Bank of India vs Shanti Swaroop Aggarwal

V.K. Jain, J.—This appeal is directed against the judgment and decree dated 07.08.1998 whereby a decree for recovery of possession of the basement and ground floor of Property No. M-29, Greater Kailash, New Delhi was passed against the appellant alongwith a decree for recovery of Rs.13,157.92/-. The plaintiff/appellant was also held entitled to future mesne profits @ Rs.5263.17 per month from the date of institution of the suit till the date of handing over of the possession of suit premises to the respondent.

The facts giving rise to the filing of this appeal can be summarized as under:-

The respondent had let out the basement and ground floor of Property No. M-29, Greater Kailash, New Delhi to the appellants at the rent of Rs.4,800/- for a month, in the year 1977. No regular lease deed was executed and registered and the appellant was last paying rent @ Rs.5263.17 per month. Suit No. 582/1993 was filed by the respondent, Sh. Shanti Swaroop Aggarwal, seeking possession of the aforesaid premises on the ground that the protection available to the appellant against eviction had been taken away by amendment of Delhi Rent Control Act, 1988 with effect from 01.12.1988. The respondent also claimed to have terminated the tenancy of the appellant vide notice dated 10.02.1990 which was served upon the appellant on 12.02.1990. In the suit filed by him, the respondent also claimed the damages for use and occupation @ Rs.44,938/- per month with effect from 01.03.1990 till the possession was handed over to him by the appellant.

Suit No. 464/1993 was filed by the appellant before this court Bank of India. It was alleged in the suit filed by Bank of India, that the suit premises were taken on rent with effect from 10.02.1977 for a period of five years with an option exercisable by the Bank for another five years. It was alleged that the Bank had exercised an option of renewal for five years with effect from 09.02.1989. This was also the case of the bank that pursuant to negotiations between the parties it was agreed that the bank would be given lease for five years with effect from 10.02.1987 @ Rs.7894.76/- per month with two options for extension of five years each @ Rs.9862.50 with effect from 10.02.1992 and Rs.12,335.60 with effect from 10.02.1997. The receipt of the legal notice was, however, not disputed by the Bank.

The respondent before this Court, denied the alleged agreement for fresh lease deed with effect from 10.02.1987 with two options for renewals of five years each.

The following issues were framed on the pleadings of the parties in suit No. 582/1993:-

(1) Whether the plaintiff is entitled to a decree of possession of the suit property? OPP

(2) Whether the plaintiff is entitled to a decree in the sum of Rs.1,04,852/-? OPP.

(3) Whether the plaintiff is entitled to future mesne profits, if so, at what rate? OPP

(4) Whether the tenancy of the defendant has been validly terminated? OPP

(5) Whether there was any contract between the parties concluded by the letter dated 13.02.1989 as alleged by the defendant in his written statement, if so, its effect? OPD

(6) Relief.

In suit No. 464/93, following issues were framed:-

(1)Whether the plaintiff is entitled to specific performance of the contract between the parties in terms of the correspondence exchanged between the parties and which stood concluded by the letter dated 13.02.89? OPP

(2) Relief.

The learned trial Judge vide impugned judgment and decree dated 07.08.1998, dismissed the suit filed by the bank and passed a decree for possession in respect of basement and ground floor of Property No. M-29, Greater Kailash, New Delhi. He also awarded mense profits @ Rs.5263.17 per month. The decree for recovery of Rs.13157.98 being arrears of rent was also passed.

Cross-objections have been filed by the respondent to the extent damages for use and occupation @ Rs.44,938/- have been denied to him.

Admittedly, the suit premises has been vacated during pendency of the appeal and the damages for use and occupation with effect from 08.08.1998 till the date the premises were vacated have also been paid at the rate agreed between the parties. It is also an admitted position that all arrears @ Rs.52,63.17 stands already paid to the respondent. The learned counsel for the parties state that since the suit premises have already been vacated by the bank and it is not pressing for specific performance of the agreement set up by it in suit No. 464/1993, the only dispute which survives for adjudication in this appeal is with respect to the rate at which damages for use and occupation are to be awarded to the respondent for the Property No. M-29, Greater Kailash, New Delhi from 01.03.1990 to 07.08.1998.

Admittedly, no documentary evidence was led by the respondent during the course of trial to prove the rent rates prevailing in this locality during the period from 01.03.1990 to 07.08.1998. No lease deed of any premises in this locality or even in surrounding localities was produced by the respondent in support of its claim for damages for use and occupation @ Rs.44,938/- per month. Neither the landlord nor the tenant of any premises in the locality in which the suit premises is situated or an adjoining/nearby locality who may have let out/taken on rent any premises during the period from 01.03.1990 to 08.08.1998 has been produced, to prove the rents prevailing during this period. One property dealer namely Mr. H. Bose was examined by the respondent Sh. Shanti Swaroop Aggarwal. However, he could not give any specific instance of any lease deed having been executed in this locality. Therefore, no reliance can be placed on the market rents given by this witness in the certificate Exhibit PW2/1 issued by him.

On a perusal of the record of the trial court, I find that vide letter dated 24.11.1989, which the learned counsel for the appellant admitted on 03.01.1996, subject to pleadings of the appellant, the bank offered rent of Rs.20,000/- per month for five years with two options of extensions of five years each at 20% increased rent. The rent offered was in respect of basement floor measuring 1012.4 sq ft, ground floor measuring 987.6 sq. ft. and first floor which measured 1100 sq. ft. This offer was reiterated in the letter dated 25.11.1989 which was also admitted by the learned counsel for the bank on 03.01.1996, subject to pleadings. Thus, the bank was offering rent @ Rs.20,000/- per month in respect of area measuring 3100 sq. ft. The rent per feet offered by the bank to Sh. Shanti Swaroop Aggarwal comes to Rs.6.45 per sq. ft. The learned counsel for the bank submits that the rent of the basement ought to be lesser than the rent of the first floor and, therefore, it would not be appropriate to award damages for use and occupation in respect of the basement at the same rate of rent. Admittedly, not only the basement but also the ground floor formed a part of the premises which were let out to the bank. If the rent of the basement is lower than the rent of the first floor, it can hardly be disputed that the rent of ground floor would be higher than the rent of the first floor. Therefore, applying the law of averages, it would only be fair and appropriate to conclude that the average market rent, of the basement and ground floor, as evidenced from the offer made by the bank, was not less than Rs.6.45 per sq. ft. for five years. The damages for use and occupation in respect of basement and ground floor @ Rs.6.45 sq ft. comes to Rs.12,900/- per month. The Bank is liable to pay damages for use and occupation @ Rs.12,900/- from 01.03.1990 to 28.02.1995. Since the Bank itself had offered increase in rent by 20% after five years, it can hardly be disputed that the market rent prevailing in the locality with effect from 01.03.1995 cannot be less than Rs.15,480/- per month, which is the figure arrived at after adding 20% to the rent of Rs.12,900/- per month. Since the bank has already paid damages for use and occupation at the rent of Rs.5,263.17 per month, it is liable to pay a sum of (Rs.12,900-Rs.5,263.17) Rs.7,636.83/- per month for the period from 01.03.1990 to 28.02.1995 and @ (Rs.15,480 - Rs.5,263.17) Rs.10,216.83/- per month for the period from 01.03.1995 to 07.08.1998. The total principal sum payable to the respondent comes to Rs.6,96,199.84/-. Since the bank has utilized the aforesaid amount by not paying damages for use and occupation at the rate prevailing in the market, there is no reason for the bank not paying appropriate interest on the amount which has been worked out in the aforesaid manner. I, therefore, award interest @ Rs.9% per month to the respondent. The interest on the amount payable for the month of March, 1990 would be paid with effect from 01.04.1990. The amount of interest for the subsequent months shall also be calculated in the same manner.

The appeal as well as the cross-objections stand disposed of. Decree sheet be drawn accordingly.

There shall be no order as to costs.

The Lower Court Record be sent back.