Delhi District Court
M/S. Tee-Em Builders (P.) Ltd vs M/S. Tata Consultancy Services Ltd on 8 October, 2021
IN THE COURT OF SHRI SANJEEV KUMAR-II, ADDITIONAL
DISTRICT JUDGE-04, SOUTH DISTRICT, SAKET COURTS,
NEW DELHI.
CS DJ/9153/2016
CNR No. DLST01-004827-2016
M/s. TEE-EM Builders (P.) Ltd.,
A Company Duly Incorporated,
Under The Indian Companies Act,
Having office at : 332,
Asiad Village Complex,
New Delhi.
....... Plaintiff
Versus
M/s. Tata Consultancy Services Ltd.
Registered Office :
Nirmal Building, 9th Floor,
Nariman Point,
Mumbai-400021.
Also At:
B-333,
Asiad Village Complex,
New Delhi. ...... Defendant
Instituted on : 29.05.2012
Reserved on : 04.08.2021
Pronounced on : 08.10.2021
CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 1
JUDGMENT
This is a suit for recovery of possession and damages for use and occupation/mesne profits instituted by the plaintiff against the defendant. The plaintiff filed an application under Order XII Rule 6 of the Code of Civil Procedure, 1908 (in short 'CPC') which was allowed vide order dated 11.12.2013 by the Hon'ble Delhi High Court (at that point of time suit was pending in High Court) and thereafter, the possession of the suit property already handed over by the defendant to the plaintiff on 31.03.2014.
PLAINT
2. The brief factual matrix of the case as stated in the plaint is:
(i) The plaintiff is a duly incorporated company under the Indian Companies Act and Shri Manish Bhati is the director of the plaintiff and is duly authorized to institute the present suit and to sign and verify the plant vide resolution of the plaintiff company dated 10.05.2012.
(ii). The defendant was a tenant of the plaintiff in respect of property bearing no.
B-333, Asiad Village Complex, New Delhi-110049 comprising of ground floor, first floor and the barsati floor as shown in the annexed plan (hereinafter referred to as 'suit property') at monthly rental of rupees 49,500/- excluding electricity and water charges. At the time of creation of the tenancy, a lease agreement dated 26.12.2005 was executed between the parties but the said lease agreement was not on requisite stamp paper and was not registered and therefore a month to month tenancy was created by payment of rent by the defendant and acceptance of rent by the plaintiff.
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(iii). The plaintiff had served a notice dated 17.02.2009 upon the defendant terminating the tenancy of the defendant and calling upon the defendant to vacate the suit property and deliver its possession to the plaintiff on expiry of the period of fifteen days. The said notice was sent to the defendant by Registered AD post and UPC at the address of the registered office of the defendant and also at the address of the suit property. The said notice was duly served at the registered office of the defendant on 20.02.2009. The defendant had sent a false reply dated 26.02.2009 and has failed to vacate the suit property after the expiry of fifteen days and its possession is illegal and unauthorized with effect from 08.03.2009. The plaintiff is entitled to possession of the suit property.
(iv). The defendant had filed a suit for specific performance of the aforesaid lease deed dated 26.12.2005. During the pendency of the said suit the defendant pointed out that the name of the plaintiff company herein had been sruck off by the Registrar of Companies (ROC) under Section 560 of the Companies Act. The plaintiff herein then filed a petition under the Companies Act before the High Court of Uttrakhand at Nainital. Vide order dated 19.03.2012, passed by Hon'ble Uttrakhand High Court (Mr. Justice B.S Verma), the ROC was directed to restore the company and in pursuance of that order, the ROC had restored the company to its original number.
(v). It was specifically provided in the notice dated 17.02.2009 that If the defendant failed to vacate the suit property within fifteen days of the service of the notice, the defendant shall be liable to pay damages for use and occupation/mesne profits at rupees 1,50,000/- per month. Suit property could have easily fetched the rent of rupees 1,50,000/- per month from 08.03.2009. The plaintiff was thus liable to pay rupees 57,00,000/- on account of mesne profits/damages from 08.03.2009 CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 3 till 07.05.2012.
(vi). The defendant had been directly depositing the rent after deducting the TDS in the account of the plaintiff before the service of the notice dated 17.02.2009. The plaintiff had specifically mentioned in para 4 of the notice dated 17.02.2009 that "That you are hereby further notified that if any amount is deposited by you in the account of my client after the termination of the tenancy the said deposit shall under no circumstances mean or be construed as acceptance of my client and shall be deemed to be a tender towards part payment of damages for use and occupation of the premises." Inspite of the said warning the defendant continued to deposit amount at rupees 49,500/- per month after deducting TDS from 01.03.2009 till 30.04.2012. The total amount so deposited comes to rupees 18,81,000/-. After giving credit to the defendant of the aforesaid amount of rupees 18,81,000/-, the defendant is liable to pay mesne profits/damages amounting to rupees 38,19,000/- from 08.03.2009 to 07.05.2012. As the claim for damages up to 07.05.2009 is barred by time, the plaintiff is claiming a sum of rupees 36,18,000/- on account of damages for use and occupation from 08.05.2009 to 07.05.2012 at the rate of rupees 1,50,000/- per month after adjusting the amount already deposited by the defendant in the bank account of the plaintiff as mentioned hereinbefore.
WRITTEN STATEMENT
3. The written statement was filed on behalf of defendant wherein it is stated:
(i). Vide a lease agreement dated 26.12.2005 entered into between the defendant and the plaintiff, the suit property was to be demised in future unto the defendant for the use and occupation as residence of its Senior General Manager their Shri Sreekantan K. Nair. Eventually, it was so demised in part performance of the CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 4 contract. The said lease was initially for a period of three years commencing on 01.01.2006. The lease rent reserved under the aforesaid lease deed was rupees 45,000/- per month for the first two years and rupees 49 500/- per month during the third year (i.e. after effecting a 10% increase). The security amount reserved under the lease deed and payable by the defendant was rupees 1,35,000/-. The advance rent was rupees 1,35,000/- to be recovered during the last three months of the lease.
(ii). Much in advance of the expiry of the lease, the defendant communicated their decision to renew the lease for further period of three years commencing from 01.01.2009. The defendant in addition to verbally communicating such intention from time to time also communicated such decision/intention to renew the lease to the defendant in writing vide their letter dated 07.11.2008. It is pertinent to state here that the said lease was renewable at the sole option of the defendant as explicit terms of the deed. For the sake of convenience clause no-1 of the lease deed dated 26.12.2005 devolving a right unto the defendant/lessee at their sole discretion, to seek renewal of the lease for a further period of three years effective 01.01.2009, is extracted below:
"1. The LESSOR hereby agrees demise unto the LESSEE the premises together with ail fixtures and appurtenances thereto to hold unto the LESSEE for a term of 3 years from 1st day of January, 2006 to the 31 st day of December 2008 with an option for the lessee to renew the lease for a further period of 3 years on mutually agreed terms and conditions."
(iii). The use of the terms "initial three year period", "lock-in Period" etc. appearing in clause No. 4(f) of the lease deed further establishes the fact that the parties to the lease intended to renew the lease beyond the initial lock-in period of CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 5 three years, provided the defendant desired to exercise their right under clause 1 of the lease deed. The plaintiff did not reply to the letter dated 07.11.2006 of the defendant. Instead, and significantly enough, by their conduct the plaintiff indicated their implied consent to the renewal on the fatty proposed terms thereof by the defendant. However, despite the defendant being ready and willing at all time to execute the fresh lease deed and having observed their part of the obligation under the "agreement to lease" clause contained in clause no-1 of the lease deed, by communicating in writing of their intention to renew, the plaintiff failed to discharge their part of the obligation under the said clause of the lease agreement. Thereafter the defendant in the month of December, 2008 in their meetings with the officers of the plaintiff reiterated their decision to enter into a fresh lease deed on the proposed terms communicated in writing earlier. To the dismay of the defendant, the plaintiff continued to delay execution of the lease deed on some pretext or the other compelling the defendant to serve upon the plaintiff further notice to renew in writing dated 26.12.2008.
(iv). To the shock and surprise of the defendant, in reply to their aforesaid letter notice dated 26.12.2008 the plaintiff vide their reply dated 01.01.2009 for the first time took a misconceived stand against entering into a lease in terms of the 'agreement to lease" clause. The contentions raised by the plaintiff were frivolous, misconceived and contravened the explicit provisions for renewal contained in clause No-1 of the lease deed dated 26.12.2005. The plaintiff in their reply sought to wriggle out of their contractual obligation by electing to employ the "mutually agreed terms" phrase in the "agreement to lease" clause to defeat the unequivocal right of the defendant to seek execution of a lease deed at their option for a period of three years commencing from 01.01.2009. Be that as it may, the defendant responded to the said reply dated 01.01.2009 of the plaintiff vide their letter dated CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 6 06.01.2009 rebutting all misconceived pleas against renewal and requesting the plaintiff again to execute a lease deed with the defendant under the "agreement to lease" clause on the terms proposed. The plaintiff was adequately noticed that it will not be open to them in law to defeat the primary intendment of the parties to the lease to enter into a fresh lease deed should the defendant so elect and that the phrase 'on mutually agreed terms" appearing in clause 1 of the lease deed cannot attain primacy to defeat such intendment contained in the phrase "option for the LESSEE to renew" appearing in the same clause 1 of the lease deed as the words "on mutually agreed terms" are only subservient to the phrase 'option for the LESSEE to renew' specially when the plaintiff had failed to forward their own terms or reject the fair terms proposed by the defendant in writing.
(v). Vide the letter dated 07.01.2008, the plaintiff ostensibly in reply to the letter of the defendant dated 06.01.2000 simply asked the defendant to handover possession without bothering to reply to the said letter dated 06.01.2009 on merits. The plaintiff has thereafter been insinuating use of coercive and illegal measures to their occupant of the suit property, in order to effect dispossession illegally. Such measures on the part of the plaintiff to oust the defendant illegally without adopting the due process of law could not be countenanced. The conduct of the plaintiff and the contents of their belated and misconceived replies smacked of a malafide intent on their part. The plaintiff wanted to somehow resile from the terms of the contract.
(vi). The defendant had at all times been ready and willing to enter into a lease on the terms proposed and continue to be so as on date. The defendant has discharged their onus by calling upon the plaintiff in writing by way of at least three written notices and also the legal notice dated 14.07.2009. The notice of the plaintiff dated CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 7 07.04.2009 seeking that the defendant vacate the premises is misconceived and illegal. The act of the plaintiff was patently illegal and constitutes a breach of the subject agreement. When the plaintiff did not relent and addressed a letter dated 07.02.2009 to the defendant with a misconceived requisition to vacate the defendant left with no other option served a legal notice dated 14.07.2009 through counsel on the plaintiff by Registered A/D post and courier. Despite service of legal notice on the plaintiff seeking execution of a fresh lease deed on the terms proposed, the plaintiff never replied to the notice.
ISSUES
4. Following four issues were framed on 11.12.2013:-
1. Is the plaintiff entitled to recover damages for use and occupation/mesne profits from the defendant in the sum of Rs.38,19,000/-?
2. Is the plaintiff entitled to a decree for future mesne profits/damages for use and occupation by the defendant with effect from 8th May 2012 till the recovery of possession of the suit premises @ Rs.1.5 lakhs per month or such higher rate as the Court may deem fit?
3. Is the plaintiff entitled to simple interest @ 18% per annum on the sums that may be awarded to it for damages and occupation/mesne profits?
4. Relief EVIDENCE
5. The plaintiff and the defendant examined one-one witness, that is, Veena CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 8 Bhati (PW-1) by the plaintiff and Satish Mehta (DW-1) by the defendant.
SUBMISSIONS OF THE PARTIES 6(i). PLAINTIFF Mr. Vikrant Pachnanda, learned counsel appearing for the defendant submitted that:
(a) The plaintiff based on the comparative lease deeds for properties of the same size and condition in the same area, is claiming mesne profits calculated at rupees 5,000 per day, i.e. rupees 60 per sq. ft per month from 08.05.2009 to 31.03.2014.
(b). Since the defendant did not vacate or handover possession of the suit property after termination of the month to month tenancy, the plaintiff was deprived of its right to lease the same to prospective tenants at a much higher rate of rent. It is a settled position in law that when the defendant has occupied the premises without any authority of law then the plaintiff is entitled to damages/mesne profits at the market rate. It has been held that mesne profits and damages for unauthorized occupancy after expiry of tenancy can be granted at a rate higher than the agreed rate of rent after the expiry of the tenancy. The plaintiff is, thus, entitled to rent at the prevailing market rate. It is well settled that the market rate of rent is a good measure and standard to compute the quantum of mesne profits. The plaintiff has led substantial evidence in respect of the prevailing market rate of rent and increase thereof during the period in question. The comparative lease deeds placed on record are of similarly situated properties (on the same road) and the quantum of mesne profits sought for is in accordance with the same. (See Fabindia Overseas Pvt. Ltd. vs. S.N Sheopari, 2013 (134) DRJ 408 DB).
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(c). There is no dispute on the size/location/description of the suit property. The plaintiff has placed on record the lease deeds of three properties, which are in the exact same location/area, as that of the suit property and is identical to the suit property. First lease deed is of dated 17 th October 2013 (Exhibit PW1/6). The said premises is built on a plot admeasuring 200 sq. yards comprising of four bedrooms, three on the first floor and one on the top floor, three bathrooms, marble flooring, park facing, parking space in the front area, open space at the rear, fully fitted kitchen and bathrooms. The rent for a period of two years is rupees 1,20,000/- per month for the first year of the lease, to be increased at the rate of 10% to rupees 1,32,000/- per month for the next year.
(d). The second lease deed is of dated 9 th May 2014 (Exhibit PW-1/7). The rent is rupees1, 20,000/- per month for the first year of the lease, to be increased at the rate of 10% after the end of the first year.
(e). The third lease deed is of dated 26 September, 2011 (Exhibit PW-1/5). The said premises is also built on a slot admeasuring 200 sq. yards (1800 Sq. Ft). The premises also comprises of four bedrooms, one on the ground floor and three on the first floor with three bathrooms, wooden flooring, park facing, parking space in the front area, open space at the rear, full fitted kitchen and bathrooms. The property comprises of ground floor and first floor bearing Number 285, Block No. Category A, in Asia Village Games Complex, new Delhi. The prevalent rent for a period of five years is rupees 1,30,000/- per month for the first two years of the lease, to be increased at the rate of 10% to rupees 1,43,000/- per month for the next three years. It is submitted that PW-1 was not cross examined on the description/rent or any particulars of the said three properties.
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(f). In response to the submissions of learned counsel for the defendant regarding the termination notice dated 17.02.2009 sent by a non- existent company having been struck off the ROC and hence, not a valid termination notice, it is submitted that the name of Company was struck of the ROC on 31.07.2007, and it was restored in May 2012. Further, this argument of the defendant had already been rejected by the Hon'ble Delhi High Court vide order dated 11.12.2013 by holding that the restoration operates retrospectively, as though the plaintiff company had never been struck off. It has also been held that the said notice is legal and valid. It is submitted further that the said argument of the defendant ought to be rejected for the reasons: (a) The said argument has already been unequivocally rejected by the High Court and the decision is final and binding. It is indeed not open to this Court to come to any different conclusion. (b) Without prejudice to the foregoing, it is submitted that the said argument was not, in fact, the reason offered by the defendant for failing to vacate the suit property upon receipt of the notice dated 17.02.2009 as is evident from the reply to the notice and the cross-examination of the defendant's witness. (c) It is not open to the tenant to question the title of the landlord. (See Jaspal Kuar Cheema & O rupees v. Industrial Trade Links & O rupees, AIR 2017 SC 3995; Keshar Bai v. Chhunulai, AIR 2014 SC 1394)
(g). The comparative lease deeds placed on record by the plaintiff prove that the market rent for the suit property is as claimed, namely, rupees 1,20,000/- to rupees 1,30,000/- and thus the plaintiff has proved that the mesne profits claimed are in fact in accordance with the market rent. Further, the lease deeds filed by the defendant also prove that market rent for the demised premises is as claimed by the plaintiff. The defendant has filed lease deeds for three properties, all of which are only single floor flats (either ground floor or first floor) where the rent is between CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 11 rupees 70,000/- to rupees 82,500/-. On the basis of evidence adduced by the defendant, the rent for the plaintiff's property would be between rupees 1,40,000/- and rupees 1,65,000/- as the plaintiff's property is admittedly two floors. Besides, the plaintiff's property is admittedly of more premium specifications being an independent bungalow with marble flooring, park facing, with parking space in the front area, open space at the rear, fully fitted kitchen and bathroom. The covered area of the suit property is approximately 2500 sq. feet.
6 (ii). DEFENDANT Mr. Shraman Sinha, learned counsel appearing for the defendant submitted that:
(a) The lease was initially for a period of three years commencing on 01.01.2006.
The lease rent reserved under the aforesaid lease deed was Rs. 45,000/- p.m. for the first two years of tenancy to be enhanced by 10% thereafter. The lease rent was increased to Rs. 49,500/- p.m. during the third year wef 01.01.2008 ( i.e after effecting a 10 % increase).
(b). The security amount reserved under the lease deed and payable by the defendant was Rs. 1,35,000/-. Further, the advance rent was Rs. 1,35,000/- to be recovered during the last three months of the lease.
(c). Prior to expiry of the lease after 3 years, the defendant communicated their decision to the plaintiff to renew the lease for a further period of three years commencing from 01.01.2009 both verbally during meetings and vide their letters, inter-alia, dated 07.11.2008, 26.12.2008 and 06.01.2009 and, including, a legal notice dated 14.01.2009. The lease was renewable at the sole option of the defendant as per explicit terms of the deed. A renewal clause even in an CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 12 unregistered deed would be read as a clause for "collateral purpose" and is enforceable in law, especially if the execution and binding effect be admitted by the lessor/plaintiff in its evidence. This is in terms of the proviso to Section 49 of the Registration Act.
(d). The use of the terms "initial three year period", "lock-in period" etc appearing in clause No. 4(f) of the lease deed also unequivocally suggests that the parties to the lease i.e the defendant and the plaintiff, intended to renew the lease beyond the initial lock-in period of three years, provided the defendant desired to exercise their right under clause 1 of the lease deed. The plaintiff declined to renew the lease upon its expiry and, instead, sent a notice of termination of lease dated 07.05. 2012.
(e). Due to various defaults made by the plaintiff including default in filing statutory returns, the name of the plaintiff company was struck off from the Register of the ROC w.e.f. 31 st July 2007 and it stood dissolved. The effect of this was that the plaintiff company, including its Board of Directors, ceased to exist in law w.e.f. 31.07. 2007 and the principles of escheat and bona vacantia kicked in. The suit property was deemed to vest in the Central Government under law. In Peirce Leslie and Co. Ltd. v. Violet Ouchterlony Wapshare and Ors., MANU/SC/0221/1968 the Hon'ble Supreme Court Observed in paras 13 to 16 the following:
Section 20(3)(iii) of the Government of India Act, 1915, provided that the revenues of India received for His Majesty would include, "all movable or immovable property in British India escheating or lapsing for want of an heir or successor, and all property in British India devolving as bona vacantia for want of a rightful owner."
14. Section 174 of the Government of India Act, 1935, provided:
CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 13 "Subject as hereinafter provided, any property in India accruing to His Majesty by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a Province, vest in His Majesty for the purposes of the Government of that Province, and shall in any other case vest in His Majesty for the purpose of the Government of the Federation . . , . "
15. Article 296 of the Constitution now provides :
" Subject as hereinafter provided, any property in the territory of India which, if this Constitution had not come into operation, would have accrued to His Majesty or, as the case may be, to the Ruler of an Indian State by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a State, vest in such State, and shall, in any other case, vest in the Union ... "
"16. These enactments show that in this country the Government takes by escheat immovable as well as movable property for want of an heir or successor. In this country escheat is not based on artificial Rules of common law and is not an incident of feudal tenure. It is an incident of sovereignty and rests on the principle of ultimate ownership by the State of all property within its jurisdiction. " Private ownership not existing, the State must be owner as ultimate lord"."
(f). This principle has been again reaffirmed by the Hon'ble Supreme Court in Narendra Bahadur Tandon v. Shankar Lal (since deceased) by Lrs, MANU/SC/0376/1980 at para no. 7 that:-
"If the company had a subsisting interest in the lease on the date of dissolution such interest must necessarily vest in the Government by escheat or as bona vacantia. In India the law is well settled that the property of an intestate dying without leaving lawful heirs and the property of a dissolved Corporation passes to the Government by escheat or as bona vacantia."
(g). In Biswanath Khan and Ors. v. Prafulla Kumar Khan, MANU/WB/0052/1988, a company which was a thika tenant was dissolved. The CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 14 issue arose whether the tenancy would be extinguished, and the land would revert back to the landlords or whether the tenancy would vest in the state by way of escheats or Bona Vacantia? The court relied upon the Supreme court judgments in Pierce Leslie (supra) and Narendra Bahadur (supra) and its own judgment In Re: U.N. Mandal's Estate. At Page 3, Para 7: It then held that "the interest of a thika tenant is also a property like any other property and would accrue to the government".
(h). The plaintiff then preferred a petition under section 560 of the Companies Act, 1956 for restoration/reviving of the Company in the High Court of Uttarakhand as late as in year 2011. Vide an order dated 19.03. 2012 the Hon'ble High Court of Uttarakhand restored the plaintiff company on the Register of the ROC w.e.f 19.03.2012 subjecting the defaulting plaintiff company to costs of Rs. 50,000/-. This is admitted by the plaintiff themselves in their evidence. Only after the company was restored to the Register by the ROC wef 19.03.12, the plaintiff preferred the present suit on 29.05.2012 for possession and mesne profits. It is noteworthy that no notice required by law under Section 106 of the Transfer of Property Act was served by the plaintiff on the defendant after its existence was restored by the High Court or even before filing of the present suit. Applying the principles laid down by the Hon'ble Delhi High Court in Jeevan Diesels & Electricals Ltd v. Jasbir Singh Chaddha, MANU/DE/1277/2011) and in Pradeep Khanna v. Renu Khetarpal, MANU/DE/1132/2011, the date of service of summons in the suit on the defendant was to be reckoned as the date of service of notice under Section 106 TP Act. Summons were issued by the registry to the defendant only on 24.08.2012 which will be borne by the record. Even taking the date in the summons to be the date of service upon defendant, the 15 day period in a notice under Section 106 TP Act would be deemed to run from 24.08.2012 and CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 15 finish on 07.09.2012. This date of service of summons in the suit, thus, is very relevant from the standpoint of reckoning unauthorized use and occupation, if any, by the defendant.
(i). As the plaintiff company had been restored to the Register by the ROC, and the defendant did not desire to hold the property any longer as tenant, the preliminary decree dated 11.12.2013 under Order 12 Rule 6 CPC passed by the Court in the present suit for handing over possession to the plaintiff was not challenged in appeal. Possession was, accordingly, handed over by the defendant to the plaintiff on 31.03.2014 in terms of the said Order. The suit remains pending for determination of mesne profits, if any, that the plaintiff may be entitled to. It is noteworthy that during the entire period of possession of the suit property by the defendant up till the date of handing over of possession on 31.03.2014 the enhanced rate of rent of Rs. 49,500/- p.m. (up from 45,000 p.m) was paid by the defendant to the plaintiff and the same is admitted by the plaintiff in their pleadings and evidence and the same is on record. Thus, there are no arrears of rent. A sum of Rs. 1,35,000/- was paid by the defendant to the plaintiff at the time of taking the property on rent. The plaintiff has till date not refunded the security amount to the defendant despite possession being handed over on 31.03. 2014. The retention of security deposit is admitted vide Ex. PW1/4. This amount is required to be adjusted in favour of the defendant and against the plaintiff along with interest @ 18% per annum w.e.f. 31.03.14 (the date of handing over possession).
(j). The issues that survive for consideration by this Court is whether the plaintiff is entitled to any mesne profits over and above the rent of Rs. 49,500/- already paid till handing over of possession on 31.03. 2014, and if so, at what rate and for what period. As regards determination of the length of period to which the CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 16 plaintiff is entitled to mesne profits, if any, the scope and applicability of at least two legal principles assume critical importance in the special facts and circumstances of the case and require consideration by this Court. The same are:
(A) The effect and operation of the notice dated 17.02.2009 issued by the plaintiff terminating tenancy on which the entire suit for the remaining relief of mesne profits is predicated. Admittedly, the alleged notice was issued on 17.02.2009 and the suit was filed only on 29.05.2012 (i.e. after 3 yrs). Whether any cause of action predicated on a notice of termination of tenancy would survive beyond limitation of 3 years? Or was the plaintiff required to serve a fresh notice for it to bear effect and bring a suit within the ambit of limitation thereof? Also, whether a notice simpliciter terminating the lease could be specifically read as a notice under Section 106 TP Act, service of which is mandated by law? (B) Further, even assuming for the sake of argument that the notice dated 17.02.2009 of the plaintiff, terminating tenancy, is to be reckoned as a notice under Section 106 TP Act and even further assuming that the effect of such notice is not time barred as on the date of filing the suit, the important question for determination is whether the said notice issued during the period the plaintiff company was not in existence (Struck off/dissolved under law) (31.07.2007 to 19.03.2012) could have had a binding effect on the defendant to render their possession as on such date unauthorized? If the question is determined in the negative, which is eminently plausible, then only the date 15 days after receipt of summons in the suit by the defendant (24.08.2012) would be held as the determinative date from which the plaintiff could be considered being in unauthorized possession after lapse of 15 days from such service. In such event the period for which mesne profits, if any, have to be ascertained would be 07.09.2012 (15 days from the date of service of summons) to 31.03.2014 (the date of handing over of possession) ie. for 18 months 23 days or rounded to 19 months.
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(k). The plaintiff fails to prove the authority of Manish Bhati to institute the suit. PW1 fails to prove that Manish Bhati and herself were directors of the plaintiff. The suit deserves to be dismissed on this ground alone. The deposition of PW1 is full of contradictions and apparent falsehoods. The testimony of PW1 is both unreliable and she fails to prove the case of the plaintiff in evidence.
(l). PW1 admits that plaintiff's notice dated 01.02.2009 to the defendant was issued when the company stood struck-off and was non-existent. She has admitted failure to issue notice under Section 106 TP Act to the defendant after restoration of the company from its non-existent status.
(m). The suit deserves to be dismissed as a party in breach of contract cannot take advantage of his own wrongs. Clearly the plaintiff was in breach of the contract (the agreement of lease) for denying the defendant its legitimate right to one renewal of lease as per clause No. 1 of the lease deed dated 26.12.2005 (supra). To allow the plaintiff to take advantage of its own wrongs would be to reward the party in breach. Not only this, the plaintiff is guilty of not approaching this Court with clean hands and has suppressed material facts. The plaintiff did not place a copy of this deed on record with its suit with an ulterior motive to mislead this Court. The deed determines the character of occupancy of the premises by the defendant which was of a bonafide tenant. The deed was placed on record by the defendant along with their written statement and the genuineness and veracity of the deed was unequivocally admitted by PW1 in her cross-examination.
(n). The notice dated 17.02.2009 issued by the plaintiff terminating tenancy on which the entire suit is predicated has no effect and operation and is inconsequential as on date of filing the suit. The cause of action predicated on this CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 18 notice commenced on 17.02.2009 and ceased on 16.02.2012 (on completion of 3 years). Admittedly, the alleged notice was issued on 17.02.2009 but the suit was filed only on 29.05.2012 (i.e. after 3 yrs). No cause of action predicated on this notice of termination of tenancy would survive beyond limitation of 3 years and its effect was barred by time as on date of filing the suit. The plaintiff was required to serve a fresh notice for it to bear effect and bring a suit within the ambit of limitation thereof which it has admittedly failed to do. Even otherwise, a notice simpliciter terminating the lease cannot be read as a notice under Section 106 TP Act which is mandated by law.
(o). Even if it is assumed for the sake of argument, without admitting, that the notice dated 17.02.2009 of the plaintiff, terminating tenancy, is to be reckoned as a notice under Section 106 TP Act and even if it is further assumed that the effect of such notice is not time barred as on the date of filing the suit still the said notice issued during the period the plaintiff company was not in existence (Struck off) (31.07.2007 to 19.03.2012) ought to be considered inconsequential and non est. It is pertinent to state that due to various defaults made by the plaintiff including default in filing statutory returns, the name of the Company was struck off from the Register of the ROC w.e.f. 31st July 2007. The effect of this was that the plaintiff company, including its Board of Directors, ceased to exist in law w.e.f. 31.07.2007 and the principles of escheat and bona vacantia kicked in. The suit property was deemed to vest in the Central Government under law.
(p). The notice dated 17.02.2009 shall have no binding effect on the defendant to render their possession as on such date unauthorized as the said notice is alleged by the plaintiff to have been sent when the company was admittedly non-existent in law. It is trite to state that a non-existent company, with a non-existent Board of CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 19 Directors cannot issue any notice much less a binding notice in law. This aspect of the matter ought to go against the plaintiff and the inescapable conclusion to be drawn is that no notice of termination of tenancy came to be served upon the defendant. The aforesaid being the position on facts, the date of receipt of summons in the suit by the defendant (24.08.2012) can only be held as the determinative date from which the plaintiff could be considered being in unauthorized possession after lapse of 15 days from such service as held by the Hon'ble Delhi High Court in the cases of Jeevan Diesels (supra) and Pradeep Khanna (supra) (The date of service of summons in the suit on the defendant was to be reckoned as the date of service of notice under section 106 of the TP Act). In such event the period for which mesne profits, if any, have to be ascertained would be 07.09.2012 (15 days from the date of service of summons) to 31.03.2014 (the date of handing over of possession) i.e. for 18 months 23 days or rounded to 19 months and not 59 months as wrongly claimed by the plaintiff.
(q). The law in respect of quantum of mesne profits is well settled. As far as may be practicable the past contract of lease stating enhancement of rent can be applied to the relevant period to arrive at the quantum of mesne profits. The lease Deed Exhibit D-1 clearly provides that the rent will increase by 10% every two years. If the rental of Rs. 49,500/- being paid by the defendant is extrapolated then the rental for the period 07.09. 2012 to 31.03.2014 will be Rs. 59,895/- or rounded off to Rs. 60,000/-. The additional mesne profits for the period of 19 months shall be Rs. 60,000 (enhanced mesne profits) less Rs. 49,500/- rent already paid i.e. 19 X Rs.10,500= Rs. 1,99,500/-. This amount less security deposit of Rs. 1,35,000/- retained by the plaintiff leaves a balance mesne profits of Rs. 64,500/- only payable to the plaintiff along with interest w.e.f. 01.04.2014 till payment. In the humble submission of the defendant the plaintiff is not entitled to any further sum CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 20 by way of balance mesne profits apart from Rs. 64,500/- as per the law laid down by the Hon'ble Delhi High Court to determine quantum applying past contract and practice between the parties for enhancement of rent. The rate of actual average increase of rent of the property in the past is a relevant yardstick and criterion for determination of mesne profits. CMC Ltd v. Balwant Singh Dharmarait & Ors., MANU/DE/0034/2010 .
(r). However, in the event, this Court is not applying the principle as set out in earliar para and instead would determine quantum as per the market rent, the Court would notice that the plaintiff has sought to justify its claim for mesne profits with a misconceived reliance upon Exhibit PW1/5, Exhibit PW1/6 and Exhibit PW1/7. It is alleged by the plaintiff that these exhibits disclose the rental of similar properties in the area to be Rs. 1.3 lac p.m., Rs. 1.2 lac p.m and Rs. 1.2 lac p.m respectively. However, these Exhibits are unworthy of being relied upon for the following reasons: (i) As regards Ex PW1/5 it may kindly be noted that the said property is much superior than the suit property falling in "Category A" (7th last line of 1st page clearly states so). The property had "fittings and fixtures" (3rd last line of page 1). The suit property belongs to Category B and there were no fittings and fixtures. (ii) As regards Ex PW1/6, three aspects make it incapable of being accepted as useful evidence. Firstly, the lease itself is executed as late as in October 2013, and thus cannot be a reference point for determination of rent for the period in reckoning. Secondly, this property too has "fittings and fixtures" (para C of the Recitals, 10th line of the 2nd page) which the suit property did not have. Thirdly, the lessor (owner) Mr. Harish Bhati is none other than the husband of PW1, Mrs Veena Bhati. It cannot be ruled out that this deed was executed on 17.10.2013 during the pendency of the suit at the behest of the plaintiff in collusion with the alleged lessee to manufacture evidence for the present suit. Be that as it CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 21 may, the rental of Rs. 1.2 lac for a "B.Cat" apartment is far removed from reality and also Ex. PW1/6 does not cover the period in reckoning. The document does not inspire confidence and is unworthy of being relied upon. (iii) As regards Ex PW1/7, again the very same three aspects make it incapable of being taken as useful evidence. Firstly, the lease itself is executed as late as in May 2014, and thus cannot be a reference point for determination of rent for a period much prior to it. Secondly, this property too has "fittings and fixtures" (para of the Recitals, last line of page 2, and para 1.1 of covenants at page 3 ) which the suit property did not have. Thirdly, the lessor (owner) Mrs. Venna Bhati is none other than PW1 herself. It cannot be ruled out that this deed was executed on 07.05.2014 (much after the defendant vacated the suit property on 31.04.2014) at the behest of the plaintiff in collusion with the alleged lessee to manufacture evidence for the present suit. Be that as it may, the rental of Rs. 1.2 lac for this "B.Cat" apartment is again far removed from reality and Ex PW1/7 is of a date much subsequent to the period in reckoning. The document does not inspire confidence and is unworthy of being relied upon.
(s). On the quantum of rental in the area such as the suit property the defendant has relied upon and proven 5 lease deeds from Exhibit DW1/2 to DW1/6 disclosing monthly rentals of Rs. 78,000/-, Rs. 70,000/-, Rs. 85,000/-, Rs. 80,000/- and Rs. 82,500/- respectively. Pertinently, the properties covered in these lease deeds are similar to the suit property in terms of location, built up area, and amenities. It can be seen that the average rental in the area such as the suit property was around Rs. 75,000/- per month.
(t). Without prejudice to the contentions of the defendant against the maintainability of the claim of the plaintiff, at best the plaintiff even as per market CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 22 levels of rent is, therefore, entitled to only Rs. 25,500 per month (Rs. 75,000 being mesne profits- Rs. 49,500 being rent already paid) as additional mesne profits till handing over of possession and for a period only from 07.09.2012 to 31.03.2014 i.e. for 18 months and 13 days , rounded off to 19 months. From this figure of Rs. 4,84,500/- (Rs. 25,500 x 19 months) a sum of Rs. 1,35,000/- being the security amount retained by the plaintiff (and admitted in document PW1/4 dated 29.03.2014) has to be deducted. As such, without prejudice to the other contentions of the defendant, it is the humble submission of the defendant that the plaintiff at best, even at market levels of rentals, shall be entitled to a decree of not more than Rs. 3,49,500/- (Rs. 4,84,500- Rs. 1,35,000/-).
ANALYSIS AND CONCLUSION
7. ISSUE No.1: Is the plaintiff entitled to recover damages for use and occupation/mesne profits from the defendant in the sum of Rs.38,19,000/-?
And ISSUE No.2: Is the plaintiff entitled to a decree for future mesne profits/dam- ages for use and occupation by the defendant with effect from 8 th May 2012 till the recovery of possession of the suit premises @ Rs.1.5 lakhs per month or such high- er rate as the Court may deem fit?
Mr. Sharman Sinha, learned counsel appearing for the defendant contended that due to various defaults made by the plaintiff the name of the plaintiff company was struck off from the Register of the ROC w.e.f. 31 st July 2007 and it stood dissolved. The effect of this was that the plaintiff company, including its Board of directors, ceased to exist in law w.e.f. 31.07. 2007 and the principles of escheat CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 23 and bona vacantia kicked in and the suit property was deemed to vest in the Central Government under law. Judgment passed in cases of Peirce Leslie and Co. Ltd. (supra); Narendra Bahadur Tandon (supra); Biswanath Khan (supra) and In Re: U.N. Mandal's Estate (supra) have been relied upon.
8. It is pertinent to mention here that during disposal of application under Order XII Rule 6 of the CPC the learned counsel for the defendant took this defence of striking off the name of plaintiff company from the register of companies by the ROC and non-existent of the plaintiff company on the date of issuance of notice of termination. It was also submitted by learned counsel for the defendant that it would be a moot point whether the subsequent resumption of the company by the order of the High Court can relate back to the date on which notice was issued and on which date the plaintiff stood dissolved; that on the date on which notice of termination was issued, the plaintiff company was not in existence. But, Hon'ble Delhi High Court (at that point of time this case was pending before Hon'ble Delhi High Court) vide its order dated 11.12.2013, rejected that argument holding that the revival of the company would relate back to the date on which it was struck-off by the ROC i.e. 31.07.2007, and allowed application under Order XII Rule 6 of the CPC by directing the defendant to handover the vacant and peaceful possession of the suit property under its occupation to the plaintiff. That order had not been challenged by the defendant and so, it has attained finality. And therefore, this issue cannot be raised again in the present case, consequently, the principles of escheat and bona vacantia are not required to be considered. Further legal notice dated 17.02.2009 for termination the tenancy of the defendant is admitted. I am not agree with the submissions of Mr. Sinha that the said notice cannot be termed to be a valid notice of termination of tenancy because at the time of its issuance the plaintiff company was not in existence. I am saying so because of observation of CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 24 Hon'ble Delhi High Court in its order dated 11.12.2013 that the revival of the company would relate back to the date on which it was struck-off by the ROC i.e. 31.07.2007.
9. Mr. Sharman Sinha has also argued on the points of directorship of PW1 of the plaintiff company; plaint signed, verified and instituted by one Manish Bhati; the signatory of Board Resolution dated 10.05.2012 (Ex. PW1/1) shown as some "CHAIRMAN", whereas therein no Chairman as came in cross-examination PW1; A Board Resolution not proven is akin to a Board Resolution not filed and would go to the very root of the matter in view of Nibro Ltd. v. National Insurance Co. Ltd., MANU/DE/0138/1991. But, in this regard it is sufficient to say that no issue regarding suit not signed, verified and instituted by authorized person etc. have been framed in this case. Further, PW-1 in her affidavit of examination-in-chief deposed about board resolution (Ex. PW1/1) authorizing Manish Bhati, one of directors of the plaintiff company to institute the present suit. PW-1 in her cross- examination deposed also that there is a designation as Chairman. She deposed herself to be chairman of the plaintiff company.
10. Now, It would be appropriate to refer to Section 2(12) of the CPC, which defines mesne profits and also to Order XX Rule 12 CPC, which prescribes the procedure to be followed by the Court while dealing with a claim for grant of mesne profits. These aforesaid provisions read as under:-
"Section 2(12) "mesne profits" of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession;"
"Order XX Rule 12:-Decree for possession and mesne profits.- (1) Where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree-
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(a) for the possession of the property;
(b) for the rents which have accrued on the property during the period prior to the institution of the suit or directing an inquiry as to such rent;
(ba) for the mesne profits or directing an inquiry as to mesne profits;
(c) directing an inquiry as to rent or mesne profits from the institution of the suit until
--
(i) the delivery of possession to the decree-holder,
(ii) the relinquishment of possession by the judgment-debtor with notice to the decree-
holder through the Court, or
(iii) the expiration of three years from the date of the decree, whichever event first occurs.
(2) Where an inquiry is directed under clause (b) or clause (c), a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such inquiry."
11. Mesne profits, which a landlord is entitled to receive from a tenant who is continuously in the occupation of the lease property despite the termination of the lease, has been laid down to mean the rate of rent which would otherwise, accrue on a suit premises during the period of its illegal occupation by a tenant. However, the burden which the Courts are often tasked with is to determine the appropriate amount payable to the landlord towards such mesne profits. This process of determination of mesne profits begins with the landlord discharging the onus placed upon him to prove his claim for mesne profits, in accordance with the law. Thereafter, it is for the Court to ascertain the appropriate mesne profits to be awarded to the claimant by adhering to the parameters as set out in Order XX Rule 12 CPC which prescribes that while passing the decree for possession, the Court may either straightaway pass a decree for mesne profits or direct that an inquiry be conducted for assessing the rate of mesne profits payable. If the Court finds that it is sufficient and authentic evidence available on record for determination of the CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 26 landlord's claim for mesne profits, the Court may, in its discretion, award the same by relying on such evidence. In the alternative, in situations when the Court finds that the evidence brought on record is not sufficient for such determination, The court may direct that an inquiry be conducted thereto, in accordance with the provisions of the CPC and/or take judicial notice under Section 114 and 57 of the Evidence Act, 1872.
12. The calculation of mesne profits always involves some guesswork and the Courts in several cases, taken judicial notice of the prevalent market rents of different areas within the city while awarding mesne profits. Rents may vary based on location of properties, nature of construction, a period of construction, purpose/ user for which the premises are let, variation between demand for tenanted premises and availability of premises and even factors relating to the position of the economy. In this regard, reference may be made to judgment of Suman Verma & Ors v. Sushil Mohini Gupta & Ors., 2014 (10) DRJ 595 wherein it was held as under:-
"(a) though undoubtedly the Division Bench of this Court in National Radio & Electronic Co. Ltd. supra has held that judicial notice, only of a general increase in rent in the city of Delhi and not of the rates of rent, in the absence of proof thereof can be taken but it cannot be lost sight of that the Courts are for doing justice between the parties and not for, on hyper technicalities, allowing the parties to suffer injustice.
b) the property of the respondents/plaintiffs which the appellants/defendants are admittedly in unauthorized occupation of, is situated in one of the poshest colonies of the city of Delhi, properties wherein fetch high rentals and which only the elite, affluent, expats and foreigners are able to afford.
(c) the said property is a independent bungalow constructed over 400 sq. yd. of land and comprising of two and a half floors.
(d) the calculation of mesne profits always involves some amount of guess work, as held by this court in International Pvt. Ltd. Vs. Saraswati Industrial Sundictes Ltd. (1992) 2 RCR 6, M.R. Sahni Vs. Doris Randhawa and reiterated in Consep India Pvt.
Ltd. supra and applicability of prevalent rents in the city and of which the Judges CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 27 manning the Courts and who are born and brought up in the same city, are generally aware of.
e) The Division Benches of this court in Vinod Khanna Vs. Bakshi Sachdev AIR 1996 Delhi 32 and S.Kumar Vs. G.K. Kathpalia 1991 (1) RCR 431, taking judicial notice, refused to interfere with the rate of mesne profits even where the landlord had not led any documentary evidence. Notice of such increase has also been taken by the Supreme Court in Saradamani Kandappan Vs. S. Rajalakshmi (2011) 12 SCC 18."
13. In the case of M. C. Agrawal v. Sahara India and Ors., 183 (2011) DLT 105, Hon'ble High Court of Delhi held that in absence of any evidence led by the landlord in respect of rent prevalent in the area even then judicial notice of increase of rent in urban areas can be taken by applying Sections 114 and 57 of the Evidence Act, 1872. In the aforesaid case an increase of 15% every year was awarded to the landlord for illegal occupation. The relevant portion of the aforesaid judgment reads as:
"8. What is now therefore to be determined is that what should be the mesne profits which should be awarded to the landlord in the absence of any evidence having been led by the landlord with respect to the rents prevalent in the area If there is no registered lease deed for a fixed period of three years, then, the tenant continues to stay in the premises, not because of any relationship of landlord and tenant pursuant to a lease of three years but only as an unauthorized occupant after the expiry of lease period by efflux of time. I therefore do not agree with the argument of the learned counsel for the tenants and I hold that since in this case tenancy expired by efflux of time on 30.11.2000 and the suit was filed on 3.4.2001, clearly, the tenant would become liable to pay mesne profits from 1.12.2000. Though it has not been argued on behalf of the landlord, I would like to give benefit to landlord of various precedents of this Court and the Supreme Court which take judicial notice of increase of rent in the urban areas by applying the provisions of Sections 114 and 57 of the Evidence Act, 1872. In my opinion, considering that the premises are situated in one of the most centrally located commercial localities of Delhi, situated in Connaught Place, an increase of 15% every year should be awarded (and nothing has otherwise been shown to me for the increase to be lesser) during the period for which the tenants have over stayed in the tenanted premises. Putting it differently, for the first year of illegal occupation, the tenant will pay 15% increased rent over the contractual rent. For the second year of illegal occupation, 15% increase will be over the original contractual rent plus the additional 15%. It will be accordingly for all subsequent years of the illegal occupation till the premises were vacated on CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 28 3.4.2005. I rely upon and refer to a Division Bench judgment of this Court in the case of S. Kumar v. G.R. Kathpalia 1999 RLR 114, and in which case the Division Bench has given benefit to the landlord and has taken judicial notice of increase in rent, and has accordingly allowed mesne profits at a rate higher than the contractual rate of rent."
14. In the case of National Radio and Electronic Co. v. Motion Pictures Associations, 122 (2005) DLT 629(DB) the Division Bench of Hon'ble Delhi High Court observed as under:-
"31. We find that this Court has in several cases taken judicial notice of the factum of increase of rent and made awards of mesne profits and damages. Noteworthy in this behalf is a judicial pronouncement of the Division Bench reported at (supra) entitled Vinod Kumar v. Bakshi Sachdev.........
21........It is true that no substantial evidence has been led by the plaintiff in respect of the increase of rent in the properties like that of the suit property. However, it is a well known fact that the amount of rent for various properties in and around Delhi has been rising staggeringly and we cannot see why such judicial notice could not be taken of the fact about such increase of rents in the premises in and around Delhi which is a city of growing importance being the capital of the country which is a matter of public history. At this stage we may appropriately refer to the Court making judicial notice of the increase of price of land rapidly in the urban areas in connection with the land acquisition matters. Even the Apex Court has taken judicial notice of the fact of universal escalation of rent and even raised rent of disputed premises by taking such judicial notice in case of D.C. Oswal v. V.K. Subbiah.
22. In that view of the matter we have no hesitation in our mind in holding that the Trial Court did not commit any illegality in taking judicial notice of the fact of increase of rents and determining the compensation in respect of the suit premises........"
15. The question as to whether the plaintiff can be awarded future mesne profits at a rate higher than what has been claimed in the plaint has been dealt with in various decisions. In the case of Santosh Arora v. M. L. Arora, 2011 (2014) DLT 312 where the Division Bench of the Hon'ble Delhi High Court held that the CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 29 rate of mesne profits, is to be determined by evidence and is not a matter of contract. The relevant portion of the judgment reads as under:-
"25. The Supreme Court in Gopalakrishna Pillai Vs. Meenakshi Ayal AIR 1967 SC 155 has held:-
"With regard to future mesne profits, the plaintiff has no cause of action on the date of the institution of the suit, and it is not possible for him to plead this cause of action or to value it or to pay court-fees thereon at the time of the institution of the suit.."
It is for this reason only that payment of Court Fees of future mesne profits decreed is a condition to the execution thereof and is not to be paid at the time of institution of the suit. At the time of institution of the suit and which often remain pending for long, it is not possible for the plaintiff to state as to what benefits the defendant in wrongful possession of the property would receive from time to time.
27. In our opinion the plaintiff in such a situation would be entitled to such higher rate since he was not obliged to make a claim for future mesne profits, not obliged to pay Court Fees thereon and could not have in any case known to future mesne profits at what rate he would be entitled to as observed by the Supreme Court in Gopalakrishna Pillai supra. Once it is held to be the duty of the Court under Order 20 Rule 12 to award future mesne profits even without a specific prayer in this regard, the specific prayer even if made by the plaintiff cannot limit the entitlement of the plaintiff to future mesne profits.
29. The Division Bench of the Calcutta High Court in Gauri Prosad Koondoo Vs. Reily ILR 9 Cal 112, High Court of Andhra Pradesh in Magunta Kota Reddy Vs. Pothula Chendrasekhara Reddy AIR 1963 AP 42 and the High Court of the Rajasthan in Prithvi Singh Vs. Pahap Singh MANU/RH/0369/2006 have also held that a plaintiff is not estopped from claiming a larger sum as mesne profits than what was claimed in the plaint."
16. Now, I have to ascertain the description etc. of the suit property. The plaintiff in its evidence (PW-1) described the suit property as premises admeasuring 200 sq. yards on plot area situated at B-333, Asiad Village Complex, Chandigram Block, New Delhi 110049 comprising of ground floor, first floor and a barsati. The suit property is further described to be an independent unit which comprises four bedrooms, three bathrooms, marble flooring, park facing, parking space in the front area, open space at the rear, fully fitted kitchen and bathroom.
CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 30 The covered area is deposed to be approximately 2500 sq. feet. PW-1 was not cross examined by the defendant on the condition and description of the suit property. The defendant's witness (DW-1) in her cross-examination has not denied that the suit property is an independent villa with two gardens, a gate and parking. She described the suit property as "There were three bed rooms, drawing room, kitchen, small study room, three wash rooms, one on ground floor and two on first floor and a servant quarter. There is only a small open space at the back of the suit property and there is also a small park in the front of the property. Vol. however, the small park in front of property is not a property of M/s. Tee Em Builders Pvt, Ltd and it is a govt. property. The said park is a public park surrounded by other houses. It is correct that there is a open space between the gate of the property and the place where the property starts. Vol. it is a small passage leading to the front door of the house/suit property. It is correct that there is space to park the car outside the gate of the suit property".
17. Thus, it can be said that there is no dispute on the size/location/description of the suit property, having the characteristics: Independent duplex unit which comprises of four bedrooms, three bathrooms, marble flooring on a plot of 200 square yards; park facing; parking space in the front area, open space at the rear; fully fitted kitchen and bathroom; covered area of the suit property to be approximately 2500 sq. feet.
18. Both the parties got exhibited lease-deeds in support of their respective case to show the rate of rent of the properties situated adjacent/near to the suit property at the relevant point of time, three lease-deeds by the plaintiff and five lease-deeds by the defendant.
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19. The first lease-deed dated 26.09.2011 (Ex.PW1/5) produced by the plaintiff is of property bearing no. 285, Block No.C, Asiad Village Complex, New Delhi. This is a registered lease-deed. This property is built on a plot ad-measuring 200 square yards (1800 square feet). It comprises of four bedrooms, one on the ground floor and three on the first floor, with three bathrooms, wooden flooring, park facing, parking space in the front area, open space at the rear, fully fitted kitchen and bathrooms. The rate of rent for a period of five years is rupees 1,30,000/- per month for the first two years of the lease, which is to be increased at the rate of 10% to rupees 1,43,000/- per month for the next three years. This is duplex property. The said lease-deed as deposed by PW-1, is with respect to a property in the exact same location/area, as that of the suit property.
20. The another/second lease-deed dated 17.10.2013 (Ex.PW1/6) produced by the plaintiff is of duplex property bearing No. 335, Asiad Village Complex, Chandgiram Block, New Delhi. This property is built on a plot ad-measuring 200 square yards comprising of four bedrooms, three on the first floor and one on the top floor, three bathrooms, marble flooring, park facing, parking space in the front area, open space at the rear, fully fitted kitchen and bathrooms. The rent for a period of two years is rupees 1,20,000/- per month for the first year of the lease which is to be increased at the rate of 10% to rupees 1,32,000/- per month for the next year. This lease-deed as deposed by PW-1, is with respect to a property in the exact same location/area, as that of the suit property.
21. The another/third lease-deed dated 09.05.2014 (Ex. PW1/7) produced by the plaintiff is of duplex property bearing No. 332, Chandgiram Block, Asiad Village Complex, New Delhi. The rent of this property is rupees 1,20,000/- per month for the first year of the lease which is to be increased at the rate of 10% every year after the end of the first year, and subsequent to the lock in period.
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22. PW-1 has not been cross-examined by the defendant on the description, rent or any particulars of the above said three properties/lease deeds (Ex. PW1/5-Ex. PW1/7). Even no suggestions have been put to the effect that these properties are not having such rooms etc. as has been deposed by PW-1. There is also no cross- examination of PW-3 (Record Keeper) who brought the lease-deed (Ex. PW1/5) and of PW-2 (Record Keeper) who brought the two lease-deeds (Ex. PW1/6 and Ex. PW1/7).
23. The defendant has also produced the lease-deed dated 19.05.2010 (Ex. DW1/2) in respect of property bearing no. R-3/564, Sachin Nag Block, Asiad Village, New Delhi. The rate of rent of this property is rupees 78,000/- per month. From the cross-examination of DW-1, it is clear that this is not an independent bungalow/villa. It is a three bed rooms flat not a duplex. This is not a park facing property because DW-1 in his cross-examination did not recall whether this property is a park facing property. It also appears from Ex. DW1/P1 that this property has no independent car garage. The location of this property is also not similar/comparable to the suit property. In the cross-examination, DW-1 could not tell as to whether property has marble flooring and has old fittings in the bathrooms. DW-1 himself had not seen the said property and he has described the property upon the information given by the servants of the said property.
24. The another/second lease-deed dated 07.03.2011 (Ex. DW1/3) produced by the defendant is in respect of property bearing no. 369, K. P. Thacker Block, Asiad Village, New Delhi. The rate of rent of this property is rupees 70,000/- per month. This is a flat as described in lease-deed itself. Further, from the cross-examination of DW-1 also it can be said that this lease-deed relates to the flat on the first floor because when a question after confronting with a photograph (Mark DW1/P2) was put to DW-1 in his cross-examination regarding the said property situated on the CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 33 first floor, he could not give the answer. It is only having two bedrooms and is half the size of the suit property because when question was put to DW-1 in his cross- examination about the property consisting of only two bedrooms flats with a plinth area of 115 square meters then he answered that he has seen the property from outside only. This property is not described by DW-1 as property which is a park facing property and has servant quarter and marble flooring. This property was leased out second time on the rental of rupees 80,000/-per month in the year 2013 as is evident from the fourth lease-deed (Ex. DW-1/5).
25. The third lease-deed (Ex.DW1/4) dated 21.01.2013 produced by the defendant is in respect of property bearing no. 292, Asiad Village, New Delhi. The rate of rent is rupees 85,000/- per month. This property is described in lease-deed itself as a bungalow having three bedrooms, one drawing/dining room, two attach bathrooms and one kitchen with fittings and fixtures and balcony space at the front and back portion. This property is not described in lease-deed and/or in evidence of DW-1 as property which is a park facing property and has servant quarter and marble flooring. This property is also not described by DW-1 as property having independent entrance, gate or car parking. When a question was put to DW-1 regarding this property not having a parking road in front of it then he replied that he does not recollect. Similarly when another question was put to him regarding this property having no gate and the access directly through the door then he replied also that he does not recollect.
26. The fifth lease-deed dated 05.11.2013 (Ex.DW1/6) produced by the defendant is in respect of property bearing No. 576, First Floor, Asiad Village, New Delhi. The rate of rent is rupees 82,500/- per month. This property is a flat situated on first floor as mentioned in lease-deed itself. This property is not described in lease-deed and/or in evidence of DW-1 as a property which is a park CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 34 facing property and has servant quarter and marble flooring. This property is also not described as property having independent entrance, gate or car parking, marble flooring, park facing, parking space in the front area and open space at the rear and 2500 sq. feet covered area.
27. The Asiad Village has several types of properties including independent villas with gardens, independent villas without gardens, independent villas with parking and gates, flats, which are either on ground floor, first floor or second floor as has been admitted by DW-1 in his cross-examination. DW-1 has not denied that the suit property is an independent villa with two gardens, a gate and parking.
28. From the comparision of said three lease-deeds produced by the plaintiff and five lease-deeds produced by the defendant, I find that the the properties, lease- deeds of which produced by the defendant cannot be considered to be similar to the suit property but the properties covered in lease-deeds produced by the plaintiff appears to be similar to the suit property in terms of location, built up area, and amenities etc.. But, it is also correct that PW-1 is herself lessor in lease-deed (Ex. PW-1/7) and her husband is lessor in lease-deed (Ex. PW-1/6); lease-deed (Ex.PW- 1/5) is pertaining to year 2011, lease-deed (Ex.PW-1/6) is pertaining to year 2013 and lease-deed (Ex.PW-1/7) is pertaining to year 2014. As per lease deeds filed by the defendant rent is between rupees 70,000/-to rupees 85,000/- during the years 2010-2013. But, as per lease deeds filed by the plaintiff rent is between rupees 1,20,000/-to rupees 1,30,000/- during the years 2011-2014. It is also relevant to note that rent of the suit property in the year 2009 was admittedly rupees 49,500/- per month.
29. The suit property which the defendantd is in unauthorized occupation of since 08.03.2009, is situated in one of the poshest colonies of the city of Delhi, CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 35 properties wherein fetch high rentals and which only the elite, affluent and expats are able to afford. The said property is a independent villa constructed over 200 sq. yards of land and comprising of ground floor, first floor and a barsati. The covered area of the suit property is approximately 2500 sq. feet. I hold that since in this case tenancy terminated by legal notice dated 17.02.2009 (Ex. P1) and the suit was filed on 29.05.2012, clearly, the tenant would become liable to pay mesne profits from 08.03.2009. It is also relevant to note that there was a lease agreement dated 26.12.2005 executed between the parties but same was not on requisite stamp paper and was not registered and therefore, a month to month tenancy was created. Keeping in view the evidence and the fact that the calculation of mesne profits always involves some guesswork, I am of the view that plaintiff is entitled to recover damages for use and occupation/mesne profits from the defendant in respect of the suit property at the rate of rupees 1,00,000/- per month with effect from 08.05.2009 to handing over the possession on 31.03.2014.
30. Further, in my opinion, considering that the suit property is situated in one of the poshest colonies of the city of Delhi, that is in Asiad Village, New Delhi an increase of 10% every year should be awarded during the period for which the defendant has over stayed in the suit property. Putting it differently, the damages/mesne profits for the first year will be rupees 1,00,000/-; for the second year of illegal occupation, the defendant will pay 10% increased mesne profits over the rupees 1,00,000/- that will be rupees 1,10,000/-; For the third year of illegal occupation, 10% increase will be over the second year damages (rupees 1,10,000/-). It will be accordingly for all subsequent years of the illegal occupation till the suit property was vacated on 31.03.2014.
31. It is admitted that the defendant was making payment at the rate of rupees 49,500/- per month to the plaintiff from 01.03.2009 up to the date of handing over CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 36 possession on 31.03.2014. Hence, this whole amount already deposited by the defendant in the bank account of the plaintiff will be adjusted.
32. It is also admitted by the PW-1 that the defendant deposited a sum of rupees 1,35,000/- to the plaintiff towards security deposit of the suit property. The plaintiff has failed to prove that same was refunded to the defendant despite possession being handed over on 31.03. 2014. This amount is also to be adjusted in favour of the defendant and against the plaintiff along with interest at the rate of six per cent per annum with effect from 31.03.14 (the date of handing over possession).
Accordingly, these issues are decided in favour of the plaintiff and against the defendant.
33. Issue No. 3:- Is the plaintiff entitled to simple interest @ 18% per annum on the sums that may be awarded to it for damages and occupation/mesne profits?
It is settled proposition of law that interest forms an integral part of the mesne profits and, therefore, once the Court awards mesne profits, the interest accruing thereon has to be allowed in the computation of the mesne profits itself. The mesne profits which in fact ought to have been paid years ago, should bear interest.
34. In case of Consep India Pvt Ltd v. CEPCO Industries Pvt Ltd, (2010) ILR 3 Del 766 the Hon'ble Delhi High Court, after examining the decision of the Hon'ble Supreme Court in State Bank of Bikaner and Jaipur v. I.S. Ratta and Ors., 120 (2005) DLT 407 observed that interest is an integral part of the mesne profits and, therefore, the same has to be allowed in the computation of mesne profits itself.
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35. Keeping in view the facts and circumstances of the case, I am of the view that the plaintiff is entitled to simple interest at the rate of nine per cent per annum with effect from 08.05.2009 to date of decree and future interest at the rate of six per cent per annum from the date of decree to the payment on the sums that are awarded for damages and occupation/mesne profits.
36. Issue No. 4: Relief In view of my findings on Issue nos 1 to 3, the suit of the plaintiff is decreed with costs in favour of the plaintiff and against the defendant for mesne profits/damages for use and occupation of the suit property at the rate of rupees 1,00,000/- per month with effect from 08.05.2009 to handing over the possession on 31.03.2014 along with simple interest at the rate of nine per cent per annum with effect from 08.05.2009 to date of decree and future interest at the rate of six per cent per annum from the date of decree to the payment on the sums that are awarded.
There will be increase of 10% every year during the period for which the defendant has over stayed in the suit property. Putting it differently, the damages/mesne profits for the first year will be rupees 1,00,000/-; for the second year of illegal occupation, the defendant will pay 10% increased mesne profits over the rupees 1,00,000/- that will be rupees 1,10,000/-; For the third year of illegal occupation, 10% increase will be over the second year damages (rupees 1,10,000/-). It will be accordingly for all subsequent years of the illegal occupation till the suit property was vacated on 31.03.2014.
CS DJ/9153/2016 M/s. TEE-EM (P) Ltd. v. M/s. Tata Consultancy Services Ltd. Page 38 The whole amount already deposited by the defendant in the bank account of the plaintiff at the rate of rupees 49,500/- per month from 01.03.2009 up to the date of handing over possession on 31.03.2014 will be adjusted. Similarly, security deposit of rupees 1,35,000/- will also be adjusted in favour of the defendant and against the plaintiff along with interest at the rate of six per cent per annum with effect from 31.03.14.
Pronounced via video conferencing. SANJEEV Digitally signed by
SANJEEV KUMAR
KUMAR Date: 2021.10.08
12:49:10 +0530
Dated: 08.10.2021
(Sanjeev Kumar-II)
Additional District Judge-4,
South District, Saket Courts, New Delhi.
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