Delhi District Court
Oriental Insurance Co. Ltd vs Life Insurance Corp. Of India on 11 November, 2024
IN THE COURT OF MR. SATYABRATA PANDA, DJ-04,
PATIALA HOUSE COURTS, NEW DELHI
PPA No.07/2020
Date of Institution: 31.01.2020
Date of Arguments: 04.11.2024
Date of Judgment: 11.11.2024
M/s Oriental Insurance Co. Ltd.,
Jeevan Vihar Building,
Parliament Street, New Delhi-110001
Through its authorised representative/
Regional Manager,
Having Regional Office at:
10th Floor, Hansalaya Building,
Barakhamba Road, New Delhi-110001 ......Appellant
Vs.
1. Life Insurance Corporation of India,
Having its Northern Zonal Office at
Jeevan Bharti Building Tower -II,
124, Connaught Circus,
New Delhi-110001.
Service to be effected through Competent office
2. Estate Officer,
Life Insurance Corporation of India,
Northern Zone, Jeevan Prakash Building,
2nd Floor (Mezzanine),
25, Kasturba Gandhi Marg,
New Delhi-110001.
...Respondents
JUDGMENT
1. The appellant has filed the present appeal under section 9 of the Public Premises (Eviction of Unauthorised PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 1 of 40 Occupants) Act, 1971 (hereinafter referred to as 'the Act') against the order dated 17.01.2020 passed by the Estate Officer in Case no. 23 of 2015 passed under Section 5(1) of the Act holding the appellant to be in unauthorised occupation of the subject premises w.e.f. 01.03.2015, as well as another order dated 17.01.2010 passed by the Estate Officer in Case no. 23 (A) of 2015 passed under Section 7(2) and 7(2A) of the Act holding the appellant liable to pay dues of Rs.6,81,08,996/- as on 31.12.2019.
2. The undisputed position is that the appellant was the tenant of the respondent in the premises admeasuring around 3959.82 sq. ft. (1597.86 sq. ft. on the third floor and 2361.96 sq. ft. on the fourth floor) situated in the Jeevan Vihar building, Parliament Street, New Delhi 110001 w.e.f. 05.11.2002.
3. The respondent filed a petition dated 28.10.2015 under sections 5 and 7 of the Act before the Estate Officer, and the Estate Officer issued show cause notices dated 30.10.2015 to the appellant as to why order of eviction and order for arrears of rent and damages with interest should not be made.
4. The brief facts of the case as per the respondent can be seen from the grounds of the show cause notices, and it would be appropriate to extract the relevant portion of the impugned order dated 07.01.2020 setting out the grounds specified in the show cause notices, as under:
PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 2 of 40 "The grounds specified in the Show Cause Notices dated 30.10.2015 for your eviction and recovery of arrears of rent and damages for your unauthorized occupation of the suit premises were as under:
GROUNDS
1. That the Petitioner Corporation is the owner/landlord of the property known as Jeevan Vihar Building. Parliament Street, New Delhi-110001.
2. That M/s Oriental Insurance Company Ltd. ie.
you were originally occupying an area admeasuring 8592 sq.ft. or thereabout at third floor of Jeevan Vihar Building. Parliament Street, New Delhi since 1973. That on 21.03.2001 a meeting was held between your officials and the Petitioner where. as per understanding arrived at between the two parties, since 01.04.2001, you started to pay the monthly rent @ Rs. 43.75 per sq.ft. per month to the Petitioner Corporation.
3. That as per understanding arrived at between the LIC, OIC, MOF and IRDA, you vacated an area admeasuring 6994.14 sq.ft. of the 3rd floor of the property in question and the same was handed over to MOF Thus the area in your occupation came down to 1597.86 sq.ft. on the 3 flооr.
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4. That the Petitioner Corporation in lieu thereof got an area admeasuring 2361.96 sq.ft. on the 4th floor of the same building vacated by IRDA and gave it to you in lies of the arca vacated by it for MOF on the third floor at the saine rent as agreed in the lease terms between you and the Petitioner Corporation. The said minutes of meeting dated were confirmed by your letter dated 22 10.2001.
5. That you are now in occupation of an area admeasuring 3959.82 sq.ft. or thereabout (ie. 1597.86 sq.ft. on 3 floor and 2361.96 sq.ft. on the 4th floor) situated in the Jeevan Vihar building. Parliament Street, New Delhi-110001 (hereinafter referred to as Premises in question") w.e.f. 05.11.2002. As agreed in the meeting held on 21.03.2001, the rate of monthly rent for the revised area admeasuring 3959.82 sq ft. was @ Rs. 43.75 per sq.ft. per month ie Rs. 1,73,242/- per month w.c.f. 05.11.2002 to 31.03.2004 excluding of electricity, water, other taxes as applicable and other municipal charges. As per the agreed terms, the rate of rent was revised to Rs. 51.69 per sq. ft. per month ie Rs. 2,16,563/- per month w.c.f 01.04 2004 till 31.03.2007. The said agreed terms finally expired on 31.03.2007. The said agreed terms finally expired on 31.03.2007.
6. That however even after the agreed terms and conditions, no lease deed could be executed between PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 4 of 40 the parties but both the parties complied with the terms and conditions agreed in the above meeting. However after the expiry of the above agreed terms no further terms were ever agreed between the parties and the said terms expired finally on 31.03.2007 and since then you became a monthly tenant and the tenancy became a monthly tenancy commencing from the 1 day of each calendar month and ending on the last day of the same English calendar month.
7. That you since inception of the tenancy were irregular in making the payment of rent and as such also became liable to pay interest on such delayed payments which were duly accounted for by the Petitioner Corporation in the accounts maintained by it The payments thus received as rent were first accounted for towards the interest and thereafter the remaining amount was adjusted towards the rent.
8. That as per the accounts maintained by the Petitioner Corporation in the usual course of its business, as on 18.10.2012. you were liable to pay a sum of Rs. 1,2407829.00 as rent, Rs 993527.00 as outstanding service tax and Rs. 77,62,092.00 as interest to the Petitioner Corporation.
9. That despite repeated requests and show cause notices served upon you, you failed to regularize your payments towards rent and even failed and PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 5 of 40 stopped paying water charges to the Petitioner Corporation.
10. That as you failed to regularize your accounts and the Petitioner Corporation even otherwise being not interested in keeping you as its tenant requested you to vacate the premises in question.
11. That as even after the expiry of the lease of tenancy agreed in the meeting dated 21.03.2001, you did not vacate the premises in question, the Petitioner Corporation, vide legal notice dated 23/28.01.2015 sent through their Counsel Mr. Abhishek Nanda, Advocate, terminated your tenancy w.e.f midnight of 28.02.2015. In the said notice you were called upon to hand over the vacant and peaceful possession of the suit premises on 28.02.2015 or in the morning of 01.03.2015, failing which, it was stated that damages @ Rs. 225 per sq.ft per month i.e amounting to Rs. 390960/- per month would be charged which is the prevalent market rate.The said notice was duly served upon you You replied the notice vide reply dated 25.02.2015 based on fake and frivolous ground. You, inspite of receipt of the notice, failed and neglected to hand over the vacant and peaceful possession of the premises in question to the Petitioner Corporation which is still onder your unauthorized use and occupation.
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12. That you are not vacating the premises in question in spite of the fact that you are in unauthorized use and occupation of the premises in question and your authority to occupy the premises in question stands determined vide legal notice dated 23/28.01.2015. You are, therefore, liable to pay damages for your unauthorized use and occupation to the Petitioner Corporation @ Rs 225/- per sq.ft. per month amounting to Rs. 8,90,960/- per month wie f 01.03.2015 till the vacation of the premises in question besides arrears of rent and interest on late payment and other dues in respect of electricity, water, service tax and other municipal charges. All the amounts received by the Petitioner Corporation from you after the termination of the tenancy are being kept in the suspense account.
13. That the Petitioner Corporation reserves its right to enhance the rate of future damages during the pendency of the present petition if the market rent increases in the area where the suit premises is situated from date of such increase besides clearing other dues such as electricity and other municipal charges, if not paid by you.
14. That the rate of damages was fixed by the competent authority of the Petitioner Corporation keeping in view the location, use, size and other parameters as well as the prevalent market rent of PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 7 of 40 the area where the aforesaid premises is situated for your unauthorised use and occupation."
5. The appellant filed its response to the show cause notices and after trial and hearing, the impugned orders came to be passed holding the appellant to be an unauthorised occupant of the subject premises w.e.f. 01.03.2015, as well as directing the appellant to pay damages @ Rs. 5,25,528/- per month w.e.f. 01.03.2015 till the premises was vacated as well as interest @ 10% p.a. on the arrears of rent and damages. The impugned order on this basis calculates the dues as on 31.12.2019 as Rs. 6,81,08,996/-.
6. The impugned orders hold the appellant to be in unauthorised occupation w.e.f. 01.03.2015 on the basis that the lease was on a month to month basis which was terminable under section 106 of the Transfer of Property Act and that the respondent had issued the notice dated 23/28.02.2015 to the appellant terminating the tenancy w.e.f. 28.02.2015. The relevant portion of the impugned orders (common to both impugned orders) in this regard is extracted hereunder:
"2. WHETHER THE RESPONDENTS ARE UNAUTHORISED OCCUPANTS?
The notice of termination dated 23/28.01.2015, Exhibit P-8, of the Petitioner Corporation was sent to the Respondents through Registered A.D. post and Speed Post at the suit premises address on PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 8 of 40 28.01.2015. The Respondent had also replied to the said notice 23/28.01.2015 vide its reply dated 25.02.2015, Exhibit P-9. The above reply of Respondent dated 25.02.2015 (Exhibit P-9) clearly proves that the notice of termination, Exhibit P-8, has been duly served upon the Respondent. Exh. P-8 and P-9, both are admitted documents.
Service of the legal notice (Exhibit P-8) upon the Respondent was proved by the witness of the Petitioner. The notice clearly mentions for the Respondents to take notice to hand over the vacant and peaceful possession of the premises to the Petitioner on the expiry of 28.02.2015,mid night or in the morning of 01.03.2015 and/or on expiry of 15 days of the receipt of that notice failing which legal proceedings for recovery of arrears of rent and possession of the premises would be initiated. The Petitioner Corporation also mentioned to take notice by the Respondents that in case the premises were not vacated as required in the said notice they would be liable to pay damages at the demanded rate.
Section 106 of Transfer of Property Act (hereinafter called T.P. Act) stipulates that in absence of written lease deed/ agreement the tenancy shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee by giving fifteen days notice.
PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 9 of 40 In this case no written lease deed was executed between the parties after 31.03.2007 therefore the tenancy of the Respondent was a monthly tenancy which was terminable by giving 15 days notice by either of the parties. The Petitioner Corporation, as per Section 106 of T.P.Act, terminated the tenancy of the Respondent by giving 15 days notice dated 23/28.01.2015 (Exhb. P-8) w.e.f. 01.03.2015. As the termination notice dated 23/28.01.2015 was duly served upon the Respondent, therefore, I hold that the tenancy of the Respondent was validly terminated by the Petitioner w.e.f. 01.03.2015.
I have already held that the tenancy of the Respondent was validly terminated by the Petitioner w.e.f. 01.03.2015.
The term unauthorised occupation is defined under Section 2(g) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971:-
(g) Unauthorised occupation" in relation to any public premises, means the occupation by any person of the public premises without authority for such occupation, and includes the continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever", PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 10 of 40 In Ashoka Marketing Ltd. vs. Punjab National Bank AIR 1991 S.C. 855 at pp.870-872- 1990(4) SCC 406, the Hon'ble Supreme Court observed as under:-
"The definition of the expression 'unauthorised occupation' contained in Section 2(g) of the Public Premises Act is in two parts. In the first part the said expression has been defined to mean the occupation by any person of the public premises without authority of such occupation. It implies occupation by a person who has entered into occupation of any public premises without lawful authority as well as occupation which was permissive at the inception but has ceased to be so. The second part of the definition is inclusive in nature and it expressly covers continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever. This part covers a case where a person had entered into occupation legally valid authority but who continues in occupation after the authority under which he was put in occupation has expired or has been determined. The words "whether by way of grant or any mode of transfer" in this part of the definition are wide in amplitude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act. The definition of PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 11 of 40 unauthorised occupation contained in section 2(g) of the Public Premises Act would, therefore, cover a case where a person has entered into occupation of the public premises legally as a tenant under a lease but whose tenancy has expired or has been determined in accordance with law."
The Respondent in its reply dated 19.04.2016 to the show cause notices dated 30.10.2015 issued under Section 4 & 7 of the PP Act stated that the present notices issued under Section 4 & 7 of the PP Act on the petition of the Petitioner Corporation filed under Section 5 and 7 of the said Act were not maintainable since the Respondent had not violated any of the provision of the Act or terms and conditions of lease agreement. The Petitioner Corporation had not shown any probable ground for eviction. The Respondent is not liable to vacate the premises or pay any damages. The Respondent is neither in an unauthorised occupation nor has defaulted in payment of lease rent and as such the notices are liable to be recalled and withdrawn.
It is clear from the definition of "Unauthorized Occupation" and the aforesaid Judgement that once the authority to occupy the public premises is withdrawn by the Statutory Authority, the occupants become unauthorized occupants thereafter. No reason is required to be assigned for withdrawing the authority. Section 106 of the Transfer of PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 12 of 40 Property Act also does not contemplate of assigning any reason for terminating the tenancy. In this regard I am supported by the decision of Hon'ble Supreme Court in Jeevan Dass vs LIC of India (1994) SCC Suppl Vol. III (694) where it was observed as under:
"Section 106 of the T.P. Act does not indicate that the landlord is entitled to terminate the tenancy by giving 15 days notice, if it is a premises occupied on monthly tenancy and by giving a month's notice if the premises are occupied for agricultural or manufacturing purposes, and on expiry thereof proceedings could be initiated. Section 106 of T.P. Act does not contemplate of giving any reason for terminating the tenancy. Equally definition of the public premises "unauthorized occupation" under Section 2(g) of the Act, postulates that the tenancy' has been determined for any reason whatsoever'. When the statute has advisedly given wide power to the public authorities under the Act to determine the tenancy, it is not permissible to cut down the width of the power vide reading into the reasonable and justifiable ground for initiating action for terminating the tenancy under Section 106 of T.P. Act. If it is so read Section 106 of the T.P.Act and Section 2(g) of the act would become ultra vires. The statute advisedly empowered the authority to act in the public interest and determine the tenancy PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 13 of 40 or leave and licence before taking action under Section 5 of the Act. If the contention of the appellant is given acceptance he would be put to higher pedestal than a statutory tenant under the Rent Act. Take e.g., that a premises is let out at a low rent years back like the present case one. The rent is unrealistic. without a view to revise adequate market rent tenant become liable to ejectment. The contention then is action is violative of article 21 offending of right of livelihood. This contention too is devoid of any substance. An owner is entitled to deal with his property in his own way profitable in its use and occupation. A public authority is equally entitled to use the public property to the best advantage as a commercial venture. As an integral incident ejectment of a tenant/ licensee is inevitable. So doctrine of livelihood cannot indiscriminately be extended to the area of commercial operation. Therefore, we do not find any substance in the contention of the appellant. The appeal is accordingly dismissed. No Cost".
In view of the above discussions and the decision of Hon'ble Supreme Court I do not require to examine the reasons of terminating the said tenancy.
I am satisfied that the authority of occupation in respect of the said premises was duly withdrawn by the Petitioner Corporation by way of the said legal notice, Exh.P-8. The definition of 'unauthorised PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 14 of 40 occupation' u/s 2(g) of the PP Act provides that the tenancy "has been determined for any reason whatsoever". In view of the above I am satisfied that the said tenancy was determined on service of the notice dated 23/28.01.2015. This makes clear that the Respondents have been occupying the suit premises without authority of such occupation. In view of the above discussion and support of the aforecited observations by the Hon'ble Supreme Court I am satisfied that the Respondent became unauthorised occupant as defined u/s 2(g) of the PP Act on determination of the said tenancy w.e.f. 01.03.2015.
Accordingly, I hold that the Respondent became unauthorised occupant with effect from the date of expiry 28.02.2015 i.e. w.e.f. 01.03.2015 in the premises in question i.e. an area admeasuring 3959.82 sq.ft. (1597.86 sq.ft. on 3rd floor + 2361.96 sq.ft. on 4th floor) in Jeevan Vihar Building, Parliament Street, New-Delhi-110001 under provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
For the reasons recorded and points decided above, I have no hesitation in concluding that the Petitioner Corporation is entitled to an order of eviction against the Respondent and also for recovery of damages. Accordingly, I hold that LIC is entitled to recover damages w.e.f. the date referred to as above PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 15 of 40 i.e. 01.03.2015 till the premises are vacated by the Respondents."
7. Before the Estate Officer, the appellant herein had sought to challenge the termination of the lease by the respondent on the basis of the guidelines issued by the Central Government vide resolution dated 30.05.2002. This contention of the appellant was rejected by the Estate Offices holding that the respondent being an affluent tenant was not covered under these guidelines. The relevant portion of the impugned orders (common to both impugned orders) in this regard is extracted hereunder:
"3. WHETHER THE APPLICANTS HAVE COMMITTED A BREACH OF GUIDELINES ISSUED BY THE CENTRAL GOVERNMENT, IF NO TO WHAT EFFECT?
The Guidelines issued by the Central Government are administrative in nature and have no force of law. Moreover, the Administrative Guidelines cannot override the P.P. Act. 1971. Hence these Guidelines are not binding on LIC of India and cannot vitiate and affect the present proceedings pending before this Authority for adjudication.
The government in its resolution dated 30.05.2002 clarified as under:
"...the Government resolution dated 30.05.2002 embodies the guidelines dated 14.01.1992 for PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 16 of 40 observance by the public sector undertakings. However, clarification was issued vide OM No. 21011/790 Pol I IV H.11 dated 07.07.1993 that the guidelines are meant for genuine non-affluent tenants and these are not applicable to the large business houses and commercial entrepreneurs."
In this regard the Hon'ble Supreme Court of India in its judgement in Banatwala & Co. Vs LIC of India & Anr. in para No. 69 quoted, "We may also note by subsequent clarificatory order dated 23.07.2003 the Central Government has made it clear that the guidelines dated 30.05.2002 will not apply to affluent tenants."
The Respondents being affluent tenant, I am of the opinion that Respondents are not covered under the said guidelines."
8. Upon holding the appellant to be in unauthorised occupation w.e.f. 01.03.2015, the Estate Officer has proceeded to determine the liability of the appellant to pay damages. The Estate Officer has taken the admitted rate of rent agreed between the parties in the meeting dated 21.03.2001 as the base and has given 25% increase every 3 years to calculate the damages for the period beyond 01.03.2015, and has in this manner calculated the damages for the period w.e.f. 01.03.2015. The relevant portion of the impugned order in Case No.23(A)/2015 in this regard is extracted hereunder:
PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 17 of 40 "4. WHETHER RESPONDENTS ARE LIABLE TO PAY DAMAGES? IF SO, AT WHAT RATE OF RENT AND FROM WHICH DATE?
I have already declared the Respondents to be unauthorised occupants w.e.f. 01.03.2015 and accordingly the Respondents are liable to pay damages from 01.03.2015 till the date of vacation of the suit premises. For determination of damages, I am guided by the Rules framed under the P.P. Act, 1971 and Rule No. 8 of PP Rules, 1971- states as under :-
ASSESSMENT OF DAMAGES: In assessing damages for unauthorised use and occupation of any public premises the Estate Officer shall take into consideration the following matter namely:-
(a) The purpose and the period for which the public premises were in unauthorised occupation.
(b) The nature, size and standard of the accommodation available in such premises.
(e) The rent that would have been realised if the premises had been let out on rent for the period of unauthorised occupation to a private person.
(d) Any damages done to the premises during the period of unauthorised occupation.
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(e) Any other matter relevant for the purpose of assessing the damages.
The Premises in question is an area admeasuring 3959.82 sq.ft. (1597.86 sq.ft. on 3rd floor + 2361.96 sq.ft. on 4th floor) in Jeevan Vihar Building, Praliament Street, New-Delhi- 110001. Petitioner Corporation has claimed damages @ Rs. 225/- per sq. ft. per month totaling to Rs. 8,90,960/- per month with effect from 01.03.2015.
In support of its claim the Petitioner Corporation has submitted a comparative lease deed executed between LIC of India and M/s. Citi Bank in respect of an area measuring 8521 sq.ft. (Basement 3734 sq.ft. and Ground Floor 3787 sq.ft.) Jeevan Vihar Building, Parliament Street, New-Delhi 110001 on a monthly rent of Rs. 19,17,225/- inclusive of property tax w.e.f. 01.09.2012 to 31.08.2017 which comes out to be Rs. 225/- per sq.feet per month. As this lease pertains to the basement and the ground floor, therefore, we cannot award Rs. 225/- per sq.ft. per month for the suit property which is situated at third and fourth floor.
However, while arriving at the legitimate rate of damages the undersigned has kept in mind the rules issued vide clause (c) of Rule no. 8 of P P Rules 1971 i.e. "The rent that would have been realised if the premises had been let out on rent for the period PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 19 of 40 of unauthorised occupation to a private person". Accordingly, the legitimate rate of damages to be awarded would be the rent that the Respondent would have been paying during the period of unauthorised occupation revised as per the terms and conditions of the original rent negotiation dated 21.03.2001. The calculation of the rate of damages as per the agreement reached between the Petitioner Corporation and the Respondent in the meeting dated 21.03.2001, Exh. P-10 (an admitted document). The terms and conditions of Exh.P-10 were also supported by the letters dated 22.10.2001 (Exh. P-3), dated 24/25.10.2014 (Exh. PW-1/6) and dated 03.11.2014 (Exh. PW-1/7) discloses that the rate of rent w.c.f. 01.04.1998 would be Rs. 35/- per sq.ft. per month. with an escalation of 25% increase over the last paid rent after every three years. Hence the projected rent w.e.f. 01.04.1998 comes out to as per details given below in the table:
S.No Time Rent in Rupees per month Increase in % . Period 01 01.04.1998 1,38,594.00 (Actual) 25 to 31.03.2001 01 01.04.2001 1,73,242.00 (Actual) 25 to 31.03.2004 02 01.04.2004 2,16,563.00 (Actual) 25 to 31.03.2007 03 01.04.2007 2,70,704.00 (Projected) 25 PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 20 of 40 to 31.03.2010 04 01.04.2010 3,38,380.00 (Projected) 25 to 31.03.2013 05 01.04.2013 4,22,975.00 (Projected) 25 to 31.03.2016 06 01.04.2016 5,28,718.00 (Projected) 25 to 31.03.2019 07 01.04.2019 6,60,898.00 (Projected) to 31.03.2022 As per the above table, the weighed average of projected rent of periods from 01.03.2015 to 31.12.2019 is as under:
Period Amount in Rupees Months Total amount 01.03.2015 to 4,22,975.00 13 54,98,675.00 31.03.2015 01.04.2016 to 5,28,718.00 36 1,90,33,848.0 31.03.2019 0 01.04.2019 to 6,60,898.00 9 59,48,082.00 31.12.2019 Total 58 3,04,80,605.0 0 Weighed average= 3,04,80,605/58= Rs.5,25,528/-
per month i.e. approximately Rs.133/- per square feet per month.
PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 21 of 40 Accordingly, I award and hold that the Respondent is liable to pay damages Rs.5,25,528/- per month with effect from 01.03.2015 to 31.12.2019. The final calculation will be arrived at on the basis of same pattern till the premises are vacated by the Respondent and handed over to the Petitioner."
9. Being aggrieved by the aforesaid impugned orders both dated 07.01.2020 holding the appellant in unauthorised occupation w.e.f. 01.03.2015 onwards and imposing damages, the appellant has file the present appeal.
10. The Ld. Counsel for the appellant has primarily argued that the Estate Officer failed to appreciate that the termination of the tenancy of the appellant by the respondent was arbitrary and in gross abuse of its dominant position and was in violation of the guidelines issued by the Central Government vide Resolution No.21012/1/2000-Pol.1 dated 30.05.2002 published in the Gazette of India. It is submitted that by virtue of the guidelines, the appellant was prevented from evicting genuine tenants such as the appellant. It is submitted that since the termination of tenancy itself was illegal being violative of the guidelines dated 30.05.2002, hence, there was no question of the appellant being in unauthorised occupation or being liable to pay any damages. It is submitted that the impugned orders are grossly incorrect in holding that the guidelines dated 30.05.2002 did not apply to the appellant.
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11. Ld. counsel for the appellant has relied upon the decision dated 25.07.2011 of the Hon'ble High Court of Delhi in WPC No. 4342/2007 entitled as Damyanti Verma vs. LIC which was also a case of eviction of a tenant and proceedings under the Public Premises Act which were initiated by the respondent herein i.e. Life Insurance Corporation. It is submitted that in this decision the Hon'ble High Court in deciding on the question of enforceability of the guidelines of 2002 held that the respondent could not be heard to say that the guidelines were not having binding force.
12. Ld. counsel for the appellant has further submitted that the Estate Officer failed to appreciate that in Suhas H. Pophale v. Oriental Insurance Co. Ltd. (2014) 4 SCC 657, the Hon'ble Supreme Court held that the intention behind the guidelines of 2002 cannot be ignored by public sector undertakings, and that the guidelines were issued with good intention to stop arbitrary use of the powers under the Public Premises Act, and that the public corporations were expected to follow the guidelines. Ld. Counsel for the appellant has in this regard also relied upon the decision in New Insurance Assurance Company Vs. Nusli Neville Wadia reported in 2008 (3) SCC 279.
13. Ld. counsel for the appellant has further submitted that the Estate Officer gravely erred in not accepting the contention of the appellant that the respondent was not entitled to any damages since the tenancy was still PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 23 of 40 subsisting and the respondent had been accepting rent continuously but claiming that it was being kept in the suspense account. It is submitted that Estate Officer failed to appreciate that the appellant was never irregular in payment of rent.
14. Ld. counsel for the appellant has submitted that the Estate Officer has failed to take into consideration the guidelines of 2002 in adjudicating the case. It is submitted that the Estate Officer failed to appreciate that the termination of the tenancy merely by service of notice was violative of the guidelines and as such was illegal. It is submitted that the Estate Officer failed to appreciate that the appellant was a genuine tenant who was paying the rent and there was no misdemeanour on the part of the appellant and as such the respondent could not have terminated the tenancy by notice in view of the guidelines of 2002.
15. Ld. counsel for the appellant has submitted that in the present case the tenancy was orally decided from the period of 05.11.2002 till 31.03.2004 and then therefrom 01.04.2004 to 31.03.2007 on a revised rate applied by the respondent. It is submitted that since 01.04.2007 no further agreement was executed between the parties and the appellant had become a month to month tenant. It is submitted that the appellant was in continuous monthly tenancy since 01.04.2007. It is submitted that the respondent had first raised an issue regarding the tenancy in the year 2015 and subsequently terminated the PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 24 of 40 appellant's tenancy w.e.f. 01.03.2015. It is submitted that during the entire period from 2007 to 2015, the respondent had never raised any objection nor any dispute concerning the appellant's tenancy. It is submitted that the appellant had consistently paid the rent in a timely manner without default and at no point was there any delay or lapse in fulfilling the rental obligations in respect of the said property. It is submitted that as such the appellant was a genuine tenant and the termination of the tenancy by service of notice was in violation of the guidelines of 2002. Ld. counsel for the appellant has submitted that since the appellant was paying the monthly rent and the termination of the tenancy was violative of the guidelines of 2002, the appellant was not in unauthorised occupation. In this regard, reliance is placed on the decisions of the Hon'ble Supreme Court in Dr. Suhas H. Pophale v. Oriental Insurance Co. Ltd. (2014) 4 SCC 657 , and Ashoka Marketing Ltd. v. Punjab National Bank (1990) SCC (4) 406.
16. On the other hand, the Ld. Counsel for the respondent has supported the impugned orders and has submitted that the same are well reasoned and do not merit any interference. It is submitted that the Estate Officer has correctly observed that the guidelines dated 30.05.2002 did not apply to the appellant. It is submitted that the Estate Officer has taken note of the Clarification issued by the Central government to the guidelines in which it was clarified that the guidelines would not apply to large PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 25 of 40 business houses and commercial entrepreneurs. It is further submitted that the Estate Officer has also correctly taken note of the decision of the Hon'ble Supreme Court in Banatwala & Co. v. LIC (2011) 13 SCC 446 holding that the guidelines will not be applicable to the affluent tenants. It is submitted that the service of the notice terminating the tenancy was clearly admitted by the respondent. It is submitted that when the tenancy was on a month to month basis and when the same had been duly terminated by the respondent by way of service of notice, then the continued occupation of the appellant over the subject premises was clearly illegal and unauthorised. It is submitted that as such there is no illegality in the impugned orders holding the appellant to be in unauthorised occupation w.e.f. 01.03.2015. It is submitted that the appellant had also vacated the subject premises during the pendency of the appeal although the appellant had not made the payments as directed by the Estate Officer in the impugned order. It is further submitted that the Estate Officer had correctly calculated the damages by giving escalation of 25% every 3 years over the last rate of rent which was agreed between the parties on 29.03.2001. On this basis, it is submitted that there is no error in the impugned orders and that the appeal be dismissed.
17. Both parties have also filed written arguments.
18. I have considered the submissions of the ld. Counsels for the parties and I have perused the record.
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19. The primary argument which has been made on behalf of the appellant is that the termination of the tenancy by the respondent was arbitrary and illegal in light of the Guidelines issued by the Central Government vide Resolution dated 30.05.2002 and that the Estate Officer failed to correctly appreciate the said guidelines. The guidelines dated 30.05.2002 relied upon by the appellant provide as under:
"Guidelines to Prevent Arbitrary use of Powers to Evict Genuine Tenants from Public Premises under the Control of Public Sector Undertakings/Financial Institutions"
1. The question of notification of guidelines to prevent arbitrary use of powers to evict genuine tenants from public premises under the control of Public Sector Undertakings/financial institutions has been under consideration of the Government for some time past.
2. To prevent arbitrary use of powers to evict genuine tenants from public premises and to limit the use of powers by the Estate Officers appointed under section 3 of the PP(E) Act, 1971, it has been decided by Government to lay down the following guidelines;
(i) The provisions of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 [P.P. (E) Act, 1971], should be used primarily to evict totally unauthorized occupants of the premises of public authorities or subletees, or employees who have ceased to be in their service and thus ineligible for occupation of the premises.
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(ii) The provisions of the P.P.(E) Act, 1971 should not be resorted to either with a commercial motive or to secure vacant possession of the premises in order to accommodate their own employees, where the premises were in occupation of the original tenants to whom the premises were let either by the public authorities or the persons from whom the premises were acquired.
(iii) A person in occupation of any premises should not be treated or declared to be an unauthorized occupant merely on service of notice of termination of tenancy, but the fact of unauthorized occupation shall be decided by following the due procedure of law. Further, the contractual agreement shall not be wound up by taking advantage of the provisions of the P.P. (E) Act, 1971. At the same time, it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State or to move under genuine grounds under the Rent Control Act or resuming possession. In other words, the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants.
(iv) It is necessary to give no room for allegations that evictions were selectively resorted to for the purpose of securing an unwarranted increase in rent, or that a change in tenancy was permitted in order to benefit particular individuals or institutions. In order to avoid such imputations or abuse of discretionary powers, the release of premises or change of tenancy should be decided at the level of Board of Directors of Public Sector Undertakings.
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(v) All the Public Undertakings should immediately review all pending cases before the Estate Officer or Courts with reference to these guidelines, and withdraw eviction proceedings against genuine tenants on grounds otherwise than as provided under these guidelines. The provisions under the P.P. (E) Act, 1971 should be used henceforth only in accordance with these guidelines.
3. These orders take immediate effect."
(Vide Resolution No. 21013/1/2000Pol, dated 30th May, 2002, published in the Gazette of India, Part 1, Sec. 1, dated 08th June, 2002)."
20. The Estate Officer has in the impugned orders held that the said guidelines were not binding on the respondent and also that the guidelines were not meant for affluent tenants such as the respondent, and as such not applicable to the respondent. I find no infirmity in this finding of the Estate Officer.
21. The Hon'ble Supreme Court has in Banatwala & Co. v.
LIC, (2011) 13 SCC 446, which was a case in which the respondent herein i.e. LIC was also a party, in reference to the guidelines dated 30.05.2002, held as under:
"On the relevance of the guidelines
93. In the instant case, the activities of the respondent LIC are controlled by the LIC Act. Section 21 of the LIC Act lays down that the Corporation shall be guided by the directions issued PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 29 of 40 by the Central Government. This section reads as follows:
"21.Corporation to be guided by the directions of Central Government.--In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may give to it in writing; and if any question arises whether a direction relates to a matter of policy involving public interest the decision of the Central Government thereon shall be final."
The guidelines dated 30-5-2002 are not directions under Section 21 of the LIC Act.
94. We have referred to the general guidelines dated 30-5-2002, laid down by the Central Government in this behalf. Guidelines 2(i) and 2(iii) are relevant for our purpose. Guideline 2(i) states that the provisions of the Public Premises Act, 1971 should be used primarily to evict totally unauthorised occupants. Guideline 2(iii) specifically states that it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State, or to move under genuine grounds under the Rent Control Act for resuming possession. Thus, these guidelines specifically recognise the relevance of certain provisions of the Rent Control Acts for their application to the properties covered under the Public Premises Act.
95. It is stated in the guidelines that the public authorities would have rights similar to private PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 30 of 40 landlords under the Rent Control Acts in dealing with genuine legal tenants. It follows that the public authorities will have the obligations of the private landlords also. It is relevant to note that the purpose of these guidelines is to prevent arbitrary use of powers under the Public Premises Act. The relevance of the guidelines will depend upon the nature of guidelines and the source of power to issue such guidelines. The source of the right to apply for determination of standard rent is the Rent Control Act, and not the guidelines.
96. We may also note that by subsequent clarificatory Order dated 23-7-2003, the Central Government has made it clear that the Guidelines dated 30-5-2002 will not apply to affluent tenants:
"Government Resolution dated 30-5-2002 embodies the Guidelines dated 14-1-1992 for observance by the public sector undertakings. However, clarification was issued vide OM No. 21011/790 Pol-I IV H. 11 dated 7-7-1993 that the guidelines are meant for genuine non- affluent tenants and these are not applicable to the large business houses and commercial entrepreneurs."
... ... ...
99. In the circumstances, we hold as follows:
... ... ...
(b) The provisions of the Public Premises Act, 1971 shall govern the relationship between the public undertakings covered under the Act and their occupants to the extent they provide for eviction of unauthorised occupants from public premises, PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 31 of 40 recovery of arrears of rent or damages for such unauthorised occupation, and other incidental matters specified under the Act.
... ... ..."
22. As is clear from the aforesaid extract from the decision in Banatwala (supra), the guidelines were not directions of the Central Government under section 21 of the LIC Act.
Further, the guidelines were meant only for genuine non- affluent tenants and were not applicable to affluent tenants such as large business houses and commercial entrepreneurs.
23. The ld. Counsel for the appellant has heavily relied upon the decision dated 25.07.2011 of the Hon'ble High Court of Delhi in WPC No. 4342/2007 entitled as Damyanti Verma vs. LIC to contend that the guidelines were binding on the respondent. However, some basic legal research on this aspect shows that this decision dated 25.07.2011 of the Ld. Single Judge of the Hon'ble High Court was carried in appeal to the Hon'ble High Court (Division Bench) in LPA No. 977/2011 and the appeal was allowed vide order dated 23.03.2012 which is reported as Life Insurance Corporation of India v. Damyanti Verma, (2012) 188 DLT 741 (DB): 2012 SCC OnLine Del 1778. The relevant portion of the said decision in LIC v. Damyanti Verma (supra) is extracted hereunder:
"12. Be that as it may, the Supreme Court recently in Banatwala & Co. v. LIC of India, AIR 2011 SC PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 32 of 40 3619 has held that the guidelines (supra) dated 30th May, 2002 are not directions under Section 21 of the LIC Act. The Supreme Court further noticed the subsequent clarificatory order dated 23rd July, 2003 of the Central Government to the effect that the guidelines dated 30th May, 2002 will not apply to affluent tenants. In the face of the said dicta of the Supreme Court, the reasoning given by the learned Single Judge of the guidelines being binding on the appellant for the reason of Section 21 of the LIC Act fails.
13. We may also notice that tenancy is but a contract and a tenant has no right to continue in occupation of the premises after the expiry of the period for which the premises were so let out. Though the Rent Control Legislations in each State have substantially interfered with the contract of tenancy and prohibited the landlords from, notwithstanding the expiry of period for which the premises were let out, evicting the tenants but as far as the city of Delhi is concerned, substantial amendments were made to the Delhi Rent Control Act, 1958 in the year 1988 (w.e.f. 1st December, 1988). The provisions of the Delhi Rent Act were made inapplicable to the premises the rent whereof was in excess of Rs. 3,500/- per month. The tenants of the premises rent whereof was/is in excess of Rs.
3,500/- per month thus lost the protection from eviction; they could continue in occupation of the premises only for the period for which the premises were let out and no further. Even if they were tenants from month to month in the premises, the landlord is entitled to evict them by determining PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 33 of 40 their tenancy notice under Section 106 of the Transfer of Property Act, 1882. The same is indicative of the legislative intent. For this reason also, the guidelines cannot be said to be coming in the way of the appellant evicting the respondents. Moreover, the provisions of the Delhi Rent Act are not available to the respondents to protect their possession of the premises.
14. The judgment of the learned Single Judge can thus not be sustained and is set aside. Resultantly the writ petitions preferred by the respondents are dismissed and the order of eviction and of damages passed by the learned Estate Officer and affirmed in appeal is confirmed. No order as to costs.
15. We may also notice that a Single Judge of this Court in Iyer & Son Pvt. Ltd. v. LIC of India, (2007) X AD (Delhi) 643 has also held that the duty of a State agency as LIC is to ensure that it uses its premises/properties and resources within its control to sub serve the best objectives and which include an obligation to ensure that it optimizes the best returns. It was thus held that nothing wrong could be seen in the want of the LIC for better returns from its properties.
16. We may also notice that the learned Single Judge whose judgment is impugned herein has also in GKW Ltd. v. LIC MANU/DE/7100/2011 and in National Textile Corporation v. Punjab National Bank MANU/DE/2095/2010 decided shortly after the judgment impugned herein held the guidelines to be not binding on LIC/PNB and not coming in the way of LIC/PNB proceeding under the PP Act.
17. We accordingly allow these appeals and set aside the judgment of the learned Single Judge; PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 34 of 40 axiomatically the writ petitions filed by the respondents are dismissed."
(Emphasis supplied by me)
24. I find that the Estate Officer is absolutely correct in holding that the guidelines were not binding on the respondent and that, in any case, the guidelines were meant only for genuine non-affluent tenants and not for corporations such as the appellant. The appellant is itself a large public sector undertaking in the insurance sector and cannot claim to be a non-affluent tenant.
25. As observed by the Hon'ble High Court (Division Bench) in Damyanti Verma (supra), even if there were tenants from month to month in the premises, the landlord is entitled to evict them by determining their tenancy through notice u/s 106 of the Transfer of Property Act, 1882.
26. The undisputed position is that the appellant was the tenant of the respondent in the subject premises and that the agreed terms of the lease had expired on 31.03.2007 and that from 01.04.2007 onwards, the appellant was a month- to-month tenant in the subject premises. The undisputed position is also that the respondent had issued legal notice dated 23/28.01.2015 to the appellant terminating the tenancy w.e.f. midnight of 28.02.2015 and calling upon the appellant to hand over the vacant and peaceful possession of the suit premiss on 28.02.2015 or in the morning of 01.03.2015. In these facts and circumstances, when the appellant was a month to month tenant who was served PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 35 of 40 with the notice dated 28.01.2015 terminating the tenancy w.e.f. 28.02.2015 and asking the appellant to hand over vacant possession on 28.02.2015, then clearly the appellant did not have any right in law to remain in occupation of the subject premises beyond 01.03.2015 and the occupation of the appellant of the subject premises w.e.f. 01.03.2015 was clearly illegal and unauthorised.
27. As such, I find no error in the impugned order dated 17.01.2020 in Case No. 23/2015 passed u/s. 5(1) of the Public Premises Act holding the appellant to have become an unauthorised occupant w.e.f. 01.03.2015 in respect of the subject premises, and the said impugned order merits no interference.
28. By way of the other impugned order also dated 17.01.2020 in Case No. 23(A)/2015 passed u/s. 7(2) and (2A) of the Public Premises Act, consequent to the finding that the appellant had become an unauthorised occupant w.e.f. 01.03.2015 in respect of the subject premises, the Estate Officer has levied damages @ Rs. 5,25,528/- per month w.e.f. 01.03.2015 till the premises was vacated as well as interest @ 10% p.a. on the arrears of rent and damages. The impugned order on this basis calculates the dues as on 31.12.2019 as Rs. 6,81,08,996/-. The monthly rate of damages has been arrived at by the Estate Officer in the following manner:
"However, while arriving at the legitimate rate of damages the undersigned has kept in mind the rules PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 36 of 40 issued vide clause (c) of Rule no. 8 of P P Rules 1971 i.e. "The rent that would have been realised if the premises had been let out on rent for the period of unauthorised occupation to a private person".
Accordingly, the legitimate rate of damages to be awarded would be the rent that the Respondent would have been paying during the period of unauthorised occupation revised as per the terms and conditions of the original rent negotiation dated 21.03.2001. The calculation of the rate of damages as per the agreement reached between the Petitioner Corporation and the Respondent in the meeting dated 21.03.2001, Exh. P-10 (an admitted document). The terms and conditions of Exh.P-10 were also supported by the letters dated 22.10.2001 (Exh. P-3), dated 24/25.10.2014 (Exh. PW-1/6) and dated 03.11.2014 (Exh. PW-1/7) discloses that the rate of rent w.c.f. 01.04.1998 would be Rs. 35/- per sq.ft. per month. with an escalation of 25% increase over the last paid rent after every three years. Hence the projected rent w.e.f. 01.04.1998 comes out to as per details given below in the table:
S.No Time Rent in Rupees per month Increase in % . Period 01 01.04.1998 1,38,594.00 (Actual) 25 to 31.03.2001 01 01.04.2001 1,73,242.00 (Actual) 25 to 31.03.2004 PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 37 of 40 02 01.04.2004 2,16,563.00 (Actual) 25 to 31.03.2007 03 01.04.2007 2,70,704.00 (Projected) 25 to 31.03.2010 04 01.04.2010 3,38,380.00 (Projected) 25 to 31.03.2013 05 01.04.2013 4,22,975.00 (Projected) 25 to 31.03.2016 06 01.04.2016 5,28,718.00 (Projected) 25 to 31.03.2019 07 01.04.2019 6,60,898.00 (Projected) to 31.03.2022 As per the above table, the weighed average of projected rent of periods from 01.03.2015 to 31.12.2019 is as under:
Period Amount in Rupees Months Total amount 01.03.2015 to 4,22,975.00 13 54,98,675.00 31.03.2015 01.04.2016 to 5,28,718.00 36 1,90,33,848.0 31.03.2019 0 01.04.2019 to 6,60,898.00 9 59,48,082.00 31.12.2019 Total 58 3,04,80,605.0 0 PPA No.07/2020 M/s Oriental Insurance Co. Ltd. Vs. Life Insurance Corporation of India Page No. 38 of 40 Weighed average= 3,04,80,605/58= Rs.5,25,528/-
per month i.e. approximately Rs.133/- per square feet per month.
Accordingly, I award and hold that the Respondent is liable to pay damages Rs.5,25,528/- per month with effect from 01.03.2015 to 31.12.2019. The final calculation will be arrived at on the basis of same pattern till the premises are vacated by the Respondent and handed over to the Petitioner."
29. The ld. Counsel for the appellant has not made any submissions in respect of the quantification of the damages and as such it is taken that the appellant has no dispute to raise in respect of the quantification and calculation of the amount of damages. In any case, I find that the Estate Officer has calculated the damages by taking into account the rate of rent which was agreed by the parties in the meeting dated 21.03.2001 and thereafter, giving 25% increase in every 3 years, and thereafter, arriving at the damages @ Rs. 5,25,528/- per month by taking the weighted average for the period from 01.03.2015 to 31.12.2019. This approach of the Estate Officer in calculating the damages appears to be reasonable, and, more so, when no dispute in regard to quantification has been raised by the appellant in the appeal. As such, no interference is called for even in the other impugned order also dated 17.01.2020 in Case No. 23(A)/2015 passed u/s.
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30. In the result, the appeal is dismissed.
31. Parties to bear own costs.
32. Let the record of the Estate Officer be returned to the Estate Officer upon substitution with certified copy and upon due acknowledgment.
33. File be consigned to record room after due compliance.
Digitally signed by Satyabrata Satyabrata Panda
Panda Date:
2024.11.11
17:35:02 +0530
(SATYABRATA PANDA)
District Judge-04
Judge Code- DL01057
PHC/New Delhi/11.11.2024
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