Delhi High Court
Udayan Sinha & Ors vs Fertilizers & Chemicals Travoncore Ltd on 5 May, 2016
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 5th May, 2016
+ RFA No.856/2015
UDAYAN SINHA & ORS ..... Appellants
Through: Mr. Abhinav Vashisht, Sr. Adv. with
Mr. Naveen Kumar Chaudhary and
Ms. Priya Chauhan, Advs.
Versus
FERTILIZERS & CHEMICALS TRAVONCORE
LTD ...Respondent
Through: Mr. P. Banerjee and Mr. Siddhartha
Jha, Advs.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The grievance of the appellants with respect to the judgment and
decree dated 1st September, 2015 of the Court of Additional District Judge
(ADJ)-09 (Central), Tis Hazari Courts, Delhi in Suit No.416/2014 (Old Suit
No.163/2008) filed by them for ejectment of the respondent/defendant from
property No.74, Link Road, Lajpat Nagar-III, New Delhi after determination
of tenancy and for recovery of mesne profits, is regarding the rate at which
they have been awarded mesne profits / damages for use and occupation.
RFA No.856/2015 Page 1 of 11
2. Notice of the appeal was issued and considering the limited nature of
the controversy in the appeal, on 27th April, 2016, when the appeal came up
after notice, the counsels for the parties were heard. After hearing, the
concerned official of the respondent was directed to be present before this
Court today with the documents showing the extent of the premises taken by
the respondent in lieu of the premises of the appellants from which the
respondent was ejected along with the proof of rent/charges being paid
therefor.
3. In response thereto, the concerned official of the respondent has
appeared today and the counsel for the respondent on the basis of the
documents brought by the said official has made statements with respect to
the premises taken in lieu of the premises subject matter of these
proceedings from which the respondent was ejected.
4. The respondent was a tenant under the appellants since the year 1960
in property No.74, Link Road, Ring Road, Lajpat Nagar-III, New Delhi.
The said property is constructed over land admeasuring 966 sq. yards and
comprises of ground, first and second floors (barsati and servant quarters).
5. The respondent was last paying rent @ Rs.18,000/- per month since
September, 2000. The tenancy of the respondent was determined by legal
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notice dated 16th January, 2008, in which the respondent was notified that
upon the failure to vacate the premises inspite of determination of its
tenancy, it shall be liable to pay mesne profits / damages for use and
occupation thereof @ Rs.5 lakhs per month. The respondent did not vacate
the premises and the appellants on 10th April, 2008 instituted the suit from
which this appeal arises. A decree on admissions, of ejectment of the
respondent was passed on 16th March, 2010. RFA No.227/2010 preferred
thereagainst by the respondent was dismissed on 29th April, 2011. SLP(C)
No.27359/2011 preferred by the respondent was withdrawn on 2nd
December, 2011. The respondent vacated the premises on 31st August, 2010.
The parties went to trial on the claim of the appellants for mesne profits and
resulting in the decree subject matter of this appeal.
6. Thus, the claim of the appellants for mesne profits is with effect from
4th February, 2008 i.e. after fifteen days of the notice dated 16 th January,
2008 and till 31st August, 2010 i.e. for a period of two years and six months.
7. The learned ADJ in the impugned judgment and decree has found the
appellants entitled to mesne profits for use and occupation of the premises @
Rs.50,000/- per month and with which the appellants are dissatisfied.
8. The respondent has not impugned the said decree for mesne profits.
RFA No.856/2015 Page 3 of 11
9. The counsels have been heard further today.
10. It is the contention of the senior counsel for the appellants that the
appellants before the Trial Court led evidence of the rate of mesne profits in
the form of registered lease deeds of two properties. One of such properties
was the ground floor of property No.34, Ring Road, Lajpat Nagar-IV, New
Delhi which was on 19th August, 2008 let out at a rent of Rs.10,25,000/- per
month with an interest free security deposit of Rs.51,25,000/-. The other
lease deed was with respect to ground and first floors of property No.D-298,
Defence Colony, New Delhi which was let out vide lease deed dated 7th
May, 2008 at a rent of Rs.2,85,000/- per month with an interest free security
deposit of Rs.8,55,000/-. It is thus the contention of the senior counsel for
the appellants that the learned ADJ has not considered the said evidence
while awarding the mesne profits.
11. Per contra, it was / is the contention of the counsel for the respondent
that the properties of which evidence was given were not comparable to the
subject property. It was also pointed out that property No.34, Ring Road,
Lajpat Nagar is situated on the main Ring Road and is permitted to be used
for commercial purposes; on the contrary, subject property is situated in the
inner lane of Lajpat Nagar not facing the main Ring Road. Similarly, it was
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stated that the lease deed of the Defence Colony property cannot be the
indice for the letting value of the subject property which is old and in a
dilapidated condition and which the appellants also during their cross-
examinations on 5th October, 2012 admitted had not been let out since the
date of vacation by the respondent. The counsel for the respondent has also
contended that the respondent is a Public Sector Undertaking (PSU) and had
contested the suit on valid grounds as according to the respondent the lease
of the premises was till 31st August, 2010 and whereafter the respondent
vacated the premises. He has also contended that the rents in Delhi have
been fluctuating and while the rents were going up till the year 2010, there
has been a sharp fall thereafter.
12. The senior counsel for the appellants has referred to the judgment of
the Division Bench of this Court in S. Kumar Vs. G.R. Kathpalia 77 (1999)
DLT 266 where mesne profits for construction over a plot of 500 sq. yards in
East of Kailash, New Delhi were awarded @ Rs.25,000/- per month and
contends that considering the passage of time and double the area of the
subject property, the mesne profits awarded are insufficient. Attention is also
drawn to a passage in Madan Mohan Garg Vs. Bohra Ram Lal AIR 1934
Allahabad 115 to the effect that when the tenant refuses to vacate the
RFA No.856/2015 Page 5 of 11
premises and remains in possession, he must be held to have agreed by
implication to hold over and to have accepted the proposal to pay rent at the
enhanced rate proposed by the landlord in the notice. On the basis thereof, it
is contended that the respondent, from the notice dated 16th January, 2008 of
determination of tenancy was conscious of the demand of the appellants of
mesne profits @ Rs.5 lakhs per month and is deemed to have agreed to
continue in occupation of the premises at the said rate, if ultimately found to
be not entitled to continue in possession.
13. I tend to agree with the counsel for the respondent that as far as the
evidence given by the appellants of the lease deed of property No.34, Ring
Road, Lajpat Nagar is concerned, the same cannot be the indice for
determination of mesne profits, owing to the vast difference in the location
and prescribed use of the said property qua the subject property. Rent of a
property meant for residential purpose and not situated in a commercial area
cannot even compare with the rent of another property, though situated not
far away but in a commercial zone. Similarly, without evidence whether the
construction of the Defence Colony property is new with all the modern
amenities or old, the lease thereof also cannot form the basis for awarding
mesne profits of subject property.
RFA No.856/2015 Page 6 of 11
14. However, after the hearing on 27th April, 2016, the respondent was
directed to produce the documents showing the cost at which it had taken the
premises in lieu of the premises of the appellants, being of the view that the
measure of the mesne profits, as defined in Section 2(12) of the Civil
Procedure Code, 1908 is the 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. It was felt that the
cost at which the respondent has taken the alternative premises would be
indicative of the profits which the respondent enjoyed of overstaying in the
property of the appellants. The contention of the respondent, that it was
continuing in possession till 31st August, 2010 under a valid lease or that it
was not in unauthorised possession has already been negatived in the decree
for ejectment and the appeal/SLP preferred thereagainst and cannot be re-
agitated.
15. The counsel for the respondent states that the respondent, vide lease
deed dated 16th August, 2010 and with effect from 1st September, 2010, has
taken first and second floors and servant quarters of property No.B-67, East
of Kailash, New Delhi constructed over 300 sq. yards of land with the area
of each of the first and second floors being 1850 sq. feet, besides the area of
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the servant quarters and at a rent of Rs.1 lakh per month for a period of three
years and whereafter it has been renewed at a rent of Rs.1.25 lakhs per
month.
16. Though the covered area of the subject property is not on record or in
evidence in the suit but the counsel for the respondent contends that the
subject property, inspite of being more than three times in size, had a
covered area approximately the same as the covered area of the East of
Kailash property.
17. Therefrom one thing is clear, that the respondent, by continuing in
occupation of the premises of the appellants saved rent which it ultimately
paid @ Rs.1 lakh for the East of Kailash premises. Seen in this light, the
decree for mesne profits @ Rs.50,000/- per month is clearly deficient and the
rate of mesne profits has to be enhanced.
18. That leaves the aspect, whether, considering the much larger size of
the subject property, any addition is to be made.
19. Computation of mesne profits, specifically in case of residential
premises, always entails some element of genuine, intelligent and honest
guess work. Reference in this regard can be made to (i) International Pvt.
Ltd. Vs. Saraswati Industrial Syndicate 1992 (2) RCR 6; (ii) M.R. Sahni
RFA No.856/2015 Page 8 of 11
Vs. Doris Randhawa AIR 2008 Del. 110; (iii) Consep India Pvt. Ltd. Vs.
CEPCO Industries Pvt. Ltd. MANU/DE/0700/2010; (iv) P.E.C. Limited Vs.
Samir Prakash MANU/DE/2781/2011; (v) Water and Power Consultancy
Services (India) Ltd. Vs. Renu Gupta MANU/DE/2738/2012; and, (vi)
Inder Sain Bedi Vs. M/s Chopra Electricals MANU/DE/5155/2012. It is
virtually impossible to get evidence to prove the exact rate thereof as the
rent of residential premises is dependent on a large number of variable
factors like flow of space, ventilation, fixtures, fittings, amenities, design,
size of rooms/kitchen, etc. and there may be a substantial difference in rent
of adjoining houses. From my experience as a citizen of Delhi and having
practiced law primarily in the field of real estate and landlord-tenant
disputes, in my view the interest of justice would be served, if the rate of
mesne profits is increased from Rs.50,000/- per month to Rs.1,50,000/- per
month for the period aforesaid of unauthorised occupation. I have arrived at
the said rate of Rs.1,50,000/- per month i.e. have increased the rate by
Rs.50,000/- over the rent paid by the respondent immediately after vacating
the subject premises, taking into account/consideration the facts (a) that the
subject premises were an independent premises and the East of Kailash
premises occupied by petitioner are only a part of the house, depriving the
RFA No.856/2015 Page 9 of 11
respondent of privacy; (b) more than three times the size of the subject
premises than that of the East of Kailash premises; (c) even if the covered
area of the two premises is nearly the same, the respondent, in the subject
premises had large open/green spaces and parking spaces/garages which are
totally lacking in the East of Kailash premises; (d) otherwise comparable
location of the two premises with the location of the subject premises having
an edge over the East of Kailash premises; (e) the respondent, if was not
benefitting from staying in the subject premises, would have on
determination of its tenancy vacated the same and shifted to another
premises; there was no bona fide defence available to the respondent, the
law on the subject being settled in a plethora of judgments; (f) the
respondent, from the demand of mesne profits @ Rs.5 lacs per month ought
to have been sufficiently warned; and, (g) the admitted fall in rentals in the
year 2010.
20. The learned ADJ has awarded interest on the arrears of mesne profits
@ 9% per annum from the date of filing of the suit.
21. In my view, the correct measure for interest on mesne profits has to be
from the end of each month for which the respondent continued in
unauthorised occupation and till the date of payment.
RFA No.856/2015 Page 10 of 11
22. Accordingly, the respondent, besides paying mesne profits @
Rs.1,50,000/- per month from the month of February, 2008 till 31st August,
2010 less the amounts already paid, shall also pay interest thereon @ 9% per
annum from the end of each month for which mesne profits are decreed, till
the date of payment.
23. The counsel for the appellants to within one month of today intimate
to the counsel for the respondent the name (s) and the proportion in which
the mesne profits are to be paid to the appellants.
24. The decree under appeal is modified accordingly and the appeal is
disposed of. The respondent having cooperated in expeditious disposal, no
costs.
Decree sheet be prepared.
RAJIV SAHAI ENDLAW, J.
MAY 05, 2016 bs (corrected and released on 25th May, 2016).
RFA No.856/2015 Page 11 of 11