Delhi District Court
I.D.B.I Ltd vs Sh. Lalit Mohan Madhan on 1 June, 2017
IN THE COURT OF SH. ANIL KUMAR SISODIA:
ADDITIONAL DISTRICT JUDGE-05: WEST:
TIS HAZARI COURTS: DELHI
CIVDJ/613026/2016 & CIVDJ/613003/2016
I.D.B.I Ltd.
Having its registered office at:-
I.D.B.I. Tower, First Floor,
World Trade Centre
Cuffe Parade,
Mumbai-400005
branch office at:-
B-1/26-27, Community Centre,
Janak Puri, New Delhi-110058 ...........Plaintiff
Versus
Sh. Lalit Mohan Madhan,
Proprietor
M/s Saraswati Construction Co.
W-135, Greater Kailash-I,
New Delhi-110048. .........Defendant
Date of institution :- 25.01.2008
Order Reserved On:- 19.05.2017
Date of Decision:- 01.06.2017
I.D.B.I Bank Ltd. Page No. 1/25
Vs.
Lalit Mohan Madhan
AND
Sh. Lalit Mohan Madhan,
Proprietor
M/s Saraswati Construction Company,
W-135, Greater Kailash Part-I,
New Delhi-110048. ......Plaintiff
Versus
IDBI Bank Limited
1. IDBI Towers,
Ist Floor, World Trade Centre, Cuffe Parade,
Mumbai-400005,(Mahrasthra)
2. B-1/26-27, Community Centre,
Janak Puri,
New Delhi-110058 ........Defendant
Date of institution :- 07.12.2007
Order Reserved On:- 19.05.2017
Date of Decision:- 01.06.2017
For IDBI Bank:-Mr. Mani Mishra, Advocate
For Lalit Mohan Madhan:-Mr. Aviral Tiwari, Advocate
JUDGMENT
I.D.B.I Bank Ltd. Page No. 2/25
Vs. Lalit Mohan Madhan
1. Vide this common judgment, I shall dispose off these two suits which have been consolidated vide orders dated 11.12.2008 and Suit No.CIVDJ/613026/2016(Old No.:-CS(OS) No.156/2008) was ordered to be treated as the lead suit.
In the present judgment the parties shall be referred to by their nomenclature as suit no. CIVDJ/613026/2016 (Old No. :-CS(OS) No.156/2008) PLEADINGS IN THE SUIT No. CIVDJ/613026/2016
2. Plaintiff bank has filed the present suit for declaration, specific performance of agreement dated 07.04.2006 and recovery against its landlord Sh. Lalit Mohan Madhan.
The facts of the case as stated in the plaint that the defendant is landlord of premises bearing no.B-1/26-27, Community Center, Janakpuri, New Delhi. The defendant agreed to let out the entire ground floor (measuring 3136 sq. feet) and part of basement(measuring 890 sq. feet) of the aforesaid property to the plaintiff for running its branch office and carrying out banking activities together with facilities and amenities on paying a sum of Rs.3,28,512/- for per month to the defendant inclusive of all applicable taxes, cess, duties, license fee and services charges. It was further agreed between the parties that the plaintiff shall deposit interest free security equivalent to initial six I.D.B.I Bank Ltd. Page No. 3/25 Vs. Lalit Mohan Madhan months rates and the plaintiff would incur expenses for interior and furnishing work. The period of tenancy was agreed to be ten years from the date of handing over of possession of the suit premises to the plaintiff. A memorandum of understanding (MoU) dated 07.04.2006 was reduced into writing and defendant agreed to execute lease deed in favour of the plaintiff for a period of ten years. The possession of the suit premises was delivered to the plaintiff on 01.06.2006. The plaintiff carried out extensive interior/renovations and also deposited the security amount with the defendant. The plaintiff spent about Rs.70 lacs in making the premises as per its requirements on the assurance of the defendant that premises can be retained by the plaintiff for a period of ten years. The plaintiff started paying the rent for the aforesaid area @Rs.92 per square feet for the covered area of the ground floor and Rs.40 per sq.feet covered area for the basement. The total amount was payable by the plaintiff amounted to Rs.3,24,112/-.
The plaintiff regularly tendered the rent to the defendant and had always been ready and willing to perform his part of obligation under MoU dated 07.04.2006 and requested the defendant to execute the lease deed but defendant avoided the same. The plaintiff also wrote letter dated 23.06.2007 in this regard. The plaintiff received the letter dated 18.06.2007 from the defendant demanding service tax @12.36% on the lease deed which was imposed by the Government of India from 01.06.2007. The plaintiff duly replied to the letter dated 18.06.2007 vide I.D.B.I Bank Ltd. Page No. 4/25 Vs. Lalit Mohan Madhan letter dated 31.07.2007 and requested the defendant to inform the service tax number and also complete the formalities i.e. execution of the lease deed without further delay. Subsequently, the plaintiff received the notice dated 10.11.2007 from the defendant whereby the tenancy of the defendant was terminated. It was stated that the tenancy of the defendant could be terminated as stipulated in the MOU dated 07.04.2006 and there was no ground with the defendant to terminate the tenancy. It was also stated that on account of the demand of the service tax raised by the defendant, plaintiff paid the service tax for the period of June to October 2007 amounting to Rs.1,66,259/- which was not paid by the plaintiff. It was stated that the defendant filed the suit for possession against the plaintiff on misconceived and untenable pleas. It was stated that the MOU dated 07.04.2006 constitutes concluded enforceable contract between the parties and since defendant has failed to perform his part of obligation, plaintiff is entitled to seek specific performance of MOU.
3. Summons of the suit were served upon the defendant. Defendant contested the suit by filing his written statement. Defendant raised preliminary objections that the suit filed by the plaintiff is not maintainable. No tenancy beyond period of one year can be created except by way of registered instrument and when there is no registered instrument i.e. lease deed, the tenancy remains month to month which can be terminated by the notice under Section 106 of Transfer of I.D.B.I Bank Ltd. Page No. 5/25 Vs. Lalit Mohan Madhan Property Act. It was stated that the plaintiff was inducted as licensee vide MOU dated 07.04.2006 in the suit property and at the most plaintiff would claim to be a tenant. Since there was no registered lease deed, the tenancy can be claimed only month to month which was duly terminated by legal notice dated 10.11.2007 and the defendant is entitled to eject the plaintiff from the suit property for which defendant has already filed the suit. It was stated that admittedly, no lease deed was executed and registered between the plaintiff and the defendant. The MOU was for the purpose of grant of license. The plaintiff never came forward to negotiate the terms and conditions for execution and registration of the lease deed and therefore, the plaintiff remained a licensee/monthly tenant whose tenancy has been duly terminated. On merits, defendant admitted that plaintiff was inducted in the suit property vide MOU dated 07.04.2006 and the plaintiff deposited the security amount with the defendant. It was also admitted that defendant had called upon the plaintiff to pay the service tax the service tax was paid by the plaintiff. It was stated that plaintiff was deducting the TDS beyond the permissible limit @20% which is otherwise only 16.83%. The plaintiff has not placed on record any document to show that it had incurred huge amount on renovation of the premises as alleged in the plaint. It was denied that the plaintiff paid the rent regularly in terms of the MOU dated 07.04.2006. Other contents of the plaint were denied and the prayer was made for dismissal of the suit.
I.D.B.I Bank Ltd. Page No. 6/25Vs. Lalit Mohan Madhan
4. The plaintiff has filed replication and has reiterated the contents of the plaint.
PLEADINGS IN THE SUIT No.CIVDJ/613003/2016
5. This is a suit for recovery of possession and mesne profits filed by landlord Sh. Lalit Mohan Madhan against the defendant bank. The case of the plaintiff in brief is that on the request of the defendant plaintiff agreed to induct the defendant bank as tenant in respect of entire ground floor and approximately 1/3th of the basement floor of property no.B1/26-27, Community Center, Janakpuri, New Delhi(hereinafter referred to as suit property) and pursuant to the same MOU dated 07.04.2006 was executed between the parties and the plaintiff agreed to pay a sum of Rs.3,28,512/- per month to the plaintiff. The plaintiff handed the possession of the suit property to the defendant on 01.06.2006. The plaintiff incurred a huge amount in carrying out flooring work on the ground floor and making a strong room in the basement as per requirement of the defendant. After handing over the entire area, the rate of rent came to Rs.3,24,112/- per month. Defendant paid a sum of Rs.19,44,672/- as six months interest free security deposit. It is further the case of the plaintiff that as per MOU dated 07.04.2006, plaintiff inducted the defendant as licensee but no proper and valid lease deed between the parties was executed and registered. At the most the I.D.B.I Bank Ltd. Page No. 7/25 Vs. Lalit Mohan Madhan defendant could claim to be a tenant month by month. With effect from 01.06.2007, due to imposition of the service tax by the Government of India, the plaintiff informed the defendant that defendant is liable to pay service tax @12.36% on the monthly rental to the plaintiff and requested defendant to make the payment vide letter dated 18.06.2007. The defendant vide its letter dated 31.07.2007, defendant requested the plaintiff to provide service tax number so that it could pay the service tax to the plaintiff. The plaintiff had been requesting the defendant to execute and register formal lease deed but the defendant failed to do so for more than a year but in letter dated 31.07.2007 defendant asked the plaintiff to complete the lease formalities. The plaintiff sent the details of registration to the defendant on 27.08.2007 but defendant failed to pay the service tax. Not only this, the defendant also deducted TDS @20% on monthly rent which is more than the rate of 16.83% which is applicable to the individuals. It was further stated that the defendant did not adhere to the statute in deduction of TDS and payment of service tax and no lease deed was executed and therefore, vide notice dated 10.11.2007, plaintiff terminated the tenancy of the defendant. The defendant was required to handover the possession of the suit property to the plaintiff after expiry of the notice period but the plaintiff continued to stay in the suit property illegally. After receipt of notice dated 10.11.2007, the defendant delivered the cheque of Rs.4,93,708/- towards the refund of TDS and service tax. By another letter dated 05.12.2007, I.D.B.I Bank Ltd. Page No. 8/25 Vs. Lalit Mohan Madhan plaintiff pointed out to defendant that any amount sent thereafter by the defendant would be accepted and adjusted towards part payment of mesne profits/damages. The defendant sent the reply dated 19.11.2007. It was further stated that the defendant was in unauthorized use and possession of the suit property and plaintiff is entitled to mesne profits for Rs.7,16,200/- per month.
6. The defendant filed written statement raising preliminary objection that the plaintiff has not paid the court fees and the plaint is liable to be rejected. The plaintiff had not approached the court with clean hands and had concealed the material facts. The plaintiff is in the habit of gaining undue advantage by forcing the tenants to vacate and re- let the property at higher rate. The plaintiff has instituted the present suit with drawing himself from the commitment made to the defendant recorded in the MOU. It was stated that the plaintiff had agreed to let out the suit property to the defendant for a period of ten years from the date of handing over the possession @Rs3,28,512/- per month inclusive of all applicable taxes, cess, duties, service charges etc. the defendant deposited interest free security equivalent to rent of 6 months and also incurred huge expenses. On the renovation of the suit property, the plaintiff had agreed to execute lease deed in favour of the defendant for the period of ten years. The defendant had received the possession of the suit property on 01.06.2006. The defendant has been regularly paying the I.D.B.I Bank Ltd. Page No. 9/25 Vs. Lalit Mohan Madhan agreed rent after deducting the tax. Defendant has also been ready and willing to perform part of his obligation under MOU dated 07.04.2006 but the plaintiff has been avoiding the execution of the release deed and the defendant wrote a letter dated 23.06.2007and requested the plaintiff to execute the lease deed. When the plaintiff did not execute the lease deed, defendant filed suit for specific performance against the plaintiff. There is no ground or breach of MOU dated 07.04.2006 which entitled the plaintiff to terminate the lease.
On merits the contents of the plaint have been denied except the terms and conditions agreed in MOU dated 07.04.2006 and the payment of service tax by the defendant. Even though, the same was stated to be the liability of the plaintiff. The defendant also claimed the refund of the service tax of Rs.1,66,259/- for the period of June to October 2007 from the plaintiff. It was stated that the TDS was deducted @20% on advise and subsequently the defendant refunded the amount of Rs.4,93,708/- vide cheque dated 13.11.2007 towards excess of TDS deducted, rent for the period of November 2007 and service tax of Rs.1,66,259/-. Other contents of the plaint have been denied and prayer was made for the dismissal of the suit.
7. The plaintiff has filed replication and has reiterated the contents of the plaint.
I.D.B.I Bank Ltd. Page No. 10/25Vs. Lalit Mohan Madhan
8. On 11.12.2008, the suit for specific performance filed by the plaintiff and the suit for possession filed by the defendant were consolidated and ordered to be tried together and the following issues were framed:-
(1)Whether the IDBI Bank Ltd. Has been ready and willing to perform its part of MOU dated 7th April, 2006?? OPP (2)Whether the MOU dated 7th April, 2006 being unregistered, no action for specific performance on the basis thereof lies?
OPD (3)If the issues above are decided against IDBI Bank Ltd., to mesne profit at what rate and for what period is the defendant entitled to?OPD (4)If the issue above is decided in favour of the defendant whether the defendant is entitled to any interest on the arrears of mesne profits and if so, at what rate and for what period?OPD (5)Relief.
9. An additional issue was framed on 09.01.2009 with the consent of the Counsel for the parties as under:-
1.Whether the plaintiff is entitled to refund of service tax of Rs.1,66,259/- paid to the defendant?OPP
10. The parties to the suit have led evidence in suit No. CIVDJ/613026/2016 in respect of all the issues.
I.D.B.I Bank Ltd. Page No. 11/25Vs. Lalit Mohan Madhan
11. The plaintiff in support of his case have examined PW-1 Sh. Gurmeet Singh who has filed evidence by way of affidavit Ex.PW-1/A and has reiterated the facts stated in the case. He has also proved Power of Attorney in his favour as Ex.PW-1/1; Letter dated 18.06.2007 as Ex.P-1; The reply dated 31.07.2007 as Ex.P-2; Legal Notice dated 10.11.2007 as Ex.P-3; Reply dated 19.11.2007 to the legal notice as Ex.P-4; The letter dated 01.12.2007 as Ex.P-5; Letter dated 14.11.2007 as Ex.P-6; MOU dated 07.04.2006 as Ex.P-7; The letter dated 21.06.2006 as Ex.P-8; Handing over/taking over certificate dated 01.06.2006 as Ex.P-9; The various invoices as Ex.PW-1/3 to Ex.PW- 1/18; Letter dated 23.06.2007 as Ex.PW-1/20 and Courier receipts as Ex.PW-1/21 & Ex.PW-1/23.
12. The plaintiff also examined PW-2 Mr Jamnadhar from Blazeflash Courier who testified that the Courier Receipt as Ex.PW-1/21 and Ex.PW1/-23 were booked by their agency and the articles were delivered at the address mentioned therein. Thereafter, PE was closed.
13. The defendant in support of his case has examined himself as DW1 and has filed his evidence by way of affidavit Ex.DW-1/A and has reiterated the facts stated in the case. He has also proved the Site Plan as Ex.DW-1/1; Certificate of Registration as Ex.DW-1/2; Letter dated 03.10.2007 is Ex.DW-1/3; Letter dated 01.12.2007 is Ex.DW-
I.D.B.I Bank Ltd. Page No. 12/25Vs. Lalit Mohan Madhan 1/4(already exhibited as Ex.P-5); Letter dated 05.12.2007 as Ex.DW- 1/5 and Certified Copy of the lease deed dated 08.01.2008 as Mark A. Defendant has also examined DW-2 R.K. Thakur from the office of the Sub-Registrar-II Janakpuri, New Delhi and he has proved the lease deed dated 08.01.2008 as Ex.DW-2/1 and DE was closed.
14. I have heard Ld. Counsel for the plaintiff as well as Ld. Counsel for the defendant and have perused the record carefully.
15. My findings on the issues are as under:-
(ADDITIONAL ISSUE FRAMED ON 09.01.2009) Whether the plaintiff is entitled to refund of service tax of Rs.1,66,259/- paid to the defendant?OPP The onus of proving this issue was upon the plaintiff. Counsel for the plaintiff has argued that the plaintiff has paid service tax amounting to Rs.1,66,259/- which was liability of the defendant and the plaintiff is entitled for the refund of the same. Counsel for the plaintiff has relied upon Clause (6) of the MOU Ex.P-7 and has argued that all the taxes were to be paid by the licensor. It was argued that even clause (1) of the MOU states that the rent was inclusive of all applicable taxes, cess, duties and service charges. He argued that the on the insistence of the defendant, plaintiff paid the service tax but actually it was the liability of the licensor/defendant.I.D.B.I Bank Ltd. Page No. 13/25
Vs. Lalit Mohan Madhan
16. Counsel for the defendant on the other hand has argued that the plaintiff is not entitled to the refund of the service tax as the service tax was in the nature of VAT and the same was to be paid by the consumer of the service i.e. the plaintiff bank. He has placed reliance of the judgment of Hon'ble High Court of Delhi in Satya Developers Pvt. Ltd. Vs. Pearey Lal Bhawan Association 225(2015) Delhi Law Times 377(DB) in support of his arguments.
17. Clause (6) of the MOU Ex.P-7 reads as under:-
"All municipal rates, cesses and taxes and outgoings including that payable presently or in future in respect of the Licensed Premises shall be paid, borne and discharged by the Licensors. Any statutory increases in taxes on account of introduction of new taxes subsequent to the first assessment made for the licensed premises after executing MOU/Leave & License Agreement and handing over charge/possession of the premises shall be borne by the Licensees. However, any increase in the lease/sub lease charges payable by the Licensors to third parties will be borne by the Licensors."
18. A bare perusal of this Clause would show that the liability of the licensor has been fixed for the payment of municipal taxes, Cess, duties etc.and the increase in lease/sub lease charges is also been placed on the licensor. However, the service tax is not charged by the municipal I.D.B.I Bank Ltd. Page No. 14/25 Vs. Lalit Mohan Madhan corporation or the local body but the same has been leved by the Government. Hence, it cannot be said that the liability to pay the service tax was of the licensor/defendant. Further, the service tax was introduced by the government only w.e.f 01.06.2007 i.e. after execution of the MOU Ex.P-7 and plaintiff bank had already taken the possession of the suit property. The MOU does not contemplate the liability of the tax which was to be imposed in future but it determines the liability of the taxes already in existence and which may increase subject to suit property taken on rent by the plaintiff bank. Hon'ble Division Bench of High Court of Delhi in "Satya Developers Pvt. Ltd. (Supra)" while dealing with a similar situation and after examining the various documents and law laid down by the Hon'ble Supreme Court held in para 26 and 27 as under:-
"26.Thus as a legislations by reference Sub- Section(2) of Section 64A of the Sales of Goods Act making applicable Sub-Section (1) of Section 64A to any duty of Customs of Excise on goods and as a legislation by incorporation Section 83 of the Finance Act making applicable Section 12B of the Central Excise Act to Service Act, Section 64A(1) is applicable to Service Tax. From the provisions a noted and the decisions of the larger benches it is evident that a service tax is a VAT which in turn is a destination based consumption tax and is to be borne by the consumer of goods. Further unless contracted to the contrary, the consumer of service is liable to refund the said tax to the service provider who in turn is liable to be I.D.B.I Bank Ltd. Page No. 15/25 Vs. Lalit Mohan Madhan pay to the Government.
27.From the legal position as noted it is evident whether the service tax liability has been agreed not be passed on the recipient of the service would depend on the interpretation of Clauses entered into between the parties....................."
19. In the aforementioned case also, the dispute was with regard to the liability of the payment of the service tax and a clause similar to Clause (6) of MOU Ex.P-7 was under consideration before the Hon'ble High Court. The Hon'ble High Court in para 32 of the judgment held that the clause inter se the parties cannot be said to cover the exemption of HDFC Bank to pay Meattles Service Tax paid by it to the Government pursuant to the Financial Act 2007. Similarly, in para 33 of the judgment it was held that the Clause (5) of the lease deed between Satya Developers and PLBA contemplated the only existing taxes, levies or charges and not future taxes.
20. In the present case also, there is nothing to show that the parties had contemplated the future taxes to be levied by the Government while executing MOU Ex.P-7. Hence, in my considered opinion, the plaintiff has failed to show that the service tax was not to be passed on to the plaintiff bank. The service tax is a VAT, and it is to be borne by the consumer of the services. Therefore, the liability of the payment of the service tax was on the plaintiff and not on the defendant. Accordingly, I.D.B.I Bank Ltd. Page No. 16/25 Vs. Lalit Mohan Madhan the issue is decided against the plaintiff and in favour of the defendant.
21. ISSUE NO.(1):-
Whether the IDBI Bank Ltd. Has been ready and willing to perform its part of MOU dated 7th April, 2006?? OPP The onus of the proving of this issue was on the plaintiff. It is an admitted case of the parties that the parties to the suit had entered into MOU Ex.P-7 dated 07.04.2006. As per the terms of the MOU, the parties were to execute a Registered Lease Deed in respect of the suit property. The plaintiff entered into possession of the suit property on 01.06.2006 and after renovation of the suit property according to its requirement started the banking business. It is further the case of the plaintiff that the plaintiff requested the defendant to come forward and get the lease deed registered and for this purpose, the plaintiff also wrote letter dated 23.06.2007 Ex.PW-1/20 and letter dated 31.07.2007 Ex.P-2 but the defendant failed to execute the lease deed in favour of the plaintiff. Counsel for the defendant on the other hand has submitted that the plaintiff failed to perform its part of the agreement and did not prepare the draft lease deed nor purchased the stamp papers for the execution of the sale deed and hence, the lease deed could not be registered. Counsel for the plaintiff submitted that the plaintiff has always been ready and willing to perform his part of the agreement but the defendant did not come forward to execute the lease deed.I.D.B.I Bank Ltd. Page No. 17/25
Vs. Lalit Mohan Madhan
22. In support of his case, the plaintiff has examined PW-1 Sh. Gurmeet Singh who had testified that the plaintiff was always ready and willing to perform its part of the agreement. On the assurances of the defendant, the plaintiff carried out work in the suit property and spent about Rs.70 lacs. He also proved the letter Ex. PW-1/20, the Courier Receipt Ex. PW-1/21, the letter Ex.P-2 and the Courier Receipt Ex.PW- 1/23. Plaintiff also examined PW-2 to prove the courier receipts.
23. Counsel for the defendant has argued that the PW-1 in his cross- examination has admitted that the plaintiff had not sent draft lease deed to the defendant and has further testified that the MOU was very basis of executing the lease deed. He also admitted that the bank did not purchase the stamp duty for the purpose of execution of the lease deed.
24. Counsel for the defendant has further argued that the defendant never received the letter Ex.PW-1/20 and the plaintiff has also not been able to prove the delivery of the said letter to the defendant. It was argued that the Courier receipt Ex.PW-1/21 did not bear the complete name and address of the defendant. It also did not bear any charges nor the same was signed by the official of the Courier Company. It was argued that PW-2 appearing for the courier company also admitted that the courier receipt Ex.PW-1/21 and PW-1/23 did not bear eh complete address of the defendant and the signatures of the official. They also did I.D.B.I Bank Ltd. Page No. 18/25 Vs. Lalit Mohan Madhan not bear the amount which was charged by the Courier Company. The receipts did not reflect as to who is the recipient fo the article nor the date or time on which the article was mentioned. The witness had not produced the proof of the delivery(POD) on the ground that the record has been weeded out. It was argued that the plaintiff has failed to show that the letter Ex.PW-1/20 was ever delivered on the defendant.
25. A bare perusal of clause 31 of the MOU dated 07.04.2006 Ex.P-7 would show that the terms, conditions and stipulations as contained in the MOU were briefly stated for the limited purpose of indicating the in- principle commitment of the parties to the agreement and elaborate terms, conditions and stipulation were to be incorporated in the lease deed to be executed by the parties in due course, meaning thereby that the parties were required to negotiate and agree upon the elaborate terms, conditions and stipulations before the lease deed could be executed between the parties. There is nothing on record to show that the plaintiff ever sent draft or the lease deed containing elaborate terms, conditions and stipulations to the defendant for his approval or held any meetings with the defendant to negotiate the final terms and conditions for drafting of the lease deed. PW-1 in his cross-examination has testified that MOU was the very basis of executing the lease and the lease deed format is standardized available with the bank but he was not sure if the draft lease deed was sent to the defendant alongwith the letter dated 23.06.2007 and I.D.B.I Bank Ltd. Page No. 19/25 Vs. Lalit Mohan Madhan 31.07.2007. He also could not confirm if the bank had prepared any draft lease deed in the present case or not. He also admits that the bank has not purchased the stamp duty for the execution of the lease deed. This conduct of the plaintiff bank shows that the plaintiff was not ready and willing to perform its part of the agreement as the plaintiff bank never took any steps for negotiating the elaborate terms and conditions of the lease deed with the defendant. It did not hold any meetings with the defendant for this purpose and never purchased the stamp papers for execution of the lease deed. The plaintiff also did not take any steps for preparing the draft lease deed and sent it to the defendant for his approval. Merely writing one or two letters for execution of the lease deed without taking any effective steps for execution of lease deed are insufficient to prove that the plaintiff was ready and willing to perform his part of the contract. The plaintiff bank has only performed that part of the contract which was necessary to start the banking operations from the suit property like renovation of the suit property, fixing of vaults etc. and not the other parts which were necessary for execution of the lease deed.
Furthermore, the claim of the plaintiff for decree of specific performance has become infructuous as the plaintiff has already vacated the suit property almost after using the premises for seven years on 31.07.2013.
I.D.B.I Bank Ltd. Page No. 20/25Vs. Lalit Mohan Madhan
26. Thus, in my considered opinion the plaintiff has failed to discharge the onus cast on it. The issue is accordingly decided against the plaintiff and in favour of the defendant.
27. ISSUE NO.(2):-
Whether the MOU dated 7th April, 2006 being unregistered, no action for specific performance on the basis thereof lies? OPD The onus of the proving this issue was on the defendant. Counsel for the defendant has argued that the relief of specific performance cannot be granted to the plaintiff as MOU dated 07.04.2006 is an unregistered document.
However, in view of my finding on issue no.(1) hereinabove, once the plaintiff has failed to establish that it had been ready and willing to perform its part of the MOU and is not entitled for the relief of specific performance, this issue loss its significance and no finding is required to be given on this issue. The issue stands disposed off accordingly.
28. ISSUE NO.(3):-
If the issues above are decided against IDBI Bank Ltd., to mesne profit at what rate and for what period is the defendant entitled to?OPD The onus of proving this issue was on the defendant. Once it has been held that the plaintiff is not entitled to the relief I.D.B.I Bank Ltd. Page No. 21/25 Vs. Lalit Mohan Madhan of specific performance and the tenancy of the plaintiff has been terminated by the defendant vide legal notice dated 10.11.2007 Ex.P-3, the occupation of the plaintiff in the suit property was of an unauthorized occupant. It is pertinent to note here that the plaintiff bank has not disputed the notice of termination of tenancy Ex.P-3 hence, the defendant would be entitled to mesne profits/damages from the plaintiff for the period of unauthorized use and occupation of the suit property by the defendant. Hence, the plaintiff would be liable to pay damages/mesne profits to the plaintiff w.e.f. 28.11.2007 till 31.07.2013, i.e. the date when defendant vacated the suit property. The argument of plaintiff that the MOU was irrevocable and lease was granted for a period of 10 years is devoid of any merits as in the absence of Registered Lease Deed, the tenancy of the plaintiff was only for month by month and the same could be terminated by notice under Section 106 of T.P. Act.
29. In order to prove the rate of mesne profits, defendant has examined DW-2 Sh. R.K. Thakur who has proved on record certified copy of the lease deed registered on 08.01.2008 as Ex.DW-2/1. Counsel for the defendant has argued that the prevailing market rate of rent of the suit property was Rs.200/- per sq. feet for the ground floor and Rs.100/- per sq. feet for the basement. Perusal of the lease deed Ex.DW-2/1 shows that the rate of rent according to this lease deed was Rs.3,81,618/- at the time of commencement of the lease i.e. January 2008. In the present I.D.B.I Bank Ltd. Page No. 22/25 Vs. Lalit Mohan Madhan case, the suit property is situated at commercial complex at Janakpuri which is considered to be a prime locality. PW-1 in his cross- examination has also admitted that the suit property is situated on the main road. There is nothing to suggest that the prevailing market rent of the properties in the area was less than Rs.200/- per sq. feet per month for the ground floor and Rs.100/- per sq. feet per month for the basement. The plaintiff has not led any evidence to the contrary on the aspect of the mesne profits and in the cross-examination of PW-1 the witness has merely denied the suggestion given by the Counsel for the defendant regarding the rate of rent. Plaintiff has not examined any independent witness nor has proved any lease deed to contradict the claim of the defendant.
30. Accordingly, in my considered opinion, the defendant has discharged the onus cast on it. I deem it appropriate to award mesne profits to the plaintiff @Rs.200/- per sq. feet per month for the ground floor and Rs.100/- per sq. feet per month for the basement of the suit property totalling to Rs.7,16,200/- per month w.e.f. 28.11.2007. The defendant shall be entitled to enhancement of the mesne profits by 15% every three years i.e. the defendant shall be entitled mesne profits @Rs.8,23,630/- per month w.e.f. 28.11.2010 to 31.07.2013. The plaintiff, however, shall be entitled to the adjustment of security amount of Rs.19,44,672/- and payments made by it to the defendant towards I.D.B.I Bank Ltd. Page No. 23/25 Vs. Lalit Mohan Madhan rent/occupation charges during the period 28.11.2010 to 31.07.2013. The issue is accordingly decided in favour of the defendant and against the plaintiff.
31. ISSUE NO.(4):-
If the issue above is decided in favour of the defendant whether the defendant is entitled to any interest on the arrears of mesne profits and if so, at what rate and for what period?OPD The onus of proving this issue was on the defendant. The defendant has examined himself as DW-1 and his affidavit Ex.DW-1/A, the defendant has claimed interest on the arrears of the mesne profits @18% per annum. However, in view of the fact that there is no agreement between the parties with regard to the payment of interest on the arrears of rent, I deem it appropriate that in view of the Section 34 CPC, the defendant is awarded simple interest @9% per annum on the arrears of mesne profits/damages till its realization after adjustments of the payments made by the plaintiff bank. The issue is accordingly decided in favour of the plaintiff and against the defendant.
32. ISSUE NO.(5):-
(RELIEF) (CIVDJ/613026/2016) In view of my findings on issue no.(1) and additional issue, framed on 09.01.2009, the suit filed by the plaintiff bank is dismissed.I.D.B.I Bank Ltd. Page No. 24/25
Vs. Lalit Mohan Madhan No order as to costs.
(CIVDJ/613003/2016) In view of my findings on issue no.(3) &(4) hereinabove, the suit filed by the defendant is decreed. The defendant shall entitled to recover mesne profits from the plaintiff @ Rs.7,16,200/- per month w.e.f. 28.11.2007. The defendant shall be entitled to enhancement of the mesne profits by 15% every three years i.e. the defendant shall be entitled mesne profits @Rs.8,23,630/- per month w.e.f. 28.11.2010 to 31.07.2013.
The defendant shall also be entitled to simple interest @9% per annum on the arrears of mesne profits till its realization.
The plaintiff shall be entitled to the adjustment of security amount of Rs.19,44,672/- and payments made by it to the defendant towards rent during the period 28.11.2010 to 31.07.2013.
The defendant shall be also entitled to cost of the suit. Decree sheet be prepared accordingly. The decree shall be executable only upon the payment of deficient court fees by the defendant.
File be consigned to record room after completion of the necessary formalities.
Announced in the open Court (ANIL KUMAR SISODIA)
Dated:- 1st June 2017 ADJ-05, WEST DISTRICT
TIS HAZARI COURT, DELHI
I.D.B.I Bank Ltd. Page No. 25/25
Vs.
Lalit Mohan Madhan