Punjab-Haryana High Court
(O&M;) Jammu And Kashmir Bank Ltd vs Amrit Pal Singh on 13 May, 2015
Author: M.M.S. Bedi
Bench: M.M.S. Bedi
CR 6152 of 2011 [1]
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
CR 6152 of 2011
Date of Decision: May 13, 2015
Jammu and Kashmir Bank Limited
.....Petitioner
Vs.
Amrit Pal Singh
.....Respondent
CORAM: HON'BLE MR. JUSTICE M.M.S. BEDI.
-.-
Present:- Mr.Aalok Jagga, Advocate
for the petitioner.
Mr. Vikas Bahl, Senior Advocate with
Mr. Divanshu Jain, Advocate for the respondent.
-.-
M.M.S. BEDI, J.
Petitioner was ordered to be ejected by the Rent Controller, Chandigarh in an eviction petition filed by landlord-respondent on the ground of bonafide personal necessity from the tenanted premises which consists of SCO No. 129-130, Sector 17-C, Chandigarh vide order dated August 14, 2010. Two months' time was granted to vacate the premises. The tenant- petitioner preferred an appeal under Section 15 of the East Punjab Urban Rent Restriction Act, 1949, for short 'the Act', as applicable SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [2] to Chandigarh, against ejectment order. The landlord-respondent being on caveat sought mesne profits. The Appellate Authority vide order dated October 14, 2010, without taking into consideration the grounds of ejectment, stayed the ejectment subject to the petitioner paying mesne profits/ damages for use and occupation of the premises at the rate of Rs.50,000/- per month w.e.f. August 15, 2010. The respondent- landlord preferred revision petition against the order of the Appellate Authority dated October 14, 2010. The High Court in Civil Revision No. 8239 of 2010 set aside the order dated October 14, 2010 and remanded the matter to the Appellate Authority, vide order dated February 21, 2011 (annexure A-3).
The Appellate Authority thereafter assessed the mesne profits at the rate of Rs.5 lacs per month taking into consideration the rent prevalent in the vicinity which lead to filing of present revision petition by the tenant.
It is pertinent to mention that the petitioner Bank had been inducted in the year 2000 on the basis of an unregistered lease agreement Annexure P-2 dated July 31, 2000 and the Rent was enhanced from Rs.8596/- to Rs.25000/- per month at the rate of 20% for every three years w.e.f. January 2000. The period of tenancy was extended for a period of 15 years i.e. till January 2015 as per the unregistered lease agreement dated July 31, 2000. As per the terms of the lease agreement, the enhanced rent from 2000 to 2003 was Rs.25000/- per month, from 2003 to 2006, it was Rs.30000/- per month, for 2006 to 2009, it was Rs.36000/- per month, from 2009 to 2012, it was Rs.43900/- per month and from 2012 to 2015, it was SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [3] Rs.51840/- per month. The landlord had been accepting the revised rent at the above said rates.
It is interesting to note that the respondent-landlord had availed a term loan of Rs.15 lacs which was to be re-paid from the rent payable by the bank in terms of lease agreement dated July 31, 2000. Copy of the loan agreement has been appended as annexure P-4. On December 30, 2006, the landlord executed deed of assignment Ex.P-2 acknowledging that he had leased out the demised premises in favour of the Bank vide lease deed dated July 31, 2000 and against the assignment of rent payable by bank, the loan shall be re-paid. Copy of the deed of assignment is part of the record as annexure P-5.
The Bank claims that according to the escalation clause in the year 2006 the rent payable by the Bank was Rs.36000/- per month. The ejectment petition having been filed vide letter annexure P-5, dated March 22, 2005, the landlord asked the tenant that in case the tenant is ready to enhance the rent to Rs.1.70 lacs per month he could settle and withdraw the ejectment proceedings. He also offered additional space for generator set as he had 600 sq. ft. available on the basement of the tenanted premises. He offered the said area for Rs.18000/- per month. The petitioner bank claims that in view of the circumstance that the landlord had already agreed to claim enhanced rent till January 2015, he was not entitled for any amount beyond the rate of enhancement agreed to. He had agreed to the escalation at the rate of 20% every three years on the rent of Rs.25000/- per month vide SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [4] lease agreement dated 31.7.2000 as such he would not be entitled to mesne profits beyond the agreed rent. Once he has entered into the lease agreement for 15 years, neither his eviction petition was maintainable nor he was entitled by principle of estopple to enhance the rent. The petitioner claims that even as per Section 53 A of the Transport of Property Act, even if the contract is not registered even then the transferor is de-barred from claiming anything from transferee contrary to what has been executed in the lease deed. The tenant- petitioner claims that once assurance had been given by the landlord, the tenant has altered his position to its detriment as such he is estopped from claiming anything contrary to the assurance earlier given.
I have considered the contention of learned counsel for the petitioner as well as counsel for the respondent.
So far as the contention that during the pendency of contractual lease, whether a landlord is entitled to file an ejectment petition is concerned, in this context this Court is of the opinion that in view of special legislation governing the relationship of landlord and tenant and grounds of ejectment, an eviction petition of the tenant can be filed even before the expiry of the lease period if there is a ground available under the Act. The provisions of the Act would certainly have an over-riding effect over all other statutes whenever there is a dispute between the landlord and tenant regarding ejectment. In this context, reference can be made to judgments of High Court in Lakshmi Venkateshwara Enterprises (P) Ltd. Vs. Syeda Vajhiunnissa Begum, (1994) 2 SCC 671, laying done that a landlord can SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [5] file suit for ejectment under the Rent Act during subsistence of contractual tenancy; followed in Rakesh Rishi Vs. Bakshish Kaur (P&H), 2013 (4) PLR 401 and MRF Limited and another Vs. S. Major Singh Purewal, 2009 (1) RCR (Rent) 624.
The contention of counsel for the landlord is that terms of the unregistered lease agreement dated July 31, 2000 cannot be read in evidence in view of Section 53 A of the Transfer of Property Act, as any document containing contract to transfer for consideration of any immoveable property requires registration, under Section 17 (1) (a) of the Registration Act.
Section 53 A of the Transfer of Property Act reads as follows:-
"53A. Part performance.- Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [6] then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."
Learned counsel argued that the lease deed which is required to be registered and is not registered; landlord would be debarred from claiming any right against the property other than the right expressly provided under the terms of the contract.
It was argued by Mr. Jagga that Section 17 (1) (A) of the Registration Act was amended on September 24, 2001 and such a document was made compulsorily registerable after September 24, 2001 but a document executed prior to the amendment shall continue to be governed by un-amended provisions. He relied upon Section 49 of the Registration Act, SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [7] as amended which provides that a registered or unregistered document effecting immoveable property and required by Registration Act or Transfer of Property Act to be registered may be received as evidence of contract in a suit for specific performance under Chapter II of the Specific Relief Act or as evidence of part performance of a contract for purpose of Section 53-A of the Transfer of Property Act or as an evidence of any collateral transaction not required to be effected by non-registration. On the basis of said provision, Mr. Jagga has contended that the unregistered document containing terms of enhancement of rent as per terms can be taken into evidence for the purpose of Section 53 A of the Transfer of Property Act.
Counsel for the petitioner has placed reliance on Full Bench judgment of Karnataka High Court in Sri Ramakrishna Theaters Limited Vs. General Investment and Commercial Corporation Limited, Manipal and others, AIR 1993 Karnataka 90 wherein it was observed that a landlord is not entitled to get possession under the Act after he had leased out a building for 25 years, when there was no forfeiture clause in the lease agreement.
The said judgment is not applicable to the facts of the present case as the said judgment stands over-ruled by the Apex Court in Lakshmi Venkateshwara Enterprises (P) Ltd., case (supra).
I have heard learned counsel for the petitioner as well as counsel for the respondent. It is pertinent to observe here that by the time this petition for determination of mesne profits came up for consideration the SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [8] ejectment order has been passed against the petitioner Bank and the ejectment order has been upheld vide order of the Appellate Authority dated October 26, 2013. The contentious issue regarding the terms of the agreement and the right of the landlord under the Act to seek ejectment prior to the period of contract remains no more in dispute so far as the ejectment order is concerned especially when the premises has now been vacated by the tenant- petitioner. It is also admitted fact that the tenant- petitioner has taken another premises on rent at the rate of more than Rs.4 lacs per month.
The short question which is required and remains to be determined in the present revision petition is regarding the entitlement of the landlord- respondent to claim mesne profits beyond the terms of the escalation clause in the unregistered lease deed for 15 years dated July 31, 2000.
The admissibility of lease agreement dated July 31, 2000 is not required to be determined for the purpose of assessing the mesne profits especially when the Rent Controller had passed the ejectment order against the tenant- petitioner on August 14, 2010. The principle of determining mesne profits after the eviction order having been passed and the right of tenant to receive higher rent than the contractual rent was established by the judgment of M/s Atma Ram Properties (P) Ltd. Vs. M/s Federal Motors Private Limited, 2005 (1) RCR (Rent) 1 (SC) as well as in the judgment in State of Maharashtra Vs. M/s Supermax International Private Limited, AIR 2010 SC 722. In the said judgments it was held that while admitting SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [9] the appeal, after ejectment order, it is perfectly open to the Appellate or Revisional Court to direct the tenant to pay rent higher than contractual rent but the Court would not fix any excessive, fanciful or punitive amount. Since the mesne profits are not assessed by the Appellate Authority on the basis of the evidence led as per the Act by production of evidence on fact on issue or relevant facts but is merely an assessment on the basis of the prima facie market rent existing at the time of the admission of the appeal after eviction order, a benefit has been bestowed on the landlord that he would be reasonably compensated for the loss occasioned by the delay in execution of the decree by the grant of stay order. The mesne profits or the compensation payable to the landlord is generally determined on the basis of the cogent material placed on the record by the parties in the shape of the registered lease deeds of the locality indicating the tentative amount of rent which a landlord would be entitled to in case he had rented out the premises at the present market rate existing on the date of ejectment. The only registered lease deeds are generally accepted. The lease deeds which are inadmissible are not taken into consideration. This question came up before a Bench of this Court in Sunder Kumar Vs. Rattan Lal, 2006 (3) RCR (Civil) 291, wherein it was held that unregistered lease deeds are not relevant for the provisional assessment of compensation or damages payable by the tenant as mesne profits to the landlord. There is no straight jacket formula provided for fixing the mesne profits in terms of the current rent but it is settled principle of law that the amount fixed as mesne profits has to be reasonable SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [10] and it should not appear to be an effort to make the fate of appeal to be illusionary.
In the present case, the petitioner, as per the unregistered lease agreement had been paying rent at the rate of Rs.8596/- per month in the year 2000 which was enhanced to Rs.25000/- per month which could further be escalated at the rate of 20% every three years. As per the terms of the agreement, the enhanced rent would have been Rs.30000/-, Rs.36000/-, Rs.43200/- and Rs.51840/- in the years ending 2006, 2009, 2012 and 2015, respectively. The relationship of the landlord with the petitioner bank was that of a borrower also on account of a loan agreement which is not disputed. The amount of Rs.50000/- earlier fixed as mesne profits after August 14, 2010 by the Appellate Authority did not appear to be reasonable but at the same time, the amount of Rs.5 lacs per month assessed after remand by the High Court, vide order dated September 14, 2011 is also excessive based upon presumptions and conjecture. The respondent has relied upon agreement of lease dated August 10, 2007 by Neeraj Bajaj and Levi Strauss Pvt. Limited for a period of 9 years fixing the rate of rent for SCO No. 110- 111 on the ground floor, and Ist floor in built up area of 8840 Sq. ft. at Rs.18 lacs per month in the year 2007 and Rs.20.70 lacs in the year 2010. The leased property consists of basement, ground floor and first floor. The rent is subject to the tax deduction.
Counsel for the parties agreed that the said premises is at present not being occupied by the tenant. The registered agreement which is SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh CR 6152 of 2011 [11] not being implemented and parties are not performing their part of the contract will not be a reliable document to access the mesne profits. The assessment of the mesne profits and compensation is certainly a work of reasonable estimation, taking into consideration the various factors of rise in the rented values. None of the judgments has considered the global recession in the value of the properties and rental value in the past 10 years. The ejectment order has finally been passed by the Appellate Authority on October 26, 2013 and the premises has been vacated w.e.f. October 31, 2014. The landlord is a borrower from the tenant bank vide a loan agreement. His endeavour is to earn mesne profits to the maximum so that the amount received may be adjusted to discharge the liability. The important fact which is required to be taken into consideration is that the petitioner bank has hired another premises measuring 1540 sq. ft. w.e.f. May 2, 2014 vide a registered lease deed for 15 years at the rate of annual rent of Rs.53,39,966/-.
Taking into consideration all the circumstances, this Court is of the opinion that the amount of mesne profits is fixed at Rs.2.50 lacs per month w.e.f. August 15, 2010 till October 26, 2013 when the ejectment order was passed. With effect from October 26, 2013 till vacation of the premises, the mesne profits per month is assessed as Rs.3 lacs p.m. The agreed rent between the parties which stood paid will be adjustable against the said amount.
Disposed of.
SANJAY GUPTA 2015.05.18 15:02 I attest to the accuracy and integrity of this document High Court Chandigarh
CR 6152 of 2011 [12] Since the petitioner has vacated the premises, it is directed that the amount will be payable within a period of two months.
May 13, 2015 (M.M.S.BEDI)
sanjay JUDGE
SANJAY GUPTA
2015.05.18 15:02
I attest to the accuracy and
integrity of this document
High Court Chandigarh