Delhi District Court
Kamal Mitra vs M/S Dunlop India Pvt. Ltd on 30 January, 2024
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS No. 58857 of 2016
Date of Institution : 07.12.2012
Final arguments heard : 18.01.2024
Date of Judgment : 30.01.2024
1. Dr. Kamal Mitra Chenoy
S/o Late Mr. A.K. Mitra,
R/0 19, Sunder Nagar,
New Delhi-110003.
Presently residing at-
65, Dakshinapuram,
J.N.U. Campus, New Delhi- 110067
2. Dr. Anuradha Mitra Chenoy
w/o Dr. Kamal Mitra Chenoy
R/0 19, Sunder Nagar,
New Delhi-110003.
Presently residing at-
65 Dakahinapuram, J.N.U. Campus,
New Delhi-110067 ....Plaintiffs
Versus
1. M/s Dunlop India Limited,
having its registered office at:
Flat No. 1, 5th Floor,
9. Syed Amir Ali Avenue,
Kolkata-700017
Also at:-
7th Floor, Bank of Baroda Building,
CS No. 58857 of 2016
KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 1 of 34
16, Parliament Street,
New Delhi-110001
through its Chairman and Managing Director.
Also at-
Corporate Office, Ruia Centre,
46, Syed Amir Ali Avenue,
Kolkata -700017
Also at-
M/s Dunlop India Limited,
Alps Building, First Floor,
56 Janpath, New Delhi 110 001
OR
M/s Dunlop India Limited (in Liquidation)
through Official Liquidator (attached to the Hon'ble High Court
of Judicature of West Bengal at Kolkata),
9, Old Port Office Street, 5th Floor, Kolkata-700001.
2. Dr. A.P. Singh,
M/s Dunlop India Limited,
Presently at-
19, Sunder Nagar,
New Delhi-110003 ..... Defendants
JUDGMENT
1. The plaintiffs have filed the present suit seeking decree of possession, permanent injunction and damages/mesne profits.
2. The suit was originally filed before the Hon'ble High Court of Delhi as CS (OS) No. 3391/2012 and was CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 2 of 34 subsequently transferred to the District Court and assigned to this Court upon change in pecuniary jurisdiction.
3. The case of the plaintiffs as pleaded in the amended plaint is as follows:
3.1. The plaintiffs no. 1 and 2 are husband and wife, respectively. The plaintiff no. 1 is the sole and absolute owner of the plot of land bearing no. 19 in block no. 171, Sunder Nagar, New Delhi admeasuring 0.179 acres, vide duly registered conveyance deed dated 26/07/2011, and the residential building constructed thereupon comprising of 5 bedrooms with attached bathrooms, 1 study room, 1 dining and sitting room, 1 kitchen, 1 laundry room, two servant quarter sets, two garages, one front garden etc. (hereinafter referred to as the 'suit property').
3.2. The plaintiff no.1 had let out the suit property to the defendant no.1 on rent vide lease agreement dated 31/07/2009 which was duly registered. The lease was for a fixed period of 3 years commencing on 01/08/2009 and expiring on 31/07/2012.
3.3. As per clause 4 of the lease agreement, it was agreed that the suit property would be used only for the purpose of residence of the defendant no. 2 and his family.CS No. 58857 of 2016
KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 3 of 34 3.4. On 01/08/2009, a hire agreement was also executed between the plaintiff no. 2 and the defendant no. 1.
The hire agreement was co-terminus with the lease agreement.
3.5. The defendant no. 1 was obliged to pay a sum of Rs.
4 lacs to the plaintiffs per month (Rs. 1.6 lacs was payable to the plaintiff no. 1 under the lease agreement and Rs. 2.4 lacs was payable to the plaintiff no. 2 under the hire agreement).
3.6. The plaintiffs had informed the defendant no.1 well in advance prior to 31/07/2012 that the lease would not be renewed. The plaintiffs time and again put the defendants to notice that they would have to vacate the suit property on the expiry of the term on 31/07/2012.
3.7. There was no renewal of the lease agreement and the tenancy expired by efflux of time on 31/07/2012.
3.8. However, the defendant no.1 dishonestly and illegally and for mala fide motives sent a letter dated 11/08/2012 purportedly sending a demand draft for rent towards the period August 2012 to January 2013 in respect of the suit property. The plaintiffs through their counsel gave an appropriate notice/reply dated 29/08/2012 to the defendant no.1 in response to the letter dated 11/08/2012.
CS No. 58857 of 2016KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 4 of 34 3.9. The defendants were continuing with their illegal occupation of the suit property despite the expiry of the lease agreement on 31/07/2012. On and from 01/08/2012, the defendants were in illegal occupation of the suit property and the status of the defendants in the suit property was that of trespassers.
3.10. Since the defendants did not hand over the peaceful and vacant possession of the suit property even after the expiry of the lease agreement and hire agreement on 31/07/2012, the defendants became liable to pay damages @ Rs. 6 lacs per month to the plaintiffs which was the prevailing market rent in the vicinity/adjoining areas.
3.11. On this basis, the present suit was filed by the plaintiffs against the defendants.
4. Both the defendants in their respective written statements took a similar defence that the lease was renewed as the parties had agreed that the lease did not to expire by efflux of time and that the defendants were entitled to continue with the tenancy on the same rate of rent even after the expiry of the term given in the lease deed. On this basis, the defendants prayed that the suit be dismissed.
5. At the time when the suit was pending before the Hon'ble High Court, the plaintiffs filed an application under Order CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 5 of 34 XII Rule 6 CPC for a judgment on admission and decree of possession.
6. Vide judgement dated 18/03/2015, the application under Order XII Rule 6 CPC of the plaintiffs was allowed by the Hon'ble High Court holding that there was no renewal of the lease as pleaded by the defendants and the lease had come to an end by efflux of time, and the suit was decreed for possession in favour of the plaintiffs directing the defendants to forthwith vacate the suit property and hand over vacant physical possession.
7. The defendant no.1 filed an intra-court appeal to the Hon'ble Division Bench being RFA (OS) No. 40/2015 challenging the judgement dated 18/03/2015 whereby the suit was decreed for the relief of possession. The said appeal was dismissed vide order dated 22/05/2015, however, in view of the undertakings given by the defendants, it was directed that the execution of the decree for possession would remain in abeyance till 31/12/2015. It would be appropriate to extract the order dated 22/05/2015 passed by the Hon'ble High Court, in extenso, as under:
"1. The appellant has filed an undertaking on affidavit (Exh. A-1) in terms of submissions made by Mr. Vikas Singh, learned senior counsel for the appellant/company on 18th May, 2015 requesting for a small extension for vacation of the subject premises till 31st December, 2015 as well as time CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 6 of 34 and rate for payment of arrears of the rent and user occupation charges up to the date of vacation.
2. Mr. Ashok Kumar Jain, learned counsel for the appellant/company has additionally filed his Vakalatnama on behalf of respondent No.3/Mr. A.P.Singh and has filed an affidavit of undertaking on his behalf as well. Mr. Ashok Kumar Jain, learned counsel also identifies the signature of Mr. A.P.Singh at points Y-1 and Y-2 on the affidavit of undertaking, which is Exh. A-2.
3. The statement of Shri Purshottam Sharma, the authorised representative of the appellant, has also been recorded.
4. The position which emerges from the undertakings given by the appellant/company and respondent No.3 is that as on date Mr. A.P. Singh is physically occupying the possession of the property i.e. 19, Sunder Nagar, New Delhi on behalf of the appellant/company. The appellant/company and respondent No.3 have thus undertaken to this Court as follows:-
(i) The undertakings given by the appellant, respondent No.3/Mr. A.P. Singh as well as by Mr. Purshottam Sharma are hereby accepted and they shall remain bound by the terms thereof.
(ii) The appellant as well as Mr. A.P. Singh shall handover vacant and, peaceful physical possession of the property bearing No.19, CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 7 of 34 Sunder Nagar, New Delhi on or before 31st December, 2015 to the respondent Nos. 1 and 2.
(iii) The appellant shall pay arrears of the user, occupation charges at the rate of Rs.1,60,000/- per month for the period between December 2014 till 17th March, 2015 to the respondent Nos. 1 and 2 on or before 30* June, 2015. The appellant shall further pay use and occupation charges at the rate of Rs.4,50,000/- per month w.e.f. 18th March 2015 (the date of the impugned judgment and decree) till such date, vacant and peaceful physical possession of the property bearing No. 19, Sunder Nagar, New Delhi is handed over to the respondent Nos. 1 and 2. Till date, arrears of this amount shall be paid to the respondent Nos.1 and 2 on or before 30* June, 2015.
(v) The appellant/company and the respondent No.3 shall not create third party rights of any kind in the property bearing No.19, Sunder Nagar, New Delhi.
(vi) So far as the pending claim of mesne profits of the respondent Nos.1 and 2 in CS(OS) No.3991/2012 is concerned, the same shall abide by the adjudication on the original side, which is on going. The payments made by the appellant/company and respondent CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 8 of 34 No.3 and the receipt of the payments in terms of the above undertakings by the respondent Nos. 1 and 2 is without prejudice to the respective rights and contentions of the parties so far as this determination is concerned.
(vii) Upon failure of the appellant/company to pay the amounts, the respondent No.3 shall be personally liable to make payments of the amount in terms of para 2 of his undertaking (Exh. A-2) and he shall remain bound by the same.
5. It is submitted by Mr. Ashok Kumar Jain, learned counsel that he shall ensure that the certified copy of the extract of the Minutes dated 09th August, 2014 (photocopy whereof has been filed on record by Shri Purshottam Sharma today), is positively filed on record within a period of one week from today. Let the same be so done.
6. The present appeal assailing the judgment and decree dated 18th March, 2015 is consequently hereby dismissed.
7. In view of the undertakings given by the appellant/company and the respondent No.3, it is directed that execution of the decree for possession of the property shall remain in abeyance till 31st December, 2015."
CS No. 58857 of 2016KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 9 of 34
8. Vide order dated 29/09/2015, an issue was framed on the point of mesne profits in the suit, as follows:
"1. Whether the plaintiffs are entitled to mesne profits, if so at what rate and for which period? OPP
2. Relief."
9. Subsequently, vide order dated 19/01/2016, the suit was transferred to the Ld. District Judge, New Delhi at Patiala House Courts due to change in pecuniary jurisdiction and the suit came to be assigned to this Court.
10. The plaintiffs led the evidence in support of their case. The plaintiffs no. 1 and 2 examined themselves as PW-1 and PW-2, respectively, and tendered their affidavits in evidence as Ex.PA/1 and Ex.PA/2 in which they deposed along the lines of the plaint. They were cross-examined by the defendants.
11. The plaintiffs also examined PW-3 Mrs. Vandana Manchanda who was called to prove the rate of rent of a neighbouring property. PW-3 tendered her affidavit in evidence as Ex.PW1/A and also produced certified copy of lease deed dated 29/05/2013 as Ex.PW-3/1.
12. The plaintiffs also summoned an official witness from the Office of the Sub-Registrar-V, Mehrauli to produce the registered lease deeds of some neighbouring properties. PW-4 Mr. Sanjay Goswami, Record Attendant, Sub-
CS No. 58857 of 2016KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 10 of 34 Registrar-V, Mehrauli appeared in response to the summons and he produced the lease deed dated 09/11/2010 as Ex.PW-4/1 and lease deed dated 17/12/2013 as Ex.PW-4/2.
13. Thereafter, the matter was put up for leading of defence evidence, however, since none appeared on behalf of the defendants, vide order dated 07/07/2017, the opportunity to lead defence evidence was closed and the matter was put up for final arguments. Thereafter, since none appeared on behalf of the defendants, the defendants were proceeded ex parte vide order dated 08/08/2018, and, subsequently, the ex parte final arguments were heard.
14. An ex parte judgement and decree dated 11/11/2019 was passed in favour of the plaintiffs and against both the defendants decreeing the suit for damages/mesne profits @ Rs. 6 lacs per month with effect from 01/08/2012 till 20/01/2016, along with simple interest @ 9% p.a., after adjusting the payments already made by the defendants from time to time.
15. Thereafter, only the defendant no. 2 herein filed an application under Order IX Rule 13 CPC for setting aside the ex parte judgment and decree dated 11/11/2019. Vide order dated 04/03/2022, the said application was dismissed by this Court.
16. Thereafter, only the defendant no.2 challenged the ex parte judgment and decree before the Hon'ble High Court of CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 11 of 34 Delhi in FAO No. 146/2022. Vide order dated 29/08/2022, which was passed with the consent of the parties, the order dated 08/08/2018 whereby the defendant no.2 was proceeded ex parte and consequent proceedings including passing of the ex parte decree was set aside. It would be appropriate to extract the relevant portion of the order dated 29/08/2022 passed by the Hon'ble High Court of Delhi in FAO No. 146/2022, as under:
"1. With the consent of the parties, the impugned order dated 08.08.2018 whereby the appellant has been proceeded ex-parte and consequent proceedings including passing of the decree are set aside. However, the respective contentions of the parties shall remain open to be adjudicated upon.
2. ... ... ..."
17. Accordingly, the suit was again taken up for adjudication by this Court.
18. The defendant no. 2 filed an application under Order I Rule 10 CPC for deletion of the defendant no. 2 from the array of parties. It was directed vide order dated 29/10/2022 that the said application shall be considered at the time of final arguments.
19. Thereafter, upon an application moved by the defendant no.2, the defendant no. 2 was permitted to lead evidence. Accordingly, the defendant no. 2 tendered his affidavit in evidence as Ex.DW-2/1 and he was cross-examined by the plaintiff.
CS No. 58857 of 2016KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 12 of 34
20. Thereafter, the final arguments were heard. The learned counsels for the plaintiff and the defendant no. 2 have made their respective submissions.
21. The plaintiff and the defendant no. 2 have also filed their respective written submissions.
22. I have considered the submissions of the learned counsels for the parties and I have perused the record including the pleadings, evidence (both oral and documentary) and the written submissions.
DECISION Issue-1: Whether the plaintiffs are entitled to mesne profits, if so at what rate and for which period? OPP
23. The learned counsel for the plaintiffs has submitted that in so far as the defendant no.1 is concerned, the defendant no.1 never challenged the ex parte judgment and decree dated 11/11/2019 and that as such the ex parte judgment and decree dated 11/11/2019 had become final with respect to the defendant no.1. It is submitted that it is only the defendant no.2 who had challenged the ex parte judgment and decree in an application under Order IX Rule 13 CPC, which came to be dismissed, and subsequently vide the appeal being FAO No. 146/2022. It is submitted that the order dated 29/08/2022 passed by the Hon'ble High Court in FAO No. 146/2022 was confined to the appellant therein i.e. the defendant no.2.
CS No. 58857 of 2016KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 13 of 34
24. In this regard, the learned counsel for the plaintiffs has also relied upon the following case laws: Mst. Suraj Kanwar Vs. Champalal, 1960 SCC OnLine Raj 61, M. Nanu & Anr. Vs. K.C. Joseph & Ors., 2001 SCC OnLine Ker 315, The Motor & General Finance Ltd. Vs. S Durailingam & Anr, 2009 (3) CTC 342, Bank of India Vs. M/s Mehta Brothers & Ors., 1991 SCC OnLine Del 140, Mehta Brothers & Ors. Vs. Bank of India & Anr., 2000 SCC OnLine Del 860, Bank of India Vs. Mehta Brothers & Ors., (2008) 13 SCC 466, and Arjun Singh Vs. Mohindra Kumar & Ors., (1964) 5 SCR 946.
25. Admittedly, the defendant no.1 never challenged the ex parte judgment and decree dated 11/11/2019. It was only the defendant no.2 who had challenged the ex parte judgment and decree in the application under Order IX Rule 13 CPC, and, subsequently, vide the appeal being FAO No. 146/2022. Even the memo of parties before the Hon'ble High Court in FAO No. 146/2022 shows that the defendant no.1 was arrayed therein as respondent no.3 only as a pro forma respondent. Perusal of the order dated 29/08/2022 which was passed by the Hon'ble High Court in FAO No. 146/2022 with the consent of the parties also shows that there was no appearance on behalf of the defendant no.1 (pro forma respondent no.3 in the appeal). A reading of the consent order dated 29/08/2022 also shows that the same was confined to the defendant no.2 only who was the appellant. The defendant no.1 has also not appeared or participated at the stage of final arguments CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 14 of 34 to contest this position, quite understandably, as the defendant no.1 also understood that the ex parte judgment and decree dated 11/11/2019 had become final with respect to the defendant no.1. Thus, the submission on behalf of the plaintiffs that the ex parte judgment and decree dated 11/11/2019 had become final with respect to the defendant no.1 deserves to be accepted.
26. The only one issue which is now to be decided is as to the liability of the defendant no. 2 towards mesne profits, which has been hotly contested by the defendant no. 2.
27. The learned counsel for the plaintiffs has submitted that the judgement dated 18/03/2015 holding that the lease expired by efflux of time on 31/07/2012 had attained finality. It is submitted that the defendant no.2 had come into possession through the lease between the plaintiff and the defendant no.1, and that it is the admitted position that the defendant no. 2 remained in physical possession even after expiry of the lease on 31/07/2012. It is further submitted that it is also the admitted position that the possession was ultimately handed over on 20/01/2016. It is submitted that during the period from 01/08/2012 till 20/01/2016, since the lease had already expired, the possession of the defendant no.2 was wrongful and, hence, the defendant no. 2 would be liable for mesne profits since he was the person who was actually in possession.
28. It is further submitted that the defendant no. 2 had also given undertaking before the Hon'ble High Court CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 15 of 34 (Division Bench) in RFA (OS) No. 40/2015, on the basis of which the execution of the decree for possession had been kept in abeyance for some time. It is submitted that in the undertaking, the defendant no.2 had undertaken that he would be personally liable to make payments of the use and occupation charges. It is submitted that even in view of the undertaking given by the defendant no. 2 in RFA (OS) No. 40/2015, the defendant no.2 would be personally liable.
29. On the other hand, the learned senior counsel for the defendant no.2 has vehemently put forth the contention that the defendant no. 2 was not even a necessary or proper party in the suit and that either the defendant no. 2 be deleted from the suit or the suit be dismissed in respect of the defendant no. 2. It is submitted that it was only the defendant no. 1 which was the lessee under the lease deed with the plaintiffs and the defendant no. 2 had no privity of contract with the plaintiff. The learned senior counsel has in this regard referred to the rent agreement Ex.PW-1/1 and the hire agreement Ex.PW-2/1 and has submitted that as per these agreements it was only the defendant no. 1 which was the lessee or hirer, and the defendant no. 2 had no role to play. The learned senior counsel has also referred to the pleadings of the plaintiffs in the amended plaint and has submitted that it was the admitted case of the plaintiffs that the lease agreement and hire agreement were only executed with the defendant no. 1 and not with the defendant no. 2, and that the notices to vacate had been CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 16 of 34 sent only to the defendant no. 1 and not to the defendant no. 2. It is submitted that as such any liability for mesne profits or damages, if any, was that of the defendant no. 1 only and not that of the defendant no. 2. The learned senior counsel for the defendant no. 2 has, in this regard, also relied upon the decision in Nandkishore Savalaram Malu v. Hanumanmal C. Biyani (2017) 2 SCC 622, and particularly to paragraphs 23 to 29 of the judgment which are extracted hereunder:
"23) The legal effect of such eviction decree under the Rent Act was that the possession of the tenant-
firm and persons claiming through such tenant became unauthorized. Since the tenant was a Firm, persons connected with the internal affairs of the Firm such as its partners and the employees working in the Firm were also bound by the eviction decree for the simple reason that all such persons were claiming through the tenant-Firm.
24) An employee of a tenant is never considered to be in actual possession of tenanted premises much less in possession in his legal right. Indeed, he is allowed to use the tenanted premises only with the permission of his employer by virtue of his contract of employment with his employer. An employee, therefore, cannot claim any legal right of his own to occupy or to remain in possession of the tenanted premises while in employment of his employer or CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 17 of 34 even thereafter qua landlord for want of any privity of contract between him and the landlord in respect of the tenanted premises.
25) There was, therefore, no need for the appellant to file a separate suit to claim possession of the suit house against defendant no.1 under the general law as he was well within his legal right to execute the decree for eviction from the demised premises in this very litigation not only against the original tenant but also against all the persons who were claiming through such tenant. As mentioned above, defendant no.1 was such person who was held to be claiming through the tenant being its employee and was, therefore, bound by the decree once passed against his employer-tenant.
26) A tenancy is a creation of contract between the two persons who are capable to enter into contract called lessor/landlord and the lessee/tenant. The two persons can be either living person or juristic persons such as Partnership Firm or a Company.
27) Once the tenancy is created either orally or in writing with respect to a land or building then it is always subject to the relevant provisions of the Transfer of Property Act, 1882 (hereinafter referred to as "the TP Act") and the State Rent Acts. Sections 105 to 111 of the TP Act provide certain safeguards, create some statutory rights, CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 18 of 34 obligations, duties whereas the State Rent Acts, inter alia, specify the grounds to enable the lessor to evict the lessee/tenant from the demised premises.
28) If the lessee/tenant is a living person, then in such event, the tenant would also include his legal representatives in the event of his death together with his dependents living with the tenant in the tenanted premises. Likewise, if the lessee/tenant is a juristic person, i.e., partnership Firm then such tenant would represent the interest of all the partners of the Firm and the employees working in the Firm. Such persons since claim through the Firm, they have no right of their own in the tenancy and in the demised property qua landlord.
29) As a matter of fact, in our view, it was not necessary for the appellants to have impleaded defendant no.1 in the present rent proceedings. The reason being that in rent proceedings the lessee/tenant is the only necessary or/and proper party and none else. A person, who claims through lessee/tenant, is not a necessary party."
(Emphasis supplied by me)
30. The learned senior counsel for the defendant no. 2 has further submitted that the reliance placed on the order dated 22/05/2015 passed by the Hon'ble High Court (Division Bench) in RFA (OS) No. 40/2015 was misplaced CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 19 of 34 inasmuch as per paragraph 4(iii) of the said order it was only the defendant no.1 who was directed to pay the use and occupation charges and that the defendant no.1 had already made payment in terms thereof. It is further submitted that as observed in paragraph 4(vi) of the said order, the payments by the defendants were without prejudice to their rights and contentions on the issue of mesne profits which was to be determined. It is submitted that as such, the order dated 22/05/2015 cannot be read in the manner as has been sought to be presented by the plaintiffs to fix any liability of mesne profits upon the defendant no. 2.
31. I have considered the submissions of the learned counsels for the parties.
32. I have no manner of doubt that the defendant no. 2 would also be liable for the mesne profits.
33. It is the admitted position that under the lease agreement Ex.PW-1/1, under clause 4, the defendant no. 1 had taken the suit property on lease solely for the purpose of residence of the defendant no. 2 and his family and personal guests of the defendant no.2. It would be appropriate to extract paragraph 4 of the lease as follows:
"4. To use the demised premises solely as the residence of Dr. A.P. Singh and his family and bona fide personal guests, and not to use the same as a CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 20 of 34 guest house or office or for any other non- residential purpose."
34. Thus, although the defendant no. 2 was not a party to the lease, however, the defendant no. 2 was the main beneficiary under the lease and it was the defendant no. 2 who came to be in the actual physical possession of the suit property under the lease.
35. Vide judgment dated 18/03/2015 passed by the Hon'ble High Court in the present suit, it has already been held that the lease had come to an end by efflux of time i.e. on 31/07/2012 and that there was no renewal thereof as was pleaded by the defendants. The appeal preferred by the defendant no. 1 against the aforesaid judgment was dismissed and the findings that the lease had terminated by efflux of time on 31/07/2012 and that there was no renewal of the lease have become final.
36. Upon termination of the lease by efflux of time i.e. on 31/07/2012, the possession of the suit property ought to have been given to the plaintiff. However, this was admittedly not done. The admitted position is that it was the defendant no. 2 who was in actual physical possession of the suit property as on the date when the lease was terminated i.e. on 31/07/2012. Admittedly, the suit property was vacated only on 20/01/2016. This was specifically put to the defendant no.2 in his cross- examination and he does not deny this. The possession of the defendant no. 2 of the suit property beyond 31/07/2012 CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 21 of 34 was clearly wrongful and illegal inasmuch as the defendant no. 2 had no legal basis to remain in possession of the suit property beyond 31/07/2012. As such, I see no reason why the defendant no. 2 should not be liable for mesne profits for the period from 01/08/2012 till 20/01/2016 when it was the defendant no. 2 who was in actual physical possession and was actually enjoying and occupying the suit property during this period.
37. Sub-section 12 of section 2 of the Code of Civil Procedure defines mesne profits, as follows:
"2 (12). 'Mesne profits' of property means those profits which the person in the 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)
38. Thus, in determining the liability for mesne profits it is to be seen as to whether the defendant was in wrongful possession of the property. If the answer is in the affirmative, then the defendant would be liable for mesne profits. It would be immaterial whether the defendant no. 2 was a party to the lease agreement. The defendant no. 2 was well aware that his coming into occupation of the suit property was only on the basis of the lease and that his CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 22 of 34 occupation could continue only till the duration of the lease. Once the lease came to an end on 31/07/2012 and the defendant no. 2, who had come into possession under the lease only, continued to remain in actual physical possession, such possession beyond 31/07/2012 was wrongful possession. Being in wrongful possession, the defendant no. 2 would without any doubt be liable for mesne profits.
39. Moreover, a perusal of the written statement of the defendant no.2 shows that the defence taken by the defendant no.2 was identical to the defence taken by the defendant no.1 to the effect that the parties had agreed taht even after the expiry of the term of the lease, the defendants would be entitled to continue with the tenancy and possession at the same rate of rent (See paragraph 4 of the preliminary submissions portion of the written statement of the defendant no.2). There is no defence taken by the defendant no.2 in his written statement that he was not personally liable since it was only the defendant no.1 who had executed the lease. Thus, the defendant no.2 never even raised the defence in his pleading to the effect that he was not personally liable. The only defence taken was that the defendants were not liable to be vacated or to mesne profits in as much as there was a renewal of the lease, which defence already stands negatived.
40. There is another important aspect of the matter. The Hon'ble High Court had passed judgement and decree CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 23 of 34 dated 18/03/2015 in the present suit decreeing the suit for the relief of possession in favour of the plaintiff and against the defendants. The defendant no. 1 had challenged the said judgment before the Hon'ble Division bench vide RFA (OS) No. 40/2015. In the said RFA proceedings, both the defendant no. 1 and the defendant no. 2 gave undertakings. The appeal was dismissed vide order dated 22/05/2015, however, in view of the undertakings given by the defendants, it was directed that the execution of the decree for possession shall remain in abeyance till 31/12/2015. Ultimately, the possession was handed over to the plaintiff's on 20/01/2016.
41. In the RFA proceedings, the defendant no. 2 had given an undertaking by way of an affidavit dated 31/05/2015 that he would also be personally liable to make payments of the use and occupation charges. It would be appropriate to reproduce paragraph 2 of the undertaking as under:
"2. I hereby undertake before this Hon'ble court that since I am in possession & occupation of the suit property, I shall quit and vacate the suit property and shall deliver the vacant possession of the said property to the Respondent nos. 1 and 2 on or before 31.12.2015. I also undertake that I shall be liable to pay Rs. 4,50,000/- per month to the respondent nos. 1 and 2 from the rate of decree till the time I would quit and vacate and deliver the CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 24 of 34 vacant possession of the property to the respondents no. 1 and 2 in case the Company fails to pay."
42. Through his undertaking, in essence, there is an admission by the defendant no.2 of his personal liability for occupation charges in as much it was he who was in the actual possession and occupation of the suit property. It was on the basis of this undertaking of the defendant no.2 that the Hon'ble High Court in RFA (OS) No. 40/2015 vide order dated 22/05/2015 directed that the execution of the decree of possession shall remain in abeyance till 31/12/2015, although the appeal against the decree was dismissed. The possession was ultimately handed over to the plaintiffs only on 20/01/2016. The defendant no.2, having taking advantage of the directions of the Hon'ble High Court which was based on the undertaking of the defendant no.2, cannot now turn around and say that he would not be personally liable for the occupation charges.
43. The judgment in Nandkishore Savalaram Malu (supra) which is relied upon by the defendant no. 2 does not in any manner really help the case of the defendant no.2. That was a case in which the landlords had filed a suit for eviction and arrears of rent under the Bombay Rent Control Act against a firm and the firm's employee. The trial court dismissed the suit against the firm's employee but decreed the suit against the firm. The landlords appealed, and the first appellate court allowed the appeal and decreed the suit against all the defendants. On a CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 25 of 34 revision application, the Hon'ble High Court set aside the order of the first appellate court and restored the order of the trial court. The Hon'ble Supreme Court has categorically held in paragraph 20 of the judgment that the order of the first appellate court reversing the order of the trial court and decreeing the suit for arrears of rent, eviction and mesne profits against all the defendants jointly and severally was correct and there was no legal basis for the Hon'ble High Court to reverse the order. The observations of the Hon'ble Supreme Court in paragraphs 24 of the judgment to the effect that an employee of the tenant is never considered to be in actual possession of the tenanted premises and in paragraphs 28 and 29 that the tenant's employee was not a necessary party in rent proceedings was in the context that an eviction decree against the tenant would also bind the employee of the tenant and the landlord need not file a separate suit to claim possession against the employee. I do not see the observations made in paragraphs 23 to 29 in Nandkishore Savalaram Malu (supra) to be helping the case of the defendant no.2 in any manner when in the present case the suit property was taken on lease specifically as per the terms of the lease for the purpose of residence of the defendant no.2 and his family. The defendant no.2 entered into actual physical possession of the property under this term of the lease and he continued to occupy the property despite termination of the lease by efflux of time. Furthermore, it is not even the case of the defendant no.2 that he was an employee of the defendant no.1 or was CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 26 of 34 occupying the suit property in this capacity. As already mentioned, the defendant no.2 has not even raised any defence in his written statement that he was not personally liable. His defence taken was only that the lease was renewed by agreement between the parties, which defence already stands negatived. In his cross-examination he states that Mr. P.K. Ruia of the defendant no.1 whom he was advising had requested him to stay at the suit property. He does not say that he was an employee of the defendant no.1. He states that his dealings were only with the defendant no.1 and not with the plaintiffs. Thus, it appears that there was some arrangement between the defendants inter se that the lease deed would be executed by the defendant no.1 with the plaintiffs for the purpose of the residence of the defendant no.2 and that the rent was payable by the defendant no.1. This inter se arrangement between the defendants would not bind the plaintiffs, who would be entitled to mesne profits from both the defendants jointly and severally since it was the defendant no.2 who was in actual possession under a specific term of the lease and he continued to occupy despite the lease having coming to an end.
44. In the result, I would hold that the defendant no. 2 cannot escape liability to pay the mesne profits to the plaintiffs on account of his wrongful occupation of the suit property from 01/08/2012 till 20/01/2016.
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45. The application under Order I Rule 10 CPC filed by the defendant no. 2 is accordingly dismissed.
46. Now, the question remains regarding the quantum of the mesne profits which the defendant no.2 would be liable to pay.
47. It is submitted by the learned counsel for the plaintiffs that the suit property is situated in a very prime area of Delhi i.e. Sunder Nagar and the plaintiff had proved the monthly rents in the same locality in similar properties. It is submitted that as per the lease deed Ex.PW-3/1 the monthly rent for a neighbouring property was around Rs. 3.3 lakhs for only the first floor during the contemporaneous period. It is submitted that as per lease deeds Ex.PW-4/1 and Ex.PW-4/2 which were also in respect of neighbouring properties during the contemporaneous period, the monthly rent was around Rs. 11.5 lacs and Rs. 9.07 lacs, respectively, for the whole property. It is submitted that in such circumstances, the claim of the plaintiffs of Rs. 6 lacs per month only was fully justifiable as this was the market rate of rent.
48. The learned counsel for the plaintiffs has further submitted that the court could take judicial notice of the increase of rent in urban areas and could grant a compounded increase at the rate of 15% per annum over the last paid rent and hire charges. In this regard, the learned counsel has referred to the following judgements: M.C. Aggarwal (HUF) Vs. Sahara India & Ors. 183 (2011) DLT 105, CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 28 of 34 Chander Kirti Rani Tandon Vs. M/s VXL Lodging N. Boarding Services Pvt. Ltd., 197 (2013) DLT 266, M/s Basant & Company Vs. M/s. Osram India Pvt. Ltd., 2018 SCC OnLine Del 7776, Adil Singh & Ors. Vs. Union of India & Ors., 280 (2021) DLT 562, Balwant Singh Dhamrait & Ors. Vs. The State Bank of India & Ors, 295 (2022) DLT 72. It is submitted that even if a compunded increase of 15% per annum was made on the last paid rent and hire charges from the year 2012-13 to 2015-16, then this would work out to Rs. 4.6 lacs per month for 2012-13, Rs. 5.29 lacs per month for 2013-14, Rs. 6.08 lacs per month for 2014-15 and Rs. 7 lacs per month for 2015-16, which would also average out to almost Rs. 6 lacs per month. As such, it is submitted that the claimed rate of mesne profits at the rate of Rs. 6 lacs per month was justifiable.
49. On the other hand, the learned senior counsel for the defendant no. 2 has disputed the rate of Rs. 6 lacs per month towards mesne profits as claimed by the plaintiffs. It is submitted that it was the own case of the plaintiffs that the rent of the suit property for the period up to July 2012 was Rs. 1.6 lacs per month only. It is submitted that an increase to Rs. 6 lacs per month would be a jump of 500% which was based on wild imagination and was not justifiable. It is submitted that it was the admitted case of the plaintiffs that the amount of Rs. 2.4 lacs per month was towards hire charges of the fittings and fixtures. It is submitted that there could not be such an increase as CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 29 of 34 claimed by the plaintiffs since no new amenities had been added and the fittings and fixtures were old.
50. It is further submitted that since the plaintiffs had agreed to drop PW-3 as a witness in the proceedings before the Hon'ble High Court in CM(M) No.407/2023, the lease deed Ex.PW-3/1 was not proved and cannot be read in evidence and relied upon by the plaintiffs.
51. It is further submitted that, in any case, the lease deeds for the neighbouring properties which were relied upon by the plaintiffs could not be a benchmark for determining the mesne profits in respect of the suit property. It is submitted that the determination of rent depends on various factors such as the age of construction, quality of construction, which side the property was facing, and various other factors. It is submitted that the plaintiffs have been unable to show that the neighbouring properties, in respect of which the plaintiffs were relying upon the lease deeds to support their claim for mesne profits, were similar in nature to the suit property in the present case.
52. I have considered the aspect of quantification of the rate of mesne profits.
53. The suit property comprises of a plot and a residential building constructed thereupon comprising of 5 bedrooms with attached bathrooms, 1 study room, 1 dining and sitting room, 1 kitchen, 1 laundry room, two servant quarter sets, two garages, one front garden etc. As per the CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 30 of 34 registered lease deed dated 31/07/2009 between the parties for the suit property, the suit property was let out for a period of 3 years commencing on 01/08/2009 and expiring on 31/07/2012 for a total amount of Rs. 4 lacs towards the lease as well as towards the fittings and fixtures. For the purposes of calculating the mesne profits, it would be proper to take into account the composite figure of Rs. 4 lacs towards the last paid rent and charges towards fittings and fixtures. The argument of the defendant no.2 that it is only the figure of rent of Rs. 1.6 lacs which is to be taken into account is not acceptable. The parties may have bifurcated the amounts for their convenience, however, the matter of fact remains that the suit property was fetching the plaintiffs an amount of Rs. 4 lacs per month as on July 2012.
54. In light of the decisions in M.C. Aggarwal (supra), Chander Kirti Rani Tandon (supra), M/s Basant & Company (supra), Adil Singh (supra), Balwant Singh Dhamrait (supra), the court could take judicial notice of the increase of rent in urban areas and grant a compounded increase at the rate of 15% per annum over the last paid rent and charges. Even if a compounded increase of 15% per annum is made on the last paid rent and charges of Rs. 4 lacs from the years from 2012-13 to 2015-16, then this would average out to around Rs. 5.75 lacs per month which is only a little less than Rs. 6 lacs per month which is claimed by the plaintiffs. If it is also take into account that the suit property is in one of the most prime localities CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 31 of 34 of New Delhi i.e. Sunder Nagar, then it does not seem that the rate of mesne profits of Rs. 6 lacs per month is unreasonable in any manner.
55. The plaintiffs have also relied upon registered lease deeds of neighbouring properties for a contemporaneous period. Under the registered lease deed Ex.PW-4/1, the rent was Rs. 11.5 lacs, whereas under the registered lease deed Ex.PW-4/2, the rent was Rs. 9.07 lacs. Even if it is taken that these properties were of much better quality compared to the suit property, even then, it is seen that these properties were receiving rents much more than what the plaintiffs are claiming in the present suit i.e. Rs. 6 lacs per month. It is clear that the properties in the locality of the suit property were capable of fetching such huge monthly rents between Rs. 9 to 11.5 lacs. By remaining in the illegal possession of the suit property, the defendants, in effect, deprived the plaintiffs from making improvements to the suit property which could have permitted the plaintiffs also to charge such high rentals as were being charged in other properties in the vicinity. Thus, it can be no argument that the fittings and fixtures in the suit property were old, since the defendants themselves deprived the plaintiffs with the opportunity to make improvements to be able to charge rentals in the range of Rs. 9 to 11.5 lacs as were being charged in respect of the neighbouring properties. If the things are seen in this context, then also the rate of mesne profits of Rs. 6 lacs per month which is claimed by the plaintiffs seems justified.
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56. It is also to be remembered that the defendants were able to wrongfully remain in possession of the suit property till 20/01/2016 i.e. for almost three and a half years longer despite the lease having already terminated by efflux of time on 31/07/2012. The defendants were able to do so by way of a completely frivolous plea that the lease was renewed which defence was contrary to the terms of the lease which specifically provided that unless specifically agreed in writing, the lease would not automatically renew and would expire by efflux of time. The plaintiffs were deprived of possession despite the lease having clearly terminated, were forced to undertake litigation to regain possession, and had to suffer harassment at the hands of the defendants. The plaintiffs were granted decree of possession through judgment dated 18/03/2015. The appeal filed by the defendants was dismissed, and the possession was ultimately handed over only on 20/01/2016. In effect, whereas the period of lease was only for 3 years, the defendants managed to occupy the premises for almost 6 and a half years i.e. more than double of the period of lease. In this context also, the rate of mesne profits claimed at Rs. 6 lacs per month is completely justified.
57. It would also be reasonable to grant the plaintiffs simple interest @ 9% per annum on the mesne profits accruing on a monthly basis.
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58. The aforesaid payments to the plaintiffs towards mesne profits and interest would, of course, be subject to adjustment of the payments already made by the defendants from time to time as use and occupation charges.
59. Accordingly, decree is passed in favour of the plaintiffs and against the defendant no.2 for mesne profits at the rate of Rs. 6,00,000/- per month from 01/08/2012 till 20/01/2016 along with interest @ 9% per annum accruing on a monthly basis, subject to adjustment of the payments already made by the defendants from time to time as use and occupation charges.
60. Costs are decreed in favour of the plaintiffs. Pleader's fee is computed as Rs. 45,000/-.
61. Let the decree sheet be drawn up accordingly, upon payment of balance court fees towards mesne profits, if any.
62. As already mentioned, in respect of the defendant no.1, the ex parte decree dated 11/11/2019 already stands.
Judgement pronounced in open court.
File be consigned to record room after due compliance.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/30.01.2024 CS No. 58857 of 2016 KAMAL MITRA Vs. M/S DUNLOP INDIA PVT. LTD. Page No. 34 of 34