Delhi District Court
Mukul Dlmia vs Andhra Bank Ltd on 4 January, 2025
IN THE COURT OF DISTRICT JUDGE-02: NORTH ROHINI
COURTS COMPLEX: DELHI
CNR No. DLNT01-010655-2016
CS DJ No. 1969/16
IN THE MATTER OF:-
MUKUL DALMIA
S/O LATE SH. S.P. DALMIA,
R/O F-14/57, MODEL TOWN
DELHI-110009
........Plaintiff
VERSUS
1. UNION BANK OF INDIA
(ERSTWHILE ANDHRA BANK LTD.)
F-14/57, GROUND FLOOR,
MODEL TOWN, DELHI-110009
2. UNION BANK OF INDIA
(ERSTWHILE ANDHRA BANK LTD.)
(ZONAL OFFICE)
THROUGH ITS GENERAL MANAGER
2ND FLOOR, AGGARWAL CORPORATE TOWERS,
PLOT NO. 23, DISTRICT CENTRE,
RAJENDRA PLACE, NEW DELHI-110008 .....Defendants
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 1 of 29
Date of institution : 20.09.2016
Date of Conclusion of Argument : 20.12.2024
Date of Order Judgment : 04.01.2025
SUIT FOR POSSESSION, INJUNCTION, RECOVERY OF MESNE
PROFITS AND DAMAGES, SERVICE TAX ALONG WITH
INTEREST
JUDGMENT
1. Vide present judgment; court shall decide the present suit filed by the plaintiff for Possession, Injunction, recovery of mesne profits and recovery of service tax with interest. At the outset counsel for the plaintiff has submitted that possession was delivered to the plaintiff on 01.05.2017. Only the remaining prayers qua recovery of mesne profits and service tax are being pressed.
2. Vide amendment dated 01.07.2023 Amended Memo of parties was taken on record. Andhra Bank had merged with Union Bank of India. The nomenclature was accordingly taken on record.
PLAINTIFF'S CASE
3. Facts as borne out from the record are that the suit property is in two portions. First portion is ground floor of property bearing no. F-14/57, Model Town, Delhi-110009 measuring 1550.44 sq. feet.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 2 of 29 Second portion is adjoining portion of property F-14/57, Model Town, Delhi-110009 measuring 155.70 sq. feet. (both the portions together are hereinafter referred to as suit properties). Total area is thus 1550.44+155.70 =1706.14 square feet.
4. As per case of the plaintiff the first portion was given lease to Andhra Bank vide lease deed dated 03.06.2005 (Ex.PW1/1 (colly). Second portion was given on lease to Andhra Bank vide lease deed dated 07.04.2014(Ex. PW1/2 (colly).
5. It is case of the plaintiff that First Vacation notice dated 12.05.2014 vide Ex.PW1/3 was given but to no avail. Both the lease deeds in favour of defendant had expired on 15.12.2014. Defendant did not vacate the suit premises. Without consent of plaintiff Rs.1,54,840/- were deposited in account of the plaintiff before May, 2017.
6. In para 6 of the plaint it is averred that damages w.e.f. 15.12.2014 i.e. date of expiry of lease till 15.09.2016 i.e. just before filing of the suit is claimed. Same is as under:
1706.14(Area) X Rs. 210 per sq. ft. (Market rate) X 21 Months (tenure) = Rs. 75,24,077/-
LESS RECEIVED = Rs. 32,51,640/-
-----------------------
Total = Rs. 42,72,437/-
------------------------
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 3 of 29
7. It is case of the plaintiff that service tax was applicable since 2012.
GST became applicable after 2017. The tenant was required to pay Service Tax and GST along with the rent. The landlord plaintiff was thereafter required to deposit the same with the concerned department. On account of arrears, the arrears of service tax are calculated at Rs.10,50,000/- till the date of filing of plaint. Regarding remainder amount evidence has been lead.
DEFENDANTS' CASE
8. It is case of the defendant that on 01.05.2017 suit premises was vacated. It is claimed that claim of plaintiff is not just. Claim is barred by limitation. Expiry of lease deeds is admitted (reply to para 4 in written statement). Liability to pay service tax on rent was disputed. It is claimed that no amount is due towards the plaintiff.
ISSUES
9. Following issues were framed vide order dated 28.01.2023:
1. Whether the plaintiff is entitled for recovery of arrears of rent/damages/charges for use and occupation?
If so, at what rate and for which period? OPP
2. Relief.
PLAINTIFF EVIDENCE Sr. NO. Name of witness Remarks/documents tendered
1. PW1 Mukul Dalmiya My affidavit is Ex. PWI/A. CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 4 of 29
1. Lease deed dated 03.06.2005 is exhibited as Ex. PW1/1(colly.) (being an admitted document).
2. Lease deed dated 07.04.2014 is exhibited as Ex. PW1/2(colly.) (being an admitted document).
3. Letter dated 12.05.2014 provided by the plaintiff to the defendants is exhibited as Ex. PW1/3.
4. Letter dated 02.07.2014 and its speed post receipt are exhibited as Ex. PW1/4 and Ex. PW1/5.
5. Letter dated 04.01.2015(not mentioned in affidavit) provided by the plaintiff to the defendants is exhibited as Ex. PW1/6.
6. Legal notice dated 05.01.2015 served by the plaintiff to the defendants and postal receipts for the same is exhibited as Ex. PW1/7 and Ex. PW1/8.
7. Legal notice dated 05.05.2015 served by the plaintiff to the defendants is exhibited as Ex. PW1/9 CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 5 of 29 and its postal receipts as Ex. PW1/10.
8. Copy of the Financial and technical bid dated 13.07.2015 is exhibited as Ex. PW1/11 (colly.).
9. Valuation report of ground floor of the property no. F-14/57, Model Town II, Delhi-110009 (i.e. tendered property)filed by the plaintiff is exhibited as Ex. PW 1/12 (colly).
10. Lease deed dated 22.08.2012 between Sunder Lal Sharma & Ors.
And M/s Mahindra Retail Private Limited for property at F-14/13, Model Town II, Delhi is marked as Mark PW A (colly). (running into 39 pages) (after dexhibiting Ex. PW 1/ 13).
10. Plaintiffs closed their evidence on 24.02.2024.
DEFENDANT EVIDENCE CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 6 of 29 Sr. Name of witness Remarks/documents tendered No.
1. DW1 Rakesh Kumar Affidavit Ex. DW1/A. Senior Branch Manager,
1. The document i.e. the Gazette Model Town.
Notification dated 04.03.2020 mentioned in the affidavit as Ex.DW1/1 is now de-exhibited and marked as Mark A (objected by the counsel for the plaintiff that the document is filed alongwith Ex.DW1/A and same is not on record till date, therefore, same cannot be marked and exhibited).
2. The document i.e. copy of Power of Attorney mentioned in the affidavit as Ex.DW1/2 is now de-exhibited and marked as Mark B. (objected by the counsel for the plaintiff that the document is filed alongwith Ex.DW1/A and same is not on record till date, therefore, same cannot be marked and exhibited).
11. Defendant closed their evidence on 05.06.2024.
12. Court has heard rival contentions, pursed case record, considered CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 7 of 29 rival submissions thoughtfully. No other point was argued by counsel for the parties, other than the submissions noticed herein under:
ISSUE WISE ARGUMENTS ADDRESSED AT BAR AND FINDINGS ARE AS UNDER:
13. Issue no. 1 is:
Whether the plaintiff is entitled for recovery of arrears of rent/damages/charges for use and occupation? If so, at what rate and for which period? OPP SUBMISSIONS BY COUNSEL FOR THE PLAINTIFF ON RIGHT TO MESNE PROFITS, RATE OF DAMAGES AND PERIOD FOR WHICH DAMAGES ARE PAYABLE
14. Learned counsel for the plaintiff has argued on this issue that vide mark PW1/A which is affidavit of examination in chief of Sh. Mukul Dalmiya, it has been explained in para 5 and para 20 as under:
"5. that I say that rent paid to me over the different time period is as :
i. From 16.12.2004 to 15.12.2007 @ Rs.94,576.84/- per month.
ii. From 16.12.2007 to 15.12.2010 @ Rs.108,763/- per month iii. From 16.12.2010 to 15.12.2013 @ Rs.1,25,078/- per month.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 8 of 29 iv. From 16.12.2013 to 15.12.2014 @ Rs.1,43,840/- per month ( and also Rs.11,000/- for the second portion as mentioned in para 3 of my present evidence) I state that the last paid rent by the defendants to me is Rs. 1,54,840/- (i.e. Rs.1,43,840/- plus Rs.11,000/- for second portion) per month.
"20. I say that I am entitled to damages/mesne profit for illegal occupation from 15.12.2014 (wrongly written as 15.12.2004 in the affidavit) (expiry of lease deed) to 01.05.2017 (vacation of property) as per the following calculations:
(1706.14 sq.ft area) X (Rs.210/- per sq. ft.) X (27.5 months) = Rs. 98,52,958.00/-
less : amount received till 15.09.2016: (Rs.32,51,640.00). less : amount received from 15.09.2016 to 01.05.2017 (Rs. 11,61,300.00/-) Add: Arrears of Service Tax (Rs.10,50,000/- plus Rs.154840.00/-) X 15% X (8 months - from
15.09.2016 to 01.05.2017) = Rs.12,35,808.00/- Total amount entitled by the Plaintiff from defendants:
Rs.66,75,826.00/-"
15. It is argued that as per valuation report Ex.PW1/12 (colly) dated 07.09.2016 the rent for above said site property should be around Rs. 200-225/- per sq. feet per month as on date. Valuation report is dated 07.09.2016.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 9 of 29
16. It is further argued that as per mark PW1/A which is a lease deed dated 22.08.2012 between Sh. Sunder Lal Sharma and Mahendera Retail Pvt. Ltd. of 1700 Sq. Carpet Feet Area in Model Town-II, New Delhi, the rent per month comes out to be Rs.209.70/- per sq. feet (as total rent for 36 months was Rs.1,28,34,000/-)
17. It is argued by counsel for the plaintiff that it is Proved that in the year 2012 for 1700 sq. yards of the property the rent was Rs.3,10,000/- per month. Reliance is placed upon Ex. PW1/A (which is a lease deed dated 22.08.2012 between Sh. Sunder Lal Sharma and Mahendera Retail Pvt. Ltd.) and Ex. PW 1/12 (colly)(which is valuation report by A.K. Gupta and Associates. It is thus argued that damages/mesne profit for illegal occupation from 15.12.2014 (expiry of lease deed) to 01.05.2017 (vacation of property) as per the following calculations:
1706.14(sq.ft area)X Rs.210/- per Sq. ft... are justified.
18. It is further argued by counsel for the plaintiff that DW1 Sh. Rakesh Kumar in his cross examination dated 05.06.2024 admitted that he had no knowledge of the Oath Commissioner, GST is applicable on lease rent paid to the land lord, the lease deeds Ex. PW 1/1 (colly) and PW 1/2 (colly) were admitted to have been executed between the plaintiff and defendant. It was further admitted that first vacation notice dated 12.05.2014 Ex.PW1/3 was received by the bank. It is further admitted that lease deed Ex. PW 1/1 (colly) and PW 1/2 (colly) provided that they were to expire on 15.12.2014.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 10 of 29 ON LIMITATION
19. It is further argued by counsel for plaintiff that the defence that suit is barred by limitation is without substance as DW1 Sh. Rakesh Kumar has admitted that vacation notice was in 2014 and present suit was filed in 2016. Reliance is placed upon section 19 of the Limitation Act. It is contended that part payments of rent were being received which extended the period of limitation (PW1 Sh. Mukul Dalmiya in his cross examination dated 24.02.2024 has admitted that defendant paid rent of Rs.1,54,840/- till date of vacation). Rent till 01.05.2017 was partly paid. Vacation of property was done on 01.05.2017. Only reason given for the plaint being defective is that defendants were suddenly asked to vacate.
PER CONTRA SUBMISSIONS BY COUNSEL FOR THE DEFENDANTS.
20. Counsel for the defendant contends that it the prayer of the plaint Rs.10.50 lakhs are prayed on account of service tax liability of defendants. Whereas in para 20 of the affidavit of PW1 Rs.12,35,808/- are being claimed.
21. Per contra counsel for the plaintiff states that suit was filed on 20.09.2016. He calculated service tax till 15.09.2016 but in the prayer it is specifically mentioned that defendant pays service tax as applicable and defendant be asked to pay at the same rate along with interest @ 18% per annum till handing over of premises to plaintiff. Possession CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 11 of 29 was handed over only on 01.05.2017. Till this date service tax is claimed.
22. Counsel for the defendants argues that valuation report Ex.PW1/12 and mark PW 1/A were not part of the plaint and no leave of the court was sought to produce the same. It is further argued that even otherwise in absence of deposition of Sh. A.K. Gupta the report cannot be said to be proved as per law.
23. Per contra counsel for the plaintiff states that an application dated 29.09.2016 for annexing the documents was filed and the same may be allowed at this stage. Further it is argued that at the time of exhibition of documents no objection regarding mode of proof was taken.
24. Counsel for the defendants further argues that at internal page 9 of Ex. PW 1/1 (colly) in the lease deed it is specifically mentioned in clause III as under:
The event of the Lessee desiring to vacate the premises on the expiry of the period of lease stipulated above, the Lessee shall give a written notice thereof to the lessor during the subsistence of the lease.
"The lessee shall have rights to extend the lease for a further period of 5(five) years. The Lessee may give written notice of their intention to so extend the lease for such further period. In the event of the failure of omission to give such notice to the Lessor, the period of the lease shall be deemed to have been extended for a further period of 5(five) years on the terms and conditions contained herein."
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 12 of 29
25. It is argued that sufficient time was not given, so defendant is not liable to pay any damages.
26. Per contra counsel for the plaintiff argues that Ex.PW1/3 a vacation notice was given which is dated 12.05.2014 making it clear that plaintiff did not want to extend the lease. Even Ex.PW1/4 dated 02.07.2014 notice was given to the Zonal Office making it clear that plaintiff did not want to extend the lease. So sufficient time was provided by the plaintiff. The tenancy can also terminate by efflux of time under section 111(a) of Transfer of Property Act. that DW1 Sh. Rakesh Kumar in his cross examination dated 05.06.2024 admitted that lease deed Ex. PW 1/1 (colly) and PW 1/2 (colly) provided that they were to expire on 15.12.2014.
27. Per contra it is also argued by counsel for the plaintiff also argues that point no. IV of the lease deed specifically provided that terms and conditions are to be mutually agreed. Since plaintiff was not willing to extend the lease, an advance notice was given to the defendants.
28. It is further argued that lease deeds provided for increase of 15% rent every three years and from 15.12.2014 till vacation in 01.05.2017 the increased rent was paid by the defendant. Defendant is not liable to pay any damages.
29. Per contra counsel for the plaintiff states that calculation given in para 20 of the affidavit of PW 1 is relied upon. Defendant was not paying increased rent @15% every three years. Last rent paid was CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 13 of 29 Rs.1,54,840/- which was duly debited for the period of 15.09.2016 to 01.05.2017 while making calculations in para 20 of the affidavit of PW1.
30. It is further argued by counsel for the defendant that no notice for vacation could have been given by the plaintiff before 15.12.2014 against terms of the contract i.e. lease deeds Ex. PW 1/1(colly).
31. Per contra counsel for the plaintiff argues that point no. IV of the lease deed specifically provided that terms and conditions are to be mutually agreed. Since plaintiff was not willing to extend the lease advance notice was given to the defendants.
32. It is further argued on behalf of defendant that damages Rs.42,72,437/- are claimed in the suit whereas PW1 has claimed an increased amount of Rs.(98,52,958-32,51,640)/- which comes to Rs. 66,01,318/-.
33. Per contra counsel for the plaintiff states that in prayer B of the plaint it was specifically prayed that defendant was asked to pay damage / usage charges at the same rate till actual physical possession is handed to the plaintiff and thus at the time of evidence calculations till that date were made.
34. Counsel for the defendant has relied upon case titled as Chander Kali Bai & Ors. Vs. Jagdish Singh Thakur decided by Hon'ble Supreme Court of India on 06.10.1977 to contend that occupation cannot be said to be unauthorized until eviction decree has been passed so defendant is not liable for damages or mesne profits.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 14 of 29
35. Per contra counsel for the plaintiff contends that case titled as Chander Kali Bai & Ors. Vs. Jagdish Singh Thakur decided by Hon'ble Supreme Court of India on 06.10.1977 applies,only when rent control Act applied. In those cases after decree, mesne profits can be given. Present case is not of statutory tenancy. Section 106 transfer of Property Act,1882. Ex.PW1/3 a vacation notice was given which is dated 12.05.2014 making it clear that plaintiff did not want to extend the lease.
ON LIABILITY TO PAY SERVICE TAX
36. Counsel for the defendant further contends that defendant is not liable to pay service tax as plaintiff PW1 Sh. Mukul Dalmiya in his cross examination dated 30.11.2023 admitted that he did not remember whether any amount towards service tax was deposited by him or not. It is further argued that the notification mark PW1/B was annexed with the replication. Same was not annexed with the plaint. No leave of court was sought and thus same cannot be relied upon. It is argued that onus was upon the plaintiff to show that he had paid the service tax to the government and only then the liability of defendant will arise.
37. Per contra counsel for the plaintiff states that mark PW1/B provides applicability of service tax. Notification itself mentions that it shall come into force on 01.07.2012. Counsel for the plaintiff states that in absence of deposit he would have suffered penalty so he has already deposited service tax though record of the same has not been proved in this case.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 15 of 29
38. It is further argued that as per terms of the lease deed as per Ex. PW1/1 (colly). The lessor had to pay taxes. If lessor fails, the lessee could pay taxes and adjust the same out of rent due. It is argued that no demand was raised from the department to the defendant so no taxes were paid. Plaintiff has not shown that he has paid GST. Counsel for the defendant relies upon case titled as M/S Meattles Pvt. Ltd. Vs. HDFC Bank Ltd. decided by Hon'ble Delhi High Court to contend that whether liability to pay service tax is of lessor or lessee is governed by contract between the parties. Reliance is placed upon Ex.PW 1/1 (colly) which is lease deed dated 03.06.2005 in which the liability of lessor is as under:
lessor hereby covenants as follows:
"......ii) That he will pay all the taxes and demands to the Municipality Local Authorities or Governments on the due dates..."
39. Per contra counsel for the plaintiff contends that in Case titled as Pearey Lal Bhawan Association vs M/S. Satya Developers Pvt.Ltd. decided on 20 October, 2010 by Hon'ble High Court of Delhi, it was held that the user i.e. the tenant is liable to pay service tax.
FINDINGS
40. This court has carefully heard and considered rival submissions, case record has been perused.
41. Shorn of unnecessary details following is the chronology of facts:
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 16 of 29 DATE EVENT 03.06.2005 the first portion was given lease to Andhra Bank vide lease deed dated 03.06.2005 (Ex.PW1/1 (colly) 07.04.2014 Second portion was given on lease to Andhra Bank vide lease deed dated 07.04.2014(Ex. PW1/2 (colly).
05.05.2015 Legal notice dated 05.05.2015 served by the plaintiff to the defendants for vacation of premises. Same is exhibited as Ex. PW1/9 15.12.2014 Leases determined on 15.12.2014as per terms of lease.
20.09.2016 Date of institution of suit 01.05.2017 Possession was delivered to the plaintiff.
LIABILITY TO PAY MESNE PROFITS
42. In case titled as Bijay Kumar Manish Kumar Huf Versus Ashwin Bhanulal Desai reported in 2024 SCC OnLine SC 980 it was held by Hon'ble Supreme Court that a tenant who once entered the property in question lawfully, continues in possession after his right to do so stands extinguished, is liable to compensate the landlord for such time period after the right of occupancy expires.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 17 of 29
43. Perusal of record shows that DW1 Sh. Rakesh Kumar in his cross examination dated 05.06.2024 admitted that the lease deeds Ex. PW 1/1 (colly) and PW 1/2 (colly) were executed between the plaintiff and defendant. It was further admitted by witness DW-1that first vacation notice dated 12.05.2014 Ex.PW1/3 was received by the bank. It is further admitted that lease deed Ex. PW 1/1 (colly) and PW 1/2 (colly) provide that they were to expire on 15.12.2014.
44. Submission by Counsel for the defendant is that at internal page 9 of Ex. PW 1/1 (colly) in the lease deed it is specifically mentioned in clause III as under:
The event of the Lessee desiring to vacate the premises on the expiry of the period of lease stipulated above, the Lessee shall give a written notice thereof to the lessor during the subsistence of the lease.
"The lessee shall have rights to extend the lease for a further period of 5(five) years. The Lessee may give written notice of their intention to so extend the lease for such further period. In the event of the failure of omission to give such notice to the Lessor, the period of the lease shall be deemed to have been extended for a further period of 5(five) years on the terms and conditions contained herein."
45. On basis of this clause above submission on behalf of defendants is that sufficient time was not given, so defendant is not liable to pay any damages. This submission is without substance. Same is rejected. Vide CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 18 of 29 Ex.PW1/3 a vacation notice was given which is dated 12.05.2014 making it clear that plaintiff did not want to extend the lease. Even Ex.PW1/4 dated 02.07.2014 notice was given to the Zonal Office making it clear that plaintiff did not want to extend the lease. So sufficient time was provided by the plaintiff.
46. Even otherwise the tenancy can also terminate by efflux of time under section 111(a) of Transfer of Property Act. DW1 Sh. Rakesh Kumar in his cross examination dated 05.06.2024 admitted that lease deed Ex. PW 1/1 (colly) and PW 1/2 (colly) provided that they were to expire on 15.12.2014. So after term of lease ended, the leasee is in unauthorized possession.
47. Further point no. IV of the lease deed specifically provided 'that terms and conditions are to be mutually agreed'. Since plaintiff was not willing to extend the lease, an advance notice was given to the defendants. Same is well within right of plaintiff.
48. Further argument on behalf of defendants that no notice for vacation could have been given by the plaintiff before 15.12.2014 against terms of the contract i.e. lease deeds Ex. PW 1/1(colly) is without merit. Same is rejected. Point no. IV of the lease deed specifically provided that 'terms and conditions are to be mutually agreed'. Since plaintiff was not willing to extend the lease advance notice was rightly given to the defendants.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 19 of 29
49. Further argument on behalf of defendants relying upon case titled as Chander Kali Bai & Ors. Vs. Jagdish Singh Thakur decided by Hon'ble Supreme Court of India on 06.10.1977 to contend that occupation cannot be said to be unauthorized until eviction decree has been passed so defendant is not liable for damages or mesne profits is without merit. Their is no dispute with law laid down in case titled as Chander Kali Bai & Ors. Vs. Jagdish Singh Thakur decided by Hon'ble Supreme Court of India on 06.10.1977 but the same applies,only when rent control Act applies. In those cases after decree, mesne profits can be given. Present case is not of statutory tenancy. This case is governed by transfer of Property Act,1882. Ex.PW1/3 a vacation notice was given which is dated 12.05.2014 making it clear that plaintiff did not want to extend the lease. Defendant is thus liable to pay mesne profits.
50. Based upon evidence on file defendants are held to be in unauthorized possession from date of expiry of lease (15.12.2014) till date of vacation of premises (01.05.2017). For this period of unauthorized possession plaintiff is held entitled by right to mesne profits.
RATE OF MESNE PROFITS
51. Perusal of valuation report Ex.PW1/12 (colly) dated 07.09.2016 shows that the rent for suit property should be around Rs.200-225/- per sq. feet per month as on date. Valuation report is dated 07.09.2016.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 20 of 29
52. Further as per mark PW1/A which is a lease deed dated 22.08.2012 between Sh. Sunder Lal Sharma and Mahendera Retail Pvt. Ltd. of 1700 Sq. Carpet Feet Area in Model Town-II, New Delhi, the rent per month comes out to be Rs. 209.70/- per sq. feet (as total rent for 36 months was Rs.1,28,34,000/-)
53. Submission by Counsel for the defendant that valuation report Ex.PW1/12 and mark PW 1/A were not part of the plaint and no leave of the court was sought to produce the same. Further argument that even otherwise in absence of deposition of Sh. A.K. Gupta the report cannot be said to be proved as per law is without merit. Same is rejected. An application dated 29.09.2016 for annexing the documents was filed on behalf of plaintiff. Since these documents are necessary for just adjudication, leave to produce them is granted. At the time of exhibition of documents no objection regarding mode of proof was taken. Same is taken to have been waived (reliance is placed upon case titled as.V. R E. Venkatachala Gounder vs Arulmigu Viswesaraswami & V.P. Temple & Others decided on 8 October, 2003 by Hon'be Supreme Court of India). Even otherwise in case titled as M.C. Agarwal HUF Vs. M/s. Sahara India and Ors. reported in 183 (2011) DLT 105 it was held that courts can take judicial notice of increase of rent and depending on the locality, Courts can grant, subject to any other evidence to the contrary, a 15% cumulative increase every year.
54. It is not disputed that 1706.14 is the total sq.ft area of both portions of leased premises. Mesne profits @ Rs. 210/- per Sq. ft Per as CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 21 of 29 claimed by plaintiff is justified on basis of valuation report Ex.PW1/12 (colly) dated 07.09.2016, mark PW1/A which is a lease deed dated 22.08.2012 between Sh. Sunder Lal Sharma and Mahendera Retail Pvt. Ltd.and further keeping in view the locality, potentiality and nature of suit premises.
55. Argument on behalf of defendants that lease deeds provided for increase of 15% rent every three years and from 15.12.2014 till vacation in 01.05.2017 the increased rent was paid by the defendant. So defendant is not liable to pay any damages is without merit. Same is rejected. Defendant was not paying increased rent @15% every three years. Last rent paid was Rs.1,54,840/- which was duly debited for the period of 15.09.2016 to 01.05.2017 while making calculations in para 20 of the affidavit of PW1.
56. Further argument on behalf of defendants that damages Rs. 42,72,437/- are claimed in the suit whereas PW-1 has claimed an increased amount of Rs.(98,52,958-32,51,640)/- which comes to Rs. 66,01,318/- . Same is not permissible is without merit same is rejected. In prayer B of the plaint it was specifically prayed that defendant be asked to pay damage / usage charges at the same rate till actual physical possession is handed to the plaintiff and thus at the time of evidence calculations till that date were made which is legal and justified.
PERIOD FOR MESNE PROFITS ARE PAYABLE CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 22 of 29
57. Plaintiff is entitled to mesne profits w.e.f. 15.12.2014 (admitted date of expiry of lease deed) till 01.05.2017 (admitted date of vacation of property) as defendant stayed in wrongful possession of suit property after termination of lease during this period for reasons in para supra.
CALCULATIONS
58. In PW1/A which is affidavit of examination in chief of Sh. Mukul Dalmiya, it has been explained in para 5 and para 20 as under:
"5. that I say that rent paid to me over the different time period is as :
i. From 16.12.2004 to 15.12.2007 @ Rs.94,576.84/- per month.
ii. From 16.12.2007 to 15.12.2010 @ Rs.108,763/- per month iii. From 16.12.2010 to 15.12.2013 @ Rs.1,25,078/- per month.
iv. From 16.12.2013 to 15.12.2014 @ Rs.1,43,840/- per month ( and also Rs.11,000/- for the second portion as mentioned in para 3 of my present evidence) I state that the last paid rent by the defendants to me is Rs. 1,54,840/- (i.e. Rs.1,43,840/- plus Rs.11,000/- for second portion) per month.
Para 20 is :
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 23 of 29 "20. I say that I am entitled to damages/mesne profit for illegal occupation from 15.12.2014 (wrongly written as 15.12.2004 in the affidavit) (expiry of lease deed) to 01.05.2017 (vacation of property) as per the following calculations:
1706.14(sq.ft area) X Rs.210/- per sq. ft. X 27.5 months Rs. Rs.98,52,958.50/-
less : amount received till 15.09.2016: (Rs.32,51,640.00/-). less : amount received from 15.09.2016 to 01.05.2017 (Rs. 11,61,300.00) Add: Arrears of Service Tax (Rs.10,50,000/- plus Rs. 154840/-) X 15% X 8 months (15.09.2016 to 01.05.2017) Rs. 12,35,808.00 Total amount entitled by the Plaintiff from defendants:
Rs.66,75,826.00/-"
59. These calculations have not been disputed by defendants by cross examination of PW-1..Though liability to pay service tax is specifically disputed.
60. Plaintiff is held entitled to damages/mesne profit for illegal occupation from 15.12.2014 (expiry of lease deed) to 01.05.2017 (vacation of property)= 27.5 months as per the following calculations:
The plaintiff is entitled to:
1706.14(sq.ft area)X Rs. 210/- per sq. ft. X 27.5 months Rs. 98,52,958.00 CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 24 of 29 less : amount received till 15.09.2016: (Rs. 32,51,640.00). less : amount received from 15.09.2016 to 01.05.2017 (Rs. 11,61,300.00) Total amount due in favour of plaintiff = Rs. 54,40,018/-
CONSIDERATION OF OTHER SUBMISSIONS BY COUNSEL FOR THE DEFENDANTS.
LIABILITY TO PAY SERVICE TAX
61. Submission by Counsel for the defendant that it the prayer in the plaint that Rs. 10.50 lakhs are due on account of service tax liability of defendants. Whereas in para 20 of the affidavit of PW1 Rs.12,35,808/- are being claimed. Same is nor permissible. This contention is without merit. Plaintiff has been found not entitled to dues on account of service tax for reasons below though 'prayer C' in plaint covers claim for service tax dues till date of handing over possession (which date is after institution of suit).
62. Submission by Counsel for the defendant that defendant is not liable to pay service tax is meritorious. Same is accepted. Plaintiff PW1 Sh. Mukul Dalmiya in his cross examination dated 30.11.2023 admitted that he did not remember whether any amount towards service tax was deposited by him or not. Onus was upon the plaintiff to show that he had paid the service tax to the government and only then the liability of defendant could arise.
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 25 of 29
63. Further in written arguments filed defendant has rightly placed reliance upon case titled as Union of India (UOI) and Ors. vs. Bengal Shrachi Housing Development Limited and Ors. Decided on 07.11.2017 reported in MANU/SC/1387/2017: 2017 INSC 1084 wherein it was held lessor is liable being 'taxable person' under law.
64. Reliance is rightly placed by defendant upon Ex.PW 1/1 (colly) which is lease deed dated 03.06.2005 in which the liability of lessor is as under:
" .......lessor hereby covenants as follows:
"......ii) That he will pay all the taxes and demands to the Municipality Local Authorities or Governments on the due dates..."
65. Counter submissions by counsel for the plaintiff that in Case titled as Pearey Lal Bhawan Association vs M/S. Satya Developers Pvt.Ltd.
decided on 20 October, 2010 it was held by Hon'ble Delhi High Court that the user i.e. the tenant is liable to pay service tax is without merit.
There is no dispute with proposition of law laid down by learned single bench in in Case titled as Pearey Lal Bhawan Association vs M/S. Satya Developers Pvt.Ltd. decided on 20 October, 2010 by Hon'ble Delhi high court. Same is clearly distinguishable as in present case Lessor covenanted to pay all taxes to government. Even if service tax or GST CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 26 of 29 was not envisioned at time of lease deed the leassor undertook liability in absolute terms. More over Division bench of Hon'ble High Court of Delhi in case reported as, "W.P(C) No.3597/2020", titled as, "M/s Allied Engineers & Builders Pvt. Limited V/s M/s Muthoot Finance Limited & Anr." (DOD: 18.06.2020), held that subject to clauses contained in the lease agreement, landlord has the obligation to discharge the GST liability.
66. Plaintiff is thus not entitled to service tax arrears as claimed.
INTEREST:
67. Though plaintiff has claimed interest @18 % pa the same is in humble opinion of the court excessive. Since banking activities were be-
ing rendered in suit property, Interest @9.5 % per annum simple from the end of the month for which mesne profits are payable {i.e.for period from 15.12.2014 (expiry of lease deed) to 01.05.2017 (vacation of prop-
erty)} till the amount is paid to the plaintiff will meet the ends of justice.
ON LIMITATION
68. Submission on behalf of defendant that suit is barred by limitation is without substance. DW1 Sh. Rakesh Kumar has admitted that vacation CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 27 of 29 notice was in 2014 and present suit was filed in 2016. Reliance is rightly placed on behalf of plaintiff upon section 19 of the Limitation Act to contended that part payments of rent were being received which extended the period of limitation (PW1 Sh. Mukul Dalmiya in his cross examination dated 24.02.2024 has admitted that defendant paid rent of Rs.1,54,840/- till date of vacation). Rent till 01.05.2017 was partly paid. Vacation of property was done on 01.05.2017. Only reason given for the plaint being defective is that defendants were suddenly asked to vacate with submission is without substance as plaintiff had right to terminate lease as per law.
69. In totality of circumstances Issue no. 1 is decided in favour of plaintiff and against defendant to the extent that plaintiff is held entitled to damages and interest as indicated above. Arrears of service tax claimed by plaintiff are however declined .
RELIEF
70. In view of the findings on issue no. 1, the suit of the plaintiffs is decreed with costs. Plaintiff is found entitled to Rs.54,40,018/- (fifty four lakh forty thousand eighteen rupees) with interest @9.5 % per annum simple from the end of the month for which mesne profits are payable {i.e.for period from 15.12.2014 (expiry of lease deed) to 01.05.2017 (vacation of property)} till the amount is paid to the plaintiff CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 28 of 29
71. Decree sheet be prepared accordingly. File be consigned to record Digitally signed room. VIKRAM by VIKRAM BALI Date:
BALI 2025.01.04
16:42:02 +0530
(Vikram Bali)
District Judge-02, North
Rohini Court Complex, Rohini
Delhi/04.01.2025
CS DJ No. 1969/16 Mukul Dalmiya Vs. Union Bank of India page no. 29 of 29