Delhi District Court
Pressman Estates And Investment Ltd vs Muthoot Leasing And Finance Ltd on 29 March, 2025
IN THE COURT OF MR. SATYABRATA PANDA, DJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS No.59062/2016
&
Counter Claim No.25/2023
Date of Institution: 30.11.1998
Date of Arguments: 24.03.2025
Date of Judgment: 29.03.2025
Pressman Realty Ltd,
Pressman House,
10A Lee Road,
Kolkata, West Bengal 700020
......Plaintiff
Vs.
Muthoot Vehicle & Asset Finance Ltd.,
Through it Managing Director,
Muthoot Chambers,
Opp. Saritha Theatre
Banerji Road, Cochin,
Ernakulam, Kerala 682018;
Also at:
Muthoot Vehicle & Asset Finance Ltd.,
Through its Manager,
Muthoot Towers, Alaknanda,
New Delhi-110019.
...Defendant/Counter-Claimant
JUDGMENT
1. The plaintiff has filed the present suit against the defendant for possession, mesne profits and damages. The defendant/counter-claimant has also filed counter-claims against the plaintiff.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 1 of 282. The suit was originally filed before the Hon'ble High Court of Delhi as CS (OS) No. 2600/1998, and subsequently, upon the change in the pecuniary jurisdiction, the suit came to be transferred to the District Court.
PLAINT
3. The case of the plaintiff, as pleaded in the plaint, is summarised as follows:
3.1. The plaintiff is the owner and landlord of premises bearing No. 2C, second floor, White House, Bhagwan Das Road, New Delhi-110001 measuring 1800 sq. ft. together with all fittings and fixtures, and the common areas (hereinafter referred to as the 'suit property').
3.2. Vide lease deed dated 06.10.1995, the plaintiff leased the suit property to the defendant company for a fixed period of 3 years commencing from the date of handing over of physical possession at a monthly rent of Rs. 80,000/- per month.
3.3. The defendant vide its letter dated 11.10.1995 admitted that the 3 years' lease would commence with effect from 01.11.1995 and further undertook to deliver vacant possession on 31.10.1998.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 2 of 283.4. On 01.11.1995, the plaintiff handed over actual physical possession to the defendant, and as per the lease deed, the lease expired by efflux of time of 3 years on 31.10.1998.
3.5. In spite of writing various letters including letters dated 09.09.1998, 26.09.1998 as well as a legal notice dated 09.11.1998 through an advocate, the defendant did not hand over the vacant physical possession.
3.6. The defendant vide its letters/replies dated 23.09.1998 and 29.09.1998 had requested for renewal of the lease on a reduced monthly rent of Rs. 50,000/- per month, which was not acceptable to the plaintiff, and accordingly, the plaintiff refused to accept the request for renewal and conveyed its decision that the vacant physical possession of the property be handed over.
3.7. Though the defendant was served with the legal notice dated 09.11.1998, the defendant neither replied to the same nor handed over vacant physical possession. Upon the expiry of the lease, the defendant was in unauthorised and illegal possession of the suit property.
3.8. Further, the rent @ Rs. 80,000/- per month had not been paid by the defendant during the lease period CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 3 of 28for four months from July to October 1998 which amounted to Rs. 3,20,000/-. Since the plaintiff was holding interest free security deposit of Rs. 10,00,000/- paid by the defendant in terms of the lease, the plaintiff adjusted the unpaid rent of Rs. 3,20,000/- from the security deposit of Rs. 10,00,000/- and there was a balance security of Rs. 6,80,000/- remaining.
3.9. The plaintiff has not accepted any rent from the defendant after expiry of the lease on 31.10.1998.
3.10. Since the defendant was occupying the suit property unauthorisedly from 01.11.1998 onwards, the plaintiff would be entitled to mesne profits.
3.11. On this basis, the plaintiff filed the suit for possession and recovery of mesne profits/damages.
WRITTEN STATEMENT
4. The defendant filed its written statement seeking dismissal of the suit. The defence set up by the defendant as pleaded in the written statement is summarised as follows:
4.1. The lease deed dated 06.10.1995 is admitted.
4.2. The suit property was taken on lease by the defendant initially for a period of 3 years at monthly rent of Rs. 80,000/-.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 4 of 284.3. At the time of execution of the lease deed, the plaintiff had agreed that the suit property would be leased out to the defendant for 5 consecutive periods of 3 years each. The plaintiff asked the defendant to furnish the flat accordingly keeping in view the long term of the lease as agreed. The base flat without any accessories or furnishing whatsoever had been leased out to the defendant. In view of the assured long term of the lease, the defendant spent sum of Rs. 9,90,000/- on the fittings and fixtures of the suit property.
4.4. Primarily, the plaintiff had agreed to lease the suit property from 01.10.1995 for initially a period of 3 years since the lease agreement could not be drawn for a longer period. At the request of the plaintiff, vide fax message dated 26.07.1995, the commencement of the lease was shifted from 01.10.1995 to 01.11.1995.
4.5. Various problems were faced by the defendant since the date of its occupation in the suit premises. The plaintiff had concealed that the building in which the suit premises was situated had insufficient electricity load and the 320 kv generator installed in the building could not sustain the continuous load of the consumers/residents resulting in frequent breakdown of the electricity and leading to adverse CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 5 of 28impact on the functioning of the defendant. The defendant also came to know in the middle of 1997 when a demolition was carried out in the building that there was no completion certificate in place and huge dues were payable to the authorities. Due to the defaults of the plaintiff, the defendant was being charged with Rs. 6.30 per unit of electricity. Since April 1997, the defendant had paid additional sum of Rs. 1,27,384/- over and above the regular charge of electricity. The defendant was also forced to pay enhanced maintenance charges.
4.6. By letter dated 03.02.1998, the defendant called upon the plaintiff to compensate the defendant for the additional payments made by the defendant due to the plaintiff's default. Another letter dated 04.07.1998 was sent by the defendant to the plaintiff highlighting the difficulties faced by the defendant and also the fact that the value of the property in general had been reduced by 40-50% and that the rent ought to be reduced.
4.7. By letter dated 08.07.1998, the plaintiff replied that with regard to the rent payable for the period of lease, the rent was payable at previously agreed rate, and further negotiation has to be done as per the agreement.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 6 of 284.8. The defendant was shocked to receive a letter dated 09.09.1998 from the plaintiff seeking delivery of vacant possession of the suit premises whereupon the interest free security deposit would be refunded.
4.9. The defendant, after having conversed with the plaintiff over telephone upon the plaintiff expressing consent to renew the lease, sent a letter dated 23.09.1998 to the plaintiff stating that it was prepared to renew the lease on the terms that the rate of rent be reduced to Rs. 50,000/- and the problem of electricity be sorted out by providing a generator set.
4.10. The plaintiff, vide letter dated 25.09.1998, wrote to the defendant refusing to reduce the rent but agreeing to renew the lease at monthly rent of Rs. 92,000/- and stating that, or else, the defendant could vacate the premises.
4.11. The defendant sent a letter dated 08.10.1998 again asking for discussion on the issue.
4.12. On 16.10.1998, a meeting was held between the director of the plaintiff, Mr. Naveen Suchanti, and chairman of the defendant where the plaintiff expressed that it wanted the defendant to continue to occupy the premises, however, that the offered rent of Rs. 50,000/- was less.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 7 of 284.13. On 23.10.1998, the chairman of the defendant received a telephonic call from the plaintiff's director stating that the rate of rent of Rs. 50,000/- was acceptable and that further communication with regard to the terms and conditions would be made.
4.14. However, the defendant was shocked to receive a notice dated 09.11.1998 from the plaintiff asking to vacate the premises. A detailed reply dated 16.11.1998 was sent by the defendant.
4.15. It is denied that the lease expired by efflux of time on 31.10.1998. By way of an oral agreement arrived at between the parties, the lease continued at reduced monthly rent of Rs. 50,000/-.
4.16. On this basis, the defendant has sought dismissal of the suit.
COUNTER-CLAIMS BY DEFENDANT
5. The defendant has also filed counter claim claiming, firstly, a sum of Rs. 9,90,000/- towards amount spent by the defendant on the furniture, fixtures and furnishings in the suit property on the promise of the plaintiff to continue 5 consecutive terms of the lease, and, secondly, a sum of Rs. 5 lacs towards damages for the loss of business and reputation suffered by the defendant due to non-
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 8 of 28availability of electricity and due to demolition of building for not having received completion certificate.
REPLICATION BY PLAINTIFF
6. The plaintiff has filed replication in which the plaintiff has reiterated the averments made in the plaint and has denied the averments made by the defendant in its written statement and counter claim.
POSSESSION HANDED OVER DURING PENDENCY OF SUIT ON 30.11.2002.
7. The undisputed position is that, during the pendency of the present suit, the possession of the suit property was handed over by the defendant to the plaintiff on 30.11.2002.
DEPOSITS MADE BY THE DEFENDANT WITH THE COURT
8. Pursuant to interim orders passed in the suit, the defendant had also deposited an amount of Rs. 14,10,000/- with the Court in the form of FDR towards the differential amount of Rs. 30,000/- (being differential of rate of rent under the lease deed of Rs. 80,000/- and amount of Rs. 50,000/- which was claimed by the defendant to be the agreed reduced rate) for the period from 01.11.1998 till the vacating of the suit property on 30.11.2002.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 9 of 289. Ultimately, vide consent order dated 24.07.2003 passed by the Hon'ble High Court of Delhi (Division Bench) in FAO (OS) NO. 225/2003 arising out of the suit, as modified by the order dated 18.12.2003, it was directed that an amount of Rs. 5 lacs in respect of the security deposit be released to the defendant out of the amount of Rs. 14,10,000/- deposited with the Court, and observing that it would be open to the defendant to seek release of remaining security amount in case the plaintiff failed to show that the rate of rent in the area was more than Rs. 80,000/-.
ISSUES
10. The following issues were framed in the suit and counter-
claim:
1. Whether the plaintiff is entitled to any mesne profits/damages for use and occupation and if so, at what rate and for what period? OPP.
2. Whether the plaintiff is entitled to any interest on arrears of mesne profits, if so, on what amount, at what rate and for what period? OPP.
3. Whether the defendant has spent Rs. 9,90,000/-
on fixtures and furnishing of the premises and is entitled to recover the same from the plaintiff? OPD.
4. Whether the defendant is entitled to recover the balance security deposit of Rs. 5 lakhs from the plaintiff? OPD.
CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 10 of 285. Whether the defendant is entitled to any damages from the plaintiff, if so, in what amount? OPD.
6. Relief.
PLAINTIFF'S EVIDENCE
11. In support of its case, the plaintiff has examined Mr. Gopal Vyas, Vice President of the plaintiff company who has tendered his affidavit in evidence as Ex. PW1/A in which he has deposed along the lines of the plaint. He was cross examined by the defendant. The plaintiff has also relied upon the relevant documentary evidence which has been exhibited during the course of evidence.
DEFENDANT'S EVIDENCE
12. In support of its case, the defendant examined Sh. L.D. Sharma as DW-1 who is the authorised representative of the defendant. He has tendered his affidavit in evidence as Ex. DW1/A in which he has deposed along the lines of the written statement and counter claim. He was cross examined by the plaintiff. The defendant has also relied upon the relevant documentary evidence which has been exhibited during the course of evidence. The defendant has also examined as DW-2 Sh. Indra Prakash Pathak, an architect, to prove the interior works in the suit property and the payments made by the defendant in this respect. He was also cross-examined by the plaintiff.
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Page No. 11 of 28PLAINTIFF'S SUBMISSIONS
13. Ld. counsel for the plaintiff has referred to the relevant pleadings and evidence in support of the plaintiff and has submitted that the plaintiff has been able to prove its case as pleaded and would be entitled to decree as prayed. It is submitted that the registered lease dated 06.10.1995 Ex. P-1 was an admitted document. It is submitted that the lease deed was binding on the parties. It is submitted that the lease deed clearly provided that the lease was only for a period of 3 years from the date of handing over of possession to the defendant. It is submitted that it was also the admitted position that the possession was given to the defendant on 01.11.1998, and hence, the lease was set to expire on 31.10.1998. It is submitted that, hence, the lease had expired on 31.10.1998 by efflux of time as per the terms of the lease. It is submitted that hence, the continued occupation of the defendant from 01.11.1998 onwards till the date of actually vacating the premises on 30.11.2002 was wrongful and illegal. It is submitted that the plea taken by the defendant that there was an alleged agreement that the lease was to be for 5 consecutive terms of 3 years each was completely bogus. It is submitted that this plea had been raised by the defendant only as an afterthought. It is submitted that in any case, in the face of the registered lease deed dated 06.10.1995 Ex.P-1, which was an admitted document, the defendant could not lead any oral evidence to the contrary in light of provisions of sections CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 12 of 2891 and 92 of the Indian Evidence Act. It is further submitted that the plea of the defendant that the lease had been renewed by way of an oral agreement at a reduced rent of Rs. 50,000/- per month was also bogus and without merit.
14. Ld. counsel for the plaintiff has further submitted that the plaintiff would be entitled to mesne profits/damages for the period from 01.11.1998 till 30.11.2002, since the defendant remained in wrongful possession of the suit property for this period despite expiry of the lease. It is submitted that for this period, the plaintiff would be entitled to mesne profits calculated in terms of Clause 2
(xiv) of the lease deed Ex. P1. It is submitted that as per this clause, the parties had agreed that the lease could be renewed after expiry with mutual consent of the parties with minimum increase of 25% of the rent. It is submitted that as such, it would be reasonable to grant the plaintiff mesne profits at this rate calculated by taking the monthly rate of rent of Rs. 80,000/- and giving an increase of 25% every 3 years. Ld. counsel for plaintiff has submitted that since the lease had given a rate of rent in case of renewal, the same would be good measure for awarding the mesne profits.
15. Ld. counsel for the plaintiff has further submitted that the counter-claims filed by the defendant were nothing but CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 13 of 28bogus and had been filed only as a counter-blast to the plaintiff's genuine claims in the suit.
DEFENDANT'S SUBMISSIONS
16. On the other hand, Ld. counsel for the plaintiff has referred to the relevant pleadings and evidence in support of the defendant and has submitted that the suit is liable to be dismissed. It is submitted that the defendant's continued possession of the suit premises beyond 31.10.1998 was not wrongful since the parties had an oral agreement to continue the lease at a reduced monthly rent of Rs. 50,000/- per month. It is submitted that, hence, the plaintiff's suit for mesne profits is liable to be dismissed. It is further submitted that, in any case, the plaintiff has not led any evidence to prove that the properties in the vicinity were fetching rent at the rate at which the plaintiff was claiming mesne profits/damages. It is further submitted that, on the other hand, the defendant has filed lease deed dated 10.02.2004 Ex.DW-1/25 (monthly rent of Rs. 48,000/-), lease deed dated 16.09.2002 Ex.DW-1/24 (monthly rent of Rs. 42,500/-), and lease deed dated 09.09.2002 Ex.DW-1/23 (monthly rent of Rs. 45,000/-), in respect of similar properties in the same building and for a contemporaneous period, to show that the rate of rent had actually substantially decreased in the vicinity.
17. Ld. counsel for the defendant has further submitted that the defendant/counter-claimant would be entitled to the CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 14 of 28counter-claims as claimed. It is submitted that there had been an agreement between the parties to continue the lease for 5 consecutive terms of 3 years each. It is submitted that based on this agreement, the defendant had incurred expenditure of Rs. 9,90,000/- in renovating the premises. It is submitted that however, the plaintiff did not honour this agreement and gave notice to vacate, due to which there is loss of Rs. 9,90,000/- caused to the defendant/counter-claimant. It is further submitted that due to non-availability of electricity and demolition of building for not having received completion certificate, the defendant had also suffered loss of Rs. 5,00,000/- due to loss of business and reputation. It is submitted that hence, the defendant/counter-claimant would be entitled to the counter-claims.
18. Both parties have also filed their respective written submissions.
19. I have considered the submissions of the learned counsels for the parties and I have perused the record.
20. My issue-wise findings are as follows.
ISSUE-WISE FINDINGS Issue No.1- Whether the plaintiff is entitled to any mesne profits/damages for use and occupation and if so, at what rate and for what period? OPP.
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Page No. 15 of 28Issue No.2- Whether the plaintiff is entitled to any interest on arrears of mesne profits, if so, on what amount, at what rate and for what period? OPP.
21. The registered lease deed dated 06.10.1995 Ex.P-1 is an admitted document. As per the terms of the lease, the lease was for a period of 3 years from the date of handing over of possession to the defendant. The undisputed position is that the possession was handed over to the defendant on 01.11.1995. Accordingly, in terms of the lease deed dated 06.10.1995 Ex.P-1, the lease was set to expire by efflux of time on 31.10.1998. It is the case of the plaintiff that the lease expired by efflux of time on 31.10.1998 in terms of the lease deed and that the defendant failed to vacate the premises despite notice, and, hence, was in wrongful possession. On the other hand, the defence which has been raised by the defendant is that by way of an oral agreement between the parties, the lease was continued/renewed at a reduced monthly rent of Rs. 50,000/-.
22. I have considered the matter, and the defence raised by the defendant of there being an oral agreement for continuation of the lease is wholly without any merit. It is the own case of the defendant in its written statement that upon receiving letter dated 09.09.1998 from the plaintiff to vacate the premises, the defendant had issued letter dated 23.09.1998 calling for renewal of the lease at reduced rent of Rs. 50,000/-. It is the own case of the defendant that CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 16 of 28vide letter dated 25.09.1998, the plaintiff wrote to the defendant that the plaintiff was ready to renew the lease at rent of Rs. 92,000/- per month and that reduction of the rent was not acceptable, and that in the alternative, the defendant could vacate the premises. It is the case of the defendant that after this, there were some discussions between the parties. It is further the case of the defendant in the written statement that on 23.10.1998, the Chairman of the defendant received a call from Mr. Naveen Sanchanti on behalf of the plaintiff stating that the rent at the rate of Rs. 50,000/- had been principally accepted "and that further negotiation with regard to the terms and conditions would be made". It is further admitted by the defendant in the written statement that, thereafter, the defendant received a notice dated 09.11.1998 from the counsel of the plaintiff asking to vacate the suit premises.
23. First of all, a perusal of the pleadings made in the written statement itself shows that there is no pleading of any concluded oral agreement between the parties to continue the lease at reduced rent of Rs. 50,000/-. All that the defendant has pleaded in the written statement is that there were some negotiations going on between the parties regarding renewal of the lease and nothing more. The defendant has not even mentioned that if there was an oral agreement to renew the lease, then for what period was this oral agreement of lease. Moreover, in law, there could have been no oral lease for a period of a year and more CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 17 of 28without a document in writing and registered. The defendant is completely silent on the period of renewal of the lease, and this only goes to show that there was no oral agreement for renewal of the lease as alleged.
24. Further, the admitted position being that the defendant had through its letter dated 23.09.1998 offered to renew the lease at reduced monthly rent of Rs. 50,000/- which was categorically declined by the plaintiff in its letter dated 25.09.1998 asking for increased monthly rent of Rs. 92,000/-, and thereafter, the plaintiff had issued notice dated 09.11.1998 to the defendant asking to vacate the suit premises, it is unbelievable that the parties had orally agreed to renew the lease at reduced monthly rate of rent of Rs. 50,000/-.
25. Further, the contention of the defendant that there was an agreement between the parties for leasing the suit premises for 5 consecutive periods of 3 years each is also wholly without merit. The registered lease deed dated 06.10.1995 Ex.P-1 is an admitted document. This lease deed nowhere mentions that the parties had agreed to renew or continue the lease for 5 consecutive terms of 3 years each. The lease was only for a period of 3 years. The renewal clause in the lease being Clause 2(xiv) only provided that the lease period may be renewed after the expiry with the mutual consent of the parties with a minimum increase in rent of 25%. Thus, as per the agreement between the parties, the CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 18 of 28lease could only be renewed with mutual consent. There was no promise by the plaintiff or agreement between the parties to mandatorily renew or continue the lease for 5 consecutive terms of 3 years each. The plea of the defendant that there was an agreement between the parties to renew or continue the lease for 5 consecutive terms of 3 years each is wholly contrary to the registered lease deed dated 06.10.1995, and as such, is rejected.
26. Thus, the lease expired by efflux of time on 31.10.1998, and the defendant was bound to hand over vacant possession to the plaintiff on the expiry of the lease on 31.10.1998. The undisputed position is that the defendant handed over possession to the plaintiff only on 30.11.2002. Since the lease had already expired on 31.10.1998, the continued occupation of the defendant from 01.11.1998 onwards till 30.11.2002 was clearly wrongful, and the plaintiff was entitled for the mesne profits/damages for the period from 01.11.1998 till 30.11.2002.
27. The ld. Counsel for the plaintiff has submitted that the plaintiff would be entitled to mesne profits calculated in the manner as provided in Clause 2(xiv) of the lease. Clause 2(xiv) of the lease provided that the parties could mutually agree to renew the lease subject to a minimum increase in rent of 25%. The ld. Counsel for the plaintiff has accordingly submitted that the plaintiff would be entitled to mesne profits by taking the admitted rent CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 19 of 28amount of Rs. 80,000/- and making a 25% increase every three years.
28. However, I do not agree with this contention made on behalf of the plaintiff. The plaintiff has not led any evidence to show that the rate of rent in the vicinity had actually increased by 25% or by any rate. Rather, the defendant has led evidence in the form of contemporaneous lease deeds Ex.DW-1/23 and Ex.DW-1/25 in respect of comparable properties to show that the rate of rent in the vicinity had actually substantially decreased. When this is the position, then it would not be appropriate to award mesne profits/damages to the plaintiff at any rate more than the last agreed rent of Rs. 80,000/- per month.
29. Although the defendant has led evidence to show that the rate of rent in the vicinity had actually substantially decreased, however, I am also not inclined to grant mesne profits/damages at any rate below the last agreed rent of Rs. 80,000/- per month. At the time of entering into the lease, the defendant had clearly agreed to take the premises on rent at the rate of Rs. 80,000/- per month. As agreed between the parties, the lease expired on 31.10.1998. Upon the expiry of the lease, it was the duty of the defendant to vacate the premises and hand over possession. However, the defendant dishonestly kept occupying the premises. Although the defendant had made CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 20 of 28an offer to the plaintiff to renew the lease at a reduced monthly rate of rent of Rs. 50,000/-, this was categorically declined by the plaintiff. The plaintiff had offered to renew the lease only on payment of increased monthly rent of Rs. 92,000/-. The plaintiff being the owner of the suit premises, it was up to the plaintiff to agree to reduce the rent if it wanted to. The defendant could not have compelled the plaintiff to reduce the rent, nor continued to occupy the premises. The continued occupation by the defendant of the suit property was nothing short of blackmail by the defendant. Even if the rates of rent in the vicinity had decreased, that by itself did not ipso facto mean that the defendant could unilaterally seek to remain in the premises by paying reduced rent. When the plaintiff was not agreeing to reduce the rent, then the defendant ought to have vacated the suit premises and taken up premises on lease elsewhere in the vicinity in case the defendant was so keen in remaining in the same building. However, rather than do so, the defendant illegally kept on holding on to the premises to force the plaintiff to agree to a decrease in the rent. In such facts and circumstances, grant of mesne profits/damages to the plaintiff at any rate below the last paid rent of Rs. 80,000/- would be akin to awarding a premium to the defendant for its illegal actions. The defendant was clearly aware that the lease had come to an end but chose to illegally remain in the premises by falsely claiming that there was an oral agreement to renew the lease at reduced rate of rent. This allegation of an oral CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 21 of 28renewal of lease was false to the defendant's own knowledge and the defendant has only resorted to falsehood to support its defence. The dishonest conduct of the defendant calls for exemplary and punitive damages to be imposed.
30. Although the defendant has been able to show that the rate of rent in the vicinity had reduced, however, since the present case calls for exemplary and punitive damages being imposed on the defendant, it would only be appropriate to grant mesne profits/damages to the plaintiff at least at the last admitted rate of rent i.e. Rs. 80,000/- per month. This would also be reasonable since the defendant itself had come into possession of the premises at the rate of rent of Rs. 80,000/- per month and had paid this rate of rent during the period of lease for 3 years. When the defendant made a conscious decision to wrongfully occupy the property even after the expiry of the lease, the defendant took upon itself all the risks and consequences of such an illegal act. It would be injustice to the plaintiff in the face of the illegal action of the defendant to grant mesne profits/damages at any rate below the last agreed rate of rent of Rs. 80,000/- per month.
31. Accordingly, the plaintiff would be entitled to mesne profits/damages at the rate of Rs. 80,000/- per month for the period from 01.11.1998 till 30.11.2002. In the facts and circumstances of the case, it would also be reasonable to CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 22 of 28grant to the plaintiff interest on the mense profits/damages @ 9% p.a. accruing on a monthly basis till actual realisation.
32. The amounts already deposited by the defendant with the Court pursuant to interim orders passed in the suit along with the interest accrued thereon shall be released to the plaintiff and would stand adjusted against the mesne profits and interest awarded as above.
33. During the course of final arguments, ld. Counsels for both the parties were not in agreement in respect of the amounts already paid by the defendant to the plaintiff for the period from 01.11.1998 to 30.11.2002. Whereas the ld. Counsel for the defendant submitted that the defendant had been paying monthly amount of Rs. 50,000/- to the plaintiff towards use and occupation charges for this period, the ld. Counsel for the plaintiff submitted that the defendant had made no payments whatsoever to the plaintiff towards use and occupation charges for this period. However, this controversy need not detain the disposal of the suit, since this would be essentially a matter of adjustment of payments already made against the awarded amounts which would be taken care of in the execution proceedings. Suffice to observe that in the execution proceedings, the defendant would be at liberty to show that it had already made payments at the rate of Rs. 50,000/- per month to the plaintiff for use and occupation of the suit CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 23 of 28premises for the period from 01.11.1998 to 30.11.2002, and any such payments shall stand adjusted against the mesne profits and interest awarded as above.
34. The Issues Nos. 1 and 2 are answered accordingly.
Issue No.3- Whether the defendant has spent Rs. 9,90,000/- on fixtures and furnishing of the premises and is entitled to recover the same from the plaintiff? OPD.
35. The defendant has made a counter-claim of Rs. 9,90,000/-
towards the expenditure incurred by the defendant on the fittings and fixtures in the tenanted premises. The defendant has made this counter-claim on the allegation that there was an agreement between the parties that the suit premises would be leased to the defendant for 5 consecutive periods of three years each. It is the case of the defendant that the defendant had incurred expenditure of Rs. 9,90,000/- wholly on the basis that the lease would be for a long term. It is the defendant's case that the defendant has suffered a loss of Rs. 9,90,000/- since the plaintiff did not honour the promise to continue the lease for 5 consecutive terms of years each.
36. This counter-claim is completely bogus and without any merit. As already held, there was no agreement between the parties for leasing the suit premises for 5 consecutive periods of 3 years each. The parties had only agreed for the lease for a period of 3 years only, and it was agreed CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 24 of 28that the lease would expire on 31.10.1998. Thus, whatever expenditure that the defendant would have incurred in the tenanted premises was with the conscious knowledge that the lease was expiring on 31.10.1998. Thus, there is no basis for the counter-claim of Rs. 9,90,000/- towards the expenditure made by the defendant towards fixtures and fittings.
37. Accordingly, the counter claim of the defendant for Rs.
9,90,000/- towards expenditure incurred for the fixtures and fittings is wholly bogus and is liable to be dismissed. The Issue No. 3 is answered accordingly.
Issue No.5- Whether the defendant is entitled to any damages from the plaintiff, if so, in what amount? OPD.
38. In so far as the counter-claim of the defendant for Rs.
5,00,000/- towards damages for loss of business and reputation suffered due to non-availability of electricity and demolition of building for not having received completion certificate is concerned, the same is also wholly bogus and without any merit.
39. Although the lease had already expired on 31.10.1998, the defendant deliberately overstayed in the tenanted premises and vacated the same only on 30.11.2002. Thus, it is clear that the defendant was itself keen on remaining in the premises although the lease had already expired. This completely belies the claim of the defendant that there was CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
Page No. 25 of 28any damage being caused to the defendant due to any loss of any business or reputation. In case the defendant was losing its business or reputation due to the tenanted property, then the defendant would have been eager to vacate the tenanted premises. However, the fact that the defendant held on to the suit premises till 30.11.2002, only goes to show that the defendant was itself eager to keep occupying the premises, although wrongfully, and, this completely falsifies the case of the defendant of having suffered any loss to business or reputation.
40. Accordingly, the counter claim of the defendant for Rs.
5,00,000/- towards damages for loss of business and reputation is also wholly bogus and is liable to be dismissed. The Issue No. 5 is answered accordingly.
Issue No.4- Whether the defendant is entitled to recover the balance security deposit of Rs. 5 lakhs from the plaintiff? OPD.
41. The undisputed position is that the defendant had given interest free security deposit of Rs. 10 lacs to the plaintiff.
42. The undisputed position is also that an amount of Rs. 5 lacs towards the security deposit was already directed to be released to the defendant vide order dated 24.07.2003 passed by the Hon'ble High Court of Delhi (Division Bench) in FAO (OS) NO. 225/2003 arising out of the suit.
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Page No. 26 of 2843. Furthermore, as per the case of the plaintiff in the plaint, the plaintiff had also adjusted an amount of Rs. 3,20,000/- out of the security deposit towards unpaid rent for the months from July to October, 1998.
44. Accordingly, the balance interest free security deposit which remains in the hands of the plaintiff would be Rs. 1,80,000/-. This amount would stand adjusted against the mesne profits and interest already granted in the foregoing paragraphs as well as the costs, and the balance, if any, shall be refunded to the defendant.
45. The Issue No. 4 is answered accordingly.
DECISION
46. In the result, it is decreed that the plaintiff is entitled to mesne profits/damages against the defendant at the rate of Rs. 80,000/- per month for the period from 01.11.1998 till 30.11.2002, along with interest @ 9% p.a. accruing on a monthly basis till actual realisation. The amounts already deposited by the defendant with the Court pursuant to interim orders passed in the suit along with the interest accrued thereon shall be released to the plaintiff and would be adjusted against the mesne profits and interest awarded. The payments already made by the defendant to the plaintiff for use and occupation of the suit premises for the period from 01.11.1998 to 30.11.2002 shall also be adjusted against the mesne profits and interest awarded.
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Page No. 27 of 28The execution of the decree for mesne profits shall be subject to the payment of court fees by the plaintiff towards the mesne profits, which shall also be recoverable by the plaintiff from the defendant as costs.
47. The Counter-Claims made by the defendant/counter-
claimant are dismissed.
48. Costs are decreed in favour of the plaintiff and against the defendant. Pleader's fee is fixed as Rs. 50,000/-.
49. The security deposit amount of Rs. 1,80,000/- in the hands of the plaintiff shall stand adjusted against the mesne profits and interest awarded as well as the costs, and the balance, if any, shall be refunded to the defendant.
50. Let the decree sheet be drawn up accordingly.
51. File be consigned to record room after the due compliances.
(SATYABRATA PANDA) District Judge-04 Judge Code- DL01057 PHC/New Delhi/29.03.2025 CS No.59062/2016 & Counter Claim No.25/2023 Pressman Estates And Investment Ltd. Vs. Muthoot Leasing And Finance Ltd.
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