Delhi High Court
M/S John Tinson Co. Pvt Ltd. vs Bank Of India & Anr. on 26 November, 2019
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 26th November, 2019.
+ CS(OS) 95/2009
JOHN TINSON CO. PVT LTD. ..... Plaintiff
Through: Ms. Shyel Trehan and Mr. Rohan
Poddar, Advs.
Versus
BANK OF INDIA & ANR. ..... Defendants
Through: Mr. Adarsh Dial, Sr. Adv. with Ms.
Sumati Anand, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This suit for recovery of Rs.10,92,02,688/- towards past mesne profits
along with interest, is ripe for final hearing.
2. It is not in dispute that the defendant Bank was a tenant under the
plaintiff in an area of 9100 sq. ft. spread over basement, ground and first
floors and terrace of Property No.54, Janpath, New Delhi w.e.f. 21 st April,
1962 till determination of tenancy and was ejected therefrom pursuant to
court proceedings, on 15th September, 2009. It is also not in dispute that no
claim for mesne profits was made by the plaintiff against the defendant Bank
in the ejectment proceedings.
3. The plaintiff instituted this suit on 18th December, 2008 for recovery
of past mesne profits w.e.f. the month of December, 2005 till the institution
of the suit.
CS(OS) 95/2009 Page 1 of 11
4. The suit having been instituted on 18th December, 2008, the plaintiff
would be entitled to mesne profits from 19th December, 2005 till 18th
December, 2008 i.e. for a period of three years prior to the institution of the
suit.
5. The plaintiff in the suit, has claimed mesne profits (i) for the month of
December, 2005 at Rs.137 per sq. ft.; (ii) from 1st January, 2006 to 31st
December, 2006 at the rate of Rs.200 per sq. ft.; and, (iii) from 1 st January,
2007 to 31st December, 2007 @ Rs.400 per sq. ft. and from 1st January, 2008
till the institution of the suit at Rs.420 per sq. ft.
6. Needless to state, the defendant Bank contested the suit.
7. In view of the narrow compass of the controversy to be adjudicated,
need to detail the pleadings of the parties is not felt and suffice it is to state
that on 12th July, 2010, the following issues were framed in the suit and the
parties relegated to evidence:-
"1. Whether the plaintiff is entitled to obtain mesne
profits/damages from the defendant with effect
from December, 2005 and if so, at what rate of
interest? OPP
2. Whether the plaintiff has not disclosed true and
complete facts of this case? OPD
3. Whether the suit is not properly valued for the
purpose of Court fee and jurisdiction? OPD
4. Relief."
8. The counsel for the plaintiff states that the plaintiff, in its evidence
examined Mr. Shashank Bhagat, the Chairman of the plaintiff, Ms. Poonam
the concerned officer from the Office of the Sub Registrar with which the
CS(OS) 95/2009 Page 2 of 11
lease deeds in proof of rate of mesne profits were registered and Mr. Gurgeet
Singh Sawhney the property broker.
9. The senior counsel for the defendant Bank on enquiry states that the
defendant Bank examined four witnesses, of which two were officials of the
defendant Bank and two others are tenant and landlords of two similarly
situated premises, lease deeds whereof were proved in proof of the rate of
mesne profits.
10. The counsel for the plaintiff and the senior counsel for the defendant
Bank have been heard.
11. The counsel for the plaintiff has referred to -
A. Ex. PW1/1, being a Lease Deed dated 29th April, 2004 with
respect to ground and mezzanine floors of 58 Janpath, let out at
the rate of Rs.130/- per sq. ft. per month.
B. Ex. PW1/2, being Lease Deed dated 20th November, 2007 with
respect to ground and mezzanine floors of 52 Janpath @ Rs.392
per sq. ft. per month.
C. Ex. PW1/4, being a Lease Deed dated 25th June, 2009 of the
ground floor and upper ground floor of the premises at 66
Janpath, taken on rent by the defendant Bank after vacating the
premises of the plaintiff, @ Rs.425/- per sq. ft. per month.
12. It is informed that it has come on record that owing to fall in rentals
thereafter, the rate of rent was subsequently reduced to about Rs.300 per sq.
ft. per month and that it has been deposed by the defendant Bank's witness
DW-4 Karan Khanna that the said rate of rent was on super area basis as
CS(OS) 95/2009 Page 3 of 11
compared to covered area or carpet area basis and that the rent on covered
area basis or carpet area basis would be more than even the rent on the super
area basis.
13. The counsel for the plaintiff has further stated that one of the pleas
taken by the defendant Bank in its defence is that the aforesaid lease deeds
have not been duly proved by the plaintiff since the plaintiff did not examine
the parties thereto and only got the certified copies of the said lease deed
proved from the official of the Office of the Sub Registrar with which the
said lease deeds were registered. Reliance is placed on Dr. Zulfiquar Ali
Khan Vs. J.K. Helene Courtis Ltd. 2009 SCC OnLine Del 2897 which in
turn relying upon the judgments under the land acquisition laws held proof
in such manner to be sufficient for the purposes of determination of mesne
profits.
14. Per contra, the senior counsel for the defendant Bank has contended
that the defendant Bank in its evidence has proved -
A. DW3/1, being Lease Deed dated 5th October, 2004 of a large
premises at 74 Janpath taken on rent by Canara Bank from 1 st
January, 2004 at a rent of Rs.85 per sq. ft. per month for the
ground floor, Rs.55 per sq. ft. per month for the mezzanine
floor and Rs.30 per sq. ft. per month for the basement and with
15% increase after three years. On enquiry, whether Canara
Bank was in occupation of the said premises from before, it is
stated that the lease deed mentions so but does not state since
when Canara Bank was in occupation of the said premises.
CS(OS) 95/2009 Page 4 of 11
B. Ex. DW4/1, being a Lease Deed dated 23rd September, 2006 of
the first floor of 74 Janpath, on super area basis, at Rs.100 per
sq. ft. per month with increase in 15% after three years.
15. The senior counsel for the defendant Bank has contended that the
leases of large premises, as was in occupation of the defendant Bank under
the plaintiff, fetch a different rate than leases of small portions. It is also
contended that the premises of the plaintiff in occupation of the defendant
Bank were without any facilities and the defendant Bank itself had provided
air conditioning in some parts of the premises in occupation of the defendant
Bank under the plaintiff.
16. The mode of assessment of mesne profits has been discussed in detail
in Ajit Gogna Vs. Jitender Gogna 2019 SCC OnLine Del 7517, Udayan
Sinha Vs. Fertilizers & Chemicals Travancore Ltd. 2016 SCC OnLine Del
3247 (SLP(C) No.27296/2016 preferred whereagainst was disposed of on
26th September, 2016), M.R. Sahni Vs. Doris Randhawa 2008 SCC OnLine
Del 268 (SLP(C) No.13820/2008 preferred whereagainst was dismissed on
26th October, 2010), Consep India Pvt. Ltd. Vs. CEPCO Industries Pvt.
Ltd. 2010 SCC OnLine Del 1349, Inder Sain Bedi Vs. Chopra Electricals
2012 SCC OnLine Del 5180, Sakata Inx (India) Ltd. Vs. Pooja Aggarwal
2012 SCC OnLine Del 916 (SLP(C) No.17896/2012 preferred whereagainst
was dismissed on 12th October, 2010), Chander Kirti Rani Tandon Vs.
VXL Lodging N. Boarding Services Pvt. Ltd. 2013 SCC OnLine Del 406
and Hindustan Petroleum Corpn. Ltd. Vs. Khwaja Asadullah Baig 1996
SCC OnLine AP 152 (DB) and the need to reiterate does not arise.
17. I have considered the rival contentions.
CS(OS) 95/2009 Page 5 of 11
18. As far as Issues no.2&3 are concerned, the non-disclosure even if any
by the plaintiff cannot deprive the plaintiff of its substantial claim of
recovery of mesne profits from the defendant Bank, who being in
unauthorised occupation of the premises of the plaintiff and which now
stands proved in the litigation going up to the Supreme Court for ejectment
of the defendant Bank from the premises. Even otherwise, the plea of non-
disclosure is vague and neither from the pleadings nor from the hearing is it
clear as to what was not disclosed and what true facts were not pleaded. The
same is the position with respect to Issue no.3 qua valuation. The relief
claimed in the suit is a money claim and court fees has been paid thereon.
Thus Issues no.2&3 are decided in favour of the plaintiff and against the
defendant Bank.
19. That brings to the meat of the problem i.e. Issue no.1 and whereunder
also only the rate at which the plaintiff is entitled to mesne profits is to be
determined, the entitlement of the plaintiff to mesne profits having stood
adjudicated in the decree for ejectment passed in favour of the plaintiff and
against the defendant Bank which has attained finality. In fact in R.S.
Maddanappa Vs. Chandramma AIR 1965 SC 1812, Gopalakrishna Pillai
Vs. Meenakshi Ayal AIR 1967 SC 155, Santosh Arora Vs. M.L. Arora
2014 SCC OnLine Del 3005 (DB) and Chemons India Pvt. Ltd. Vs. Vijay
Singh Sandhu (2013) 204 DLT 260 it has been held that even without a
claim for mesne profits being made, the Court is empowered when passing a
decree for ejectment from immovable property, to award mesne profits
and/or to order an inquiry into mesne profits. So implicit is the entitlement
for mesne profits of the owner, from the unauthorised occupation of the
premises.
CS(OS) 95/2009 Page 6 of 11
20. As far as the rate of mesne profits is concerned, the principles relating
to assessment thereof have been discussed and laid down in detail in the
judgments aforesaid and need to reiterate the same is not felt. Suffice it is to
broadly state that applying the aforesaid judgments, what is evident from the
three lease deeds being Ex.PW1/1, PW1/2 and PW1/4 proved by the
plaintiff and the two lease deeds being DW3/1 and DW4/1 proved by the
defendant Bank is that between the years 2005 and 2008 with which we are
concerned in the present suit, the rate of rent in the locality in which the
premises are situated were on the upswing.
21. Though there is a huge dichotomy between the rates of rent in the
leases proved by the plaintiff and the leases proved by the defendant Bank
but the reason therefor becomes immediately evident from the admission by
the senior counsel for the defendant Bank, of the lease DW3/1 proved by the
defendant Bank being in renewal of an earlier lease deed. Merely because a
landlord of a premises in occupation of tenant agrees, for his or her own
reasons, including of avoiding litigation, to the offer of a tenant already in
occupation of the property to increase the rent, does not truly reflect the
prevalent rent in the locality and which is the measure of mesne profits.
Rather, Section 2(12) of the Code of Civil Procedure, 1908 (CPC) defines
mesne profits as the profits which the person in wrongful occupation of the
property actually received or might with the ordinary diligence have
received therefrom, together with interest on such profits. Here the
defendant Bank was in unauthorised occupation of the property of the
plaintiff and the measure of the profits which the defendant Bank received
from continuing in unauthorised occupation of the premises of the plaintiff
is evident from the fact that the defendant Bank, on vacating the said
CS(OS) 95/2009 Page 7 of 11
premises, had to take another premises in the same locality, vide lease deed
Ex.PW1/4 supra at a rent of Rs.425/- per sq. ft. per month. Therefrom alone
it is evident that the defendant Bank, by continuing to litigate with the
plaintiff and resisting ejectment from the premises, benefited by not paying
such rates of rent for the premises of the plaintiff.
22. Here the defendant Bank as aforesaid was in possession of the
property of the plaintiff since the year 1962 and continued to enjoy the same
under the protection of the Delhi Rent Control Act, 1958 till the
applicability thereof was legislatively removed w.e.f. 1 st December, 1988
and whereafter only the plaintiff became entitled to recover possession from
the defendant Bank and whereafter also the defendant Bank inspite of being
a Public Sector Bank resisted the same and dragged the plaintiff to litigation
till the Supreme Court.
23. Going by the said logic, the defendant Bank should be liable to pay
mesne profits to the plaintiff at Rs.425/- per sq. ft. per month. However
since the mesne profits are for a period w.e.f. 19th December, 2005 the
exercise of computing is to be undertaken.
24. On enquiry, it is informed that the defendant Bank was in occupation
of 3100 sq. ft. area in the basement, 3100 sq. ft. area on the ground floor
and 2900 sq. ft. area on the first floor.
25. Applying the aforesaid judgments and considering (i) that the subject
premises are situated at main Janpath Road where commercial use is
permitted of the ground as well as first floor and such use was in fact being
made; and, (ii) that the defendant Bank was occupying the ground and first
floor as a composite premises and its functions were spread over both the
CS(OS) 95/2009 Page 8 of 11
floors, no distinction can be made between the rate of rent of the ground
floor and the first floor. However the rate of rent of the basement though
mostly used also for commercial purposes but permitted use whereof is for
storage purposes, the rate thereof has to be less than that of the ground and
first floors. A perusal of Ex.PW1/4 being the Lease Deed of the new
premises taken on rent by the defendant Bank after vacating the premises of
the plaintiff, also shows the defendant Bank to have agreed to pay the same
rent for the ground as well as the upper ground floors of the new premises.
26. The aforesaid Lease Deed Ex.PW1/4 provides for increase in rent by
15% ever three years. Following the said trend, the rent for a period of three
years prior thereto would be 15% less than the rent agreed to be paid for the
subsequent three years and similarly for a period of every three years prior
would have to be reduced by another 15%. Applying the said calculation,
the mesne profits for three years prior i.e. December, 2005 to December,
2008 would be less by 15% of Rs.425/- i.e. @ Rs.369.56 paise per sq. ft. per
month. However plaintiff has claimed at much lesser rate. Thus, the claim
of the plaintiff for mesne profits, (a) for the month of December, 2005 @
Rs.137/- per sq. ft. per month; (b) from 1st January, 2006 to 31st December,
2006 @ Rs.200/- per sq. ft. per month; and, (c) from 1st January, 2007 to 31st
December, 2008 @ Rs.396.56 paise per sq. ft. per month is allowed.
27. In the aforesaid state of affairs the need to discuss the other leases is
not felt.
28. The counsel for the plaintiff has also sued for future mesne profits
from the date of institution of the suit viz. December, 2008 till the date of
vacation of the premises viz. 15th September, 2009.
CS(OS) 95/2009 Page 9 of 11
29. I have enquired from the counsel for the plaintiff, how the plaintiff
can claim future mesne profits in a simplicitor suit for recovery of arrears of
mesne profits. Only in a suit for recovery of possession along with mesne
profit, under Order XX Rule 12 of the CPC can the Court grant future mesne
profits. Such claim is also contrary to the general principle of law
otherwise, of the cause of action being prior to the date of institution of the
suit. Reference in this regard may be made to Gopalkrishna Pillai supra,
Santosh Arora supra and Cosmos Infra Engineering (I) Ltd. Vs. Tirupati
Buildings & Offices (P) Ltd. 2016 SCC OnLine Del 6378.
30. The plaintiff, besides being entitled to mesne profits, is also entitled to
interest thereon from the date of institution of the suit till realisation.
31. Though the Delhi Rent Control Act, 1958 has legislatively provided
for interest at 15% per annum on arrears of rent which are akin to mesne
profits but considering the prevalent rates of rent for the period of which the
suit pertains, it is deemed appropriate to award to the plaintiff interest on the
mesne profit due from the date of institution of the suit till the date of
passing of the decree and/for another two months thereafter @ 9% per
annum and thereafter @ 15% per annum.
32. The plaintiff shall also be entitled to costs of the suit with professional
fee and miscellaneous expense assessed at Rs.2,00,000/-.
33. The senior counsel for the defendant Bank has contended that the
plaintiff itself in or about 2012 let out the premises at much lesser rent. We
are however not concerned with the prevalent rents in the year 2011-12
when the witness of the defendant Bank also deposed that the rent of the
CS(OS) 95/2009 Page 10 of 11
premises taken by the defendant Bank reduced and rents for the period for
which mesne profits are claimed have to be taken into consideration.
34. Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
NOVEMBER 26, 2019 'pp' (corrected & released on 21st December, 2019) CS(OS) 95/2009 Page 11 of 11