Delhi District Court
Gopal Das Estates And Housing Pvt. Ltd vs Ing Vysya Life Ins. Co. Ltd on 30 April, 2024
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS No.59169/16
Date of institution: 21.05.2007
Date of arguments: 14.03.2024
Date of judgment: 30.04.2024
Gopal Das Estates and Housing Pvt. Ltd.
Gopaldas Bhawan
28, Barakhamba Road
New Delhi-110001 ..............Plaintiff
Vs.
ING Vysya Life Insurance Co. (P) Ltd.
ING Vysya House
5th floor, 22, Mahatama Gandhi Road
Banglore-560 001
also at
10th floor, Dr. Gopaldas Bhawan
28, Barakhamba Road,
New Delhi-110001 ...............Defendant
JUDGMENT
1. The plaintiff has filed the present suit against the defendant for possession, damages/mesne profits and interest.
2. The suit was initially filed before the Hon'ble High Court of Delhi as CS (OS) No. 913/2007, and, subsequently, vide order dated 17.02.2016 of the Hon'ble High Court, the suit was transferred to the District Court in light of amendment in the pecuniary jurisdiction.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.1 Of 71 PLAINT
3. The case of the plaintiff, as pleaded in the plaint, may be summarised, as follows:
3.1. The plaintiff company is the owner and landlord of premises bearing space no. 5, 10th Floor, Dr. Gopal Das Bhawan, 28, Barakhamba Road, New Delhi 110001 measuring about 12,500 sq. ft. of super area, as shown in red in the site plan annexed to the plaint together with space for parking of 20 cars in the basement of the building (hereinafter referred to as the 'suit property').
3.2. The suit property was let out by the plaintiff to the defendant company vide lease deed dated 31.08.2004 at rent of Rs. 5,60,340/- per month.
3.3. The lease was for a period of 3 years commencing from 19.01.2004 and expiring on 18.01.2007 as per Clause 3(1) of the lease deed.
3.4. It was a term of the lease that in case the defendant wanted to renew the lease, it had to serve a notice to the plaintiff, 6 months prior to the date of expiry of the lease.
3.5. No notice for renewal of the lease was served by the defendant in terms of the lease.
3.6. There was no lease between the parties after expiry of the lease on 18.01.2007.CS No.59169 of 2016
GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.2 Of 71 3.7. The defendant failed to hand over the vacant and peaceful possession of the suit property to the plaintiff upon expiry of the lease by efflux of time on 18.01.2007.
3.8. A legal notice dated 02.02.2007 was sent by the plaintiff through its advocate by registered post to the defendant calling upon to hand over the vacant physical possession of the suit property, and the notice was duly served upon the defendant.
3.9. However, despite service of the notice, the defendant failed to hand over vacant physical possession.
3.10. The occupation by the defendant of the suit premises after expiry of the lease was unauthorised, illegal and unlawful. Thus, the defendant was liable to pay damages/mesne profits to the plaintiff at the prevailing market rate. The suit property is situated at Connaught Place which is a premier business centre of Delhi. The market rate of rent of similar premises in the vicinity is at least Rs. 200/- per sq. ft. super area per month and the defendant was liable to pay the same for occupation of the suit property beyond 18.01.2007.
3.11. The plaintiff had been informed that the defendant had filed a suit bearing no. 284/2007 against the plaintiff before the Hon'ble High Court of Delhi and CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.3 Of 71 an interim order had been granted to the defendant and it was directed that the rent of the suit premises be accepted by the plaintiff without prejudice to its rights and contentions. However, no summons in the suit had been received by the plaintiff as on the date of the filing of the present suit.
3.12. On this basis, the plaintiff has filed the present suit for possession of the suit property, damages/mesne profits and interest.
WRITTEN STATEMENT
4. The defendant filed written statement in its defence. The case of the defendant, as pleaded in the written statement, may be summarised, as follows.
4.1. The tenth floor of the building known as "Gopal Das Bhawan" situated at property bearing no. 28, Barakhamba Road comprises of Space No. 1 to 5. There were three owners of the said spaces, namely, Mr. Dalmeet Saini, who was owner of Space No. 1, Mr. Gurvinder S. Saini, who was owner of Space No. 2, 3 and 4, and the plaintiff herein, who was owner of Space No. 5.
4.2. The defendant required an office space for its regional office admeasuring 15,000 sq. ft. approximately, therefore, at the time of discussion for the lease, the defendant had informed the plaintiff and CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.4 Of 71 the other two owners of the aforesaid spaces that it would execute identical individual lease deeds subject to the condition that the lease deeds would be executed in respect of separate portions namely Space No. 1 to 5 and all the 5 spaces would be treated as a composite unit and the respective lease deeds would run coextensive and co-terminus with each other. The precondition was understood and agreed by the individual owners including the plaintiff.
4.3. Accordingly, the lease deed dated 31.08.2004 in respect of the Space No.5 was executed between the plaintiff and defendant and was duly registered.
4.4. The terms and conditions of the said lease deed are identical to the lease deeds executed by the defendant with the other two owners.
4.5. The plaintiff and other owners of the spaces had informed the defendant that they did not provide services relating to maintenance, power backup and air conditioning which were essential for the occupation and enjoyment of the subject premises and the defendant was informed by the plaintiff that Ardee Housing Private Ltd. and Hoover Service Private Ltd., which were associates of the plaintiff, alone were permitted to provide services in the building. Hence, the defendant, at the instance of the plaintiff, executed a maintenance and services CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.5 Of 71 agreement with Ardee on 31.08.2004 and an agreement for providing central air-conditioning and power backup with Hoover. In terms of clause 1.2 of the said agreements, these agreements were co- terminus and coextensive with the lease.
4.6. Under Clause 3.1 of the lease, the lease was for a period of 3 years commencing from 19.01.2004 till 18.01.2007.
4.7. Under Clause 3.2 of the lease, the defendant had the sole option and discretion to extend the term of lease for two terms of 3 years each, subject to enhancement of lease rent as stipulated in clause 5 of the lease deed.
4.8. Under Clause 4.1 of the lease, in case the defendant intended to exercise its option to renew the lease, the defendant may give notice to the lessor prior to the expiry of the term.
4.9. Under Clause 4.2 of the lease, which was a non-
obstante provision, the notice under Clause 4.1 would be deemed to have been served unless a written notice of intention to vacate the demised premises was given by the defendant to the plaintiff.
4.10. Under Clause 4.3 of the lease, when a notice under Clause 4.1 or deemed notice under Clause 4.2 was given, the plaintiff was to come forward to execute CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.6 Of 71 and register a fresh lease deed on the same terms and conditions subject to the enhancement of rent in terms of Clause 5 of the lease.
4.11. Under Clause 4.4, in case the plaintiff did not come forward to execute and register the fresh lease deed, the defendant was entitled to seek special performance and to continue to occupy the demised premises subject to payment of lease rent at the enhanced rate.
4.12. In terms of Clauses 3.1 to 3.3 conjointly read with Clauses no. 4.1, 4.2 and 4.3 of the lease, it was not mandatory for the defendant to issue notice for renewal in terms of Clause 4.1 of the lease deed, and in terms of the deeming provision contained in Clause 4.2 of the lease deed, unless the defendant issued a notice communicating its intention to vacate, the defendant was deemed to have exercised its option to renew the lease for a second term.
4.13. Hence, in case the defendant company did not issue notice communicating its intention to vacate, the plaintiff was obligated in terms of Clause 4.3 of the lease deed to come forward to take steps to register a fresh lease deed on the same terms and conditions set out in the lease deed subject to enhancement of lease rent by 15%.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.7 Of 71 4.14. Since the defendant did not issue a notice giving intention to vacate the demised premises, the deeming provision under Clause 4.2 came into operation and it was deemed that the defendant had given notice of renewal under Clause 4.2. As such, the plaintiff was obligated to come forward to execute a fresh lease deed and register the same with the concerned authorities.
4.15. The plaintiff had concealed the fact that by letter dated 13.01.2007 written by the defendant in response to the plaintiff's letter dated 12.01.2007, the defendant had stated its stand in terms of the aforesaid provisions of the lease.
4.16. Vide its letter dated 13.01.2007, the defendant company had undertook to comply with and perform its obligations under the lease deed including payment of lease rent at the enhanced rates and requested the plaintiff to indicate a convenient date for execution and registration of the lease deed for the period commencing from 19.01.2007 to 18.01.2010.
4.17. However, when the defendant sent lease rent at the enhanced rates with effect from 19.01.2007, the plaintiff refused to accept the same.
4.18. In addition to the payment of lease rent at enhanced rates, the defendant also prepared a fresh lease deed CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.8 Of 71 on the same terms and conditions as set out in the lease deed dated 31.08.2004, subject to enhancement of lease rent and was awaiting intimation from the plaintiff about the convenient date for execution and registration.
4.19. However, the plaintiff through its advocates sent notice dated 02.02.2007, received on 06.02.2007, whereby the defendant was put to notice to vacate the demised premises.
4.20. The plaintiff has concealed that the plaintiff had filed suits in the Hon'ble High Court of Delhi for specific performance against all the three owners of the spaces, including the plaintiff. The suit against the plaintiff was CS (OS) No. 284/2007, whereas the suits against the other two owners were CS (OS) No. 283/2007 and CS (OS) No. 303/2007. The Hon'ble High Court had vide orders dated 19.02.2007 passed ex parte ad interim stay order in favour of the defendant qua the possession and enjoyment of the suit property subject to payment of the enhanced rent and applicable maintenance charges. The ex parte ad interim order was communicated to the plaintiff as well as to the other two owners immediately. The present suit was filed after receipt of the orders dated 19.02.2007, however, the plaintiff has concealed this fact in his plaint.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.9 Of 71 4.21. On this basis, the defendant has sought dismissal of the suit.
REPLICATION
5. The plaintiff has filed replication in which it has reiterated the averments made in the plaint and has denied the averments made in the written statement. The plaintiff has denied the interpretation of Clauses 3 and 4 which has been put forth by the defendant. It is stated that as no notice of intention to renew the lease for the second term as provided for in Clause 4.1 was given, there could be no renewal in terms of Clause 3.3. It is stated that it was mandatory for the defendant to give six-month notice. It is stated that Clause 4.3 would come into play only if the defendant had issued notice of renewal prior to expiry of lease. It is stated that the deeming provision under Clause 4.2 did not apply as the requirement of the law was the execution of a registered lease deed. It is stated that there was no automatic renewal without the defendant exercising option to renew six months before the expiry of lease and without execution of a registered lease deed for every term. It is denied that there was any suppression or concealment as alleged in the written statement. It is stated that the defendant did not take any initiative for renewal of the lease. It is further stated that when the plaintiff approached the defendant by its letter dated 12.01.2007 asking if the defendant was interested that the lease could be renewed at market rent, even then the defendant did not come forward to settle the mutual terms CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.10 Of 71 and rushed to the court. It is stated that the defendant's letter dated 13.01.2007 was baseless and of no consequence.
ISSUES
6. Vide order dated 18.05.2009, the following issues were framed in the suit:
1. Whether the plaintiff is entitled for decree of possession in respect of property shown in red in the plaint? OPP
2. Whether the plaintiff is entitled for mesne profits, if so, at what rate and for what period? OPP
3. Whether the tenancy of the defendant expired by efflux of time on 18/01/2007 as alleged by the plaintiff, if so, to what effect? OPP
4. Whether the defendant in accordance with Clause 3.2 of the lease deed dated 31/08/2004 had the sole option and discretion for extension of the term of the lease of the demised premises for 2 terms for 3 years each beyond 18/01/2007 as alleged by the defendant, if so, to what effect? OPD
5. Whether the deemed notice under clause 4.2 would constitute notice of renewal as contemplated under clause 4.1 of the lease deed and no notice as contemplated under clause 4.3 was required as alleged by the defendant, if so, to what effect? OPD CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.11 Of 71
6. Relief.
POSSESSION HANDED OVER DURING PENDENCY OF SUIT -
DEFENDANT FILED I.A. IN PRESENT SUIT FOR REFUND OF SECURITY DEPOSIT-
SUIT OF DEFENDANT FOR SPECIFIC
PERFORMANCE DISPOSED OF AS HAVING
BECOME INFRUCTUOUS
7. During the pendency of the suit, the possession of the suit premises was admittedly handed over by the defendant to the plaintiff on 28.09.2012.
8. Upon the handing over of possession of the premises, the defendant moved an application u/s. 151 CPC in the present suit, being I.A. No. 21990/2012, for refund of security deposit of Rs. 27,77,791/- along with interest.
9. The defendant herein had earlier filed suit being CS (OS) No. 284/2007 against the plaintiff herein before the Hon'ble High Court of Delhi seeking specific performance for renewal of the lease and execution and registration of fresh lease deeds. The defendant herein had similarly earlier filed two other suits for specific performance being CS (OS) No. 283/2007 and CS (OS) No. 303/2007 against the two other owners of the spaces which were taken on lease on the tenth floor of the subject building. In the suit for specific performance filed by the defendant against the plaintiff being CS (OS) No. 284/2007, the following ex parte ad CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.12 Of 71 interim injunction had been passed vide order dated 19.02.2007:
"IA No. 1762/2007 in CS (OS) No. 284/2007 Case of the plaintiff is that the plaintiff has taken the premises in question on rent from the defendant No. 1 for which lease deed dated 31.8.2004 was executed between the parties which was commenced from 19.1.2004 for a period of three years, expiring on 18.1.2007. Clause 4 of the of the said lease deed contains the provision for renewal of the lease deed. It is the submission of the learned counsel for the plaintiff that the reading of clause 4 would make it clear that the parties understood and expressed that in case the plaintiff/lessee is interested in renewal of the lease, he could give notice, six months prior to the expiry of term and as per clause 4.2 of the lease deed if notice showing intention not to renew the lease is not given, it was to be deemed that the lessee/plaintiff is interested in getting the lease renewed. On this basis, submission advanced is that the plaintiff has a right to seek further renewal for further period of three years. But inspite of that the defendant has taken the plea that since specific notice in writing was not given, the plaintiff has forgo its right to seek renewal of the lease.
Having regard to the averments made and after perusing the documents, I am of the view that the CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.13 Of 71 plaintiff has made out a case for ex-parte ad-interim injunction. On plaintiff paying the rent and maintenance charges which can be accepted by the defendants without their rights and contentions, the injunction in terms of prayer a & b is granted in favour of the plaintiff till the next date of hearing.
Dasti."
10. All these three suits, being CS (OS) No. 284/2007 CS (OS) No. 283/2007 and CS (OS) No. 303/2007, came to be disposed of vide common order dated 15.05.2015 passed by the Hon'ble High Court as having become infructuous since the plaintiff had already vacated the premises on 28.09.2012. It would be appropriate to extract the common order dated 15.05.2015 passed in the aforesaid three suits as under:
"1. The plaintiff has instituted the present suits praying inter alla for a decree of specific performance against the defendants calling upon them to execute and register a lease deed In respect of the suit premises for a period of three years, commencing on 19.1.2007. Further, the plaintiff has prayed for a decree of permanent and mandatory injunction directing the defendants No.2 and 3 to continue providing maintenance facilities in respect of the suit premises.
2. The Court is informed that during the pendency of the present suits, the plaintiff had CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.14 Of 71 vacated the suit premises on 28.9.2012. In view of the fact that the plaintiff has elected to vacate the suit premises and has already handed over the possession thereof to the defendants, nothing further survives for adjudication in the present suits as they have been rendered infructuous.
3. The suits are accordingly disposed of, along with the pending applications.
The date already fixed, l.e., 18.8.2015 stands cancelled."
11. In the present suit, vide order dated 15.05.2015, it was observed that the relief of possession stood satisfied and the suit became confined to the issue of damages/mesne profits. The defendant's application being I.A. No. 21990/2012, for refund of the security deposit, was also disposed of, vide order dated 15.05.2015, observing that the issue of refund of security deposit would be considered at the stage of final arguments. It would be appropriate to extract the relevant portion of order dated 15.05.2015 passed in the present suit, as under:
"1. The present suit has been listed before the court along with CS(OS) No.283/2007, a suit instituted by the defendant herein in respect of the same premises.
2. By a separate order passed in CS(OS) Nos.283/2007, 303 /2007 and 284/2007, the said suits have been disposed of as having been rendered CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.15 Of 71 infructuous in view of the fact that the defendant herein has handed over possession of the suit premises to plaintiff on 28.9.2012. In view of the said development, the first relief prayed for the plaintiff which is for a decree of possession in respect of the suit premises, stands satisfied.
The remaining relief is with regard to damages/mesne profits.
3. The case is at the stage of recording of the evidence. The parties are directed to appear before the Joint Registrar on 18.8.2015, for leading evidence in respect of issues No.2 to 6. In view of the changed circumstances, the plaintiff shall lead the evidence in the first instance.
... ... ...
IA No.21990/2012 (by the defendant u/S 151 CPC for refund of security deposit)
1. The issue of refund of security deposit shall be decided at the time of final arguments.
2. The application is disposed of."
12. Both parties have led their respective evidence, both oral and documentary, in support of their case.
PLAINTIFF'S EVIDENCE CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.16 Of 71
13. In support of its case, the plaintiff has examined its authorised representative Mr. Virender Singh Yadav as PW- 1 and he has tendered his affidavit in evidence as Ex. PW- 1/A, in which he has deposed along the lines of the plaint. He was cross-examined by the defendant. The plaintiff has relied upon the following documents:
i. Extract of minute book bearing signatures of Mrs. Meenakshi Varma is Ex. PW-1/1 (OSR). ii. Extract of minute book bearing signatures of Ms. Shibani Varma is Ex. PW-1/2 (OSR). iii. Certified copy of registered lease dated 31.08.2004 is Ex. PW-1/3.
iv. Original letter dated 12.01.2007 addressed to defendant is Ex. PW-1/4.
v. Notice along with postal receipt issued to the defendant company dated 02.02.2007 is Ex. PW- 1/5.
vi. Certified copy of lease deed dated 07.07.2008 is Ex. PW-1/6.
vii. Certified copy of lease bearing signatures of Ms. Shibani Varma and Ms. Shefali Varma are Ex. PW-1/7, Ex. PW-1/8 and Ex. PW-1/9.
viii. Original receipts for applying certified copy of original lease deed are Ex. PW-1/10, Ex. PW- 1/11, Ex. PW-1/12, Ex. PW-1/13 and Ex. PW- 1/14.
DEFENDANT'S EVIDENCE CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.17 Of 71
14. In support of its case, the defendant has examined its authorised representative Mr. Chidananda P. as DW-1 and he has tendered his affidavit in evidence as Ex. DW-1/A, in which he has deposed along the lines of the written statement. He was cross-examined by the plaintiff. The defendant has relied upon the following documents:
i. Letter dated 13.01.2007 sent by the defendant to the plaintiff in reply to plaintiff's notice dated 12.01.2007 is Ex. DW-1/1.
ii. Letter dated 05.07.2012 from the defendant to the plaintiff is Ex. DW-1/2.
iii. Maintenance agreement between the defendant and Ardee House Pvt. Ltd is Mark A.
15. The learned counsels for both the parties have made their respective oral submissions.
SUBMISSIONS OF PLAINTIFF
16. The learned counsel for the plaintiff has referred to the relevant pleadings and evidence in support of the plaintiff and has submitted that the plaintiff would be entitled to decree.
17. The learned counsel for the plaintiff has submitted that the plaintiff would be entitled to mesne profits for the period from February 2007 to September 2012 @ Rs. 200/- per sq. ft. per month, which would be the market rent, taking the area as 12,500 sq. ft., which comes to Rs. 17 Crores. It is submitted that the defendant was under unauthorised and CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.18 Of 71 illegal possession from 19.01.2007 to 28.09.2012 and hence would be liable for the mesne profits. It is submitted that the lease had expired on 18.01.2007 due to efflux of time u/s. 111(a) of the Transfer of Property Act and no new lease was executed and registered between the parties. It is submitted that the tenant was in unauthorised possession on the expiry of the lease. It is submitted that even otherwise, the lease was determined by sending the letter dated 02.02.2007 by the plaintiff u/s. 111(h) of the Transfer of Property Act.
18. It is submitted that a lease could not be automatically renewed for a period of 3 years as it required mandatory registration. It is submitted that a covenant for renewal of the lease did not ipso facto extend the tenure of the lease. It is submitted that the covenant of renewal of lease in future was an agreement to agree in future which was not legally tenable and was unenforceable.
19. It is submitted that the defendant had failed to show under what capacity it was holding on to the premises after 18.01.2007 despite determination of the lease u/s. 111 of the Transfer of Property Act. It is submitted that there is no other mode of executing a lease except by a registered instrument u/s. 107 of the Transfer of Property Act. It is submitted that the only mode of creation of lease was by way of a duly registered and stamped instrument.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.19 Of 71
20. It is submitted that the defendant did not get any final relief for registration of the lease deed in the suit for specific performance being CS (OS) No. 283/2007 filed by the defendant against the plaintiff before the Hon'ble High Court. It is further submitted that the defendant did not seek any relief of declaration in its suit of the legality and validity of the tenancy beyond 18.01.2007.
21. It is further submitted that the rent was paid and accepted under the order of the Hon'ble High Court which was without prejudice to the rights and contentions of the plaintiff herein.
22. It is submitted that there was no mutual extension of the lease from 19.01.2007 till 28.09.2012. It is submitted that the tendering of rent by the tenant and its acceptance by the landlord after the lease had been determined would not create a tenancy in favour of the tenant. It is submitted that the continued occupancy of the premises by the defendant from 19.01.2007 to 28.09.2012 was wrongful possession.
23. It is further submitted that admittedly the lease was for a period of 3 years only from 19.01.2004 till 18.01.2007 and no new lease was executed and registered after 18.01.2007. It is submitted that no lease for 3 years could be renewed automatically as it requires mandatory registration. It is submitted that the plaintiff as lessor had at no point of time given any consent to the defendant to continue to occupy the premises after expiry of the lease on 18.01.2007. It is CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.20 Of 71 submitted that the defendant itself had filed a suit for special performance before the Hon'ble High Court of Delhi being CS (OS) No. 283/2007 with a prayer to execute and register a lease deed for a period of 3 years, which goes to show that the lease had expired on 18.01.2007 due to efflux of time. It is further submitted that DW-1 has in his affidavit in evidence also admitted that the initial term of lease was 3 years from 19.01.2004. It is submitted that the defendant occupied the premises at sufferance and was liable to pay the mesne profits.
24. It is submitted that after the expiry of the lease on 18.01.2007, the defendant became a tenant at sufferance since the defendant continued to remain in possession even after the determination of the lease. It is submitted that a tenancy at sufferance does not create any landlord-tenant relationship. It is submitted that the defendant has not even pleaded that it was a tenant at holding over u/s. 116 of the Transfer of Property Act. It is submitted that, therefore, the continued occupation beyond 18.01.2007 was unauthorised.
25. To support his argument that there could be no automatic renewal of lease without a registered instrument, the ld. Counsel for the plaintiff has relied upon the decision dated 17.07.2013 of the Hon'ble High Court of Delhi in RFA No. 134/2013 titled as Jain Cooperative Bank Ltd. v. Sh. Dharamveer Mugrai, and the decision dated 15.05.2007 of the Hon'ble Supreme Court in Civil Appeal No. 2517/2007 titled as Hardesh Ores Pvt. Ltd. v. Hede and Company.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.21 Of 71
26. The learned counsel for the plaintiff has further submitted that the defendant was not having the sole option and discretion for extension of the term of the lease of the demised premises for two terms because the lease could not be extended at the sole option of the defendant. It is submitted that the extension of the lease at the tenant's option could not bypass the stamp duty payable to the government. It is further submitted that under section 107 of the Transfer of Property Act, a lease of immoveable property for more than one year could be created only by a registered instrument. It is submitted that there was no concept of automatic renewal of lease by mere exercise of option by the lessee/tenant. It is submitted that under section 108(q) of the Transfer of Property Act, on the determination of the lease, the lessee is bound to put the lessor into possession of the property. It is submitted that the plaintiff was just receiving the rent under the orders of the Hon'ble High Court without prejudice to the rights and contentions of the plaintiff.
27. The learned counsel for the plaintiff has further submitted that there is no provision in law for the service of a deemed notice for renewal of lease. It is submitted that the renewal of lease must be separate and independent from the earlier lease and could only be done by way of a registered instrument and payment of stamp duty. It is submitted that the defendant was relying upon a deemed renewal of lease which was contrary to section 107 of the Transfer of Property Act which provides for mandatory registration if CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.22 Of 71 the lease was for more than one year. It is submitted that since there was no renewal of lease, the deemed notice could not constitute notice of renewal. It is further submitted that in the present case, the lease was for a fixed period of 3 years from 19.01.2004 to 18.01.2007 and the lease did not extend beyond this time.
28. It is further submitted that the defendant had never sought any declaratory relief that the termination of the agreement by the plaintiff was bad in law despite the termination notice dated 02.02.2007 u/s. 106 of the Transfer of Property Act. It is submitted that in the absence of any prayer for declaratory relief regarding the termination of the lease, the defendant's suit for specific performance CS (OS) No. 284/2007 was liable to be dismissed as not maintainable on merits, however, before the suit could be dismissed, the defendant withdrew the same and therefore the suit was not adjudicated by the Hon'ble High Court. It is submitted that even in the present suit, the defendant had not filed any counter-claim nor had he sought any declaratory relief against the termination of the lease by the plaintiff, and as such, the termination of the lease by efflux of time as well as by the notice dated 02.02.2007 was absolutely valid and just. To support his contention that a suit for specific performance of an agreement was not maintainable without seeking declaration of the termination of the agreement as bad in law, the learned counsel has relied upon the following case laws: I.S. Sikandar v. K. Subramani (2013) 15 SCC 27, Navjyot Singh v. Sayyad Irshad Ali (decision CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.23 Of 71 dated 14.01.2020 of the Hon'ble High Court of Bombay in CRA No. 122/2018), Dharampal Satyapal Ltd. v. Sanmati Trading and Investment Ltd. 2020 SCC OnLine Del 209, and Mohinder Kaur v. Sant Paul Singh (2019) 9 SCC 358.
SUBMISSIONS OF DEFENDANT
29. On the other hand, the learned counsel for the defendant has referred to the relevant pleadings and evidence in support of the defendant, and has submitted that the suit deserves to the dismissed.
30. The learned counsel for the defendant has referred to the various relevant clauses of the lease, particularly Clauses 3, 4, 5, 6 and 13. It is submitted that under the provisions of the lease, the term of the lease was 3 years and it was also provided for further two terms of 3 years each, and thus the total term contemplated under the lease was 9 years. It is submitted that in terms of the lease, the plaintiff had no right to terminate the lease either in the first, second or third term, but on the sole ground if the defendant defaulted in payment of the monthly lease rent. It is submitted that the option of renewal of the lease was vested with the defendant. It is submitted that the renewal of the lease for the second and third term was on enhancement of rent @ 15% over the last paid rent. It is submitted that the defendant had two options of renewing the lease for the second and third term. It is submitted that one option was by giving a notice in writing to the plaintiff under clause 4.1, and the other option was by not giving any notice of CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.24 Of 71 intention to vacate as provided in clause 4.2 of the lease deed. It is submitted that Clause 4.2 clearly and unequivocally provided that in case no notice of intention to vacate the leased premises was given by the defendant to the plaintiff, the notice of renewal as contemplated in clause 4.1 shall be deemed to have been served by the defendant to the plaintiff. It is submitted that Clause 4.2 created a deeming fiction and in terms of this it was presumed that unless the defendant had given a notice to vacate, it would be presumed that the defendant had issued a notice of renewal as contemplated under Clause 4.1. It is submitted that the deeming fiction in Clause 4.2 of the lease had to be given full effect. It is submitted that under clause 4.3, the plaintiff was enjoined to execute the lease deed for the second and third term. It is submitted that a combined reading of Clause 3 with the Clauses 4.1 to 4.3 of the lease made it abundantly clear that if the defendant did not give a notice to vacate the leased premises to the plaintiff, then it had manifested its intention for renewal of the lease, and as such the lease had to be renewed and the plaintiff had to come forward to execute the lease.
31. It is further submitted by the learned counsel for the defendant that the actions of the plaintiff were contrary to the express terms of the lease. It is submitted that the plaintiff's actions were motivated by the increase in the property rentals. It is submitted that the letter dated 12.01.2007 issued by the plaintiff was contrary to the provisions of the lease. It is submitted that the defendant CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.25 Of 71 had entered into maintenance agreements with two companies which were associated with the plaintiff and the plaintiff had also started putting undue pressure on the defendant through its associated companies threatening to cut off electricity supply so as to hamper the operations of the defendant and force it into vacating the leased premises. It is submitted that in these circumstances, the defendant was compelled to file the suits against the owners of the tenth floor of the property for specific performance and permanent and mandatory injunction.
32. It is submitted that in these suits for special performance filed by the defendant, the Hon'ble High Court of Delhi had on the basis of Clause 4 of the lease deed, granted ad interim injunction against the owners including the plaintiff subject to the defendant paying the enhanced rent and maintenance charges. It is submitted that, thus, by virtue of the interim injunction granted by the Hon'ble High Court, the defendant continued to be in possession of the suit property by paying the enhanced rent as contemplated under the lease. It is submitted that the defendant finally vacated the suit property on 28.09.2012.
33. It is submitted that during the pendency of the suits, the defendant had sent a letter dated 05.07.2012 to the plaintiff for termination of the lease with effect from 28.09.2012 and handing over the possession of the lease and vide the said letter, the defendant also put the plaintiff to notice to refund the security deposit amount. It is submitted that thereafter, CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.26 Of 71 on 28.09.2012, the defendant handed over the peaceful, vacant and physical possession of the tenth floor of the property including the leased premises on 28.09.2012.
34. It is further submitted that at the time of handing over the leased premises, the plaintiff had in its possession an amount of Rs. 27,77,791/- as security deposit. It is submitted that the plaintiff failed to return the security deposit to the defendant and thus in terms of Clause 6.8(ii) of the lease deed, the plaintiff was liable to pay interest @ 12% p.a. on the amount of Rs. 27,77,791/- till actual refund.
35. It is submitted by the learned counsel for the defendant that the possession of the leased premises was with the defendant in conformity with the lease deed. It is submitted that the defendant had been paying rent to the plaintiff at the rates provided for in the lease deed. It is submitted that the occupation of the suit property by the defendant beyond 18.01.2007 was authorised by the terms of the lease deed, and as such the defendant was not liable to pay any mesne profits. It is submitted that the defendant had approached the Hon'ble High Court of Delhi in CS (OS) No. 284/2007 and the possession of the plaintiff was protected by ad interim injunction orders.
36. Both parties have also filed their respective written submissions.
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37. I have considered the submissions of the learned counsels for both the parties and I have perused the record, including the pleadings, evidence, both oral and documentary, and the written submissions.
ISSUE-WISE FINDINGS
38. My issue-wise findings are as follows.
Issue No. 1. Whether the plaintiff is entitled for decree of possession in respect of property shown in red in the plaint? OPP
39. The Issue No.1 no longer survives and has become infructuous as the subject property was admittedly vacated by the defendant on 28/09/2012 and possession handed over to the plaintiff.
Issue No. 2. Whether the plaintiff is entitled for mesne profits, if so, at what rate and forward.? OPP Issue No. 3. Whether the tenancy of the defendant expired by the flux of time on 18/01/2007 as alleged by the plaintiff, if so, to what effect? OPP Issue No. 4. Whether the defendant in accordance with Clause 3.2 of the lease deed dated 31/08/2004 had the sole option and discretion for extension of the term of the lease of the demised premises for 2 terms for 3 years each beyond 18/01/2007 as alleged by the defendant, if so, to what effect? OPD CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.28 Of 71 Issue No. 5. Whether the deemed notice under clause 4.2 would constitute notice of renewal is contemplated under clause 4.1 of the lease deed and no notice is contemplated under clause 4.3 was required as alleged by the defendant, if so, to what effect? OPD
40. The aforesaid issues are interconnected in nature and, hence, are taken up together for discussion.
41. The registered lease deed dated 31.08.2004 Ex.P-2 is the admitted document/deed executed between the parties and the rights and liabilities of the parties would have to be determined as per the terms of the said deed.
42. Clause 3 of the lease deed provides for the term of the lease and it would be appropriate to extract the said clause as under:
"3. TERM:
3.1. The term of the Lease for the Demised Premises, under the present Lease Deed, shall be Three (3) years commencing from January 19, 2004 ("Commencement Date") and expiring on January 18, 2007 (the "Term").
3.2 The Lessee, at its sole option and discretion, can extend the term of lease for the Demised Premises, for two terms of three years each ("Second Term" and "Third Term" respectively), subject to CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.29 Of 71 enhancement in the Lease Rent as provided in Clause 5 below.
3.3 The Parties may extend the period of the lease, for the Demised Premises, beyond three terms of Three (3) years, on mutually acceptable terms and conditions. However, in case no agreement is reached between the Parties, on expiry of the three terms of Three years each, as provided herein, ie. on or before January 18, 2013, the Lessee shall hand over vacant and peaceful possession of the Demised Premises, to the Lessor.
3.4 The Parties have expressly understood and agreed that the Term of the Lease is co-extensive and co-terminus with the lease in respect of Space No. 1 and 5, at the option of the Lessee."
(Emphasis supplied by me)
43. Clause 3.1 of the lease provides that the lease is for a period of three years commencing from 19.01.2004 and expiring on 18.01.2007.
44. Clause 3.2 of the lease provides that the defendant as the lessee could at its sole option and discretion extend the term of lease for two terms of three years each subject to enhancement in the lease rent as provided for in the lease.
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45. Clause 3.3 of the lease deed provides that beyond the three terms of 3 years each, the parties may extend the lease on mutually acceptable terms and conditions.
46. Clause 4 of the lease deed provides for the renewal of the lease and it would be appropriate to extract the said clause as under:
"4. RENEWAL 4.1 In the event, on expiry of the Term of the Lease, the Lessee intends to exercise its option to renew the lease for the Second Term, the Lessee may give to the Lessor a notice, not less than six (6) months prior to the expiry of the Term, and in case of the Lessee intends to exercise its option to renew the lease, for the Third Term, the Lessee may give to the Lessor a notice, not less than three (3) months prior to the expiry of the Second Term of the lease. The option to renew the lease for the Second Term/Third Term, is subject to the Lessee, undertaking to abide by the present terms and conditions of lease and subject to enhancement of Lease Rent, ING VYSYA LIFE INSURANCE CO. PVT. LILby 15% of the Lease Rent paid/payable, for the 36 month/72 month, as the case may be.
4.2 Such notice shall be deemed to have been served on the Lessor by the Lessee, unless a written CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.31 Of 71 notice of intention to vacate the Demised Premises is given, by the Lessee, to the Lessor.
4.3 Within a period of Thirty (30) days from the receipt of such Notice from the Lessee, exercising option to renew the lease in case such notice is issued in terms of Clause 4.1 above or in case no notice is issued, in terms of the deeming provision under Clause 4.2 above, and in any case, Thirty (30) days prior to the expiry of the Term of the Lease/Second Term of the lease, the Lessor, shall come forward, execute and take steps to register a fresh Lease Deed, on the same terms and conditions set out herein, subject to enhancement of Lease Rent by 15% of the Lease Rent paid/payable, for the 36th month/72 month, as the case may be.
4.4 In case of failure on the part of the Lessor, to come forward, execute and take steps to register a fresh Lease Deed as specified hereinabove, the Lessee shall be entitled to seek specific performance hereof and to continue to use, occupy and enjoy the Demised Premises, subject to payment of Lease Rent, at the specified rate, during the pendency of proceedings initiated by the Lessee, in the Court having jurisdiction, without any obstruction or restriction by the Lessor.
4.5 In case, the Term of the Lease is not renewed as specified in Clause 3.2 and Clause 3.3 above or CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.32 Of 71 the Term(s) of lease is determined, as provided hereunder, the Lessee shall hand over vacant and physical possession of the Demised Premises to the Lessor, simultaneous with the receipt of Security Deposit specified hereunder, upon the expiry/determination of the Term of Lease. In case of failure of the Lessee to hand over vacant and physical possession of the Demised Premises upon determination of lease and despite the Lessor intimating in writing its willingness to refund the balance Security Deposit remaining unadjusted as stated hereinabove, the continued occupation of the Lessee in the Demised Premises, shall be trgated as unauthorized occupation and as mesne profits for such unauthorized occupation of the Demised Premises, the Lessor shall be entitled to seek and recover Lease Rent at the rate of 1.5 times as that of the Lease Rent reserved for the last month of Lease prior to determination, under these presents."
47. Clause 4.1 of the lease deed provides that in case the defendant as lessee intended to renew the lease for another term, the lessee could give to the lessor a notice not less than 6 months prior to the expiry of the term.
48. Clause 4.2 of the lease provides that such a notice would be deemed to have been served on the lessor by the lessee, unless a written notice of intention to vacate the demised premises is given by the lessee to the lessor.
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49. Clause 4.3 of the lease provides that within a period of 30 days of the notice from the lessee exercising the option to renew the lease under clause 4.1 in case such notice was given or in case no notice was given, then in terms of clause 4.2, and in any case 30 days prior to the expiry of the term of the lease, the lessor shall come forward, execute and take steps to register a fresh lease deed on the same terms and conditions subject to enhancement of lease rent by 15%.
50. Clause 4.4 provides that in case of failure on the part of the lessor to come forward, execute and take steps to register a fresh lease deed, the lessee shall be entitled to seek specific performance thereof and to continue to use, occupy and enjoy the demised premises, subject to payment of lease rent at the specified rate, during the pendency of such proceedings initiated by the lessee without any of the action or restriction by the lessor.
51. Under Clause 3.2, the defendant as lessee had the sole option and discretion to seek renewal of the lease. Under Clause 4.1, the lessee could exercise the option to renew the lease by giving notice for renewal. This notice of renewal would have been deemed to be given in terms of Clause 4.2 if there was no notice by the defendant indicating intention to vacate the demised premises.
52. Clause 4.2 of the lease is clear and unambiguous. As per clause 4.2, it was not required for the defendant to give an actual notice in writing to the plaintiff for renewal of the CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.34 Of 71 lease. Rather, in case there was no notice by the defendant giving intention to vacate, then it was to be deemed that the defendant had given a notice for exercising its option to renew the lease.
53. Under the lease deed, the plaintiff did not have any right to foreclose the defendant's right to exercise its option to renew the lease.
54. Under Clause 4.3 of the lease, once the defendant had exercised its option to renew the lease, which the defendant had done by virtue of the deemed notice to renew in terms of clause 4.2, it was obligatory on the part of the plaintiff to come forward 30 days prior to the expiry of the lease to execute and take steps to register a fresh lease deed on the same terms and conditions subject to the enhancement of rent.
55. In the Clause 4.4, the parties had also envisioned the scenario in case the plaintiff did not come forward to execute and register a fresh lease after the defendant had exercised the option to renew. In such a case, under Clause 4.4, the defendant was entitled to seek specific performance and to continue to use, occupy and enjoy the demised premises subject to the payment of the lease rent at the enhanced rate.
56. Now, coming to the facts of the case, admittedly, there was no notice in writing given by the defendant to the plaintiff CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.35 Of 71 giving intention to vacate the demised premises. Hence, under Clause 4.2 of the lease, it would be deemed that the defendant had given notice to the plaintiff exercising its option to renew the lease.
57. Thus, under Clause 4.3, it was obligatory on the part of the plaintiff to come forward 30 days prior to the expiry of the lease, which was to expire on 18.01.2007, to execute and register a fresh lease deed for another term of 3 years on the same terms and conditions subject to enhancement of rent.
58. Undisputedly, the plaintiff did not come forward in terms of Clause 4.3 to execute and register a fresh lease deed for another term of 3 years on the same terms and conditions subject to enhancement of rent.
59. Rather, what the plaintiff did was to write the letter dated 12.01.2007 Ex.PW-1/4 to the defendant informing that the lease was to expire on 18.01.2007, that no notice of intention to renew the lease was given by the defendant and that if the defendant was interested in entering into a fresh registered lease deed at the current market rent and rates then the plaintiff would do so. The plaintiff further informed that in case, the defendant did not respond, then it would be presumed that the defendant was not interested in entering into a fresh registered lease deed and would be vacating the premises on 18.01.2007.
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60. The aforesaid stand taken by the plaintiff in its letter dated 12.01.2007 was clearly contrary to the terms of lease, as per which the notice to exercise option to renew the lease would have been deemed to have been given if no notice giving intention to vacate was given. Since the defendant did not give any intention to vacate, under the terms of Clause 4.2 of the lease deed, it was deemed that the defendant had given notice exercising the option to renew. Thus, the plaintiff's contention in its letter dated 12.01.2007 Ex.PW-1/4 that the defendant had not given notice exercising the option to renew was palpably erroneous. Rather than asking the defendant whether the defendant was interested in executing a fresh registered lease deed as per the current market rates, the plaintiff ought to have come forward to execute and register a fresh lease deed for another period on the same terms and conditions subject to the enhanced rates as already prescribed in the lease deed.
61. The defendant had responded to the plaintiff vide its reply letter dated 13.01.2007 Ex.DW-1/1 informing that there was a deemed notice exercising option to renew the lease in terms of Clauses 4.1 and 4.2 of the lease deed and calling upon the defendant to come forward to execute and register a fresh lease deed in terms of Clause 4.3 for another term.
62. However, the plaintiff vide its notice dated 02.02.2007 Ex.PW-1/5 informed the defendant that there was no notice for renewal of the lease and that accordingly, the defendant had not right to claim renewal. It was further informed that CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.37 Of 71 the tenancy had expired on 18.01.2007. It was further informed that without prejudice to the plaintiff's contention that the lease had expired on 18.01.2007, the tenancy was being terminated upon expiry of 15 days of receipt of the notice dated 02.02.2007. The defendant was called upon to hand over the vacant physical possession of the property.
63. In my view, the plaintiff had clearly breached the agreement for renewal of the lease by not coming forward to execute and register a fresh lease deed in terms of Clause 4.3 of the lease deed. As already mentioned, the present case is squarely covered under Clause 4.2. Since there was admittedly no notice in writing by the defendant giving intention to vacate the premises, it would be deemed that notice to renew the lease was served on the plaintiff under clause 4.2. Consequently, under clause 4.3, the plaintiff was obligated to come forward and execute and register the fresh lease deed. However, the plaintiff failed to do this and was as such clearly in breach of the deed.
64. Once the plaintiff failed to come forward to execute and register the fresh lease deed in terms of Clause 4.3, consequently, Clause 4.4 became activated. Under Clause 4.4, the defendant was entitled to seek specific performance and to continue to use, occupy and enjoy the demised premises subject to payment of the lease rent at the specified rate during the pendency of the specific performance proceedings without any obstruction or restriction by the lessor.
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65. In fact, the defendant had exercised its rights under Clause 4.4 of the lease and had filed suit for specific performance being CS (OS) No. 284/22007 against the plaintiff herein for execution and registration of a fresh lease under the renewal agreement contained in Clause 4 of the lease deed. Vide interim orders passed in CS (OS) No. 284/22007, the defendant was permitted to continue to occupy the demised premises subject to payment of the specified enhanced rent. Consequently, the defendant remained in possession upon payment of the enhanced rent till vacating the premises on 28.09.2012.
66. Thus, by filing the suit for specific performance being CS (OS) No. 284/2007 before the Hon'ble High Court of Delhi, the defendant had clearly exercised its rights under Clause 4.4 of the lease, and in terms of Clause 4.4, the defendant was entitled to continue in occupation of the demised premises during the pendency of the suit for specific performance upon payment of the enhanced rate.
67. The occupation of the demised premises by the defendant even after 18.01.2007 till the date of handing over of possession on 28.09.2012 cannot thus be termed as unauthorised or illegal, as the same was authorised under Clause 4.4 of the lease deed which constituted the mutual agreement between the parties.
68. When the parties had themselves executed the lease deed dated 31.08.2004 understanding fully well the terms CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.39 Of 71 thereof, the plaintiff cannot now seek to resile from the terms thereof. The plaintiff would be bound by Clause 4.4 of the lease which authorised the continued use, occupation and enjoyment of the demised premises during pendency of the specific performance proceedings without any obstruction or restriction by the lessor and only subject to payment of the lease rent at the specified rate. It has not been disputed that the defendant was paying the enhanced rates as specified in the lease pursuant to the interim orders passed in CS (OS) No. 284/22007.
69. The argument of the plaintiff that there was no fresh lease executed and registered after 18/01/2007 is wholly without merit. The sole dispute in the suit is now only of mesne profits and the question to be considered is whether the defendant's possession beyond 18.01.2007 was unauthorised. This question would be answered in the negative since the continued occupation by the defendant of the demised premises beyond 18.01.2007 till 28.09.2012 was authorised by Clause 4.4 of the lease deed which constituted the mutual agreement between the parties.
70. The plaintiff having executed the lease deed containing the agreement for renewal in Clauses 4.1 to 4.5 with open eyes is estopped by the principle of estoppel by deed from pleading or claiming anything to contrary to these clauses.
71. The sole issue for determination in the suit now is on the aspect of mesne profits, for which the main criteria is to CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.40 Of 71 ascertain whether the defendant was in 'wrongful possession'.
72. Section 2(12) of the Code of Civil Procedure defines mesne profits as follows:
"(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;"
(Emphasis supplied by me)
73. Thus, clearly, for a person to be liable for mesne profits such person has to be in 'wrongful possession' of the property.
74. In the present case, as already held, the continued occupation, use and enjoyment of the suit premises by the defendant was clearly authorised by Clause 4.4 of the lease deed executed between the parties. Hence, it cannot be said that the defendant was in 'wrongful possession' for the period beyond 18.01.2007.
75. The plaintiff had itself breached the agreement of the parties for renewal of the lease in terms of Clause 4.1 to 4.5 of the lease deed. The Clause 4.4 of the lease deed is very CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.41 Of 71 specific and explicit in authorising the continued occupation of the demised premises by the defendant. The plaintiff had failed to come forward to execute and register a fresh lease deed in terms of Clause 4.3 despite there being a deemed notice seeking renewal by the defendant under Clauses 4.1 and 4.2. The defendant had exercised its rights under clause 4.4 of the lease and had filed the suit for specific performance. Interim orders were passed in the suit for specific performance protecting the continued occupation of the defendant subject to payment of the enhanced rent and maintenance charges. It is not disputed that the defendant was also paying the amounts at the specified enhanced rate. Hence, the continued occupation by the defendant of the suit premises was fully authorised under Clause 4.4. There was no 'wrongful possession' of the defendant over the suit premises since the possession was authorised by the terms of the contract between the parties. Having voluntarily executed the contract, the plaintiff cannot be permitted to resile from the contract or to claim or plead anything contrary to the contract. There being no wrongful possession, there would be no question of payment of any mesne profits.
76. Of course it would have been wholly a different matter had the defendant not exercised its rights under Clause 4.4 and not filed any suit for specific performance of the agreement to renew the lease. In such event, it could have been said that the defendant having itself not exercised the right to seek specific performance, there would be no application of CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.42 Of 71 Clause 4.4. However, in the present case not only did the defendant file the suit for specific performance, but the Hon'ble High Court also passed ad interim injunction in the suit for specific performance protecting the continued occupation of the defendant subject to payment of the rent. Thus, in terms of Clause 4.4 of the deed, the defendant was entitled to occupy and enjoy the suit property during the pendency of the specific performance proceedings.
77. It is completely immaterial that there was no fresh lease deed executed which was registered and stamped as contended on behalf of the plaintiff. It is to be remembered that it was the plaintiff itself which had breached the agreement by not coming forward to execute and register the lease deed, forcing the defendant to file the suit for specific performance. Moreover, the possession of the defendant was duly authorised by the agreement between the parties as contained in Clause 4.4 of the lease deed. Hence, the possession of the defendant cannot be termed as wrongful or illegal and, thus, there would be no question of payment of any mesne profits.
78. The decision in Jain Cooperative Bank Ltd. (supra) which has been relied upon by the plaintiff is clearly distinguishable. That was a case in which the defendant- lessee did not file any suit for specific performance of the agreement for extension of the lease and the limitation for filing the same had also expired. Furthermore, in that case there was no provision similar to Clause 4.4 of the lease CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.43 Of 71 deed in the present case which permitted the lessee to file a suit for specific performance and to remain in possession upon payment of the enhanced rent during the pendency of the specific performance proceedings.
79. Similarly, the decision in Hardesh Ores Pvt. Ltd. (supra), also relied upon by the plaintiff, holding that there would be no automatic renewal would be of no assistance to the plaintiff. There is no dispute with the principle that a fresh lease deed ought to be by way of an registered instrument and stamped. However, that is not the issue in the present case. The sole issue involved in the present suit is of mesne profits. For this, it is to be considered whether the possession beyond 18.01.2007 till 28.09.2012 was wrongful and illegal. In the present case, in light of Clause 4.4 of the lease deed, there was a clear mutual agreement between the parties permitting the defendant to continue in possession on payment of the enhanced rent during the pendency of the specific performance proceedings. The plaintiff is barred by the principle of estoppel by deed from pleading or claiming anything to the contrary the agreement.
80. Now, I may also deal with the contention of the plaintiff that the defendant had never sought any declaratory relief against the termination of the agreement by the plaintiff by virtue of the notice dated 02.02.2007. In this regard, the ld. Counsel for the plaintiff has relied upon the decision of the Hon'ble Supreme Court in I.S. Sikandar (supra) and other decisions following I.S. Sikandar (supra) being Navjyot CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.44 Of 71 Singh (supra), Dharampal Satyapal Ltd. (supra), and Mohinder Kaur (supra).
81. It is the contention of the plaintiff that even in the suit filed by the defendant, the defendant never sought any declaratory relief against the termination of the agreement by plaintiff through its notice dated 02.02.2007. It is the plaintiff's case that even in the present suit, the defendant never filed any counter-claim seeking any declaratory relief to this effect. On this basis, it is the plaintiff's contention that when the defendant never challenged the termination of the agreement by the plaintiff then the defendant cannot seek to claim that its possession was authorised under the agreement.
82. I have given careful consideration to this contention of the plaintiff as well. Although this argument of the plaintiff seems to be quite interesting, however, on a closer scrutiny I find no merit in the same.
83. In I.S. Sikandar (supra), which was a case of a suit for specific performance of an agreement to sell, it was held that when the agreement to sell had been terminated then a suit for specific performance simpliciter without seeking declaratory relief to declare the termination of the agreement to sell as bad in law would not be maintainable. The other decisions relied upon by the plaintiff follow this principle laid down in I.S. Sikandar (supra).
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84. The defendant had filed the suit for specific performance of the agreement for renewal/extension of the lease for another term in terms of Clauses 4.1 to 4.5 of the lease deed. The defendant has in his defence in the present suit also relied upon the said provisions.
85. It is the contention of the plaintiff that the plaintiff had terminated the agreement through its notice dated 02.02.2007 Ex.PW-1/5, and that the defendant ought to have claimed a declaratory relief that such termination was bad. However, a bare perusal of the notice dated 02.02.2007 shows that in this notice the plaintiff had not cancelled or terminated the lease deed itself. Through the notice dated 02.02.2007, the plaintiff had only informed that although the tenancy stood expired by efflux of time on 18.01.2007, without prejudice to this, the tenancy stood terminated by the notice. The 'termination' which the notice dated 02.02.2007 deals with is the termination of the lease for the first term of 3 years ending on 18.01.2007. The plaintiff did not by way of the notice terminate or cancel the lease deed itself which contained the agreement of renewal between the parties in the Clauses 4.1 to 4.5. Hence, in fact, the plaintiff had never cancelled or terminated the agreement for renewal itself as contained in the Clauses 4.1 to 4.5. Once this conclusion is drawn, there is no basis for the plaintiff to argue that the defendant ought to have sought a declaratory relief against the termination of the agreement. Hence, the decision in I.S. Sikandar (supra) and other CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.46 Of 71 decisions following I.S. Sikandar (supra) have no relevance to the present case.
86. In the result, it is held that the plaintiff would not be entitled to any mesne profits.
87. The Issues Nos. 2 to 5 are answered in terms of the foregoing discussion.
88. The suit of the plaintiff is liable to be dismissed.
RE: REFUND OF SECURITY DEPOSIT WITH INTEREST BY THE PLAINTIFF TO THE DEFENDANT
89. Now, coming to the question of refund of the security deposit with interest. As already mentioned, during the course of the present suit, the defendant had on 28.09.2012 vacated the suit premises and handed over the same to the plaintiff. The defendant had in the present suit filed an application being I.A. No. 21990/12 seeking refund of the security deposit of Rs. 27,77,791/- along with interest. Vide order dated 15.05.2015, it was observed by the Hon'ble High Court that the relief sought in the suit for recovery of possession stood satisfied, and the I.A. No. 21990/12 was disposed of by observing that the issue of refund of security deposit would be considered at the time of final arguments.
90. I have also heard the learned counsel for the parties at the time of final arguments on the point of refund of security deposit to the plaintiff.
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Page no.47 Of 71
91. The Ld. counsel the defendant has referred to the order dated 15.05.2015 and has submitted that the defendant had filed the application being I.A. No. 21990/12 under section 151 CPC for refund of the security deposit upon handing over of the vacant physical possession of the suit property. It is submitted that vide order dated 15.05.2015 the application was disposed of by the Hon'ble High Court by observing that the issue of refund of security deposit would be decided at the time of final arguments. Ld. Counsel for the defendant has submitted that in as much as the suit of the plaintiff ought to be dismissed, the defendant would be entitled for refund of the security deposit which was admittedly paid by the defendant to the plaintiff and which was to be simultaneously refunded along with the handing over of possession in terms of the provisions of the lease. It is submitted that undisputedly the possession was handed over on 28.09.2012. Ld. Counsel has referred to clauses 6.6 and 6.8 (ii) of the lease deed. It is submitted that as per the terms of the lease the plaintiff would also be liable to pay interest on the security deposit from 28.09.2012 till actual payment. It is submitted that the defendant could seek refund of security deposit in the suit filed by the plaintiff itself. In this regard, the ld. Counsel for the defendant has referred to the decision in Liberty Sales Services v. Jakki Mull & Sons, (1997) 41 DRJ 26 (DB), 1997 SCC OnLine Del 215. It is submitted that the relief for refund of the security deposit along with the interest which is made by the defendant in the present suit by way of an application is CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.48 Of 71 incidental and connected to the plaintiff's own cause of action in the suit. It is submitted that the defendant would be entitled to claim the security deposit in the present suit filed by the plaintiff in as much as, assuming that if the plaintiff was to succeed in the suit, the security deposit would in such case be adjusted against the claim of mesne profits. It is submitted that by similar analogy, in case the suit is to fail, then the defendant can claim refund of the security deposit along with interest in terms of the lease. It is submitted that the claim for refund of the security deposit along with interest in terms of the lease is essentially a claim for restitution based on the doctrine of unjust enrichment and would be an equitable relief to which the defendant would be entitled.
92. On the other hand, the prayer for refund of the security deposit with interest is vehemently opposed by the learned counsel for the plaintiff. It is submitted that although if the plaintiff were to succeed in the suit, then of course the security deposit would be adjusted against the mesne profits, however, in the event that the suit of the plaintiff is dismissed, then no relief for refund of security deposit or interest could be granted to the defendant in as much as the defendant never filed any counter claim in the present suit. It is submitted that it was for the defendant to file a counter claim or a separate suit claiming refund of the security deposit and interest and having not done so, the relief for refund of security deposit and interest had become barred by limitation. It is further submitted that without filing a CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.49 Of 71 counter-claim and without filing any court fees in respect of such counter claim, the defendant cannot claim refund of security deposit or interest. It is further submitted that the order dated 15.05.2015 passed by the Hon'ble High Court of Delhi did not grant any right in favour of the defendant but merely observed that the issue of refund of security deposit would be decided at the time of final arguments and nothing more. It is submitted that when the defendant had never filed any counter claim claiming refund of the security deposit and when this relief had become barred by limitation, the defendant could not seek refund of security deposit along with interest in the plaintiff's suit. Ld. counsel for the defendant has further submitted that Liberty Sales Services (supra) would have absolutely no application in the facts of the present case in as much as that case was dealing with the case of an injunction. It is submitted that in that case the Hon'ble High Court (Division Bench) was only dealing with an issue whether the Ld. Single Judge could have allowed an interim application for injunction filed by the defendant in the plaintiff's suit, and that the issue of refund of security deposit as a final relief was not before the Court. It is submitted that hence Liberty Sales Services (supra) is completely distinguishable from the facts of the present case and has no application.
93. I have considered the submissions of the learned counsels for the parties on the aspect of refund of security deposit along with interest.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.50 Of 71
94. The sole objection raised by the plaintiff to the defendant's claim for refund of security deposit along with interest is that this relief cannot be granted to the defendant in the plaintiff's suit without the defendant filing any counter- claim.
95. It would be appropriate to refer to the decision of the Hon'ble High Court of Delhi in Liberty Sales Services (supra), which has been relied upon by the defendant. The facts in the said case were that while dismissing the suit of the plaintiff, the Court on an application granted injunction in favour of the defendant and against the plaintiff. The plaintiff filed appeal before the Hon'ble High Court (Division Bench). In the appeal, in Liberty Sales Services (supra), it was held as follows:
"xxx xxx xxx On the basis of the above contentions of the counsel, the following points are for consideration:
(1) xxx xxx xxx
(2) xxx xxx xxx
(3) Whether the learned Single Judge had powers to allow IA 4480/96 filed by defendant directing appellant to remove the goods, furniture and decorative material and whether this amounted to passing a decree for possession in favour of CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.51 Of 71 defendant and against the appellant without the defendant filing a separate suit?
xxx xxx xxx
xxx xxx xxx
Point 3: This relates to the allowing of the IA of the respondent-defendant against the appellant for removal of goods. It is true that when a suit for injunction is field by a plaintiff against a defendant, normally, the defendant cannot get a decree for possession against the plaintiff. But, question is whether there are any exceptions to this rule.
Learned counsel for the defendant pointed out that the agreement had come to an end on 31.3.1994 and the suit had been filed by appellant for injunction in April 1994 in the court of the Sub Judge (later it was transferred to the High Court) and ex-parte injunction had been granted against respondents on 2.4.1994. The respondents filed written statement and reply in the I.A. contending that there was no tenancy and it was only an agency agreement. The learned Sub Judge vacated the temporary injunction on 15.4.1994. An Appeal M.C.A. 112/94 was filed before Senior Sub Judge and a "status quo order" was granted on 19.4.1994. This appeal was transferred to High Court as FAO 231/96.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.52 Of 71 Meanwhile, appellant also filed the other suit 885/94 under Section 20 of the Arbitration Act in this Court and obtained an interim order, in the nature of a temporary arrangement on 23.5.94 as follows:
"Counsel for the plaintiff states that they have been tendering money payable every month to the defendant, but the defendant has not been accepting since the filing of the suit. Mr. Malhotra states that the defendant, who has been all along in possession of the suit premises and in fact the employees are his employees and he is paying their salaries and all out goings of the staff, which are reimbursed by the plaintiff under the impugned agreement. Be that as it may, I direct that the Plaintiff should pay to the defendant in the manner he was paying under the agreement dated 31.3.1994 and this payment shall be without prejudice to the rights and contentions of both the parties. The defendant will have a right to take daily account of the daily sales to enable him to know as to what amount is payable to him. The defendant shall continue to enjoy all rights, which are provided for under the said agreement. He will also have a right to visit the premises at any time during the shopping hours, but he will not interfere with the conduct of sales of the products. This CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.53 Of 71 arrangement shall continue till further orders. List the case on 29th July, 1994."
Thereafter the said interim injunction was affirmed, with slight modification by another learned Judge on 1.3.95, stating that prima facie the appellant was in physical possession and will continue in possession. If the agreement dated 23.5.1994 does not work, then the appellant might either tender Rs. 30,000 p.m. by cheque or draft etc. Or deposit the same in Court. Appellant was to file an undertaking into Court to compensate respondent for such amount as the Court may assess if the petition filed by them is dismissed.
This latter order dated 1.3.95 was appealed against by the respondents before the supreme Court in SLP(C) 14065/95. The Supreme Court allowed the appeal on 2.11.95 and passed the following order:
"Leave granted.
Having heard both sides, we are satisfied that in the facts and circumstances of the case, the interim order dated 1.3.1995 made by the High Court which has the effect of recognising the prima facie possession of the property with the respondent and permitting its continuance subject to payment of Rs. 30,000/- per month as rent to the appellant is not justified. Even the tentative finding on the question of CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.54 Of 71 possession of the disputed property may have an impact on the merits of the other points involved for decision between the parties in this and other litigations between them. The facts do not justify grant of the equitable relief of temporary injunction in this case. We refrain from mentioning or commenting upon the detailed submissions made by both sides since these matters have to be decided on merits in the first instance by the Court below.
For the above reasons the appeal is allowed and the impugned order in so far as it relates to making an interim order in the nature of injunction is set aside."
The above orders would, in our view, reveal that though the agreement expired on 31.3.94, the appellant obtained a series of interim orders on the first suit 264/94 on 2.4.94 from the Sub-Judge (before transfer) and it was vacated on 15.4.94. In MCA 1129/94 filed by appellant before Senior Sub-Judge, status quo order was obtained on 19.4.94. (MCA) also was transferred to High Court as FAO). Meanwhile, appellant filed Suit No. 885/94 in High court and obtained interim arrangement order dated 23.5.94 which was modified on 1.3.95 but the latter was set aside by Supreme Court on 2.11.95. As on 1.10.96, when the IA 2417/96 was filed in- Suit CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.55 Of 71 264/94 before transfer and IA 4480/96 was filed in same suit after transfer to this court by the defendants for removal of furniture, stock or decorative material, it is obvious that the stock must have been stock brought in after suit and before 1.10.96. Directions issued in the IAs in favour of defendant against plaintiff's to remove such stock in question is, in our view indeed an order in the nature of restitution under Section 151 CPC. So far as the furniture and decorative material is concerned, their removal is incidental to the other directions given. further when suit 885/94 is withdrawn, appellant could not have retained any benefit obtained by interim orders.
In any event, there is sufficient legal authority that in certain exceptional circumstance, a defendant can obtain an injunction against a plaintiff. This principle sometimes is applied in our country to interim injunctions i.e. while dismissing the temporary injunction applications of a plaintiff, temporary injunctions have been granted in favour of the defendant against the plaintiff. But the real basis of the principle in England appears to be that it is applied to suits, i.e. while dismissing injunction suits, a decree of injunction is passed against plaintiff and in favour of defendants, in certain situations.
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.56 Of 71 In Suganda Bai v. Sulu Bai (AIR 1975 Karn. 137) which no doubt related to Order 39 proceedings, G.K. Govinda Bhat CJ quoted Collisions v. Warrens (1901) 1 Ch. 912. There Buckley J. after referring to a number of decisions of the English Courts, quoted Lopes LJ in Carton v. Fey (1894(2) Ch. 541 (CA) (at 545) as follows:
"The question is this whether the defendant can move an injunction against the plaintiff without filing a counter claim or issuing a writ in a cross action. In my opinion, he can in some cases, but only in cases where the defendants claim to relief arises out of the plaintiff's cause of action, or is incidental to it."
Buckley J, also referred to the view of Davey LJ in Carter v. Fey to the following effect"
"In my opinion, it must be relating to or arising out of the relief sought in the action which is before the Court, and that any other injunction cannot be properly be granted in the action."
This case was followed by the Calcutta High Court in Ashis Ranjan Das v. Rajendra Nath Mullick (AIR 1982 Cal. 529) quoting Lindley L.J. in Carter v. Fey:
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.57 Of 71 "If the defendants application for an injunction were in any way conected with or incidental to the object and purpose of the plaintiff's action, he would have good ground for his contention."
It will be noticed therefore that a defendant can move for an injunction against the plaintiff without filing a counter-claim or suit or cross-action provided such a claim to relief arises out of the plaintiff's cause of action or is incidental to it. Halsbury's Laws of England, Vol. 24, 4th Ed, para 1048 refers to these case. It is, as already stated, significant that the principle was applied by the English Courts in the main suit itself for they say that relief can be claimed in the suit by the defendant by filing an application and without a counter-claim or cross-action or by issuing a writ. The condition is that it should arise out of the plaintiff's cause of action or is incidental to it. In fact, in Collision v. Warren 1910(1) Ch. 812, both plaintiff and defendant relied upon the same agreement, and it was held that defendant was entitled to apply for an injunction against the plaintiff. In that case, the plaintiff who was the owner of a business of running a hotel appointed defendant as trustee and executed a deed of arrangement describing the defendant as trustee to pay the plaintiff's creditors and agreed to occupy the lease hold house as manager. Later the defendant CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.58 Of 71 terminated the plaintiff's services as manager and requested plaintiff to leave the premises. The plaintiff sued for a declaration that he was to be continued as manager and sought for injunction, damages etc. Defendant gave notice of motion against plaintiff to restrain plaintiff from remaining in or upon the hotel and not to interfere in the management. Plaintiff contended that the defendant's request was in ejectment and could not be granted in plaintiff's suit for injunction. Buckley J. applied Carter v. Fey (1894)(2) CR. 541 while holding plaintiff has no right to continue in occupation or retain possession held:
"What is the defendant's cause of action? It is identically the same thing from the opposite point of view. He negatives the plaintiff's claim to be employed and claims to prevent him from interfering with the management. In the state of things. I think he is entitled to move in the plaintiff's action. It is a novelty to me that an order can be obtained to restrain a person from remaining in a house, which is, of course equivalent to a mandatory order upon him to go out".
After referring to Spurgin v. White (1860) 2 Giff. 473 where such an injunction of a mandatory nature was held could be issued, Buckley J. held:
CS No.59169 of 2016GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.59 Of 71 "That appears to me to be a precedent for an order I am prepared to make, which will have the effect of restraining the plaintiff from remaining in possession of the premises."
The said order was affirmed by the Court of Appeal, in the same report, by Rigby, Vaughan Williams and Stirling L.JJ.
Following the aforesaid ruling, we hold that the relief claimed by the defendants in their IA against the plaintiff arises out of the same contract upon which appellant had filed the suit and the relief is also incidental to the refusal of the plaintiff's injunction. The learned Judge was right in directing plaintiff to remove its stock, furniture and ornamental items. Point 3 is held against the appellant."
(Emphasis supplied by me)
96. The ratio of Liberty Sales Services (supra) is that in exceptional cases a defendant can claim a relief in the plaintiff's suit without filing a counter-claim or suit or cross-action provided that such a claim to relief arises out of the same cause of action or contract upon which the plaintiff had filed its suit and the defendant's relief is incidental to the refusal of the plaintiff's suit.
97. At this stage, it would be appropriate to also refer to the decision of the Hon'ble High Court of Delhi in CM (M) No. 484/2020 titled as Parnita Kapoor v. Arvind Malik, in CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.60 Of 71 which the Hon'ble High Court has relied upon the decision in Liberty Sales Services (supra) to grant relief to the defendant-landlord against the plaintiff-tenant in a suit filed by the plaintiff-tenant. Vide order dated 01.10.2020 in Parnita Kapoor (supra), it was directed as under:
"1. This hearing has been held through video conferencing.
2. The present petition has been filed challenging the order dated 27th August, 2020 by which the application of the Petitioners/ Defendants/ Landlords (hereinafter, "Landlords") of the property in question, seeking use and occupation charges, has been dismissed by the ld. Civil Judge.
3. The case of the Landlords is that they had given the property on rent vide agreement dated 15th October, 2018 for a period of 11 months only to one Mr. Roshan, who is also an advocate.
4. The Landlords are not aware as to the manner in which Respondent No.1, who is also an advocate, came into possession of the property. Respondent No.1 has filed a suit for permanent and mandatory injunction claiming that the monthly rent is Rs.1,60,000/-. The prayer is for an injunction restraining the Landlords from interfering in his enjoyment of the property and from getting the CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.61 Of 71 property vacated without following the due process of law. The application for use and occupation charges was then filed by the Landlords alleging that the property was never given on rent to Respondent No.1 and the rent was Rs. 3,80,000/- per month. The Landlords had even purchased stamp duty for getting the rent deed registered. In any event, the Landlords prayed that since Respondent No.1 is in occupation of the property, he should pay monthly use and occupation charges.
5. The ld. Trial Court has rejected the application for use and occupation charges on the ground that the suit does not relate to monthly occupation charges which the Landlords may be entitled to, as the cause of action is different.
6. Having heard ld. counsel for the Landlords, issue notice to the Respondents. As per the plaint, the Plaintiff/Respondent No.1 admits that the rent is Rs.1,60,000/- per month. The relevant extract of the plaint reads:
"3. That in the month of May, 2019, the defendant No.1 to 4 agreed to let out the suit property on rent to the plaintiff on monthly rent of Rs.1,60,000/- per month excluding the water and electricity charges for the residential for a period of three years and the plaintiff also CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.62 Of 71 agreed for taking the suit property on rent from the demanded the advance security amount of Rs.6,00,000/- from the plaintiff alongwith two months advance rent. ..."
7. Respondent No.1, even though he may be having various allegations against the Landlords, cannot enjoy the suit property without paying any use and occupation charges. Since the question as to whether the rent is Rs.3,80,000/- or Rs.1,60,000/- is yet to be adjudicated, to the extent that Respondent No.1 admits that monthly rent is Rs.1,60,000/-, he ought to pay the said amount in order to continue to enjoy the suit property. It is not necessary in every suit that a counterclaim ought to be filed for the defendant to seek relief. In Liberty Sales Services Vs. Jakki Mull & Sons, (1997) 41 DRJ 26 (DB), the Ld. Division Bench of the Delhi High Court has held that:
*** *** ***
*** *** ***
8. Thus, the Defendant in a suit would be entitled to claim relief without filing a counter-claim if the same arises out of the proceedings filed by the Plaintiff itself. Since the Plaintiff's/Respondent No.1's case in the Plaint is that the rent is Rs. 1,60,000/-, at least to CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.63 Of 71 that extent the Plaintiff/Respondent No.1 would be liable to pay the said amount to the Landlords.
9. Accordingly, as an interim order, it is directed that Respondent No.1 pay to the Landlords a sum of Rs.1,60,000/- per month on or before the 10th of every month w.e.f. 1st October, 2020. Ld. Counsel submits that the last paid rent was in November 2019. Thus, for the previous period i.e., since November, 2019 to 1st September, 2020, directions shall be issued after notice is served. Respondent No.1 shall also ensure that no third-party rights are created in the suit property and status quo is maintained as to title and possession.
10. ... ... ..."
(Emphasis supplied by me)
98. Ultimately, the Hon'ble High Court disposed of the CM (M) No. 484/2020 titled as Parnita Kapoor v. Arvind Malik, vide order dated 15.02.2021, by confirming the order dated 01.10.2020, as under:
"CM(M) 484/2020 ... ... ...
This petition is disposed of confirming the orders dated 01.10.2020 and 17.12.2020 of this court. The CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.64 Of 71 learned Trial Court shall consider the effect of the admitted default on part of the respondent no.1 while considering the suit/any application filed by the petitioners, on merit. The learned Trial Court shall also expedite the hearing of the suit."
(Emphasis supplied by me)
99. Thus, through Parnita Kapoor (supra) it is seen that there is a precedent that in a suit filed by a tenant as plaintiff against the defendant-landlord for injunction restraining interference from possession, the Hon'ble High Court of Delhi has granted relief to the defendant-landlord for the payment of the monthly rents. By similar analogy, in my view, this principle could also extend to a case of a defendant-tenant being granted the relief of refund of security deposit in a suit filed by the plaintiff-landlord for eviction and mesne profits.
100. The plaintiff has filed the present suit for possession and damages/mesne profits on the basis of the admitted lease deed dated 31.08.2004. It has not been disputed by the plaintiff that in case the plaintiff was to succeed in the suit, the security deposit amount was to be adjusted against the mesne profits. The defendant has in the present suit contested the claim of the plaintiff and has handed over vacant and physical possession during the pendency of the proceedings on 28.09.2012. In the suit, it has been the defendant's case that the possession of the defendant was CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.65 Of 71 authorised by Clause 4.4 of the lease deed, which position has been found to be ultimately correct. Upon vacating the demised premises, the defendant had moved the application being I.A. No. 21990/2012 for refund of the security deposit in terms of the lease. Vide order dated 15.05.2015, it was directed that the issue of refund of security deposit would be decided at the time of final arguments.
101. In its application u/s. 151 CPC being I.A. No. 21990/2012, the plaintiff has sought refund of security deposit of Rs. 27,77,791/- in accordance with Clause 6.6 of the lease deed along with interest from 28.09.2012 when the physical vacant possession was handed over till the date of actual refund of security deposit.
102. Clause 6.6 of the lease deed provides as follows:
"6.6 The amount, remaining unadjusted towards Security Deposit shall be refunded by the Lessor to the Lessee, simultaneous with the handing over vacant physical possession of the Demised Premises, on expiry of the Term of lease hereunder or such renewed Term (Second Term/ Third Term) as the case may be, by efflux of time or upon its sooner determination/termination, as provided herein."
103. Further, Clause 6.8 (ii) of the lease deed provides as follows:
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Page no.66 Of 71 "6.8 In the event, any part of the Security Deposit remains unadjusted, as specified in sub-
clause 6.6 above, the Lessor shall refund the unadjusted Security Deposit to the Lessee in full, upon determination of the Lease by efflux of time or upon its determination by way of termination during its renewed period. In addition, in case, the Lessee does not receive the unadjusted Security Deposit reserved herein in full and/or the Lessee does not receive the unadjusted Security Deposit under the lease for Space No. 1, 2, 3 and 4, the Lessor expressly agrees, undertakes and covenants as follows:
i) The Lessee shall (without prejudice to any of its other rights and remedies available in law or in equity), not be obliged of bound to vacate and give ING VYSYA LIFE INSURANCE CO. PVT. LTD.
charge of the Demised Premises to the Lessor and the Lessee shall be entitled to use or permit to use the Demised Premises by any person of its choice without being liable to pay any rent, outgoings or damages to the Lessor until such time as the Lessor refunds to the Lessee, the unadjusted Security Deposit in full;
ii) In addition, the Lessor shall be liable to pay to the Lessee interest 12% p.a., on the unadjusted Security Deposit from the date on which the same became CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.67 Of 71 due, till the date of actual receipt of the unadjusted Security Deposit by the Lessor to the Lessee; and
iii) In the event the Lessor is unable to refund the unadjusted Security Deposit as aforesaid for a period of 90 days from the date it becomes due, the Lessee shall be at liberty to further sublet the Demised Premises, to any Company of repute, for period of not less than Twelve (12) months at a time on such terms and conditions as the Lessee may in its absolute discretion deem fit. The Lessor shall be bound to and agrees that it will do all such acts deeds and things necessary whether by way of execution of any future documents/deeds or otherwise to bring about this understanding into effect and in the event that the Lessor is unable so to be present or to sign such documents/deeds, the Lessor hereby grants to the Lessee and appoints the Lessee as its Attorney with the right to execute such documents/deeds and to be present on its behalf before the appropriate authority for registration of the same document/deed and to be present on its behalf before the appropriate authority for registration of the same document/deed and to do all necessary acts, deeds and things as required by the lesee."
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104. The defendant has in its application I.A. No. 21990/2012 u/s. 151 CPC sought the refund of security deposit along with interest in terms of the Clauses 6.6 and 6.8 (ii) of the lease deed.
105. In my view, the claim of the defendant for refund of security deposit along with interest is a claim which can be said to be arising out of the plaintiff's own cause of action or at least can be said to be incidental to it. The defendant's claim for security deposit is itself incidental to the rejection of the plaintiff's relief in the suit. It is the own admitted case of the plaintiff that the security deposit amount was to be adjusted against the mesne profits claimed. The plaintiff filed the suit for possession and mesne profits, whereas the defendant contested the suit by claiming that the possession was authorised under Clause 4.4 of the lease. The possession was handed over during the pendency of the suit, and the application for refund of security deposit was filed. The relief sought for refund of the security deposit being incidental to the plaintiff's cause of action, the present case falls under the exceptional category, when the court can grant a relief in favour of the defendant and against the plaintiff even when the suit of the plaintiff is being dismissed. In so far as the quantum of security deposit being Rs. 27,77,791/- is concerned, no dispute has been raised regarding the same.
106. I have already held that the possession of the defendant till 28.09.2012 cannot be said to be wrongful and that the suit CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.69 Of 71 of the plaintiff is liable to be dismissed and that the plaintiff would not be entitled to any mesne profits. Simultaneously, with the handing over of vacant physical possession, the plaintiff was liable to refund the security deposit amount to the defendant in terms of Clause 6.6 of the lease deed, which was admittedly not done. Clause 6.8 (ii) of the lease deed provides for interest @ 12% p.a. in case of non-refund of the security deposit.
107. The non-refund/withholding of the security deposit even upon handing over of the possession on 28.09.2012 was for the reason that the claim of the plaintiff for mesne profits was pending adjudication in the present suit, and in case the plaintiff was to be found entitled to mesne profits, then the security deposit was to be adjusted. Now that the plaintiff's suit has been ultimately dismissed, the defendant would be entitled to receive the security deposit along with interest in restitution.
108. Accordingly, the defendant would be entitled to refund by the plaintiff of the security deposit amount of Rs. 27,77,791/- along with interest @ 12% p.a. from 28.09.2012 till date of actual payment, in terms of Clauses 6.6 and 6.8(ii) of the lease deed. It is ordered accordingly.
109. Since this order of refund with interest has been made in equity and in restitution, it would only be fair to direct the defendant to make payment of appropriate court fees on this amount. Accordingly, the order of refund of security with CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
Page no.70 Of 71 interest is subject to the defendant making payment of the court fees on the security deposit refund amount and interest granted.
DECISION
110. Accordingly, the suit of the plaintiff is dismissed.
111. In respect of the defendant's I.A. No. 21990/2012, the plaintiff is directed to refund to the defendant the security deposit amount of Rs. 27,77,791/- along with interest @ 12% p.a. from 28.09.2012 till date of actual payment. This order is subject to the defendant making payment of the court fees on the security deposit refund amount and interest granted.
112. Costs of Rs. 50,000/- are awarded to the defendant against the plaintiff.
113. Let the decree-sheet be drawn up accordingly.
114. File be consigned to record room after due compliance.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/30.04.2024 CS No.59169 of 2016 GOPAL DAS ESTATE & HOUSING P LTD. VS. ING VYSYA LIFE INS. CO. LTD.
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