application under Section 9 of the City Tenant's Protection Act, praying for a direction to the landlord/plaintiffs to sell the suit property to the 1st defendant at a price to be determined by this Court. This Application was numbered as Application No.135 of 2006 in the present Suit.
16/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 3.9. While the aforesaid Application was pending, a batch of cases pending before the Hon'ble Apex Court (in C.A.No.1257/2007, C.A.No.1925/2007 and C.A.No.708/2008) regarding the issue as to whether Oil Corporations, such as the 1st defendant are entitled to avail the benefits of Section 9 of the City Tenants Protection Act, were then remanded from the Supreme Court to a Division Bench of this Court. This Court, vide a Judgment dated 08.08.2011 (reported in 2011 (5) CTC 437), held that, Oil Corporations, such as the 1st defendant were in legal possession, but were not in actual physical possession which is the sine qua non to maintain an application under Section 9 and proceeded to reject the Oil Corporation's Applications filed under Section 9 of the Act.
3.10. The Oil Corporations, including the 1st defendant herein, challenged the aforementioned Orders dated 08.08.2011 of the Division Bench, before the Hon'ble Apex Court in S.L.P.Nos.34839, 33430, 34945 of 2011 etc. and the same are pending. In all these cases, the Hon'ble Apex Court directed all the parties to maintain status quo as regards possession vide Order dated 16.12.2011, which interim order continues to be in force as on date. By another Order dated 09.10.2013, the batch of cases has been directed to be heard by a Three-Judge Bench of the Hon'ble Apex Court. 17/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 3.11. Subsequent to the Division Bench's Judgment dated 08.08.2011, this Court vide Order dated 17.10.2012 dismissed the 1st defendant's Application under Section 9 of the Act i.e. Application No.135 of 2006. The 1st defendant then challenged the Order of dismissal in O.S.A. No. 248 of 2013. A Division Bench of this Court dismissed the Appeal while granting liberty to the 1st defendant to file an application before the learned Single Judge in the manner known to law.
3.12. Pursuant to the aforesaid Order, the 1st defendant took out an Application No.1164 of 2014 praying for restoration of their Application under Section 9 of the Act i.e. Application No.135 of 2006. The said Application was allowed vide Order dated 17.04.2014 and the Application No.135 of 2006 was restored, on condition directing the 1st defendant to deposit a sum of Rs.20 Lakhs to the credit of the Suit and further pay a st sum of Rs.1 Lakh per month to the plaintiffs from 01.04.2014. The 1 defendant had deposited Rs.20 Lakhs, which was subsequently withdrawn st by the plaintiffs. The 1 defendant also paid the monthly sum of Rs.1,00,000/- to the plaintiffs as per order dated 17.04.2014.
3.13. As things stood thus, the plaintiffs filed an Application No.5852 of 2015 in the present suit, seeking direction to the 1st defendant to purchase the suit property for a sum of Rs.23,00,00,000/- or such market 18/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 value that may be fixed by this Court. In the said Application, vide Order dated 18.02.2016, an Advocate Commissioner was appointed to inspect and inter-alia ascertain the market value of the suit property, taking into account the Legislative mandate under Section 9 of the Act. The learned Advocate Commissioner conducted inspection and filed his Report on 18.03.2016 before this Court valuing the land at Rs.23,500/- per Sq. Ft. and the total value being Rs.20,28,99,000/-. The 1st defendant filed its objections to the said report. This Court, then proceeded to pass orders in Application No.5852 of 2015 accepting the valuation made by the learned Advocate Commissioner. It then adjourned the matter for the 1st defendant to file an undertaking to purchase the property by paying the Market Value fixed by the Commissioner and if the 1st defendant was not prepared to purchase the Property, further orders would be passed, taking into account the relief claimed in the Application. Aggrieved by the said Order, the 1st defendant filed an appeal in O.S.A.No.195 of 2016 before this Court. The said Appeal was dismissed by a Division Bench of this Court vide Order dated 05.10.2016, while observing that the matter would be proceeded before the learned Single Judge.
3.14. Thereafter, the plaintiff's Application No.5852 of 2015 was taken up by the learned Single Judge. At this juncture, pursuant to the 19/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 directions of this Court, the 1st defendant filed an affidavit stating that they were not inclined to purchase the suit property at the price determined by the learned Advocate Commissioner and that it required a period of 3 years to vacate and handover the possession of the same to the plaintiffs. After hearing the parties at length, the learned Single Judge by order dated 19.04.2016 held as follows:
"7. Considering the date of expiry of the lease, location of the suit property, which is in prime locality and the rent paid by the 1 Respondent/D1 to the plaintiff and also the entire facts and circumstance of this case, this Court is of the considered view that one year time is suffice to deliver the possession by the 1st Respondent/D1 to the plaintiff. With respect to the other reliefs, the suit is to be proceeded with."
3.15. The aforesaid order was challenged by the plaintiffs in O.S.A. No.256 of 2016 in which, a Division Bench of this Court passed final orders in the Appeal on 19.12.2017, which is as follows:
st a. That the 1 defendant being a Public Sector Undertaking cannot immediately vacate the suit premises and a period of one year granted by the learned Single Judge would be adequate for the 1st defendant to remove the superstructure, wind up operations and hand over vacant possession of the suit property:20/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 b. Enhancing the amount payable by the 1st defendant towards charges for occupation and use of the suit property to a sum of Rs.5 Lakhs for the period of 1 year from the date of the order of the learned Single Judge i.e. 19.04.2017 till the date of handing over of the suit property.
C. Fixing timeliness for filing of pleadings, directing that the enquiry for mesne profits be commenced and proceeded with.
3.16. In the light of the above order of the Division Bench, the suit Relief (a) seeking direction to the defendants to vacate and handover peaceful and vacant possession of the suit property, became infructuous. As a result, only suit reliefs (b) and (c) which, cumulatively, are for mesne profits from the date of the suit till the date of delivery of possession, remained for adjudication by this Court.
3.17. In this context, it is submitted that the relief of mesne profits as prayed for by the plaintiffs is untenable, baseless and devoid of merits. The 1st defendant is not liable to pay mesne profits to the plaintiffs and the plaintiffs' claim in this regard ought not to be countenanced by this Court. The 1st defendant's use and occupation of the suit property was neither unlawful nor unauthorised. The 1st defendant was fully entitled to retain 21/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 possession of the suit property. At no point of time the 1st defendant's right to remain in possession of the suit property suffered from any infirmity in the eyes of law.
3.18. As mentioned earlier, the 1st defendant has set up its Retail Outlet on the suit property and had been carrying on the business of marketing and vending of Petroleum Products to the general public from the suit property right from the time that it took possession thereof. The 1st defendant, at its sole cost, has developed the suit property, laid concrete on the entire premises and had put up several superstructures on the suit property and has also modified, maintained and repaired the suit property in the light of the growing demand at its Retail Outlet. Over the years, the 1st defendant has also carried out modifications and repairs to the superstructures keeping in mind the business requirements. The 1st defendant has incurred enormous expenditure in the course of erecting, modifying and the up-keep of the superstructures on the suit property, which were integral to the activity of marketing Petroleum Products at its Retail Outlet.
3.19. It is well settled law that, any stipulation by a tenant to surrender possession of the land with superstructures erected by it or to accept as compensation, any value other than the value determined under 22/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Section 3 of the Act, will not be valid and in respect of the proceedings for ejectment, the tenant will be entitled to insist upon either the conveyance of the land to itself under Section 9 or payment of the compensation to be determined in accordance with Section 3 and 4 respectively. The tenant will be entitled to protection under Section 12 and also to insist upon his right under Sections 3, 4 and 9 at his option. The over-riding right of the protection under Section 12 of the Act read with sections 3 and 4 or Section 9, as the case may be, would relate to the tenant only, so long as he continues to be in possession of the land as a lessee, even though it may be after expiry of the lease. It is submitted that, in the present case having erected superstructures on the suit property, as per the provisions of Section 12 of the Act, notwithstanding expiry of the lease, the 1st defendant is clearly entitled to the protection under Sections 3, 4 and 9 of the Chennai City Tenant's Protection Act, 1921.
3.20. In order to protect its interests as a tenant, the 1st defendant had filed an application under Section 9 of the Chennai City Tenant's Protection Act, 1921 being Application No.135 of 2006 and also an Application No.134 of 2006 seeking appointment of an Advocate Commissioner to survey and inspect the suit property to verify the extent of the superstructures put up by the 1st defendant and to value the extent of 23/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 land that would be required by the 1st defendant to carry on its business activity as it is doing now. The said Application No.135 of 2006 under Section 9, remains pending on the file of this Court. By virtue of this fact, notwithstanding the expiry of the lease, the 1st defendant was entitled to remain in possession of the suit property till such time i.e. Section 9 Application is disposed of in a manner known to law. Furthermore, as per the provisions of the Act, the 1st defendant would also be entitled to compensation in respect of the superstructures erected, modified and maintained by it in the suit property. The mechanism provided under the said Act for disposal of the Section 9 Application also provides for determination of such compensation and without the same being completed, the tenant is entitled in law to retain possession of the property. Further, if the landlord fails to pay the compensation so determined, the tenant would be entitled to remain in possession for a period of 5 years with the landlord losing the right to seek eviction. In the light of the above provisions, the 1st defendant having filed a Section 9 Application in compliance with the provisions of the Act and the same being pending, the 1st defendant was fully entitled to retain the possession of the suit property and the same cannot be said to be unlawful or unauthorised. In this context, it is pertinent to mention that, the question of the rights of Oil 24/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Corporations vis-a-vis the City Tenant's Protection Act, 1921 has also remained at large and is pending final adjudication by the Hon'ble Apex Court. As stated earlier, the Special Leave Petitions filed by the Corporations, including the 1st defendant, are pending before a 3-Judge Bench and there is an interim order directing that status-quo be maintained as regards the possession in the meantime.
3.21. As stated above, by order dated 19.04.2016, this Court has permitted the 1st defendant to remain in possession of the suit property for a period of one year. It is therefore submitted that the 1st defendant's possession of the suit property has been implicitly recognized by this Court in a series of orders and therefore, the same cannot be said to be unlawful or unauthorised. This being so, the plaintiffs are not entitled to mesne profits as prayed for in the Suit.
3.22. According to the plaintiffs, the Lease expired as of 14.04.1997, whereas the plaintiffs have chosen to approach this Court only in the year 2005 after a long gap of approximately 8 years. The long delay is on account of the fact that the plaintiffs were carrying on negotiations at regular intervals with the 1st defendant for the purchase of the suit property. While these discussions were in progress, the plaintiffs permitted the 1st defendant to remain in possession of the suit property and did not 25/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 raise any protest or objection with regard to the same. It is only when the negotiations between the parties fell through on account of the unreasonable demands of the plaintiffs, did the plaintiffs choose to approach this Court and file the present Suit. It is therefore submitted that, the plaintiffs, having acquiesced to the possession of the plaintiff from 14.04.1997 till the date of filing of the suit and not having raised any objection to the same, the 1st defendant's possession of the suit property during this period was not unauthorised and no mesne profits are payable in this regard. The plaintiffs, having chosen to permit the 1st defendant to remain in possession of the Property without raising any objection thereto, cannot be heard to state that such possession was without their authorisation and claim mesne profits in that regard.
3.23. The 1st defendant, which has been operating its Retail Outlet on the suit property, had made extensive changes to the vacant land by adding superstructures and also the necessary infrastructure for the purpose of operating the Retail Outlet. The 1st defendant, at their own cost, had made several improvements in the suit property over time, for the purpose of its business requirements. Without these superstructures and the developments made to the suit property by the 1st defendant, it would not have been possible for the 1st defendant to operate its Retail Outlet and 26/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 market petroleum products to the general public. In such circumstances, it is submitted that all the revenues earned by the 1st defendant from its Retail Outlet on the suit property are solely due to the improvements made by the 1st defendant to the suit property. Thus, for this reason too, the 1st defendant is not obligated to pay any mesne profits to the plaintiffs. Furthermore, the 1st defendant has also incurred enormous costs in making the aforesaid improvements to the suit property and also in operating the Retail Outlet over the years. Taking the same into consideration, the profits earned by the 1st defendant are minimal to the point of being non-existent. Thus, the 1st defendant not having earned any profits from the suit property, it not entitled to mesne profits.
3.24. Assuming for the sake of argument, without admitting that the 1st defendant's possession of the suit property is unauthorised and the plaintiffs are entitled to mesne profits, the quantum of such mesne profits prayed for in the Suit is hugely inflated. The 1st defendant has prayed for a fanciful figure of Rs.1,50,000/- per month without providing any material particulars as to how the said figure has been arrived at. In fact, the plaintiffs state that the "fair and reasonable" rate would Approximately be Rs.40/- per Sq. Ft. resulting in a total sum of Rs.3,45,360/- for the suit property, but have specifically chosen to restrict their claim to 27/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Rs.1,50,000/-. The figure of Rs.40/- itself is arbitrary and not rationale or no material particulars have been provided as to how the said figure is determined, save for vague statements to the effect that the property is located in a prime and valuable commercial locality.
3.25. Without prejudice to the aforesaid submissions, it is submitted that the 1st defendant has been in possession of the suit property on the bona-fide belief that it was lawfully entitled to do so. It is submitted that, during the relevant period, various Courts have been examining the question as to whether the Oil Corporations such as the 1st defendant are entitled to avail the benefits of Section 9 and there is a significant amount of ambiguity prevailing in the matter. As mentioned earlier, a Division Bench of this Court had held that the oil corporations were in legal possession, but were not in actual physical possession which is a sine-qua- non to maintain an application under Section 9 and proceeded to reject the Oil Corporation's Applications filed under Section 9 of the Act. This Judgment on the appeal has been challenged before the Hon'ble Apex Court by the several corporations, including the 1st defendant. The Hon'ble Apex Court has directed that status-quo as regards possession be maintained vide Order dated 16.12.2011, which interim order continues to be in force as on date. As a result, the 1st defendant was under the bona 28/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 fide belief that its possession of the suit property itself was lawful. The plaintiffs, being well aware of the pending proceedings before the Hon'ble Apex Court, has chosen not to take any steps in the present Suit for several years. It is only in the year 2016, the plaintiffs have come forward with an Application No.5852 of 2016 for a direction to the 1st defendant to purchase the property at market value or to handover the possession thereof. It is submitted that the plaintiffs, having knowledge of the prevailing legal position, chosen to remain silent and had not taken any steps in the Suit for several years. They are thus not entitled to mesne profits and their claims in this regard may be dismissed.
3.26. In the light of the above, it is clear that no mesne profits under suit reliefs (b) and (c) are payable to the plaintiffs. It is further submitted that, the plaintiffs have not complied with the mandatory requirement under Section 11 of the Chennai City Tenant's Protection Act to issue notice to the 1st defendant and also the Commissioner of the Corporation of Chennai. On this score alone, the Suit is liable to be dismissed by this Court.
3.27. At the cost of repetition, it is submitted that the 1st defendant has developed the suit property, concretized the same, erected, modified and maintained several superstructures in the suit property for which the 29/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 1st defendant is entitled to be compensated as per the provisions of the Act. The value of superstructures and the amounts invested by the 1st defendant in them over the years is Rs.52 lakhs. It is submitted that the 1st defendant having invested an amount of Rs.52 Lakhs in respect of superstructures and the Retail Outlet, is filing a statement setting out the particulars of such expenditure to the Written Statement. Further, on account of the fact that the 1st defendant is required to vacate and handover the possession of the suit property, the 1st defendant will now have to find an alternative location for its Retail Outlet. Furthermore, the 1st defendant will also have to apply for and obtain statutory Clearances and permissions in order to store and market petroleum products in the new location. The 1st defendant will also have to construct suitable structures on the new location to suit its business requirements to operate a Retail Outlet. The total cost of the above process to establish a new Retail Outlet will be Rs.1 Crore. A statement showing the Bill of Quantities and Estimates of Expenditure involved in the resitement of the Retail Outlet along with a Certificate from the Territory Manager of the 1st defendant is filed. It is submitted that the resitement is to be carried out as per the settled norms and standard operating procedures of the 1st defendant which have been in place for several years. The norms and policies of the 1st defendant 30/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Corporation in this regard are being filed herewith. The estimates of expenditure are also in accordance with the schedule of rates of the 1st defendant that its contractors must comply with. Furthermore, it is submitted that the said entire process of establishing a new Retail Outlet is likely to take a minimum period of 9 Months. During this period, on account of the fact that the 1st defendant will not be able to operate a Retail Outlet, it will suffer a business loss of Rs.20.81 Lakhs being the margins from the business of a Retail Outlet. It is submitted that the said figure has been arrived at based on the margins being earned by the current Retail Outlet on the suit property.
3.28. The total damages as claimed by the 1st defendant is an amount of Rs.1,72,81,000/-. The 1st defendant is entitled to be compensated to the said extent under the provisions of the Chennai City Tenant's Protection Act, 1921 and is raising a counter-claim against the plaintiffs in this regard. Therefore, the 1st defendant prayed to dismiss the present suit with exemplary costs and to direct the plaintiffs to pay the 1st defendant a sum of Rs.1,72,81,000 as compensation.
4. The 2nd defendant has also filed written statement denying all the allegations contained in the plaint stating that this defendant has no brevity of contract with the plaintiffs nor is there any legal relationship between 31/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 2nd defendant and the plaintiffs. The 2nd defendant deals with the products of the 1st defendant and the relationship between the 1st and 2nd defendant is that of a Licensor and Licensee. The dealership agreement between the 1st and 2nd defendants provided for a peaceful enjoyment of the land and the installations therein and this was to the knowledge of the plaintiffs. The plaintiffs can seek any relief only as against the 1st defendant and not nd against the 2nd defendant. The 2 defendant is neither a necessary nor a nd proper party to the suit. Therefore, the 2 defendant's possession cannot be called unlawful and thereby providing a cause for taking any action against the 2nd defendant. Further, there are no averments as against the 2nd defendant and hence, the relief asked for against the 2nd defendant is not supported by any pleadings. This suit is misconceived as against the 2nd defendant and is liable to be dismissed with costs.
5. The plaintiffs have filed reply statement to the written statement filed by the 1st defendant by stating that the original 1st plaintiff namely Late Dr.(Mrs.) Kamakshi Sundaram, died on 26.12.2017. Her legal heirs are her daughter, Mrs.Haima Sundaram, the Original 2nd plaintiff and her son, Mr.C.Aryama Sundaram. The share of Late Dr.(Mrs.)Kamakshi Sundaram has been settled in favour of the original 3rd plaintiff, 32/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Mr.Skanda Sundaram. The two plaintiff's are the present co-owners of the suit property.
5.1. The plaintiffs deny all the allegations contained in the Written Statement of the 1st defendant, except those that are specifically admitted herein. The 1st defendant's Counter Claim is neither maintainable in law nor on facts. The plaintiffs reiterate the averments and the prayers made in the plaint and prays to grant leave to refer to the same as part and parcel of the Reply Statement. No allegation in the Written Statement of the 1st defendant shall be considered as admitted for want of non-traverse or a specific denial.
5.2. The plaintiffs state that this Court by order dated 19.04.2017, in Appn. No.5852 of 2015, directed the defendants to vacate the suit property. The Division Bench, by judgment dated 19.12.2017 in O.S.A. No.256 of 2017, confirmed the order to vacate the property. Accordingly, on 18.04.2018, the defendants vacated and handed over the suit property to the plaintiffs. The relief/prayer (a) of the Plaint no longer survives, based on the order of this Court. On 23.09.2019, this Court transferred the Suit to the Commercial Division of this Court. The 1st defendant's delay in filing the Written Statement was also condoned.
33/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 5.3. The plaintiffs state that the issues to be now decided in the present Suit are relating to the plaintiffs' entitlement to mesne profits and the 1st defendant's Counter Claim for damages. The 1st defendant's Counter claim of Rs.1,72,81,000/- comprises of (a) Rs.52 lakhs, the alleged value of superstructures and the amounts invested by the 1st defendant in the suit property, (b) Rs.1 Crore, the alleged costs to establish a new Retail outlet, (c) Rs.20.81 Lakhs, the alleged business loss that the 1st defendant would suffer for 9 months.
5.4. The 1st defendant's counter claim of Rs.52 lakhs is based on the premise that they are entitled to compensation under the Madras City Tenants Protection Act, 1921 (hereinafter referred to as "MCTP Act"). The plaintiffs state that the Act is not applicable to the present case as this Court's order dated 19.04.2017, directing the defendants to vacate and hand over the possession of the suit property was not passed based on the provisions of the MCTP Act. Therefore, the 1st defendant's claim for damages/compensation based on the MCTP Act is misconceived and untenable and it is liable to be rejected. Further, the 1st defendant is not entitled to the benefits under the MCTP Act, after expiry of the lease in April 1997 as it was only a trespasser and not a tenant/contractual lessee and was also not in actual physical possession of the suit property. 34/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 5.5. The other two heads of damages are the alleged resitement and loss of business is frivolous, untenable and misconceived. The 1st defendant was directed to vacate the suit property based on orders of this Court and such vacation was almost 20 years after the lease period expired in April 1997 and the defendants' continued possession was wrongful. Therefore, these counter claims are frivolous, speculative and are completely unsustainable and are liable to be rejected.
5.6.The allegations with regard to development of superstructures and maintenance over the years at the sole cost of the 1st defendant are concerned, the superstructures on the suit property were mostly temporary constructions/sheds, tanks, fuel dispensers and semi-concrete structure which were over 50 years and it had no commercial value. The plaintiffs have no use for any of the superstructures constructed by the 1st defendant and the 1st defendant, at the time of vacating, removed all removable/usable structures. The plaintiffs did not request/require the 1st defendant, not to remove any part of its alleged superstructure, but instead required the 1st defendant to remove all its materials/structures, whatsoever from the suit property.
5.7. The allegation that due to the unreasonable and stubborn positions taken by the plaintiffs, no agreement could be arrived at by the 35/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 parties, is false and misleading. The plaintiffs state that the 1st defendant, by using its status as a public sector oil corporation, was attempting to acquire the suit property for a paltry sum. The plaintiffs had not accepted to it. The 1st defendant was not taking any fruitful steps to either acquire the suit property or vacate the same, even when they are dis-entitled to any protection under the MCTP Act, as they were not in actual physical possession. The plaintiffs were compelled to file Application No.5852 of 2015, to direct the 1st defendant to acquire the suit property for a sum of Rs.23,00,00,000/- or at such market value as may be fixed by this Court, within a date to be fixed by this Court, failing which, to direct them to vacate and hand over vacant possession of the suit property to the plaintiffs. On 29.04.2016, this Court after evaluating the learned Advocate Commissioner's Report dated 18.03.2016, directed the 1st defendant to take a decision to purchase the suit property for a sum of Rs.20,28,99,000/- . The 1st defendant filed an appeal in O.S.A. No.195 of 2016 as against the said order. However, before the Division Bench, the 1st defendant submitted that it has taken a considered decision not to buy the suit property at the price stipulated. Accordingly, on 05.10.2016, O.S.A. No.195 of 2016 was dismissed. This Court then on 18.11.2016, directed the 1st defendant to file an Undertaking, which it did on 30.11.2016, 36/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 seeking for three years to vacate. This Court by Order dated 19.04.2017, rejected such request and directed the 1st defendant to vacate the property within one year.
5.8. The allegations with references to notices, applications and orders passed in this Suit/Appeals which are all matters of record. The plaintiffs state that the order dated 19.04.2017 was not passed under the MCTP Act. The 1st defendant, who was not in actual physical possession and was a trespasser after expiry of the lease in April 1997, is not entitled to the benefits under the MCTP Act.
5.9. The allegations that the 1st defendant is not liable to pay mesne profits to the plaintiffs and that the 1st defendant's use and occupation of the suit property was neither unlawful nor unauthorised and that the 1st defendant was fully entitled to retain possession of the suit property and that at no point of time did the 1st defendant's right to remain in possession of the suit property suffered from any infirmity in the eye of law, are all denied as baseless and untenable. The defendants' occupation of the suit property after expiry of the lease in April 1997, is unlawful. The defendants have deprived the plaintiffs of their right to possession, enjoyment and use of their property. The defendants, after expiry of the lease, have made profits by utilising the suit property for commercial 37/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 purpose. The defendants are therefore, liable to pay mesne profits to the plaintiffs, during the period of such wrongful possession till the date of handing over the possession of the suit property to the Plaintiff.
5.10. The plaintiffs deny the allegation that the 1st defendant incurred enormous expenditure in erecting, modifying and upkeep of superstructures in the suit property. In any case, such allegations/contentions are not relevant, as the plaintiffs did/do not require any of the structures put up by the 1st defendant and most of the structures have been removed by the 1st defendant at the time of vacating the suit property. Only unusable and old structures were abandoned by the 1st defendant, which are of no utility and have been demolished by the 1st defendant.
5.11. As far as the allegations with references to various provisions of the MCTP Act and Applications filed by the 1st defendant are concerned, as already stated, the said MCTP Act is not applicable to the 1st defendant. The order to vacate was also not passed under the MCTP Act. Further, the 1st defendant is not entitled to any rights/benefits under the said MCTP Act, as it was not in actual physical possession and was in wrongful possession after expiry of the lease in April 1997. The plaintiffs state that the 1st defendant has filed Application No.135/2006 to abuse the 38/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 provisions of the MCTP Act and to retain unlawful possession and deprived the plaintiffs of their suit property illegally. The Special Leave Petition filed by the 1st defendant has been dismissed on 06.12.2018.
5.12. As far as the allegations that this Court on 19.04.2017 implicitly recognised the 1st defendant's possession of suit property and same cannot be said to be unlawful or unauthorised and the plaintiffs are not entitled to mesne profits, are deemed as baseless and untenable as the order of this Court directing the defendants to vacate the suit property was on account of the defendants' wrongful possession of the property.
5.13. The allegations that the plaintiffs have acquiesced to the possession of the defendants from 14.04.1997 till the date of filing the suit and that the 1st defendant's possession of the suit property was not unauthorized and no mesne profits are payable, are denied as baseless and untenable. The 1st defendant's possession after April 1997 is wrongful possession. The 1st defendant filed an Application under Section 9 of the MCTP Act purportedly to acquire the suit property but when this Court passed an order fixing a price of the suit property and called upon the 1st defendant to indicate as to whether it was willing to acquire the suit property (even though MCTP Act was not applicable), the 1st defendant stated that they were not willing to acquire the suit property which clearly 39/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 establishes that the 1st defendant's recourse to MCTP Act was only to evade the order of eviction being passed by this Court and it was not bona- fide. The 1st defendant is liable to pay mesne profits in law for occupation of the suit property after expiry of the Lease Agreement. In any case, the plaintiffs have sought mesne profits only from 25.09.2002 till the date of handing over of the possession by the 1st defendant.
5.14. The contentions that the 1st defendant had made several improvements to the suit property and all the revenues earned by the 1st defendant from its retail outlet are solely due to the improvement made by the 1st defendant to the suit property and that the 1st defendant is not obligated to pay mesne profits to the plaintiffs and that the profits earned by the 1st defendant is minimal to the point of being non-existent and that the 1st defendant not having earned any profits from the suit property, are completely false, untenable and misleading. In fact, one of the untenable counter claims made by the 1st defendant is that the alleged loss of business due to closure of the retail outlet which the 1st defendant quantified as Rs.20.81 lakhs for a period of 9 months. Therefore, the said contentions of the 1st defendant's are dishonest and contradictory and are made to mislead this Court.
40/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 5.15. The allegation that the mesne profits prayed for in the suit is hugely inflated and that the 1st defendant's prayer for Rs.1.50 lakhs per month is a fanciful figure, without providing any material particulars and that no rationale or material particulars have been provided to show as to how the figure is determined which are untenable, baseless and misleading. The plaintiffs contended that this Court may assess the mesne profits as per settled law and on such assessment of the applicable mesne profits, this Court may pass a decree directing the 1st defendant to pay the same. The learned Advocate Commissioner appointed by this Court vide his Report dated 18.03.2016, has assessed the market value of the suit property at Rs.20,28,99,000/-. This Court also accepted the said valuation. The 1st defendant challenged he said valuation but thereafter, withdrew the Appeal. The plaintiffs rely on the said market value of the suit property as assessed by the learned Advocate Commissioner and accepted by this Court during the course of evidence. Further, the plaintiffs also filed along with the Reply Statement, the Guideline value/property valuation applicable to the suit property for the period from 01.04.2002 to 16.07.2019, to disprove the 1st defendant's untenable contention that no mesne profits are payable. A Valuation Report by a Chartered Engineer assessing the applicable rent for the suit property, is also filed. 41/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 5.16. The allegations that the 1st defendant has been in possession of the suit property on the bona-fide belief that it was lawfully entitled to do so and that the plaintiffs chose to remain silent and did not take steps in the Suit for several years and that they are not entitled to any mesne profits, are untenable and baseless. The plaintiffs state that the defendants' possession after expiry of the lease Agreement in April 1997 was wrongful possession and is a matter of record. Accordingly, the contentions of the alleged proceedings as to the applicability of Section 9 of the MCTP Act, is an attempt of the 1st defendant to justify their unlawful and wrongful possession and to evade the payment of mesne profits to the plaintiffs who have been deprived of the suit property for almost 20 years after expiry of the Lease.
5.17. The allegations that the plaintiffs have not complied with the mandatory requirement of the MCTP Act and the suit is liable to be dismissed, is untenable, the plaintiffs state that the said MCTP Act is not applicable to the facts of the present Suit and the 1st defendant's reference to Section 11 of MCTP Act is misleading.
5.18. The contention that the 1st defendant is entitled to be compensated a sum of Rs.1,72,81,000/- under the provisions of MCTP Act is denied as absurd, untenable and baseless, the plaintiffs state that the 42/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 order of eviction was passed by this Court long after expiry of the Lease Agreement and the defendants were in wrongful possession for 20 years. Therefore, no right can be claimed by the 1st defendant on an order of eviction being passed against such wrongful possession. The claim of business loss of Rs.20.81 lakhs and Rs.1 crore as the cost of establishing a new Retail outlet and the alleged statement/certificate filed by the 1st defendant are all completely immaterial and irrelevant. In any case the plaintiffs state the premise of the counter claim for damages raised by the 1st defendant is based on the MCTP Act, which is not applicable to the present Suit. This Court may reject such untenable counter claim made by the 1st defendant.
5.19. As stated above, after April 1997, the defendants' possession is wrongful and the plaintiffs have been deprived of fruitful benefits of the suit property, while on the other hand the defendants were commercially exploiting/using the suit property and were making profits. The 1st defendant was also attempting to retain the possession of the suit property and use such wrongful possession to compel the plaintiffs to sell the suit property for paltry sum.
5.20. The allegations that the suit property is situated in the locality where the property value have fallen drastically and is not attractive and 43/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 that the 1st defendant is not liable to pay mesne profits, are denied. The learned Advocate Commissioner's Report dated 18.03.2016, has assessed the market value of the suit property and further, the Guideline value relating to the suit property also establishes the loss suffered by the plaintiffs and the illegal profits made by the 1st defendant by virtue of the wrongful possession of the suit property.
5.21. As stated above, the counter claim of Rs.1,72,81,000/- claimed by the 1st defendant is denied as fictitious, speculative, frivolous and not maintainable in law and this Court may reject the same. The plaintiffs pray this Court to decree the Suit as prayed for in Reliefs (b) and (c) of the plaint with costs.
6. Upon considering the pleadings and oral and documentary evidence, the following issues were framed by this Court on 16.12.2019:
"1.Whether the 1st defendant is liable to pay past mesne profits of Rs.54,00,000/- (Rupees Fifty Four Lakhs) from 25.09.2002 till date of Suit?
2. Whether the 1st defendant is liable to pay future mesne profits at Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only) per month or such other rate as may be fixed by this Court in accordance with the market value whichever is higher from the date of Plaint till date of delivery of vacant possession?44/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005
3. Whether the 1st defendant is entitled to its counter claim of Rs.1,72,81,000/- (Rupees One Crore Seventy Two Lakhs Eighty One Thousand only) if so?
4. Whether the 1st defendant is entitled to the benefits of the City Tenants Protection Act?
5. Whether the plaintiff is liable to compensate the 1st defendant under the provisions of the Chennai City Tenant's Protection Act, 1921 in respect of the superstructure erected by the 1st defendant on the Suit Schedule Property and interest thereof? and
6. What other relief the parties are entitled?"
7. After framing issues, during trial, on the side of the plaintiffs, two witnesses, were examined as P.W.1 and P.W.2 and 22 documents were marked on the side of the plaintiffs as Exs.P1 to P22. On the side of the defendants, two witnesses were examined as D.W.1 and D.W.2 and 13 documents were marked as Ex.D1 to Ex.D13 besides one Court document was marked as Ex.C1.
8. The learned counsel for the plaintiffs submitted that as per the order of this Court, dated 19.12.2017 passed in O.S.A. No.256 of 2017, the defendants vacated and handed over the suit property to the plaintiffs. 45/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 After the suit property was handed over to the plaintiffs, the plaintiffs have constructed a commercial building of approx. 15000 Sq.ft. and have leased out the same. Therefore, the relief 'a' sought for in the plaint no longer survives.
8.1. Now the plaintiffs sought for the relief of 'b' and 'c' regarding mesne profits. The 1st defendant had not only been in wrongful and illegal occupation of the suit property, even after expiry of the lease, but deprived of the plaintiffs of the fruitful utilization and benefits that they would have derived if the suit property had been handed over on expiry of the lease. The suit property is located in a prime commercial locality and if the defendants had handed over on 15.04.1997 (on expiry of lease), the plaintiffs would have developed the property and received substantial income and accretions from the property. The 1st defendant had filed an application under Section 9 of the MCTP Act purporting to purchase the property and when it was dismissed as not maintainable, the 1st defendant sought to restore the same, but took no further steps. Thereafter, the plaintiffs filed an application in A.No.5852 of 2015, to direct the defendants to either purchase the suit property at market value or to vacate but, the 1st defendant refused to purchase the property. This Court, on 19.04.2017, directed the defendants to vacate within one year. Even 46/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 thereafter, the defendants continued to occupy the property for a period of one year. The amount that was being paid by the defendants was a meagre amount which was far below the market value of the suit property. The 1st defendant had been giving false assurances to purchase and/or pay increased rental amount to continue their occupation, but had no intention to honour its assurances. The defendants are liable to pay mesne profits to the plaintiffs for the unjust and illegal occupation from 15.04.1997, but the plaintiffs have claimed the mesne profits from September 2002 (i.e., from 3 years immediately preceding the filing of the Suit). The 1st defendant had earned substantial profits by running a commercial establishment, namely, a Retail Petrol Outlet in the suit property which is evident from Ex.D13, the original statement showing calculation of projected loss on the basis of margins.
8.2. The 1st defendant was put on notice even prior to expiry of the lease that the lease would not be renewed and they had to vacate and hand over the possession to the plaintiffs. (Exs.P.3, P.4, P-6, P-7 & P11). However, the 1st defendant, knowing fully well that their continuation in the suit property is wrongful, continued to occupy the suit property by paying meagre amount of rent. The 1st defendant refused to hand over the suit property to the plaintiffs even after knowing that their possession is 47/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 illegal and unjust and continued to carry on business in the suit property. The 1st defendant is an illegal and wrongful occupier after expiry of the lease period in April 1997 and they are liable to compensate the plaintiffs for the unauthorized use and enjoyment of the suit property.
8.3 The suit property has been classified as a “commercial area” special type and is situated in a prime location at the intersection of T.T.K. Road and C.P. Ramasamy Road and is surrounded by posh commercial buildings. The 1st defendant was fully aware of the fact that the suit property is located in a premier commercial area and that the plaintiffs will earn higher returns than what the 1st defendant was paying. The defendants' possession after 15.04.1997 is wholly illegal and wrongful and they are thus liable to pay mesne profits to the plaintiffs. Being a commercial property, the mesne profits to be paid by the 1st defendant can be determined on an annual rate of return of 12% on the value of the property.
8.4. Upon the suit property being handed over on 18.04.2018 by the 1st defendant, the Plaintiff has developed the suit property, built a commercial building of 15000 sq.ft. and have given it on lease. There is no doubt that the plaintiffs have the financial resources to develop the suit property and this fact is indicated by the fact that the plaintiffs have 48/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 developed a commercial building in the suit property after the defendants handed over the possession to the plaintiffs.
8.5. Insofar as the relief (b) of the prayer made in the suit is concerned, the plaintiffs have furnished the Guideline Value of the Property for the period from 01.04.2002 to 31.03.2003 and from 01.04.2003 to 24.09.2005 as follows:
(a) from 25.09.2002 to 31.03.2003 @ Rs.2478/- per sq.ft. is Rs.2,13,95,052/- (Ex.P18).
b) from 01.04.2003 to 24.09.2005 @ Rs.2579/- per sq. ft., is Rs.2,38,21,206/- (Ex.P18).
8.6. On an Annual Return of 12% on the value of the Property, the suit property would have fetched returns as follows:
(i) from 25.09.2002 to 31.03.2003, a sum of Rs.13,26,493/- per year or Rs.2,13,951/- per month [at 9% returns the amount would be Rs.1,60,463/- per month) (Ex. P19).
(ii) from 01.04.2003 to 24.09.2005, a sum of Rs.70,98,719/- per year or Rs.2,38,212/- per month. [at 9% returns the amount would be Rs.1,78,659/- per month] (Ex.P19). 49/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 8.7. The defendants have, for the period from 25.09.2002 to 24.09.2005, i.e. three years prior to the filing of the suit, restricted their claims for mesne profits at Rs.1,50,000/- per month [which is even lesser than the amount computed on 9% return on the value of the Property]. This Court may fix the past mesne profits for three years prior to the date of the filing of the suit at Rs.1,50,000/- per month, amounting to Rs.54,00,000/-. The 1st defendant may be directed to pay past mesne profits of Rs.54,00,000/- for the period from 25.09.2002 to 24.09.2005 together with interest at 18% p.a. from the date of the suit till the date of payment.
8.8. Insofar as the relief 'c' is concerned, the plaintiffs have assessed the future mesne profits from the date of the Suit till the date of handing over of the possession of suit property (i.e., till 18.04.2018).
8.9. The plaintiffs have examined PW.2, Chartered Engineer to assess the value of the suit property for the suit period. His reports have been marked as Exs.P18 & P19.
8.10. The Annual Rate of Return for the suit property, which is located in a prime commercial area is 12% on the value of the suit property, which is also assessed for computing the fair rent for a non- residential property as per Section 4(3) of the Tamilnadu Buildings (Lease and Rent Control) Act, 1960.
50/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 8.11. In Ex.C1 (dated 18.03.2016), the learned Advocate Commissioner appointed by this Court, had assessed the value of the suit property at Rs.20,28,99,000/-. This Court, on 29.04.2016, in Application No.5852 of 2015, also passed an order directing the 1st defendant to take a decision to acquire the Property at such valuation or further orders would be passed. Ultimately, when the 1st defendant did not agree to acquire, this Court directed the 1st defendant to vacate the property.
8.12. The plaintiffs submit that considering the location of the suit property in a prime commercial area, its market value would be substantially higher than the Guideline Value. However, the plaintiffs adopted the Guideline Value, to arrive at the annual returns of the suit property and the mesne profits thereon for various periods. The Courts have held that Guideline Value is a reliable indice for assessing the value of a property.
8.13. The plaintiffs have furnished the Guideline Value for the suit property from 25.09.2005 till 18.04.2018 which are marked as Ex.P12 to P-16. The suit property has been valued at Rs.23,31,18,000/- by a Chartered Engineer (PW-2) in his Valuation Report which is marked as Ex.P18. The Engineer has assessed the market value of the suit property measuring 8634 sq.ft. for various periods during the pendency of the Suit 51/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 as under:
a) for the period from 25.09.2005 till 31.7.2007 @ Rs.2.759/- per sq.ft. the market value at Rs.2,38,21,206/-
(Ex.P19).
b) for the period from 01.08.2007 till 31.03.2012 @ Rs.10.984/- per sq.ft., the market value at Rs.9,48,35,856/- (Ex.P19 ).
c) for the period from 01.04.2012 till 08.06.2017 @ Rs.23,500/- sq.ft., the market value at Rs.20,28,99,000/- (Ex.P19).
d) for the period from 09.06.2017 till 18.04.2018 @ Rs.15.745/- per sq.ft, the market value at Rs.13,59,42,330/- (Ex.P19).
8.14. The Annual Return on the suit property which was used by the defendants for commercial purpose situated in a prime commercial area. On calculating the mesne profits at 12% on the value of the suit property per year or the compensation payable at 1% per month for various periods during pendency of the suit, as assessed in the evidence of PW.2 (Engineer) is stated as under. PW.2 has also considered that as the leased property was vacant land, he has assessed the same and in his opinion, fair rent at the rate of return of 9% is reasonable as stated below: 52/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005
(a) for the period from 25.09.2005 till 31.7.2007 mesne profits at 12% Return is Rs.2,38,212/- per month (Ex.P19) [fair rent at 9% Return-Rs.1,78,659/- per month (Ex.P19).
The total sum for the respective period is Rs.39,66,230/-.
(b) for the period from 01.08.2007 till 31.03.2012, mesne profits at 12% Return is Rs.9,48,359/- per month (Ex.P19) (fair rent at 9% return -Rs.7,11,269/- per month (Ex.P.19). The total sum for the respective period is Rs.3,98,31,060/-
(c). for the period from 01.04.2012 till 08.06.2017, mesne profits at 12% return is Rs.20,28,990/- per month (Ex.P.19). (Fair rent at 9% return-Rs.15,21,742/- per month (Ex.P.19). The total sum for the respective period is Rs. 9,47,53,802/-.
(d). for the period from 9.06.2017 till 18.04.2018, mesne profits at 12% return is Rs.13,59,423/- per month (Ex.P19). The total sum for the respective period is Rs.1,05,35,526/-.
8.15. Therefore, the total amount payable by the defendants to the plaintiffs as mesne profits for the period of 3 years immediately preceding the filing of the suit, is Rs.54,00,000/- and from 25.09.2005 till 18.04.2018, it is Rs.14,90,86,621/- together with interest at 18% per annum to be paid thereon from the respective months when the amounts 53/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 were payable till the date of payment.
8.16. Further, the defendants have filed 4 lease deeds in Exs.D4 to D7 for the purpose of assessing the monthly lease rentals of the suit property. Those lease deeds do not pertain to properties near the suit property. In any event such lease deeds do not reflect the actual value since st they were entered in terrorum owing to the economic duress of 1 defendant being in possession of the property and refusing to vacate, causing the landlords in those cases to compromise and arrive at a much lower lease rental than the prevailing market value, together with a restricted period of lease and so as to avoid a lengthy legal proceedings for eviction.
8.17. The 1st defendant produced these lease deeds before the learned Advocate Commissioner, who rejected the valuations in all these lease deeds.
st 8.18. The 1 defendant has filed Exs.D8 to D12 being the orders passed by the Hon'ble Supreme Court relating to determination of market rent payable by the 1st defendant in respect of another Retail Petrol Outlet. The Hon'ble Supreme Court relied upon a Report filed by the learned Advocate Commissioner appointed to determine the market rent payable. As per the said report, the learned Commissioner has relied on the 54/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 guideline value of the properties as posted on the web-site of the Registration Department of Tamilnadu.
8.19. P.W.2 (Engineer) examined by the plaintiffs had given cogent evidence on valuation of the suit property for the period claimed and his assessment of fair return for lease of the suit property on monthly basis. Thus, the rent assessment of mesne profits/fair rent payable by the 1st defendant as damages for unauthorized use and occupation of the suit property on the basis of the guidelilne value, is just and reasonable assessment.
8.20. Insofar as the counter claim is concerned, the 1st defendant has made a counter claim of Rs.52,00,000/- on the basis that they are entitled to compensation under the MCTP Act, 1921. The 1st defendant is not a tenant /contractual lessee and is only an unlawful occupier and after expiry of the lease in April 1997, they are not entitled to the benefits under the said Act. MCTP Act, 1921 is not applicable to the 1st defendant. Further, this Court's Order dated 19.04.2017, directing the defendants to vacate and hand over the possession of the suit property was not passed under the MCTP Act. The D.W.1 in cross examination has admitted that the plaintiffs did not obstruct the 1st defendant from removing their materials from the suit property and that the superstructures left behind on the property, had 55/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 no value (Q.19-21). The 1st defendant's claim for damages/compensation based on the MCTP Act is misconceived and untenable and the same is liable to be rejected on this ground. As regards the 1st defendant's claim of Rs.1 crore towards cost of resitement to establish a new outlet, D.W.1 has admitted that no resitement was done and no costs were incurred (Q.27). As far as the alleged loss of Rs.20.81 Lakhs, claimed by the 1st defendant as business loss for 9 months till the new Retail Outlet is established, is concerned, since the 1st defendant has not established any new Retail Outlet, as admitted by D.W1 (Q.27), the counter claim is untenable.
8.21. Insofar as the interest is concerned, the 2nd defendant utilized the suit property for commercial purpose, i.e. running a Retail Petrol Outlet and earning substantial profits. The plaintiffs were denied of just and fair return of use of their property by the defendants. The 1st defendant, by not paying fair return on the suit property, had deprived of the plaintiffs, the amounts that the 1st defendant ought to have paid every month during the period of their unlawful occupation and accordingly, the 1st defendant is liable to pay interest @ 18% per annum on the damages from the respective dates. The plaintiffs have issued a pre-suit notice on 21.07.2005 claiming damages for unlawful use and occupation of the suit property, before initiating the Suit and despite receipt of notice, the defendants 56/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 neither vacated, nor paid mesne profits.
8.22. On 17.04.2014, the 1st defendant filed Appln. No.1164/2014 to reopen the application No.135/2006 and the same was allowed on condition that the 1st defendant deposits Rs.20,00,000/- to the credit of the Suit and also pay the plaintiffs a sum of Rs.1,00,000/- per month from 01.04.2014. The 1st defendant deposited the amount of Rs.20,00,000/- . The plaintiffs were allowed to withdraw the amount of Rs.20,00,000/- deposited by the 1st defendant. The 1st defendant had paid a sum of Rs.1,00,000/- per month from 01.04.2014 till 31.03.2017 amounting to Rs.36,00,000/-. The Division Bench, on 19.12.2017 passed an order in O.S.A.No.256 of 2017 directing the 1st defendant to pay Rs.5 lakhs per month as charges for use and occupation of the suit property from 19.04.2017 till 18.04.2018, by recording the 1st defendant's undertaking to vacate and hand over possession of the suit property by 18.04.2018. The 1st defendant paid the sum of Rs.60,00,000/- to the plaintiffs as per the said order. Thus, the amount of Rs.1,16,00,000/- paid by the 1st defendant to the plaintiffs is to be deducted from the mesne profits to be fixed by this Court.
8.23. Insofar as the costs are concerned, the defendants are fully aware that the lease expired in April 1997 itself, but they continued to 57/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 unlawfully use and occupy the suit property. The defendants' action compelled the plaintiffs to file the presents Suit. During the course of the Suit, the plaintiffs were constrained to seek for appointment of Advocate Commissioners for assessing the value of the suit property. The plaintiffs were also constrained to engage a Chartered Engineer to adduce evidence on the mesne profits. As per Section 35 of C.P.C. (as amended by Commercial Courts Act), the successful party is entitled to costs. The plaintiffs are entitled to the costs as indicated in Section 35 of C.P.C. Therefore, the plaintiffs pray that this Court may pass a decree in the suit for mesne profits, past and future and may fix the mesne profits as claimed in Reliefs (b) and (c) and to direct the 1st defendant to pay mesne profits to 1st plaintiff and 2nd plaintiffs in ratio of 25% and 75% respectively together with interest at 18% per annum and costs.
9. The learned counsel for the defendants submitted that in compliance of the order of this Court dated 19.04.2017, the defendants vacated and handed over the suit property to the plaintiffs on 17.04.2018 and therefore, the relief (a) as sought for in the plaint, no longer survives.
9.1. As far as the relief 'b' and 'c' are concerned, the plaintiffs are not entitled to any mesne profits as prayed for in Suit Reliefs. The definition of “mesne profits” is provided in Section 2(12) of the Code of Civil 58/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Procedure, 1908 which reads as follows:
"In this Act, unless there is anything repugnant in the subject or context,- (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"
In view of the foregoing definition of mesne profits, in the present case, the plaintiffs are not entitled to any mesne profits.
9.2. The possession of the suit schedule property has not at any point of time been "wrongful"; During the period prior to the filing of the Suit, it is an admitted fact that, Mr.C.A. Sundaram, the legal heir of the original lessor Mr.C.R.Sundaram was engaging in negotiations with the 1st defendant to explore the options for the lease/purchase of the Suit Schedule Property. In such circumstances, the 1st defendant was clearly permitted to continue to remain in occupation of the Suit Schedule Property by the then Plaintiff without any protest or demur. During this period, the lease rent as per the lease deed between the parties was continued to be paid and the same was received without any whisper of protest.
9.3. The above position ensured right from the time on which the 59/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 lease expired on 14.04.1997. It was only in and by letter dated 21.07.2005, that any protest was raised to the 1st defendant's continued occupation for the first time. Thereafter, the present Suit came to be filed.
9.4. As mentioned earlier, immediately on receipt of the summons in the Suit, the 1st defendant herein filed A.No.135/2006 invoking Section 9 of the Chennai City Tenant's Protection Act, 1921. The said Application was pending on the file of this Court, resulting in the possession of the Suit Schedule Property by the 1st defendant being anything but "wrongful". The statutory right, that was available at that time, and its lawful invocation by the 1st defendant would sanctify and protects the possession of the 1st defendant and the same cannot be termed as "wrongful".
9.5. It is submitted that, in a batch of cases filed by various oil marketing companies, such as the 1st defendant, the Hon'ble Supreme Court granted status-quo to be maintained in respect of the premises. This situation was to be preserved while the Hon'ble Supreme Court was seized of the question as to whether oil marketing companies, such as the 1st defendant would be entitled to the benefits of Section 9 of the Chennai City Tenants Protection Act, 1921. The said order would further fortify the possession of the 1st defendant in respect of the Suit Schedule Property. 60/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Since its right under Section 9 had been invoked by way of Application No.135 of 2006, the question being under consideration before the Hon'ble Supreme Court which had passed an order directing that status-quo be maintained in the meantime, the possession of the Suit Schedule Property by the 1st defendant cannot be said to be "wrongful".
9.6. The batch of cases filed before the Hon'ble Supreme Court were disposed of, vide Judgment dated 28.01.2020 and the interim order directing maintenance of status-quo remained in force till the said date. As mentioned earlier, the possession of the Suit Schedule Property was handed over to the plaintiffs on 17.04.2018 i.e. two years prior to the final judgment of the Hon'ble Supreme Court. Thus, the benefit of the order passed by the Hon'ble Supreme Court and the protection under Section 9 of the 1921 Act, were available until the handing over of the vacant possession of the Suit Schedule Property to the plaintiffs on 17.04.2018.
9.7. Thus, in view of the foregoing, at no period of time was the possession of the Suit Schedule Property "wrongful" resulting in the claim for mesne profits falling at the very first hurdle in terms of the definition under Section 2(12) of the Code of Civil Procedure.
9.8. It has been held by the Hon'ble Supreme Court that the Oil Corporations such as the 1st defendant are not in actual physical 61/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 possession of the properties such as the Suit Schedule Property wherein retail outlets were being operated through dealers. Therefore, the 1st defendant cannot be held liable to pay the mesne profits to the owners such as the plaintiffs herein. In view of the Hon'ble Supreme Court's Judgment in Bharat Petroleum Corporation Limited Vs. R. Chandramouleeswaran and Others in Civil Appeal No.2870 of 2007 and batch of cases dated 28.01.2020, it has been categorically held that the oil marketing corporations such as the 1st defendant, who had given the properties leased by them to third parties such as their licensees or dealers, would not be in "actual physical Possession of such properties.
9.9. In such circumstances, the categorical finding of the Hon'ble Apex Court being thus, the fundamental requirement for mesne profits of "possession" by the 1st defendant is itself not satisfied. As per the law laid down by the Hon'ble Supreme Court, the 1st defendant is not in "actual physical possession" and hence, they cannot be mulcted with a claim for mesne profits by the Plaintiff. It is submitted that, even the requirement of "possession", leave alone "wrongful possession" is not satisfied to attract mesne profits in the present case, in the light of the judgment of the Hon'ble Apex Court dated 28.01.2020.
9.10. The Plaintiff has not pleaded nor proved that the 1st defendant 62/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 has earned any profits from the Suit Schedule Property, which is a sine- qua-non for a claim of mesne profits. Yet another fundamental requirement for establishing a claim for mesne profits is that, the Plaintiff must plead and prove that the person in the alleged wrongful possession of its property has earned profits from the said property.
9.11. In the present case, no such pleading has been made by the plaintiffs. The plaintiffs have not adduced any evidence to show that the 1st defendant has earned any profits from the Suit Schedule Property. In the absence of such pleading and proofs, the relief of mesne profits cannot be granted.
9.12. It has been held time and again, by no less an authority than the Hon'ble Supreme Court most authoritatively in Fateh Chand Vs. Balkishan Das (AIR 1963 DC 1405) that, the normal measure of mesne profits is the value of the land in the hands of the person supposedly in wrongful possession and that the estimated return that the property might fetch cannot be considered as the base for determining the mesne profits. The law laid down by the Hon'ble Supreme Court in this Judgment continues to hold the field and continues to be cited and relied upon by the Hon'ble Supreme Court.
9.13. In the present case, the pleadings in the Plaint as regards the 63/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 quantification of the plaintiffs’ claim for mesne profits, the same has to be determined based on the "market value". In other words, it is the value or return that the property might fetch in the market and the same is the basis for the claim for mesne profits. The Hon'ble Supreme Court has categorically held that, the same cannot be the basis for a claim for mesne profits and such profits must be based on the profits received or might have been received by the person in wrongful possession with ordinary diligence. There is no such plea found either in the plaint or in the reply statement filed by the plaintiff in the present Suit. It is submitted that the absence of such a plea is fatal to the claim for mesne profits of the Plaintiff.
9.14. It is further submitted that, the plaintiffs have not proved that the 1st defendant has earned any profits from the suit schedule property nor that any profits might have been received with ordinary diligence. The entire evidence of the Plaintiff is only with regard to the possible rental returns that the property would fetch in the market. This cannot be the basis for claiming mesne profits as held by the Hon'ble Supreme Court.
9.15. In the present case, it is an admitted fact that, a “Retail Outlet” was being operated on the suit schedule property. This vital factor would differentiate the same from other cases wherein mesne profits for the 64/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 alleged wrongful possession of a leased out property has been determined on the basis of the rent that such a property would fetch in the market. Such cases cannot be applied to or relied upon in the present case inasmuch as the plaintiffs have all along been fully aware of the nature of the activity being carried on in the Suit Schedule Property. Therefore, in light of the plain language of Section 2(12) of the Code of Civil Procedure, and the law laid down by the Hon'ble Supreme Court, it was incumbent on the part of the plaintiffs to plead and prove that the 1st defendant had earned profits from the suit schedule property in order to sustain its claim for mesne profits. This burden of pleading and proof had not been discharged by the plaintiffs in the present suit and the suit reliefs (b) and
(c) for past and future mesne profits ought to be rejected by this Court.
9.16. In no point of time, the defendants were declared “unauthorized occupants” or trespassers and M/s.BPCL paid deposits and usage charges as directed by this Court till the land was handed over to the plaintiffs.
9.17. Even assuming, without admitting, that the 1st defendant was in wrongful possession and that any profits were earned by the 1st defendant, they were solely due to the improvements made by the 1st defendant to the Suit Schedule property. Such profits are specifically 65/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 excluded from the meaning of the term "mesne profits" as defined above and the plaintiffs are not entitled to the same. As per Section 2(12) of the Code of Civil Procedure, profits due to the improvements made by the person in the alleged wrongful possession cannot be included to determine the mesne profits. In the present case, it is an admitted fact that, the only vacant land was leased out to the 1st defendant.
9.18. It is the 1st defendant who has made several improvements to the Suit Schedule Property, resulting in it being operated as a Retail Outlet for the sale and marketing of petroleum products. It is solely due to the improvements made by the 1st defendant on the Suit Schedule Property that the same could be run as a retail outlet. If at all any profits were earned, it is solely due to such improvements made on the vacant land that was originally granted on lease in favour of the 1st defendant by Mr.C.R.Sundaram.
9.19. Therefore, if at all any profits were earned by the 1st defendant from the suit schedule property, they were so earned only due to the improvements made by the 1st defendant to the said property. As such, the same would stand as specific exclusion from the meaning of mesne profits. At any rate, the plaintiffs have not pleaded or proved that profits were earned in the first place. Therefore, the contention that they earned profits 66/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 only due to the improvements made by the 1st defendant, would not be mesne profits, is only made in-arguendo.
9.20. Further, the valuation/quantification of the mesne profits put forth by the plaintiffs in the Plaint as well as in their evidence is inflated, highly arbitrary and bears no nexus to reality. This argument is taken without prejudice to the 1st defendant's submission that the computation/entitlement of mesne profits cannot be based on the rental returns or any other returns that the property would fetch in the market.
9.21. The plaintiffs have valued their claim for past mesne profits i.e. for the period of 3 years immediately preceding the date of the Plaint at Rs.1,50,000/-. It is sought to be portrayed as if, the said amount is itself significantly reduced and lower compared to a return of 12% on the guideline value of the property. It is well settled law that the guideline value cannot, under any circumstances be the basis for determining the market value of a property, in particular for the purpose of fixing the fair rent. This legal position has been elucidated by the Hon'ble Full Bench of this Court in the case of M/s Sakthi and Co. Vs. Shree Desigachary reported in (2002) 2 LW 297.
9.22. In the present case, the plaintiffs state that the rental returns that the Suit Schedule Property would fetch is the basis for determining 67/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 mesne profits. That being so, the above legal position, wherein it has been categorically held that the guideline value is notified only for the purpose of collecting stamp duty and Revenue cannot be used to compute fair market value of properties, would be directly applicable to the present case. It is further held that in the same judgment that, such fixation on the basis of the guideline value would be illegal and unsustainable. This Hon'ble Court has clearly held that the evidence on the basis of bona fide sales in respect of the lands situated near about the land in question, possessing the same or similar advantageous features during the relevant point in time, would be the basis for determination. In view of the aforesaid categorical ruling, the entire evidence of the plaintiffs wherein the guideline value is used as the basis for determination of the fair rent ought to be rejected as irrelevant.
9.23. The plaintiffs have examined one Mr.R.Senthilkumar as P.W.2 for the purpose of letting in evidence in respect of the valuation of the suit schedule property and determination of fair rent in respect thereof. In the Valuation Report dated 10.07.2015 (Exhibit P.18), prepared by the said Mr.R.Senthilkumar, the Guideline Value is mentioned as Rs.23,500/- and the present value of the land is mentioned as Rs.27,000/-. On the basis of the said present value, the total value of the property is pegged at 68/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Rs.23,31,18,000/-. The said Witness has also made the reports marked as Exhibit P.19 which are fixation of fair rent reports for the period from 2002-2018 in respect of the suit schedule property. In the course of his deposition, P.W.2 has made the following statements with regard to his reports:
a. That he has not perused any sale deeds, conveyance deeds of any similar properties, or any properties for that matter while preparing his report (Q.41 to Q.45); b. He admits that he did not even visit the sub-registrar's office to independently verify whether there are any sale deeds, lease deeds or documents for the purpose of valuing the land (Q.35 and Q.36);
c. A completely false statement is made that there are no sale instances or lease instances during the time of preparation of his Reports in Exhibit P.18 and Exhibit P.19 (Q.56 and Q.57). Given that, he has deposed that he has not independently verified whether there are any such instances and that he was not given any such documents by the plaintiffs, there is no basis for his assertion in reply to the said questions.
d. Infact, in his reply to Q.No.75, he reiterates that there is no sale of large commercial land and that he does not know of any land and buildings.
e. His answer to the question Nos.58 and 59 where he is asked to supply the basis for his answers to the questions previous, his answers are pointedly evasive and non- committal.69/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 f. In his answer to Q.No.59, PW2 states that he has enquired the value of "similar vacant land in that particular area",.However, in the very next question, he states that he does not know where any such "similar vacant land" is located, clearly exposing his statement to be a falsehood.
g. When asked about the nature of his "local enquiries" in Q.62, he states that he brought real estate brokers/agents to the property and showed it to them and asked them for the market value.
h. However, in the very next questions (Q.63 and 64), he claims not to remember the names of these so-called real estate brokers/agents. Most damagingly, there is no mention of any such real estate brokers/agents either in his reports or in his proof affidavit filed before this Hon'ble Court.
i. He further admits in Q.No. 76 that he is not aware of any instances of lease of commercial properties in the surrounding areas of the Suit Schedule Property; j. He also admits in response to Q.No.77, that in areas such as the one wherein the Suit Schedule Property is situated, vacant land is rarely leased out. k. Yet another aspect that emerges is that, the PW2 was aware of and could have compared similar properties for the purpose of giving his reports. In Q.No. 68 to 71, he was asked whether he was aware that there was a petrol bunk opposite to the Suit Schedule Property itself, at the very same traffic intersection. The witness claims to not remember any such property, thus showing the shallow and vacuous extent of his enquiries.70/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 l. He further admits that the transactions pertaining to the said property could be taken to assist in determining the value of the Suit Schedule Property. However, he has not done so.
m. Yet another aspect of the property that it admitted by the PW2 is that, the property is irregular in shape, a disadvantage when it comes to it being utilised in any manner. The same would naturally have an effect on the viability of the property and its value, but has been completely ignored by PW2.
n. The market value of the property was never ascertained by verifying sale deed or by any other method. In the Q.No.54 to 58, when asked about the market value of the site considering the irregular dimension of the land, he did not respond and gave evasive reply. Hence inference should be drawn under section 114(g) of the Indian Evidence Act that the market value of the schedule property is less than the guideline value. He has neither measured the dimension of the land nor conducted any local enquiry as mentioned by him. Further he has not mentioned the usable area of land such as the FSI and usable area of the land particularly when he has taken land and building method.
9.24. Given the above answers, the following conclusions can be drawn:
a. PW2 has not carried out any independent inquiry to determine the market value of the suit schedule property and has gone only by the Guideline Value, which this Court has itself held not to be permissible;71/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 b. PW2 admits that vacant land is never leased out. In other words, there is no rental market for vacant land to be leased out. As a necessary corollary, there can be no rental value or fair rent assigned to such property on the basis of "market value". There being no market or demand as it is unlikely to be let out as such, even adopting the plaintiff's own argument, the property can only be assigned nil value.
c. Therefore, when the Suit Schedule Property cannot be let out as such, Fair Rent based on market value cannot be the basis for determining mesne profits.
d. The reports in Exhibits P18 and P19 and are clearly flawed and prepared only for the purpose of the suit claim and bear no nexus to the actual reality, which is that the Suit Schedule Property being vacant land, there would have been no demand to take the same on lease, as admitted by PW2 himself, and hence no question of it fetching any rent, much less fair rent.
9.25. Insofar as the Reports in Exhibit P.19 are concerned, it is stated explicitly therein that determination of fair rent therein is as per Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
However, the sole basis for the market value of the Property in each and every one of the reports in Exhibit P.19 is the Guideline Value. This is 72/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 clearly impermissible and at odds with the Hon'ble Full Bench Judgment of this Court the case of M/s Sakthi and Co. Vs. Shree Desigachary ((2002) 2 LW 297). Further Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 is applicable only in cases of buildings, whereas, in the present case, only the land was let out on lease and hence the reports Exs. P.18 & 19 prepared as per Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, not to be considered by this Court.
9.26. In these reports, there is no other "local enquiry" or any other type of investigation that is even claimed to be done as per the Reports. Therefore, the Guideline Value has been blindly adopted to be the Market Value, in direct contravention of the prevailing legal position.
9.27. Then, an exorbitant rate of return of 9% is arbitrarily applied to determine the fair rent. It is submitted that, the said rate of return is excessive and clearly inflated. This can be seen from the following facts:
a. Even according the author of the report, the likelihood of the property being leased out is unlikely as there is no market for it (Q.77);
b. Rental returns for similar properties, for similar purposes, is far less as can be seen from the several lease deeds filed by the defendants and marked as Exhibit Nos. D4, D5, D6 and D7.73/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 9.28. The defendants, on the other hand, have produced before this Court the certified copies of lease deeds in respect of similar properties on which the defendants run petroleum outlets, the documents i.e. in Exhibit Nos.D4, D5, D6 and D7. All these lease deeds are in respect of the properties which are in vicinity of the suit property, i.e., at a distance of about 3-5 kilometres from the suit property. The properties in registered lease deeds in Exhibit Nos.D4, D5, D6 and D7 are similar to the suit property on various aspects including the extent, the area in which they are located with comparable vehicular movement. These lease deeds also reflect the actual rental value that is being paid by the defendants to the land owners which had been arrived at after taking into consideration the various indices and is in commensurate with the market rental income which such property would generate.
9.29. Another vital aspect is that, recently, the Hon'ble Supreme Court in the matter of National Company Vs. The Territory Manager, Bharat Petroleum Corporation Ltd and Anr. (C.A. No. 6726 of 2021 and M.A. Diary No. 30165 of 2021) accepted the valuation provided in the Report of a former Judge of this Court. In the said Report, an annual rate of return of only 2.30% has been applied to determine the market rent, with increases of 25% every 5 years. The said Report dated 14.11.2022 had 74/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 been marked as Exhibit No.D9 in the present Suit. The same has also been accepted and sanctified by the Hon'ble Supreme Court vide orders dated 24.02.2023, 20.03.2023 and 02.05.2023, marked as Exhibit Nos. D10, D11 and D12 in the present Suit.
9.30. As per Ex.D9, the rental value of a property like that of the suit property, would be generated, having been fixed taking into account the positive and negative factors in respect of such properties where a vacant land is made available for setting up a retail petroleum outlet to carry out retail sale operations. As per Ex.D9, the annual rental return has been fixed at 2.30% to begin with. A close reading of the said exhibit would reveal that an independent assessment of the market rent has been arrived at on the basis of G.O.Ms.No.460 dated 04.06.1998 together with the Cost Inflation Index issued by the Central Board of Direct Taxes under the Income Tax Act, 1961 as applicable for the relevant period. The report in Ex.D9 has been accepted by the Hon'ble Supreme Court in the proceedings dated 20.03.2023 in Misc. Application Diary No.30165 of 2021 in CA.No.6726/2021. Further, vide proceedings dated 02.05.2023, the Hon'ble Supreme Court has rejected the prayer for interest as the same had been taken into account in the report itself, viz., Ex.D9.
9.31. The mediation proceedings relating to the matter of M/s. Cove 75/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Holdings and the 1st defendant would not be of any relevance to the present suit. The same is a bilateral settlement arrived at after due negotiations between the parties. The amounts of the settlement would not throw any light on the valuation aspects or fair rent nor can they be said to be binding on the 1st defendant.
9.32. Further, the plaintiffs have paid the deficit Court fee for determining the Mesne Profits in respect of the Suit Schedule property.
The Counter Claim of the 1st defendant is eminently maintainable and ought to be decreed by this Court in full.
9.33. The learned counsel submitted that insofar as the Counter Claim of the 1st defendant is concerned, the same rests under three heads:
a. Cost of resitement;
b. Compensation for structures erected by the 1 defendant on the Suit Schedule Property; and c. Business loss.
9.34. The counter claim under all the three heads ought to be granted to the 1st defendant. In support of the counter claim, the 1st defendant has filed and marked the original statement and list of assets of the 1st defendant's retail outlet (Ex.D2), being the original certificate issued by the 1st defendant's Territory Manager showing the Bill of Quantities and estimates of expenditure involved in resitement (b. Ex.D3) and the 76/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 projected loss on the basis of the margins (Ex.D13).
9.35. The witness of the defendant has deposed in detail regarding the aforesaid counter claims and his testimony is as such not contested or rebutted by the plaintiffs in any manner. As such, the counter claims ought to be lawfully granted to the 1st defendant as prayed for directing the plaintiffs to pay to the 1st defendant the counter claims of Rs.1,72,81,000/-
as compensation and the suit filed by the plaintiffs may be dismissed. In support of his contention, the learned senior counsel for the defendants relied on the following judgments;
1.M/s.Sakthi & Co. though its partner Veeranan Vs. Shree Desiachary reported in (2006) 2 L.W. 297.
2.Haridas Girdhardas and Ors. Vs.V.Sivarama Subramanian and Ors. reported in MANU/TN/0315/1987
3.Union of India (UOI) and Ors. Vs. Banwari Lal and Sons (P) Ltd. reported in MANU/SC/0331/2004.
4.Executive Director Vs. Sarat Chandra Bisoi and another reported in (2006) 6 SCC 326, and
5.Fateh Chand Vs. Balkishan Das reported in MANU/SC/0258/1963.
77/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005
10. The learned counsel for the plaintiffs while replying to the above submissions of the learned counsel for the defendants, submitted that the allegation of the 1st defendant that, only on 21.07.2005 (Ex.P.11), for the first time, the plaintiffs protested about the 1st defendant's continued occupation of the suit property, is false. Even before expiry of the lease period, the plaintiffs had issued notice calling upon the 1st defendant to vacate the premises, vide letter dated 15.03.1997 (Ex.P.3). Again on 01.07.1998 (Ex.P.7), the plaintiffs called the defendants to vacate the suit property.
10.1. As far as the contention of status-quo order passed by the Hon'ble Supreme Court, is concerned, the suit property is not part of the proceedings/batch of cases before the Hon'ble Supreme Court. Therefore, the status-quo order passed by the Hon'ble Supreme Court would not be st applicable for the 1 defendant to contend that its possession is not "wrongful". On the contrary, the issue of continued illegal possession of st the 1 defendant has already been finally decided by the Court, which has st ordered the 1 defendant's eviction from the suit property.
10.2. In fact, the plaintiff filed Application No.5852 of 2015, as the 1st defendant continued to occupy the suit property without even pursuing 78/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 its Application No.135 of 2006 filed under the City Tenants Protection Act, 1921 and without even vacating the suit property. The City Tenants Protection Act gives an option to the lessee of the vacant land to purchase the Property if the lessor/land owner initiates any action for recovery of possession. The plaintiffs, without going into the aspect as to whether Section 9 of the Act is applicable to the 1st defendant or not, had sought for a direction that either the 1st defendant shall purchase the suit property at a value fixed by this Court or to vacate the property. The 1st defendant, despite initially contending that it would take a decision on purchase of the suit property, thereafter, on an order being passed on 18.03.2015 directing the 1st defendant to inform as to whether they were ready to purchase the property and the 1st defendant instead of indicating the same, filed an Appeal in O.S.A.195 of 2016. During the hearing of the Appeal, the 1st defendant stated that they are not interested in buying the Property and therefore, it is clear that their occupation of the property from the date of expiry of the lease, was wrongful. Application No.5852 of 2015 was thereafter taken up for hearing and by order dated 19.04.2016, the learned Single Judge directed the 1st defendant to vacate the Property within a period of one year. This order had become final inter-se parties. Therefore, to contend that the issue of Section 9 of the said Act pending before the 79/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Hon'ble Supreme Court is relevant for the purpose of deciding as to whether the 1st defendant's possession is wrongful or not, is completely misconceived.
10.3. The purpose of Section 9 of the said City Tenants Protection Act is to give an option to the Lessee/1st defendant to purchase the land, but when the Plaintiff offered to sell the Property at a price fixed by this Court, the 1st defendant declined to purchase the same. Therefore, its contention that the pendency of the batch of cases before the Hon'ble Supreme Court on the applicability of Section 9 of the City Tenants Protection Act, 1921, would render its possession not wrongful, is completely misleading and misconceived, as it had clearly indicated that they were not interested to purchase the property and the Application under Section 9 of the City Tenants Protection Act, was only to delay the order of eviction.
10.4. With regard to the contention that the plaintiff had not pleaded nor proved that the 1st defendant has earned profits on the Suit Schedule Property, and therefore is not entitled to claim any mense profits is concerned, it is submitted that this contention is not relevant, as the Hon'ble Supreme Court and this Court in the following judgments have held that the guideline value of the property can be taken into accounts for 80/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 the purpose of assessing the damages for illegal occupation of a property.
1 2017 SCC Online Mad Para 40-Damages for illegal use and
26346 occupation of Schedule property 12%
BPCL Vs. Friend-in-Need annual returns on value of property
Society (claimed less than that- was allowed by
Court)
2 1997 (2) CTC 481 Para 15 Market value fixed on the basis
SK Rohini Vs. HPCL 2006 of Guideline Value
3 2006 (4) CTC 754 Para 14 Market value fixed based on
(HPCL Vs. Tayarammal & Guideline value
others 1998)
4 1998 (7) SCC 184 Para 21-23-No right for lessee to stay on
Raptakos Brett & Co Ltd in property after expiry of lease Vs. Ganesh Property 5 1996 (2) LW 568 Para 7 -Tenant has no right to remain in (HPCL Vs. Uma Rani) possession on expiry of lease 6 1961 SCC OnLine AP 126 Para 13 Plaintiff entitled to claim larger (Magunta Kota Reddy Vs. sum as mesne profits than that claimed in Pothula Chandrasekhara Plaint Reddy) 7 2004 (8) SCC 579 (BPCL Para 15- Only right of a tenant who may Vs. N.R. Vairarmani) have put up structures is to remove the structures at time of delivery 10.5. Further, the 1st defendant has raised a Counter Claim contending that they were earning profits by use of the Property and on 81/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 such untenable basis, claimed damages on account of the defendants being ordered to vacate the property, [Q-32 & 33- DW-1- Cross Examination], thereby in effect, claiming damages for their illegal occupation of property which is an absurd proposition.
10.6. Even in the report of the learned Commissioner appointed by the Hon'ble Supreme Court (Ex.D.9), the learned Commissioner had based on the working of the guideline value (Paragraph 51 & 58 (b) of Report) for the purpose of arriving at the returns on the Property which was occupied by the lessee even after expiry of the lease. DW.1 has also accepted that the basis of the market rate arrived at in Ex.D9 was based on the guideline value during Cross Examination (Q.29). Further, in that case, where the learned Commissioner had been appointed to arrive at the damages to be paid for illegal occupation, it appears that independent examination of an expert was not adduced in that case. In the present suit, the plaintiffs have examined a Chartered Engineer as PW-2 and he has adduced evidence on the market value of the property and the annual returns for the period claimed in the Suit.
10.7. As far as to Exs. D4 to D7 referred to by the 1st defendant is concerned, the learned Commissioner in the Report (Ex.D9), has in Paragraphs 29 to 24 of the Report, found that these documents-Lease 82/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Deeds are not relevant and rejected them. Further, these Lease Deeds have been entered into by the owners of such property, after expiry of the existing lease with the 1st defendant and the 1st defendant continued to occupy the property without vacating the property, which clearly shows that these Lease Deeds (Ex-D4 to Ex,97), have been entered into under duress and distress by the owners and is therefore not reliable. In fact, the said leases were entered into since the owners opted for that course, rather than a long and arduous action for eviction. The plaintiffs however went through years of litigation to evict the defendants (with the defendants taking every step to drag on the same) in accordance with law and claim its legal rights to mesne profits. Therefore, he prayed that the suit may be decreed in favour of the plaintiffs.
11. On a perusal of the pleadings, oral and documentary evidence and the submissions made by the learned counsel on either side, the issues are answered as follows:
12. As far as the first relief (a) sought for by the plaintiffs that, too, to direct the defendants to vacate and hand over the peaceful and vacant possession of the suit property is concerned, the plaintiffs have admitted st that the 1 defendant had handed over the property on 18.04.2018 and after taking the possession of the same, the plaintiffs have developed the 83/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 suit property and built a commercial building of 15,000 sq.ft. and given the same for lease and the defendants have also admitted that the possession of the suit property was handed over to the plaintiffs on 17.04.2018 i.e. two years prior to the final judgment of the Supreme Court. Hence, both the plaintiffs and the defendants admitted that pending suit, the suit property was handed over on 18.04.2018 and the plaintiffs also have taken over the same and is utilizing the same. Therefore, the first relief sought for by the plaintiffs has become infructuous. Hence, this suit is dismissed as infructuous as far as the first relief is concerned.
13. The specific case of the plaintiffs is that the suit property originally belonged to one late S.R.Sundaram and originally, one M/s.Burmah-Shell Oil Storage And Distributing Company of India Ltd. (hereinafter in short referred to as 'Burmah Shell'), had entered into an Indenture of Lease, dated 14.05.1954 with Late Mr.C.R.Sundaram and had taken the suit property (a vacant land) on lease for a period of 20 years with effect from 15.09.1953 for operating petrol station. The 2nd defendant is the retail dealer who is operating the Petrol Station on behalf of the 1st defendant. Subsequently, on 24.04.1957, a fresh Indenture of Lease was entered into between the Late Mr.C.R.Sundaram and Burmah Shell, which was registered as Document No.904 of 1957, Book No.1, Volume 289, 84/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 pages 214 to 218 on 03.07.1957 in the Office of the Sub-Registrar, Mylapore. The Said Lease Deed provided for lease of the aforesaid Property for a period of 20 years commencing from 15.04.1957.
14. Clause 2 of the said Lease Deed provided that the monthly rent of Rs.240/- shall be paid on or before the 10th day of the month succeeding that month, for which it is payable. As per Clause 3(iii) of the said Lease Deed, the Lessee agreed to yield up (hand-over) the said Property on determination of the Lease. Sub-Clause 4(iv) of the said Lease Deed, reads as follows:
"that the Lessor will on the written request of the Lessee made one month before the expiration of the term hereby created and if there shall not be at the time of such request any existing breach or non- observance of any of the covenants on the part of the Lessee herein before contained grant to it a Lease of the demised premises on the same rental for the further term of 20 years from the expiration of the said term and containing the like covenants and provisions as are herein contained with the exception of the present covenant for renewal."
15. In and around the year 1976, the Burmah-Shell was taken-over by the Central Government under the Burmah-Shell (Acquisition of 85/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Undertaking in India) Act, 1976. Subsequently, all the assets and liabilities of the said Burmah-Shell vested in the 1st defendant. The 1st defendant extended/renewed the Lease for a further period of 20 years with effect from 15.04.1977 and continued to pay the same rental of Rs.240/- per month. The said renewal of Lease expired by efflux of time on 14.04.1997. The said lease was not renewed thereafter.
16. On 03.02.1997, the 1st defendant had written to Late Mr.C.R.Sundaram, requesting renewal of Lease for a further period of 20 years from 15.04.1997 on a mutually agreed rental. Mr.C.R.Sundaram having passed away on 03.11.1996, his legal heir and executor of his Estate, Mr.C.A.Sundaram, on 15.03.1997, wrote to the 1st defendant informing the demise of Mr.C.R.Sundaram and that the joint owners of the said property are the 1st and the 2nd defendants and Mr.C.A.Sundaram. The 1st defendant was asked to vacate and hand over the peaceful possession of the said property on 15.04.1997 and the 1st defendant's request for renewal was refused.
17. On 25.03.1997, the plaintiffs reiterated to the 1st defendant that the lease will come to an end on 14.04.1997, and remittance of the rent by the 1st defendant to the account of late Mr.C.R.Sundaram would not be considered as acceptance of rent for lease of the said property and could 86/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 not be taken as receipt of rent. It was also brought to the notice of the 1st defendant that a separate Bank Account had been opened for collection of the dues of the Estate of late Mr.C.R.Sundaram.
18. The plaintiffs had, in fact, vide letters dated 15.03.1997 and 25.03.1997, already notified the 1st defendant regarding the demise of Mr.C.R.Sundaram and the particulars of his legal heirs.
19. Subsequently, the 1st defendant contacted the legal heirs of Mr.C.R.Sundaram both directly and through the 2nd defendant to find out as to whether there was any possibility of them permitting the continued occupation by the 1st defendant of at least a part of the said property. After several discussions between the plaintiffs and the 1st defendant, without prejudice to the plaintiffs' rights, and so as to amicably resolve this matter, the defendants were required to release forthwith 1½ grounds of the said property to the plaintiffs as per the drawings and the balance area would be given on lease for a period of 10 years on a reasonable rent of Rs.4,000/- per month. However, there was no progress on such discussions.
20. The plaintiffs therefore, on 21.07.2005, wrote to the 1st defendant, informing them that they continue to be in unlawful occupation of the said property from 15.04.1997 without paying any compensation and putting the 1st defendant on notice of the determination/expiry of the 87/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 lease on and from 15.04.1997. The Plaintiffs therefore called upon the defendants to hand over the vacant and peaceful possession of the said property on or from 01.09.2005 and also called upon the 1st defendant to pay a sum of Rs.1,00,000/- per month as damages/mesne profits for unlawful use and occupation of the said premises from 15.04.1997. Despite receipt of the said notice, the defendants have not vacated and handed over the peaceful possession of the said property and neither paid, nor attempted to pay any damages for unlawful occupation of the said property. Therefore, the plaintiffs filed this suit for unlawful occupation and use of the said property by the defendants and for past mesne profits from 15.04.1997 for three years and thereafter future mesne profits. The suit was filed in the year 2005.
21. The specific case of the defendants is that the suit schedule property was taken on lease as vacant land by the 1st defendant's predecessor-in-interest, the Burmah Shell Company in the year 1954 from Mr.C.R.Sundaram, vide Indenture of Lease dated 14.05.1954. In the year 1957, a fresh indenture of lease dated 24.04.1957 was entered into between the parties for a period of 20 years from 15.04.1957 at a monthly rent of Rs.240/- per month, with an option under Clause 4(v) thereof for renewal for a further term of 20 years. The suit schedule property had been taken 88/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 on lease for the purpose of operating a retail outlet for marketing of the petroleum products to the general public. In the year 1976, on 24.01.1976, the Government of India acquired the entire equity shareholding in Burmah Shell Oil and Storage and Distribution Company of India Limited and as a result, the said entity became a Government Company, named as Burmah Shell Refineries Limited. Similarly, from 24.01.1976 onwards, the right, title and interest and liabilities of Burmah Shell Oil Storage and Distribution Company of India, stood transferred to and vested in the Central Government, by virtue of the Burmah Shell (Acquisition and Transfer of Undertakings in India) Act, 1976 (Act 2 of 1976). Subsequently, on 12.02.1976, the name of the Burmah Shell Refineries Limited was changed to Bharat Refineries Limited and on 01.08.1977, the name was again changed to Bharat Petroleum Corporation Limited. Thus by the aforesaid sequence of events, the 1st defendant Company came to be the successor-in-interest of the Burmah Shell Company in general and also with particular reference to the Indenture of Lease entered into with Mr.C.R.Sundaram.
22. After being vested with the business and undertaking of Burmah Shell, the 1st defendant herein continued to carry on the marketing and distribution of the petroleum products from the suit property. For this 89/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 purpose, the 1st defendant developed the suit property, put up superstructures and also modified the same to meet the growing commercial demands of the 1st defendant's retail outlet. The superstructures have been developed from time to time, maintained and repaired over the years at the sole cost of the 1st defendant in keeping with the business requirements and in the process, the 1st defendant has incurred significant expenditure over a period of time.
23. Mr.C.R.Sundaram expired in the year 1996. The Lease expired on 14.04.1997. Thereafter, Mr.C.A.Sundaram claiming to be the legal heir and executor of Mr.C.R.Sundaram's Estate, had been corresponding with the 1st defendant Company. The 1st defendant had on 03.02.1997, requested lease in respect of the suit property be renewed so as to enable it to continue to operate the retail outlet on the same property. This however, was initially negatived by Mr.C.A.Sundaram. Subsequently, however negotiations were held between the parties wherein, the possibility of extension of the Lease/purchase of the suit property were explored and discussed. Right from the year 1997, negotiations were held between the representatives of both parties in order to arrive at an amicable settlement of the disputes. However, such discussions and negotiations were not fruitful and no agreement could be arrived at by the parties, mainly due to 90/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 the unreasonable and stubborn stand taken by the plaintiffs.
st
24. After a gap of more than 8 years, the 1 defendant received a Letter dated 21.07.2005 wherein, it was alleged that the 1st defendant was in unlawful occupation of the Suit Schedule Property and calling upon the 1st defendant to handover the vacant and peaceful possession of the same. A further claim of Rs.1,00,000/- per month as damages/mesne profits for unlawful occupation was also made against the 1st defendant by the said Letter.
25. In this context, the present Suit came to be filed by the plaintiffs. Immediately upon receipt of summons, the 1st defendant filed an application in A.No.135 of 2006 under Section 9 of the City Tenant's Protection Act, praying for a direction to the landlord/plaintiffs to sell the suit property to the 1st defendant at a price to be determined by this Court.
26. While the aforesaid Application was pending, a batch of cases pending before the Hon'ble Apex Court (C.A.No.1257/2007, C.A.No.1925/2007 and C.A.No.708/2008) regarding the issue as to whether Oil Corporations, such as the 1st defendant are entitled to avail the benefits of Section 9 of the City Tenants Protection Act, were then remanded to a Division Bench of this Court. This Court, vide a Judgment dated 08.08.2011 (reported in 2011 (5) CTC 437), held that, Oil 91/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Corporations, such as the 1st defendant were in legal possession, but were not in actual physical possession which is a sine-qua-non to maintain an application under Section 9 and proceeded to reject the Oil Corporation's Applications filed under Section 9 of the Act.
27. The Oil Corporations, including the 1st defendant herein, challenged the aforementioned order dated 08.08.2011 passed by the Division Bench, before the Hon'ble Apex Court in S.L.P.Nos.34839, 33430, 34945 of 2011 etc. and the same are pending. In all these cases, the Hon'ble Apex Court directed all the parties to maintain status-quo as regards possession vide Order dated 16.12.2011, which interim order continues to be in force as on date. By another Order dated 09.10.2013, the batch of cases has been directed to be heard by a Full Bench of the Hon'ble Apex Court.
28. Subsequent to the Division Bench's Judgment dated 08.08.2011, this Court vide Order dated 17.10.2012 dismissed the 1st defendant's Application filed under Section 9 of the Act i.e. Application No.135 of 2006. The 1st defendant then challenged the Order of dismissal in O.S.A. No. 248 of 2013. A Division Bench of this Court dismissed the Appeal by granting liberty to the 1st defendant to file an application before the learned Single Judge in the manner known to law.
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29. Pursuant to the aforesaid order, the 1st defendant took out an Application No.1164 of 2014 praying for restoration of their Application under Section 9 of the Act i.e. Application No.135 of 2006. The said Application was allowed vide order dated 17.04.2014 and Application No.135 of 2006 was restored, on condition however that the 1st defendant deposits a sum of Rs.20 Lakhs to the credit of the Suit and further pay a st sum of Rs.1 Lakh per month to the plaintiffs from 01.04.2014. The 1 defendant had deposited the sum of Rs.20 Lakhs, which sum has st subsequently been withdrawn by the plaintiffs. The 1 defendant also paid the monthly sum of Rs.1,00,000/- to the plaintiffs as per order dated 17.04.2014.
30. As things stood thus, the plaintiffs filed an Application No.5852 of 2015 in the present Suit, seeking a direction to the 1st defendant to purchase the suit property for a sum of Rs.23,00,00,000/- or such market value as may be fixed by this Court. In the said Application, vide Order dated 18.02.2016, an Advocate Commissioner was appointed to inspect and inter alia ascertain the market value of the suit property, taking into account the Legislative mandate under Section 9 of the Act. The Advocate Commissioner had also conducted inspection and filed his report on 18.03.2016 before this Court valuing the land at Rs.23,500/- per Sq. Ft. 93/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 and the total value being Rs.20,28,99,000/-. The 1st defendant filed their objections to the said report. This Court, then proceeded to pass orders in Application No.5852 of 2015 accepting the valuation made by the learned Advocate Commissioner. It then adjourned the matter to enable the 1st defendant to file an undertaking to purchase the property by paying the Market Value fixed by the Advocate Commissioner and if the 1st defendant was not prepared to purchase the Property, further orders would be passed, taking into account the relief claimed in the Application. Aggrieved by the said order, the 1st defendant filed O.S.A.No.195 of 2016 before this Court. The said Appeal was dismissed by a Division Bench of this Court vide judgement dated 05.10.2016, observing that the matter would be proceeded before the learned Single Judge.
31. Thereafter, the plaintiff's Application No.5852 of 2015 was taken up by the learned Single Judge. At this juncture, pursuant to the directions of this Court, the 1st defendant filed an affidavit stating that it was not inclined to purchase the suit property at the price as determined by the learned Advocate Commissioner and that it required a period of 3 years to vacate and hand over the possession to the plaintiffs. After hearing the parties, the learned Single Judge passed an order dated 19.04.2016 st granting one year time to vacate and hand over possession by the 1 94/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 defendant.
32. The aforesaid order was challenged by the plaintiffs in O.S.A. No.256 of 2016. A Division Bench of this Court passed final orders in the said Appeal on 19.12.2017, confirming the order passed by the single Judge regarding the time period to vacate and hand over the property. However, the Hon'ble Division Bench enhanced the amount payable by the st 1 defendant towards charges for occupation and use of the suit property as follows:
st a. That the 1 defendant being a Public Sector Undertaking cannot immediately vacate the suit premises and a period of one year granted by the learned Single Judge would be adequate for the 1st defendant to remove the superstructure, wind up operations and hand over vacant possession of the suit property:
b. Enhancing the amount payable by the 1st defendant towards charges for occupation and use of the suit property to a sum of Rs.5 Lakhs for the period of 1 year from the date of the order of the learned Single Judge i.e. 19.04.2017 till the date of handing over of the suit property.
c. Fixing timeliness for filing of pleadings, directing that the enquiry for mesne profits be commenced and proceeded with.
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33. Subsequently, the defendant handed over the property on 17.04.2014 after one year and therefore, the suit relief (a) seeking a direction to the defendants to vacate and handover the peaceful and vacant possession of the suit property, has become infructuous.
34. Since the matter was pending before various forums and even the Hon'ble Supreme Court has granted an order of status-quo and also both the parties agitated before the concerned forum, their possession is not illegal. Their possession even after expiry of lease period from the year 1997 till handing over of the possession in the year 2018 are not illegal or unlawful possession and therefore, the plaintiffs are not entitled for mesne profit. Further, the defendants had made improvements in the property and out of the improvements only, they got profit. Further, the defendants are Government undertaking Company and they are only providing service to the public by distributing diesel and it is not run for profit. More so over, they did not earn profit out of the alleged unlawful possession. However, since they already handed over the possession as per the directions of this Court and also deposited a sum of Rs.20 lakhs which was also withdrawn by the plaintiffs and during pendency of the proceedings, they also paid monthly Rs.1 lakhs. Therefore, the plaintiffs are not entitled to any mesne 96/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 profit much less than the past or future. Therefore, the suit is liable to be dismissed.
35. As already stated that pending proceedings, since the defendants st could not purchase the property, as directed by this Court, the 1 defendant had handed over the property on 18.04.2018. Therefore, the first relief sought for by the plaintiffs has become infructuous.
36. Issue No.1: Whether the 1st defendant is liable to pay past mesne profits of Rs.54,00,000/- (Rupees Fifty Four Lakhs) from 25.09.2002 till date of Suit?
36.1. The possession was admitted and the last extension of lease period expired on 14.04.1997 itself. The defendants had not immediately come forward either for extension or for handing over the possession or for payment of fair rent. Meanwhile, in the year 1996, the original lessee S.R.Sundaram died and his legal heirs took steps and also communicated. Though several negotiations had taken place, the same could not be materialized either for extension of lease or for fair rent or handing over the possession of the suit property. Therefore, the plaintiffs have filed the suit in the year 2005. Immediately, the defendants also filed petition under Section 9 of City Tenant's Protection Act, praying to direct the 97/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 landlord/plaintiffs to sell the suit property to the 1st defendant at a price to be determined by this Court and this Court vide Order dated 17.10.2012 st dismissed 1 defendant's application in A.No.135 of 2006. The 1st defendant then challenged the order of dismissal in O.S.A. No. 248 of 2013. A Division Bench of this Court dismissed the Appeal by granting liberty to the 1st defendant to file an application before the learned Single Judge in the manner known to law. Pursuant to the aforesaid order, the 1st defendant took out an Application No.1164 of 2014 praying for restoration of its Application under Section 9 of the Act i.e. Application No.135 of 2006. The said Application was allowed vide Order dated 17.04.2014 and Application No.135 of 2006 was restored, on condition however that the 1st defendant deposits a sum of Rs.20 Lakhs to the credit of the Suit and further pay a sum of Rs.1 Lakh per month to the plaintiffs from 01.04.2014. The 1st defendant had deposited a sum of Rs.20 Lakhs, which has subsequently been withdrawn by the plaintiffs. The 1st defendant also paid a sum of Rs.1,00,000/- monthly to the plaintiffs as per order dated 17.04.2014. Meanwhile, the plaintiffs filed an Application in A.No.5852 of 2015 in the present Suit, seeking a direction to the 1st defendant to purchase the suit property for a sum of Rs.23,00,00,000/- or such market value as may be fixed by this Court. In the said Application, vide Order 98/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 dated 18.02.2016, an Advocate Commissioner was appointed to inspect and inter-alia ascertain the market value of the suit property, taking into account the Legislative mandate under Section 9 of the Act. The learned Advocate Commissioner conducted inspection and filed his report on 18.03.2016 before this Court valuing the land at Rs.23,500/- per Sq. Ft. and the total value is Rs.20,28,99,000/-. The 1st defendant filed their objections to the said report. This Court, then proceeded to pass orders in Application No.5852 of 2015 accepting the valuation made by the learned Advocate Commissioner. The Court then adjourned the matter to file an undertaking by 1st defendant to purchase the property by paying the market value fixed by the learned Advocate Commissioner and if the 1st defendant was not prepared to purchase the property, further orders would be passed, taking into account the relief claimed in the Application. Aggrieved by the said order, the 1st defendant filed O.S.A.No.195 of 2016 before this Court, which was dismissed by a Division Bench of this Court vide order dated 05.10.2016 by observing that the matter would be proceeded before the learned Single Judge.
36.2. Thereafter, the plaintiff's Application No.5852 of 2015 was taken up by the learned Single Judge. At this juncture, pursuant to the directions of this Court, the 1st defendant filed an affidavit stating that it 99/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 was not inclined to purchase the suit property at the price determined by the learned Advocate Commissioner and that it required a period of 3 years to vacate and handover the possession of the property to the plaintiffs. After hearing the parties at length, the learned Single Judge by an order st dated 19.04.2016 granted one year time to 1 defendant to hand over the possession.
36.3. The aforesaid order was challenged by the plaintiffs in O.S.A. No.256 of 2016. A Division Bench of this Court passed judgment in the Appeal on 19.12.2017, confirming the order of the single Judge regarding the time period to vacate and hand over the possession. However, the Court st enhanced the amount payable by the 1 defendant towards charges for occupation and use of the suit property to a sum of Rs.5 Lakhs for a period of 1 year from the date of the order of the learned Single Judge i.e. 19.04.2017 till the date of handing over of the suit property.
st 36.4. Subsequently, on 18.04.2018, the 1 defendant handed over the possession to the plaintiffs and upon the suit property being handed over on 18.04.2018 by the 1st defendant, the plaintiff has developed the suit property, built a commercial building of 15000 sq.ft. and have given it on lease.
36.5. Insofar as the relief (b) is concerned, the plaintiffs have 100/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 furnished the Guideline Value of the Property for the period from 01.04.2002 to 31.03.2003 and from 01.04.2003 to 24.09.2005 as follows;
(a) from 25.09.2002 to 31.03.2003 @ Rs.2478/- per sq.ft. is Rs.2,13,95,052/- (Ex.P18).
b) from 01.04.2003 to 24.09.2005 @ Rs.2579/- per sq. ft., is Rs.2,38,21,206/- (Ex.P18).
36.6. On an Annual Return of 12% on the value of the Property, the suit property would have fetched returns as follow;
(i) from 25.09.2002 to 31.03.2003, a sum of Rs.13,26,493/- per year or Rs.2,13,951/- per month [at 9% returns the amount would be Rs.1,60,463/- per month) (Ex. P19).
(ii) from 01.04.2003 to 24.09.2005, a sum of Rs.70,98,719/- per year or Rs.2,38,212/- per month. [at 9% returns the amount would be Rs.1,78,659/- per month] (Ex.P19).
36.7. The defendants have, for the period from 25.09.2002 to 24.09.2005, i.e. three years prior to the filing of the suit, restricted their claims for mesne profits at Rs.1,50,000/- per month [which is even lesser than the amount computed on 9% return on the value of the Property]. This Court may fix the past mesne profits for three years prior to the date of the filing of the suit at Rs.1,50,000/- per month, amounting to Rs.54,00,000/-. 101/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 The 1st defendant may be directed to pay past mesne profits of Rs.54,00,000/- for the period from 25.09.2002 to 24.09.2005 together with interest at 18% p.a. from the date of the suit till the date of payment.
36.8. According to the defendants, in compliance of the order of this Court dated 19.12.2017, the defendants vacated and handed over the suit property on 17.04.2018 and therefore, the prayer (a) as sought for by the plaintiffs no longer survives.
36.9. As far as mean profits are concerned, as per Section 2(12) of CPC, the 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 the profits due to improvements made by the person in wrongful possession. In this case, the defendants' possession is not a wrongful possession. Even prior to filing of the suit, the defendants with the legal heirs of the said C.R.Sundaram, the original lessor was engaged in the negotiations with the first defendant to explore an option for lease/purchase of the suit property. In such circumstances, the first defendant was clearly permitted to continue to remain in occupation of the suit property by the then plaintiff without any protest or demur. During the period, the lease rent as per the lease deed between the parties continued to 102/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 be paid and the same was received without any whisper or protest. Though the lease expired on 14.04.1997 itself, only on 21.07.2005, protest was st raised to the 1 defendant to continue the occupation of the first item. Therefore, the present suit is filed by the plaintiffs. Immediately, on receipt st of the summons in the suit, the 1 defendant, filed application in A.No.135 of 2006 invoking Section 9 of the City Tenant Act, 1921 and the said application was pending before this Court. Therefore, the possession of the first defendant is not wrongful. The statutory right that was availed at that time is lawful invocation by the first defendant and therefore, the possession of the defendant cannot be termed as wrongful possession.
36.10. Further, the case of the defendants that in batch of cases filed by various Oil companies, the Hon'ble Supreme Court has ordered status- quo to be maintained in respect of the premises and which came to be dismissed in the month of December 2018 only and till such time, the status quo was to be maintained. Further, the plaintiffs filed an application to direct the defendants to purchase the property and the same was taken by this court and though this Court directed the defendants to purchase the property on the fixed sale consideration, since the defendants did not purchase the property, this Court passed an order to vacate the property. Therefore, the defendants also vacated the premises on 17.04.2018. 103/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Therefore, the possession of the defendants is not either wrongful or unlawful and hence, the plaintiffs are not entitled to mesne profit. However, pending suit, as per the directions of this Court, they deposited Rs.20 lakhs and further paid Rs.1 lakhs per month and all the amount were taken by the plaintiffs and therefore, the plaintiffs are not entitled for mesne profit as sought for.
36.11. According to the plaintiffs, despite several negotiations, the defendants, did not come forward either for extension or for handing over the property which is in prime locality at Chennai. Though the defendants stated that it is only a government undertaking oil company and they are not earning profit and that they are only providing service to the public, however, in the city, naturally the distribution of oil would be more even without any break and tirelessly, they used to sell and therefore they would have earned profit. The defendants are not doing any free service, they are only selling oil to the public on the price fixed by the company and even they do not give any concession.
36.12. The defendants did not come forward for amicable settlement for more than 8 years from the date of expiry of the lease period to till the filing of the suit i.e. from 14.04.1997 to 2005. However, the plaintiffs restricted their claims of meane profit only for three years, at 104/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Rs.1,50,000/- per month for the period from 25.09.2002 to 24.09.2005, i.e. three years prior to the filing of the suit, amounting to Rs.54,00,000/- together with interest at 18% p.a. from the date of the suit till the date of payment.
36.13. Already the defendants deposited Rs.20 lakhs and continued to pay Rs.1 lakhs per month on other proceedings. The defendant did not immediately come forward to pay a reasonable rent and to extend the lease period, but they continued to be in possession. Whatever the superstructure put up by the defendant is only for their benefit and out of the superstructure, the plaintiffs will not get any benefit.
36.14. Under the above circumstances, the defendants are liable to pay only Rs.1 lakh per month for the period of three years immediately prior to filing of the suit. Insofar as the interest is concerned, the plaintiffs have sought interest at the rate of 18% per annum, however, admittedly there were proceedings initiated by one of the defendants and also by the plaintiffs and meanwhile, the matter went upto Supreme Court and the same was pending till 18.12.2018. Therefore, the plaintiffs are not entitled to the interest at the rate of 18%. However, they are entitled to interest at the rate of 7.5% per annum.
105/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 36.15. Accordingly, the defendants are liable to pay the plaintiff a sum of Rs.1 lakh per month for the period of three years immediately prior to the filing of the suit with interest at the rate of 7.5% per annum.
Issue No.1 is answered accordingly.
37. Issue No.2: Whether the 1st defendant is liable to pay future mesne profits at Rs.1,50,000/- per month or such other rate as may be fixed by this Hon'ble Court in accordance with the market value whichever is higher from the date of Plaint till date of delivery of vacant possession?
37.1. As stated above, the 1st defendant extended/renewed the lease for a further period of 20 years with effect from 15.04.1977 and continued to pay the same rental @ Rs.240/- per month and the said renewal of lease expired by efflux of time on 14.04.1997 itself. Thereafter, since the defendants had not immediately come forward either for extension or for handing over the possession or for payment of fair rent, the legal heirs of the original lessor S.R.Sundaram filed the suit in the year 2005 after several negotiations. Immediately, the defendants also filed petition under Section 9 of the City Tenant's Protection Act, praying for a direction to the st landlord/plaintiffs to sell the suit property to the 1 defendant at a price to be determined by this Court. Thereafter, several proceedings were initiated 106/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 by both the plaintiffs and defendants. At last, when this Court had directed the defendant to purchase the suit property on the value fixed by the learned Advocate Commissioner, the defendant refused to purchase the same and all these years, the defendant was running the petrol station and continued to be in possession of the suit property. Even from 14.04.1997 till 24.09.2005, the defendants did not even offer or deposit a fair rent which is reasonable to them. The defendants are not a charitable organisation. Admittedly, the property is in a prime locality in Chennai and therefore, the defendants would have naturally earned profits through their business and therefore, the defendants are liable to pay future mesne profit from the date of filing of the suit and till the date of handing over the possession i.e. 17.04.2018.
37.2. Though the plaintiffs stated that the Annual Return on the suit property which was used by the defendants for commercial purpose and situate in a prime commercial area on calculating the mesne profits, at 12% on the value of the suit property per year or the compensation payable at 1% per month for various periods during pendency of the suit, as assessed by PW.2. However, PW.2 has also considered that as the subject property was vacant land, he has assessed, in his opinion that fair rent, at the rate of return of 9% is reasonable as stated below:
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(a) for the period from 25.09.2005 till 31.7.2007 mesne profits at 12% Return is Rs.2,38,212/- per month (Ex.P19) [fair rent at 9% Return-Rs.1,78,659/- per month (Ex.P19).
The total sum for the respective period is Rs.39,66,230/-.
(b) for the period from 01.08.2007 till 31.03.2012, mesne profits at 12% Return is Rs.9,48,359/- per month (Ex.P19) (fair rent at 9% return -Rs.7,11,269/- per month (Ex.P.19). The total sum for the respective period is Rs.3,98,31,060/-
(c). for the period from 01.04.2012 till 08.06.2017, mesne profits at 12% return is Rs.20,28,990/- per month (Ex.P.19). (Fair rent at 9% return-Rs.15,21,742/- per month (Ex.P.19). The total sum for the respective period is Rs. 9,47,53,802/-.
(d). for the period from 9.06.2017 till 18.04.2018, mesne profits at 12% return is Rs.13,59,423/- per month (Ex.P19). The total sum for the respective period is Rs.1,05,35,526/-.
37.3. However, the said rate was fixed only for outright sale and for fixing fair rent, the same yardstick cannot be used. However, the 1st defendant is liable to pay Rs.1,50,000/- as future meanse profit from the date of suit and till the date of handing over the property. As far as the interest is concerned, pending suit since the defendants had already vacated 108/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 the property, the 1st defendant is liable to pay interest at the rate of 6% per annum.
The issue No.2 is answered accordingly.
38. Issue No.3: Whether the 1st defendant is entitled to its counter claim of Rs.1,72,81,000/- if so?
38.1. According to the plaintiffs, the 1st defendant has made a counter claim of Rs.52,00,000/- on the basis that they are entitled to compensation under the MCTP Act, 1921. The 1st defendant is not a tenant/contractual lessee and is an unlawful occupier and after expiry of the lease in April 1997, they are not entitled to the benefits under the said Act. The MCTP Act, 1921 is not applicable to the 1st defendant. Further, this Court's Order dated 19.04.2017, directing the defendants to vacate and hand over the possession of the suit property, was not passed under the MCTP Act. D.W.1 in cross examination has admitted to question No.19 that the plaintiffs did not obstruct the 1st defendant from removing their materials from the suit property and that the superstructures left behind the property, had no value. The 1st defendant's claim for damages/compensation based on the MCTP Act is misconceived and untenable and liable to be rejected on this ground. As regards the 1st 109/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 defendant's claim of Rs.1 crore towards cost of resite to establish a new Outlet, D.W.1 has admitted in question No.27 that no resite was done and no costs were incurred. As far as the alleged loss of Rs.20.81 Lakhs, claimed by the 1st defendant as business loss for 9 months till the new Retail Outlet is established, is concerned, since the 1st defendant has not established any new Retail Outlet, as admitted by D.W1 in Q.27, the counter claim is untenable.
38.2. As stated by the plaintiffs, the defendants have not established that the plaintiffs unlawfully or without giving an opportunity to the defendants, vacated them and no breathing time was given to them to establish a new outlet and thereby, they occurred loss. The extended lease period itself expired on 14.04.1997. Further, the issue Nos.1 and 2 have been answered against the defendants and in favour of the plaintiffs to some extent.
38.3. Under these circumstances, the defendants are not entitled to counter claim.
Issue No.3 is answered accordingly.
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39. Issue No.4: Whether the 1st defendant is entitled to the benefits of the City Tenants Protection Act?
As discussed above, despite this Court had given opportunity to the defendants to purchase the suit property, the defendants refused to purchase the same. Under these circumstances, the defendants are not entitled to the benefits of the City Tenants Protection Act?
Issue No.4 is answered accordingly.
40. Issue No.5: Whether the plaintiff is liable to compensate the 1st defendant under the provisions of the Chennai City Tenant's Protection Act, 1921 in respect of the superstructure erected by the 1st defendant on the Suit Schedule Property and interest thereof?
40.1. The defendants have not established that the superstructure erected by them is benefited to the plaintiffs after they handed over the possession or the plaintiffs are utilizing the superstructure. Further, the superstructure put up by the defendants is peculiar in nature which can be utilized only by the defendants. Moreover, the plaintiffs have stated that after taking possession of the suit property, they have removed the superstructure put up by the defendants and built a commercial complex. Even the defendants have not stated the value of the superstructure which 111/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 was put up in early 1957 and that depending upon the extension of lease period only, for their own purpose they had put up the superstructure/renovated the superstructure and not for any improvement of the plaintiffs' property.
40.2. Since the plaintiffs are not beneficiaries of the superstructure put up by the defendants and already the issue Nos.1 to 4 were answered against the defendants, the defendants are not entitled to be compensated in respect of the superstructure.
The issue No.5 is answered accordingly.
41. Issue No.6:What other relief the parties are entitled? 41.1. As already discussed above, the defendants had not come forward with amicable terms of reasonable/fair rent on the date of expiry of lease period in the year 1997 till the date of filing of the suit in the year 2005 for eight years and therefore, due to the attitude of the defendants, the plaintiffs were constrained to file suit and even after filing of the suit, there were several proceedings met out by the parties and all those proceedings ended against the defendants.
41.2.Therefore, the defendants are liable to pay the costs of the suit. The issue No.6 is answered accordingly.
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42. Conclusion :
42.1. As far as the first relief (a) sought for by the plaintiffs seeking to direct the defendants to vacate and hand over the peaceful and vacant possession of the suit property, is concerned, the plaintiffs have admitted st that the 1 defendant has vacated and handed over the property on 18.04.2018 itself and after taking the possession, the plaintiffs have developed the suit property and built a commercial building for 15,000 sq.ft. and has given the same for lease and the defendants have also admitted that the possession of the suit property was handed over to the plaintiffs on 17.04.2018 itself. Since both the plaintiffs and the defendants have admitted that pending suit, the suit property was handed over to the plaintiffs by the defendants, the first relief sought for by the plaintiffs had become infructuous. Hence, this suit is dismissed as having become infructuous as far as relief (a) is concerned.113/121
https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 42.2. As far as the relief past mesne profits is concerned, the 1st defendant is liable to pay only Rs.1 lakh per month for a period of three years immediately prior to the filing of the suit, with interest at the rate of 7.5% per annum.
42.3. Further, the 1st defendant is liable to pay Rs.1,50,000/- as future mesne profit from the date of suit till the date of handing over the property. As far as the interest is concerned, pending suit, since the defendants had already vacated the said property, the 1st defendant is liable to pay interest at the rate of 6% per annum.
42.4. As far as counter claim is concerned, the defendants have not established that the plaintiffs unlawfully or without giving opportunity to the defendants, vacated them and no breathing time was given to them to establish a new outlet and thereby, they incurred loss. Under these circumstances, the defendants are not entitled to counter claim. 114/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 42.5. As discussed in issue No.4, the defendants are not entitled to the benefits of the City Tenants Protection Act and as discussed in issue No.5, since the plaintiffs are not beneficiaries of the superstructure put up by the defendants, the defendants are not entitled to be compensated by the plaintiffs in respect of the superstructure.
42.6. Accordingly, this suit is partly decreed as stated above and the defendants are directed to pay the costs of the suit to the plaintiff.
02.01.2025 (1/2) ksa-2 List of Witness Examined on the side of the Plaintiff:
1. P.W.1 - Mr.Skanda Sundaram
2. P.W.2 - Mr.R.Senthilkumar 115/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 List of Exhibits marked on the side of the plaintiff:
S.No. Exhibits Description of Documents
1 P.1 Certified copy of the Lease Deed dated 24.04.1957
2 P.2 The copy of the Letter dated 03.02.1997
(Defendant counsel raised objection for marking this document stating that it is a photocopy) (Plaintiff counsel represented that in the Statement of Admission and Denial filed by the 1st defendant this document has been admitted by the 1st defendant) 3 P.3 The Office copy of Letter dated 15.03.1997 with A/D card (Defendant counsel raised objection for marking this document stating that it is a photocopy) 4 P.4 The office copy of Letter dated 25.03.1997.
(Defendant counsel raised objection for marking this document stating that it is a photocopy) 5 P.5 The Original Letter dated 08.04.1997 6 P.6 The Office copy of Letter dated 26.12.1997 (Defendant counsel raised objection for marking this document stating that it is a photocopy) 7 P.7 The office copy of Letter with A/D card dated 01.07.1998 (Defendant counsel raised objection for marking this document stating that it is a photocopy) 8 P.8 The Original Letter dated 19.08.1998 9 P.9 The Office copy of Letter dated 25.11.1998 (Defendant counsel raised objection for marking this document stating that it is a photocopy) 116/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 S.No. Exhibits Description of Documents 10 P.10 The copy of the Extract from Permanent Land Register dated 03.04.1976 (Defendant counsel raised objection for marking this document stating that it is a photocopy) 11 P.11 The Original Letter with A/D card dated 21.07.2005 12 P.12 The web copy of he Guideline value and property valuation issued by Registration Department-Mylapore Village from 01/04/2002 to 31.03.2003.
13 P.13 The web copy of the Guideline value and property valuation issued by Registration Departent-Mylapore Village from 01.04.2003 to 31.07.2007.
14 P.14 Te web copy of the Guideline value and property valuation issued by Registration Department-Mylapore Village from 01.08.2007 to 31.03.2012 15 P.15 The web copy of the Guideline value and property valuation issued by Registration Department-Mylapore Village from 01.04.2012 to 08.06.2017 16 P.16 The web copy of the Guideline value and property valuation issued by Registration Department-Mylapore Village from 09.06.2017 to 16.07.2019 17 P.17 The affidavit of 2nd plaintiff under Sectin 65B of Evidence Act dated 18.07.2019. (Defendant counsel raised objection for marking these documents stating as Ex.12 to Ex.P16 and Ex.P17 are not in compliance with Section 65B of the Evidence Act and are objected to) (Plaintiff counsel replied that Ex.P12 to P16 are printouts from the website of Tamilnadu Registration Department) 117/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 S.No. Exhibits Description of Documents 18 P.18 The original valuation Report of R.Senthilkumar & Associates dated 10.07.2015 List of Witness Examined on the side of the Defendant:
1. D.W.1 - Mrs.Ranjitha R.Gopal
2. D.W.2 - Mr.Arun Kandikonda S.No. Exhibits Description of Documents 1 D.1 The original authorization letter dated 15.11.2023 2 D.2 The original statement of list of assets at the 1st defendant's retail outlet on the suit property 3 D.3 The original certificate issued by the Territory Manager of the 1st defendant enclosing statment showing the Bill of Quantities and estimates of expenditure involved in the resitement of the retail outlet dated 09.02.2018 4 D.4 The certified copy of the lease deed dated 15.07.2013 5 D.5 The certified copy of the lease deed dated 27.06.2003 6 D.6 The certified copy of the lease deed dated 01.04.2004 7 D.7 The certified copy of the lease deed dated 23.04.1998 8 D.8 The Web copy of the order dated 15.07.2022 passed by the Hon'ble Supreme Court in Miscellaneous Application (Diary) No.30165 of 2021 in CA.No.6726 of 2021 9 D.9 The certified copy of the report of Justice Chitra Venkatraman dated 14.11.2022 submitted to the Hon'ble Supreme Court in Miscellaneous Application (Diary) No.30165 of 2021 in CA.No.6726 of 2021 118/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 S.No. Exhibits Description of Documents 10 D.10 The Web copy of the order dated 24.02.2023 passed by the Hon'ble Supreme Court in Miscellaneous Application (Diary) No.30165 of 2021 in CA.No.6726 of 2021 11 D.11 The Web copy of the order dated 20.03.2023 passed by the Hon'ble Supreme Court in Miscellaneous Application (Diary) No.30165 of 2021 in CA.No.6726 of 2021 12 D.12 The Web copy of the order dated 02.05.2023 passed by the Hon'ble Supreme Court in Miscellaneous Application (Diary) No.30165 of 2021 in CA.No.6726 of 2021 13 D.13 The original statement showing calculation of projected Loss on the basis of Margins Section 65B affidavit is filed for Ex.D8, Exs.D10 to D12 Court Document -1 S.No. Exhibits Description of Documents
1. C.1 The report dated 18.03.2016 of the advocate commissioner 119/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 Ex.P.19 to 22 marked through D.W.2 S.No. Exhibits Description of Documents 1 P.20 Signature of Hari Kishen 2 P.21 The first page of whatsapp communication 3 P.22 (the agreement entered into between 1st defendant and Cove Holdings.)The deed of compromise dated 20.04.2023 02.01.2025 (2/2) Index : Yes / No Speaking Order : Yes / No Neutral Case Citation : Yes/No Ksa-2 120/121 https://www.mhc.tn.gov.in/judis C.S. No.894 of 2005 P.VELMURUGAN. J.
Ksa-2 C.S. No.894 of 2005 02.01.2025 121/121 https://www.mhc.tn.gov.in/judis