Delhi District Court
Rani Charnalia vs Cifco Limited on 18 April, 2026
IN THE COURT OF MS. DEEPALI SHARMA,
DISTRICT JUDGE (COMMERCIAL COURT)-03
PATIALA HOUSE, NEW DELHI
CS (COMM) No.: 720/22
CNR No. DLND01-007097-2022
In the matter of:
Rani Charnalia,
W/o Late Mr. Sunil Charnalia,
2852, River Vistaway,
MT. Pleasant,
SC 29466, USA.
Also at:
21-A, Aurangzeb Lane,
New Delhi-110011.
........ Plaintiff
Versus
CIFCO LIMITED,
Through Mr. Milan Bhupendra Dalal, Director,
3rd Floor, Connaught House,
Bearing Municipal No. 9E,
Connaught Place,
New Delhi-110001.
Also at
Reg. Office :
Unit-1, Bhupan Chambers,
Ground Floor, Dalal Street,
Fort, Mumbai-400001.
Defendant
Date of institution of suit : 23.08.2022
Judgment reserved on : 13.04.2026
Date of Judgment : 18.04.2026
CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 1 of 27
JUDGMENT
1. The plaintiff had filed the present suit for recovery of possession of the tenanted premises i.e. 3rd Floor, Connaught House, bearing Municipal No. 9E, Connaught Place, New Delhi, ad-measuring 1250 sq. feet (hereinafter referred to as the 'Suit premises'). The plaintiff also prayed for a decree of arrears of rent, mesne profits, damages, pendente-lite and future interest etc. Vide order dated 17.02.2024, a decree for possession was passed in favour of plaintiff in respect of suit premises.
2. Facts in brief are that the plaintiff is absolute owner of suit premises, more particularly shown in red colour in the site plan. The present suit has been filed through duly constituted attorney of plaintiff namely Sh. Arun Kumar Khanna vide registered GPA. According to the plaintiff, the defendant was the tenant of the plaintiff in respect of the suit premises and a Lease Deed dated 13.05.2014 was executed between defendant through its authorized signatory Sh. Minal Bhupendra Dalal and Karta Late (Sh.) Santosh Kumar Khanna, which was duly registered on 13.05.2014. In terms of the Lease Deed, the tenancy was for a period of three years commencing from 01.04.2014 till 31.03.2017. As per Clause 2 of the Lease Agreement, monthly rent of the suit premises was Rs. 50,000/- subject to TDS to the lessor on or before 10th of each English calender month. The same was excluding water & electricity charges. As per Clause 3 of the aforesaid Lease Deed, the tenancy of defendant was renewable after every three years subject to 10% increase in the CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 2 of 27 rental amount for a maximum period of 09 years. As per clause 7 of the Lease Deed, it was specifically agreed between the parties that the defenant shall have no right to sub-let or assign or part with the possession of the suit premises.
3. According to the plaintiff, after commencement of tenancy, the defendant paid Rs. 50,000/- for a period of three years and further paid Rs. 55,000/- per month from 01.04.2017 and Rs. 60,500/- per month from 01.04.2020 onwards. The tenancy of the defendant came to an end due to efflux of time on 01.04.2018. Thus, on expiry of Lease Deed, neither was the Lease Deed renewed nor any fresh Lease Deed executed, as such, in the terms of Section 106 of Transfer of Property Act, 1882, the tenancy of the defendant from 01.04.2017 had been on a month to month basis on the same terms & conditions as per Lease Deed dated 13.05.2014. Plaintiff states that it had duly accepted the defendant as tenant and that defendant had been paying the rent towards month to month tenancy to the plaintiff.
4. It is further case of plaintiff that the defendant did not pay the monthly rent, since December 2021 and further failed to deposit the TDS amount with the concerned authority and provide the TDS Certificate to the plaintiff despite repeated requests and reminders from the plaintiff, telephonically as well as through emails. It is further case of plaintiff that the defendant further failed to abide by Clause 4 (a) & Clause 6 of the Lease Deed and also failed to pay municipal taxes for the suit premises, thus, resulting in a demand from the concerned authorities, against the plaintiff for an amount of Rs. 8,77,214.19 CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 3 of 27 as on 31.10.2017. Plaintiff vide various communications, oral, telephonic as well as emails, requested the defendant to clear the arrears of the rents qua the demised premises and also clear dues towards the house tax of the same, however, defendant failed to clear the same. Plaintiff served a legal notice dated 21.06.2022 upon the defendant terminating the tenancy of the defendant in respect of demised premises but despite receipt of the notices, the defendant failed to hand over vacant, peaceful and physical possession of suit premises to the plaintiff and further failed to make payment of arrears of rent and other dues including TDS. The plaintiff has also claimed mesne profits arising out of unauthorized use and occupation of the premises @ Rs. 2,15,000/- per month and stated that it is the present market rate of rent prevalent in the market for similarly situated premises. It is further the case of plaintiff that the defendant has also caused substantial damage to the demised premises and there was seepage/leakage in the ceiling and the Surveyor, engaged by plaintiff, vide his report calculated the damage worth Rs. 18 Lakhs approximately and plaintiff is also entitled for the same from the defendant. It is also stated that plaintiff has already initiated a separate suit for recovery of municipal taxes bearing Suit no. 1148 of 2017 and as such present suit is limited to recovery of possession, arrears of rent, mesne profits and damages for illegal use and occupation of the demised premises by the defendant.
5. It is also the case of the plaintiff that the defendant, in breach of the agreement dated 13.05.2014 has illegally sublet the CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 4 of 27 suit premises to one of the group companies of RESBIRD Technologies/ Amedues India Pvt Ltd without permission from the plaintiff. It is also urged in the plaint that the plaintiff is entitled to arrears of rent/damages for use and occupation of the demised premises from 01.12.2022 till 06.07.2022 @ Rs. 60,500/- p.m. amounting to Rs. 4,46,038/-; mesne profits/damages for unauthorized use and occupation of the demised premises from 07.07.2022 till having over of premises to plaintiff @ Rs.2,15,000/- per month or such rate as would be ascertained after enquiry under Order XX Rule 12 of CPC and damages for causing damage to the demised premises i.e. Rs. 18,00,000/- (i.e. total Rs. 24,79,038/-). It is also urged that defendant is also liable to pay interest to the plaintiff on the aforesaid amount @ 2% per month.
6. Pursuant to summons issued, the defendant appeared and filed written statement not disputing that the defendant is the tenant of the plaintiff in respect of suit premises and the Lease Deed dated 13.05.2014 stood signed and executed between CIFCO Limited through its authorized signatory / Director and Late (Sh.) Santosh Kumar Khanna. It is submitted that the suit premises is in the possession of defendant for over five decades. Initially, the suit premises was with Muller & Philips (India) Ltd and later the tenancy was transferred to M/s Panika Trading Pvt Ltd and lastly, it was transferred in the name of defendant initially for a rent of Rs. 2500/- per month and later the same was enhanced by execution of Lease Agreement dated 13.05.2014. The defendant did not dispute that the Lease Deed was executed CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 5 of 27 on 13.05.2014 for three years but stated that it was mutually agreed between the parties that the tenancy would continue upto 09 years by enhancing the rent as per the Lease Deed and stated that in fact 09 years was the lock-in period and none of the parties to the Lease Deed can violate the said term with regard to the lock-in period of 09 years and thereby, the plaintiff has no right to repudiate the contract at this stage. The defendant denied that it had no right to sublet the said premises and in fact referred to Clause 7, which is reproduced as under:
"Lessee shall not be entitled to sublet or assign or part with possession of the said office premises, however, without parting with the possession and creating any right, title and interest can enter into joint venture or collaboration or business center agreement with the another party".
7. It is submitted by the defendant that the plaintiff was aware about the suit premises being with Bird Travels Pvt. Ltd. as per Franchise Agreement dated 01.05.2008 between the defendant and M/s Bird Travels Pvt Ltd. This fact was brought to the notice of the father of the plaintiff, who was the Karta of said HUF, and he was aware about the franchise agreement, so Clause 7 of the Lease Deed was a mere formality. The defendant stated that it had not committed any breach of agreement dated 13.05.2014. It is also submitted that defendant had not paid rent to the plaintiff on account of fall of roof and this fact was brought to the knowledge of plaintiff and defendant explained the reason for non payment of rent via communications through emails. The defendant stated that it had not paid the rent to the plaintiff as the plaintiff failed to perform its part of contractual obligation as per CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 6 of 27 Lease Deed.
8. Thereafter an application was filed by the plaintiff under Order XII Rule 6 CPC and after hearing the arguments, the Ld. Predecessor of this Court disposed off the said application vide order dated 17.02.2024 whereby the plaintiff was held entitled to claim of relief of possession of suit premises and thereby a Decree of Possession was passed in favour of the plaintiff and the defendant was directed to hand over vacant possession of the suit premises i.e. 3rd Floor, Connaught House bearing Municipal No. 9E, Connaught Place, New Delhi, admeasuring 1250 sq. feet, to the plaintiff within two months from the date of the said order. It was further mentioned that the other claims of the plaintiff shall be adjudicated upon trial.
9. Vide order dated 28.03.2024, following issues were framed :
1) Whether the plaintiff is entitled for Rs. 4,64,038/-
towards arrear of rent/damage for use and occupation of the demised premises from 01.12.2021 till 06.07.2022 @ Rs. 60,000/-? OPP
2) Whether the plaintiff is entitled for Rs. 2,15,000/- towards mesne profits and damages for unauthorized use and occupation of the demised premises from 07.07.2020 till 06.08.2022 @ Rs. 2,15,000/- per month? OPP
3) Whether the plaintiff is entitled for future mesne profits / damages for unauthorized use and occupation of the demised premises @ Rs. 2,15,000/- per month from 07.08.2022 till handing over possession? OPP
4) Whether the plaintiff is entitled for damages for Rs. 18,00,000/- for causing damages of the demises premises?
OPP
CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 7 of 27
5) Whether the plaintiff is entitled for interest? If yes, at
what rate and at what period? OPP
6) Relief.
10. In support of its claim, plaintiff examined Arun Khanna as PW1, who led his evidence by way of affidavit (Ex.PW1/A) and reiterated the averments made in the plaint and relied upon the following relevant documents:-
1. General Power of Attorney dated 12.11.2010 Ex. PW-1/1.
2. Site plan of demised premises Ex. PW1/2.
3. Lease Deed dated 13.05.2014 Ex. PW1/3.
4. House Tax receipts of the demised premises Ex.
PW1/4.
5. Account statement of HDFC Bank Limited Ex PW1/5.
6. Legal demand notice dated 21.06.2022 alongwith postal receipts and tracking record Ex PW1/6 (colly).
7. Report of the surveyor dated 03.08.2022 Ex.
PW1/7.
8. Lease Deed dated 31.03.2017 Ex.PW1/8.
9. Lease Deed dated 25.09.2017 Ex. PW1/9.
10. Lease Deed dated 07.08.2019 Ex. PW1/10.
11. Certificate under Section 65B of the Indian Evidence Act Ex. PW1/B.
11. Plaintiff also examined-in-chief Sh. Sanjay Kumar as PW2, however, his examination could not be concluded as in terms of order dated 25.09.2024, the plaintiff did not press for placing on record photographs of the suit premises and as such examination-in-chief of PW2 remained incomplete.
12. Plaintiff examined PW3 Sh. Prashant Tyagi, Junior Assistant in office of Sub-Registrar VII, who produced originals documents i.e. Lease Deed dated 31.03.2017 already Ex.PW1/8, Lease Deed dated 25.09.2017 already Ex. PW1/9 and Lease CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 8 of 27 Deed dated 07.08.2019 already Ex. PW1/10.
13. Plaintiff also examined PW4 Sh. Praveen Pal, official of HDFC Bank, Amar Colony Branch, New Delhi, who produced the Statement of Account of Rani Charnalia Ex. PW4/2 and Certificate under Section (2)A of the Bankers Book Evidence Act 1891 Ex. PW4/3 and Certificate under Section 65B of the Indian Evidence Act 1872 Ex. PW4/4. He also produced his authority letter Ex. PW4/1.
14. Thereafter vide order dated 20.01.2025 plaintiff's evidence was closed.
15. Defendant also examined DW1 Sh. Miland Bhupendra Dalal, who led his evidence by way of affidavit (Ex.DW1/A) and reiterated the averments made in the plaint and relied upon the following relevant documents:-
1. Franchise Agreement dated 01.05.2008 between defendant and M/s Bird Travel Pvt. Ltd. Mark-D.
2. Correspondence between the parties through emails Ex. DW1/B (colly).
3. Certificate under Section 64(4)(c) of BSA, 2023 Ex.
DW1/C. Thereafter vide order dated 17.02.2025 DE was closed.
16. I have heard arguments addressed by Ld. Counsel for the parties and perused the record.
17. Written submissions have been filed by the plaintiff wherein it is stated that the plaintiff filed an Execution Petition bearing No. 112/2024 titled as Rani Charnalia vs. CIFCO Ltd. and the possession of the suit premises was obtained by the plaintiff in the fourth week of January 2025. It is stated that the CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 9 of 27 defendant failed to pay the arrears of rent to the plaintiff. It is urged that the defendant is liable to pay the same alongwith mesne profits and damages.
ISSUEWISE FINDINGS :
ISSUE NO. 1: Whether the plaintiff is entitled for Rs. 4,64,038/- towards arrear of rent/damage for use and occupation of the demised premises from 01.12.2021 till 06.07.2022 @ Rs. 60,000/-?
18. Onus to prove the issue no. 1 was on the plaintiff. It is deposed by PW1 that the defendant was the tenant of the plaintiff in respect of the premises in issue and a Lease Deed dated 13.05.2014 Ex. PW1/3. Monthly rent of the premises was fixed @ Rs. 50,000/- per month subject to TDS in terms of Clause-2 of the Lease Deed. The lease was renewable every three years subject to 10% increase in rent for a maximum period of nine years in terms of Clause-3 of the Lease Deed. The defendant paid rent in terms of the Lease Deed which came to an end due to efflux of time on 01.04.2017 and thereafter neither the lease deed was renewed nor any fresh lease deed executed. It is stated that thereafter the lease became a month to month lease and on the same terms and conditions as contained in the lease deed dated 13.05.2014. It is stated by PW1 that the defendant did not pay the rent since December 2021 and also failed to deposit the TDS with the concerned authority.
19. In this regard, DW1 Sh. Miland Bhupendra Dalal has CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 10 of 27 deposed that the rent since 01.12.2021 was irregular. DW1 further deposed that the reason for non-payment of rent was inaction on part of the plaintiff to make repairs and to renovate the premises, owing to which the defendant was not able to use the premises in question on account of its damaged and non- habitable condition. It is urged that the plaintiff has failed to repair/or pay for the falling of the roof of the premises.
20. In order to prove that the roof of the premises was damaged, the defendant has relied upon the e-mail Ex. DW1/B(colly) and the Certificate under Section 64(4)(c) of BSA 2023 as DW1/C.
21. Perusal of Ex. DW1/B(colly) reveals that vide e-mail dated 14.06.2022 the plaintiff wrote to the defendant stating that the damage to the roof would be considered as a minor damage in the ordinary course and not a heavy/major damage, which is required to be repaired by the landlord, it being the usual and normal wear and tear to the building premises, which is to be carried out at the cost of the tenant and that the landlord would be responsible for major repair of the building.
22. Pursuant thereto another e-mail was written by the plaintiff to the defendant on 27.07.2022 stating that upon carrying on the inspection of the premises, it was noted that there was necessity of getting the ceiling leakage repaired at once and the issue was required to be attended by the defendant, however, no action had been taken by the defendant resulting in further damage. It was further stated therein that since there was no response upon attending the repairs regarding to ceiling leakage, CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 11 of 27 the plaintiff had engaged a surveyor and to suggest remedial measures. The plaintiff further stated that in case the repair was necessary, they would get the repair carried out at the cost and expenses of the defendant.
23. From the aforesaid, it emerges that admittedly certain repairs in the roof of the premises were required to be carried out. The plaintiff wrote to the defendant vide the aforesaid emails pointing to the necessity of repairing the ceiling leakage and further that a surveyor had been appointed to assess the damage as well as the fact that they would get the repair carried out at the cost and expense of the defendant. The plaintiff also stated that it would be treated as a minor damage.
24. It is urged by ld. Counsel for the defendant that since the plaintiff has admitted that the ceiling of the premises required repairs, therefore, it is proved that the premises was not in habitable condition and therefore the defendant was not liable to pay the rent.
25. In this regard, the plaintiff has placed reliance upon the judgment in the matter of Ramanand & Others vs. Dr. Girish Soni & Anr., in RC.REV. 447/2017, date of decision 21.05.2020 , wherein the issue before the Hon'ble Delhi High Court was as to whether the lock-down would entitle the tenants to claim waiver or exemption from payment of rent or suspension of rent. The Hon'ble High Court noted that in the absence of a contract, a tenant may try to invoke the Doctrine of Frustration of Contract or impossibility of performance. The Hon'ble High Court referred to the decision in the matter of Raja Dhruv Dev Chand CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 12 of 27 vs. Raja Harmohinder Singh & Anr., AIR 1968 SC 1024, wherein it was held that Section 56 Indian Contract Act did not apply to lease agreements and observed that a lease is a completed conveyance though it involves monthly payment and hence, Section 56 Indian Contract Act could not be invoked to claim waiver, suspension or exemption from payment of rent. The Hon'ble High Court also referred to the decision of the Division Bench of the Delhi High Court in Hotel Leela Venture Ltd. vs. Airport Authority of India, 2016 (160) DRJ 186 , wherein it is observed as under:
"34. The consideration for the lease being one; albeit having two constitutive elements, the law declared by the Supreme Court in the decision reported as (1968) 3 SCR 339 Raja Dhruv Dev Chand Vs. Raja Harmohinder Singh & Anr. would squarely be applicable; and if it was the claim by the lessee that the consideration for the lease failed or became oppressed, the claim would fail because neither the doctrine of frustration applies to a lease nor broad principles thereof to a lease. The reason being that executory contracts alone are capable of being frustrated and not executed contracts. For example, 'A' a retailer of shoes purchases shoes from 'B' who is the manufacturer of shoes. The agreed quantities of shoes are delivered and part sale consideration paid. On account of change in import policy the market is flooded with imported shoes which are much cheaper vis-à-vis the price payable by 'A' to 'B'. 'A' cannot plead frustration requiring the Court to reduce the price and relieve him the obligation to pay the balance sale consideration to 'B'.
35. A contract for lease whereunder the lessee obtains possession from the lessor is an executed contract and during the duration of the lease, since it is a term of the agreement that consideration shall be rendered periodically, the agreed consideration has to be paid and it hardly matters that rents have fallen in the meanwhile. The result of a lease is the creation of a privity of estate inasmuch as lease is the transfer of an interest in immovable property within the meaning of Section 5 of the Transfer of Property Act, 1882, as was held in para 20 of the decision reported as 2003 (5) SCC 150 CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 13 of 27 T.Lakshmipathi & Ors. Vs. P.Nithyananda Reddy & Ors. That apart, as held in the decisions reported as (1960) 2 SCR 793 Alopi Prashad Vs. UOI and (1975) 2 SCC 633 Panna Lal Vs. State of Rajasthan a contract is not discharged merely because it turns out to be difficult or onerous for one party to perform and none can resile from a contract for said reason." (emphasis supplied)
26. The Hon'ble Delhi High Court in Ramanand & Ors. (Supra) further observed that the Doctrine of Force Majeure is recognized in Section 108(b)(e) of Transfer of Property Act, 1882, and stated that temporary non-use by tenant due to any factors would not entitle the tenant to invoke this Section and referred to the decision in the matter of Raja Dhruv Dev (Supra) wherein it was held as follows :
"17. The case strongly relied upon by counsel for the appellant was Gurdarshan Singh and Anr. v. Bishen Singh(1). In that case a lease was executed on January 8, 1947 in respect of agricultural land situated in an area which on partition of India fell within West Pakistan. The Court found that possession of the demised land was not given to the lessee, and the landlord was on account of riots unable to deliver possession. Obviously on that finding the tenant was entitled to claim refund of the rent paid. But the Court proceeded to consider the question "whether the doctrine of frustration applies to a contract of lease of agricultural lands" and recorded an answer that the doctrine of frustration applies to leases. The Court observed at P. 13- "that the doctrine of frustration does apply to leases, but even if it does not apply in terms to a contract of lease of agricultural land the broad principle of frustration of contract applies to leases". We are unable to agree with that observation, and the observation at p. 11 that "According to Indian law, sales of land as also leases are contracts". Under a lease of law there is a transfer of right to enjoy that land. If any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was let out, because of fire, tempest, flood, violence of an army or a mob, or other irresistible force, the lease may, at the option of the lessee, be avoided. This rule is incorporated in s. 108(e) of the Transfer of Property Act and applies to CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 14 of 27 leases of land, to which the Transfer of Property Act applies, and the principle thereof to agricultural leases and to leases in areas where , the Transfer of Property Act is not extended. Where the property leased is not destroyed or substantially and permanently unfit, the lessee cannot avoid the lease because he does not or is unable to use the land for purposes for which it is let to him." (Emphasis supplied)
27. The judgment in the matter of T.Lakshmipathi vs. P.Nithyananda Reddy & Others, 2003 (5) SCC 150, was also cited wherein the Hon'ble Supreme Court made the following observations :
"21. In Woodfall's Laws of Landlord and Tenant (28th Edition, Vol.1) the relevant law is so stated:- "Where the lessee covenants to pay rent at stated period (without any exception in case of fire), he is bound to pay it, though the house be burnt down; for the land remains, and he might have provided to the contrary by express stipulation, if both parties had so intended. And this rule applies, although the lessee's covenant to repair contain an exception in case of fire." (para 1-0778) "In a lease of land with buildings upon it the destruction of even the entirety of the buildings does not affect the continuance of the lease or of the lessee's liabilities under it, unless so provided by express contract." (Para 1-2055) "A demise must have a subject-matter, either corporeal or incorporeal. If the subject-matter is destroyed entirely, it is submitted that the lease comes automatically to an end, for there is no longer any demise. The mere destruction of a building on land is not total destruction of the subject- matter of a lease of the land and building, so the demise continues. But if by some convulsion of nature the very site ceases to exist, by being swallowed up altogether or buried in the depths of the sea, it seems clear that any lease of the property must come to an end." (Para 1-2056) (Emphasis supplied)
28. The judgment in the matter of Sangeeta Batra vs. M/s VND Foods & Others, 2015 (3) DLT (CRI) 422 , was also CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 15 of 27 referred to wherein it was held that the fact that the leased premises intended to be run as restaurant was sealed on two occasions was of no relevance as the tenants did not choose to avoid the lease and it was held that if the leased premises were rendered substantially and permanently unfit for the purpose for which it was let, the lessee has the option to avoid the lease. Unless the lessee so avoids the lease, he cannot avoid his obligation contained in Clause L of Section 108 to pay the rent to the lessor.
29. Accordingly, it was held in Ramanand case (Supra) that until and unless there is a complete, permanent destruction of the property, Section 108(b)(e) of Transfer of Property Act, 1882, cannot be invoked and it was held that temporary non-use of the property due to lock-down cannot be construed as rendering the lease void and the tenant cannot avoid payment of rent in view of Section 108(b)(l) of Transfer of Property Act, 1882.
30. In Aranya Hospitality Management Services Pvt. Ltd. vs. K.N.Dhoundiyal and Others, Arb.A.(Comm.) 6/2017, decided on 21st March, 2017, the Court considered the force majeure clause of the contract to hold that the mere non-approval by the concerned authority for running a restaurant would not entitle the tenant to seek suspension of rent. The Court held that under circumstances wherein the tenant cannot use the property for the purpose for which it was leased, the tenant would have no right to continue enjoying the property and seek suspension of rent at the same.
CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 16 of 2731. In the present case, DW1 deposed that the rent became irregular since 01.12.2021. The defendant failed to prove that any rent amount was paid since December 2021. No document has been placed on record by the defendant to show that any rent was paid by the defendant since December 2021. The defendant also stated that the last rent paid by the defendant to the plaintiff was @ Rs. 60,500/-. On the other hand, the plaintiff has placed on record the account statement Ex. PW4/2 reflecting that no rent was paid since December, 2021 till the termination of tenancy on 06.07.2022, vide legal notice dated 21.06.2022. It may further be noted that the issue no. 1 as framed reflects that the plaintiff has claimed Rs. 4,64,038/- towards arrears of rent @ Rs. 60,000/- for the period mentioned therein, however, the plaintiff has in the prayer Clause of the suit has claimed arrears of Rs. 4,64,038/- towards arrears of rent, which was calculated @ Rs. 60,500/-. Hence, the amount of Rs. 60,000/- mentioned in issue no. 1 is read as Rs. 60,500/-.
32. It may be noted that the communications Ex. DW1/B(colly) were written by the plaintiff to the defendant wherein the plaintiff stated that urgent repairs were required in the ceiling of the premises and stated that they were minor repairs to be carried out at the expense of the defendant. It may be noted that no response thereto was given by the defendant to the said e-mails whereby any consent was given to carry out the repairs or denying the contents regarding the defect in the ceiling being a minor one. No option was exercised by the defendant under Section 108(b)(e) Transfer of Property Act, 1882 to avoid CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 17 of 27 the tenancy and the defendant continued to enjoy the premises and remained in possession of the same. In these circumstances, in light of the law discussed above, the defendant cannot claim suspension of rent while urging that the premises was rendered un-habitable.
33. The defendant is accordingly liable to pay the arrears of rent of Rs. 60,500/- per month to the plaintiff for the period between 01.12.2021 till 06.07.2022 i.e. 15 days from the notice under Section 106 Transfer of Property Act, dated 21.06.2022 Ex. PW1/6, whereby the plaintiff terminated the tenancy of the defendant and called upon the defendant to hand over peaceful vacant physical possession of the premises in issue. The plaintiff is also entitled to interest at the rate of 6% per annum on the aforesaid amount from the date w.e.f. the date of notice under Section 106 Transfer of Property Act i.e. 21.06.2022 till its realization. Issue no. 1 is decided accordingly.
Issue No. 2: Whether the plaintiff is entitled for Rs. 2,15,000/- towards mesne profits and damages for unauthorized use and occupation of the demised premises from 07.07.2020 till 06.08.2022 @ Rs. 2,15,000/- per month? And
3) Whether the plaintiff is entitled for future mesne profits / damages for unauthorized use and occupation of the demised premises @ Rs. 2,15,000/- per month from 07.08.2022 till handing over possession?
34. Admittedly, the possession of the premises was handed over to the plaintiff by the defendant during execution CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 18 of 27 proceedings in fourth week of January 2025. The tenancy was terminated vide Legal Notice dated 21.06.2022 Ex. PW1/6, which came into effect from 07.07.2022.
35. The plaintiff has further urged that the defendant has placed reliance upon a Franchise Agreement dated 01.05.2008 between defendant and M/s Bird Travel Pvt. Ltd. Mark-D, which is actually a rent agreement to sublet the premises in issue to a third party at a monthly rent of Rs. 2,15,000/- per month in the year 2008 and hence, the plaintiff has claimed Rs. 2,15,000/- per month as mesne profits between the period from 07.07.2022 till January 2025, when the possession was handed over to the plaintiff. It is not the case of the plaintiff that the Franchise Agreement was not entered into between the defendant and M/s Bird Travels Pvt. Ltd. The defendant has disputed the fact that the premises in issue was in fact sublet to the third party i.e. M/s Bird Travels Pvt. Ltd. and urged that it was a genuine Franchise Agreement between them. In his cross-examination, DW1 denied that the office of M/s Bird Travels Pvt. Ltd was situated in the premises in issue. He stated that the faculty from their office used to visit the premises to give lectures and training to the trainees of the defendant and that M/s Bird Travels Pvt. Ltd used to issue certificates to the trainees. DW1 further stated that none of the employees of the defendant was working with M/s Bird Travels Pvt. Ltd nor were they paid by M/s Bird Travels Pvt. Ltd. He stated that only one employee of the defendant Mr. Mangesh was administratively involved in the training programme with M/s Bird Travels Pvt. Ltd but he had never CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 19 of 27 been paid by M/s Bird Travels Pvt. Ltd. He stated that the last fees received by defendant from M/s Bird Travels Pvt. Ltd was in the year 2020 and that the said amount was above Rs. 2 Lakhs. He stated that the defendant had multiple business but the arrangement with M/s Bird Travels Pvt. Ltd was only related to travel and aviation as the defendant being an IATA agent was qualified for the same.
36. Perusal of the Franchise Agreement Mark-D1 reveals that the same was executed on 01.05.2008 between the defendant and M/s Bird Travels Pvt. Ltd with the object of running an institution in the field of tours and travels in Delhi at the premises in issue since the defendant had the experience of running an IATA approved agency and the help of M/s Bird Travels Pvt. Ltd was sought in carrying out the said activity in the said premises under the name and style of Travel Research Aviation Institute in the said premises. For the said purpose, the defendant was required to appoint a Manager with the consent of M/s Bird Travels Pvt. Ltd to look after the day-to-day running of the institution. The functioning of the institution was exclusive responsibility of M/s Bird Travels Pvt. Ltd subject to control and supervision of the Manager appointed by the defendant. As per the said agreement, M/s Bird Travels Pvt. Ltd was required to pay a commission @ 1% over and above the annual turn-over of .05 crores from the said institutes in addition to the minimum guaranteed payment of Rs. 2,25,000/- per month, which was to commence from 01.07.2008. M/s Bird Travels Pvt. Ltd also paid an amount of Rs. 4,50,000/- equivalent to two months of CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 20 of 27 minimum guaranteed amount as interest free refundable security deposit, which was to be refunded at the time of termination of the agreement. The said Franchise Agreement also provided that the agreement was initially for a period of three years, renewable for two consecutive terms of three years each subject to enhancement by Rs. 27,000/- at the time of renewal. Pertinently, the agreement also provided that the Manager appointed by the defendant would be empowered to inspect the record maintained by M/s Bird Travels Pvt. Ltd and M/s Bird Travels Pvt. Ltd shall alow inspection of the record to the nominee of the defendant during working hours of the institution which shall comprise total receipts/fees/income and commission and such record of the business would be kept by M/s Bird Travels Pvt. Ltd at the premises in issue only. It further provided that the defendant and its Manager would retain the keys and would be in possession of the premises and shall conduct the business of running the institution at the demised premises through M/s Bird Travels Pvt. Ltd. It is also mentioned therein that the said arrangement was not in any way transferring any occupational right, title or interest in the premises to M/s Bird Travels Pvt. Ltd and all the rights including right of possession would remain with the defendant.
37. Accordingly, it emerges from perusal of the testimony of DW1 as well as the Franchise Agreement that the defendant had appointed a Manager, who was administratively involved in the training programme with M/s Bird Travels Pvt. Ltd. Pertinently, the defendant had retained the keys and was to CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 21 of 27 remain in possession of the premises. In the event the premises had been Sub-let by the defendant to M/s Bird Travels Pvt. Ltd, then the defendant could not have retained possession and the keys of the said premises. The defendant also had the right to inspect the record maintained by M/s Bird Travels Pvt. Ltd. including the record pertaining to receipts/fees/income and the commission, thereby indicating that the defendant exerted some influence over the working of the institution and also remained in possession of the premises.
38. The Franchise Agreement was entered into on 01.05.2008 between the defendant and M/s Bird Travels Pvt. Ltd. for running an institution at the premises in issue. The Lease Deed Ex. PW1/3 was entered into on 13.05.2014, when the Franchise Agreement was already in place since the year 2008. Clause 7 of the Lease Deed also provides that the lessee could enter into joint venture or collaboration or business center agreement with another party without parting with possession of the premises. It is also relevant to note that on a question being put to PW1 during his cross-examination that there was a Franchise Agreement executed between M/s Bird Travels Pvt. Ltd. and the defendant, with the consent of father of PW1, PW1 stated that he was not aware of the execution of the Franchise Agreement. Clause 7 of the Lease Deed dated 13.05.2014, however, seems to have been introduced therein keeping in view the fact that the defendant was already in collaboration with M/s Bird Travels Pvt. Ltd. in respect of the premises in issue, since the year 2008. Be that as it may, as discussed, the Lease Deed CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 22 of 27 Ex. PW1/3 envisages that the defendant could enter into any joint venture/ collaboration/business center agreement with another party. Perusal of the Franchise Agreement also reveals that the defendant retained possession of the premises and did not transfer any right of possession to M/s Bird Travels Pvt. Ltd. by way of the said agreement. In these circumstances, it cannot be stated that the franchise Agreement was essentially an agreement to Sub-let the premises to M/s Bird Travels Pvt. Ltd. at a monthly rent of Rs. 2,15,000/-, which has been claimed as mesne profits by the plaintiff from the defendant.
39. In order to prove the mesne profits qua the premises in issue, the plaintiff has further relied upon three Lease Deeds Ex. PW1/8, Ex. PW1/9 and Ex. PW1/10 and PW1 has stated that the said Lease Deeds are in respect of similarly situated properties.
40. The premises in issue is situated at Third Floor, Connaught House, bearing Municipal No. 9E, Connaught Place, New Delhi, admeasuring 1250 sq. feet.
41. The plaintiff has place reliance upon the Lease Deed dated 31.03.2017 Ex. PW1/8 is in respect of Shop No. E-10/1, Ground and Mezzanine Floor, E Block, Inner Circle, Connaught Place, New Delhi, admeasuring 2200 sq. feet, having a monthly rent of Rs. 22 Lakhs.
42. The plaintiff has also proved the Lease Deed dated 25.09.2017 Ex. PW1/9 is in respect of premises no. 27/4, Ground Floor, E Block, Middle Circle, Connaught Place, New Delhi, admeasuring approximately 9000 sq. feet, out of which 3000 sq. feet was covered, having a monthly rent of Rs. 12,50,000/-.
CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 23 of 2743. The plaintiff has also relied upon the Lease Deed dated 19.07.2019 Ex. PW1/10 is in respect of Flat No. 6, First Floor, Phase-B, Harsha Bhawan, Plot No. 13-29, E Block, Connaught Place, New Delhi, admeasuring 872.926 sq. feet, having a monthly rent of approximately Rs. 89,500/- plus GST.
44. It has been held by the Superior Courts in a catena of decisions that calculation of mesne profits always involves some amount of guess work and the applicability of prevalent rents in the city. (The judgment in the matter of International Pvt. Ltd. vs. Saraswati Industrial Sundictes Ltd., (1992) 2 RCR 6; M.R.Sahni v. Doris Randhawa, AIR 2008 DELHI 110 and in Consep India Pvt. Ltd. vs. CEPCO Industries Pvt. Ltd. (2010) ILR 3 Delhi 766, referred to).
45. It is relevant to note that the defendant has not placed on record any Lease Deeds of similarly situated properties to controvert the Lease Deeds put-forth by the plaintiff. The Lease Deeds placed on record by the plaintiff pertain to E-Block, Connaught Place, where the premises in issue is located. It may however be noted that the premises mentioned in Ex. PW1/8 is situated on the ground floor and mezzanine floor in the inner circle at Connaught Place and is admeasuring 2200 sq. feet and fetching a monthly rent of Rs. 22,00,000/-. The premises relating to Ex. PW1/9 is situated on the ground floor, middle circle at Connaught Place and is admeasuring 9000 sq. feet and having a monthly rent of Rs. 12,50,000/-. The premises relating to Ex. PW1/10 is situated on the first floor, middle circle at Connaught Place and is admeasuring 872 sq. feet and having a monthly rent of Rs. 89,500/-.
CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 24 of 2746. The premises in issue in the present case is situated on third floor at Connaught House admeasuring 1250 sq. feet. It is also borne out on record that the said premises required repairs for proper functioning . No such drawback has been indicated in properties mentioned in Ex. PW1/8, Ex. PW1/9 and Ex. PW1/10. Moreover, the premises in issue is located on the third floor, which would fetch lessor rental value in comparison to properties situated on the lower floors. The area of properties mentioned in Ex. PW1/8 and Ex. PW1/9 is also much larger. The premises mentioned in Ex. PW1/10 has a rental value of Rs. 89,500/- for an area of 872.926 sq. feet, however, the same is located on the first floor. No cross-examination of the plaintiff's witnesses was conducted to show that the premises was not situated in the area not fetching good rental value. The cross-examination of PW1 was conducted to show that the premises in issue required repairs. In his cross-examination, PW1 denied that the rental value of the premises in issue as on date was not more than Rs. 40,000/-. It may be noted that the plaintiff had also appointed a Surveyor, to assess the damage to the premises for repair of the premises.
47. Accordingly, taking into account the entirety of facts and circumstances of the case, in my view it would be proper and in fitness of things if the plaintiff is granted mesne profits @ Rs. 80,000/- per month for the period between 07.07.2022 till the date of handing over of possession of the premises to the plaintiff in January, 2025. In view of the settled position of law that the court can award interest on mesne profits as held by the Hon'ble CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 25 of 27 Supreme Court in Mahant Narayana Dasjee Varu vs. the Board of Trustees, Tirumalai Tirupathi Devasthanam, AIR 1965 SC 1231, the plaintiff is also entitled to interest at the rate of 6% per annum on the said amount from the date of Decree till its realization.
48. Issue no. 2 and 3 are decided accordingly.
Issue no. 4: Whether the plaintiff is entitled for damages for Rs. 18,00,000/- for causing damages of the demises premises?
49. Onus to prove issue no. 4 was on the plaintiff. In order to prove that the premises had been damaged, the plaintiff has relied upon the Surveyor's report Ex. PW1/7. The Surveyor was examined as PW2. In his cross- examination, PW2 deposed that he had made an estimate of Rs. 18 Lakhs for structural strengthening job. It may however be noted that only the covering letter of the Surveyor's report was exhibited and proved by PW2 and the remaining pages of the report had not been proved on record through testimony of any witness. In these circumstances, the plaintiff has failed to prove the quantum of damages to be Rs. 18 Lakhs. Issue no. 4 is accordingly decided against the plaintiff.
50. Issue no. 5 has already been dealt with alongwith issue nos. 1, 2 and 3.
RELIEF
51. In view of aforesaid discussion, present suit is decreed CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 26 of 27 in favour of the plaintiff and against the defendant for an amount of Rs. 60,500/- per month towards the arrears of rent for the period between 01.12.2021 till 06.07.2022. The plaintiff is also entitled to interest at the rate of 6% per annum on the aforesaid amount from the date w.e.f. the date of notice under Section 106 Transfer of Property Act i.e. 21.06.2022 till its realization.
52. The plaintiff is also granted mesne profits @ Rs. 80,000/- per month for the period between 07.07.2022 till the date of handing over of possession of the premises to the plaintiff in January, 2025. The plaintiff is also entitled to interest at the rate of 6% per annum on the said amount from the date of Decree till its realization.
53. Pre-institution mediation fees, if any, be also added to the cost.
54. Decree sheet be drawn accordingly.
55. File be consigned to Record Room.
Digitally signed by DEEPALI DEEPALI Announced in the open Court SHARMA SHARMA Date: 2026.04.18 On 18th April, 2026 16:46:49 +0530 ( Deepali Sharma ) District Judge (Commercial Court)-03, Patiala House Court, New Delhi. CS (COMM): 720/22 Rani Charnalia vs. CIFCO Limited Page 27 of 27