New India Assurance Co. Ltd. vs M/S M. Gulab Singh & Sons P. Ltd

Valmiki J. Mehta, J

This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant/tenant impugning the judgment of

the trial court dated 9.5.2017 by which the trial court has decreed the suit for possession and mesne profits filed by the respondent/plaintiff/landlord

with respect to mesne profits. The suit premises is an area of 11276 sq. ft. in the first floor (rear wing) of the building known as Gulab Bhawan, 6,

Bahadurshah Zafar Marg, New Delhi. It may be noted that the appellant/defendant/tenant has already vacated the suit premises on 30.6.2010 and the

only issue decided by the impugned judgment is the mesne profits which are payable by the appellant/defendant to the respondent/plaintiff for the

period from 1.1.1999 to 30.6.2010.

With respect to the issue at hand of the mesne profits payable by the appellant/defendant to the respondent/plaintiff, and which is the subject matter

of issue no.7, trial court has awarded mesne profits at the following rate:-

“44. The result is that the plaintiff shall be entitled to damages/mesne profits-at the rate of Rs.26 per square foot per month for the year 1999 (from

January 1999 to December 1999); at the rate of Rs.30 per square foot per month from January, 2000 to December, 2002; at the rate of Rs.35 per

square foot per month from January 2003 to December 2005; at the rate of Rs.40 per square foot per month from January 2006 to December 2008;

and at the rate of Rs.46 per square foot per month from January 2009 to June 2010 for the entire suit premises measuring 11276 square feet in

area.â€​ (emphasis added)

The aforesaid rate of mesne profits for different periods have been arrived at by the trial court by placing reliance upon the lease deeds proved and

exhibited by the respondent/plaintiff as Ex.PW1/8 and Ex.PW1/9. Ex.PW1/8 is a lease deed dated 4.11.2005 with respect to the second floor, front

block, of the very same building and the rate of rent was Rs.35 per sq. ft. per month. The rent which was payable in terms of the lease deed

Ex.PW1/8 dated 4.11.2005 was to be increased by 15% every three years. Ex.PW1/9 is the lease deed dated 11.1.2006 for the fourth floor, front

block, again of the very same building, at rent of Rs.38 per sq. ft. per month. Since the period in question is from 1.1.1999 to 30.6.2010, trial court has

reduced the figure of rent of Rs. 35 per sq. ft. as contained in Ex.PW1/8 dated 4.11.2005 and also fixed the rate of rent from 1.1.1999 by taking

agreed rate of rent of Rs.15 per sq. ft. per month payable under the original lease entered into between the parties on 1.1.1993 and increasing the

agreed rate of rent of Rs.15 per sq. ft to Rs. 26 per sq. ft. as on 1.1.1999. It may be noted that since the period in question for determining mesne

profits is the period from 1.1.1999 to 30.6.2010, the lease deeds proved and exhibited by the respondent/plaintiff as Ex.PW1/8 and Ex.PW1/9 are

relevant because these lease deeds are not only with respect to the very same premises but are with respect to around 50% of the period for

calculating the mesne profits viz from the years 2005 to 2010.

As held by this Court on numerous occasions, some amount of honest calculation and guess work is always in built in the process of determining the

mesne profits and courts are entitled on the basis of evidence on record of the suit, and more particularly documentary evidences, to arrive at honest

and fair rate of rent which is payable as mesne profits. Obviously, there cannot be too many identical situations in almost overwhelming number of

cases, and therefore, calculation of mesne profits on the basis of rate of rent payable by taking the rate of rent of the premises in question or rate of

rent of the premises in the same area or nearby areas always involves an honest assessment by a civil court inasmuch as a civil court decides an issue

in the suit on the basis of preponderance of probabilities.

In view of the aforesaid discussion, I do not find any illegality whatsoever in the impugned judgment of the trial court determining the mesne profits

payable for different periods from 1.1.1999 to 30.6.2010 from Rs. 26/- per sq. ft. to Rs. 46/- per sq. ft. whereby effectively the rate of rent is fixed for

the first period commencing from January 1999 and thereafter increased at 15% every three years. In fact, in my opinion, appellant/defendant is lucky

because it has been held by this Court in the case of M.C. Agrawal HUF Vs. Sahara India and Ors. 183 (2011) DLT 10 5that courts are also

empowered to grant mesne profits in the absence of any evidence to the contrary by increasing the mesne profits payable compounding the same and

increasing it by 10% every year, whereas in the present case enhancement is only granted at 15% every three years.

Learned counsel for the appellant/defendant sought to argue that the appellant/defendant is in possession of the rear portion of the building, and

therefore, the trial court has committed an error in relying upon the lease deeds Ex.PW1/8 and Ex.PW1/9 with respect to the front block of the very

same building, however, trial court has rightly rejected this argument by observing that the leases are for office purposes and really therefore it would

not make much difference whether the office is situated at the front portion of the premises or at the back of the premises. Obviously, the trial court is

correct in so observing because the issue of the front portion would arise with respect to any showroom on the ground floor especially in the front, but

an office which is used not as a showroom but for administrative work of the appellant/defendant/tenant company will result in the fact that it does not

make too much difference of the office premises being situated at the front or the back of the building.

Learned counsel for the appellant/defendant then argued that the trial court has illegally granted compound rate of interest, however this argument

is misconceived because reference to the discussion and the operative para of the impugned judgment shows that what has been granted is only

simple interest at 8% per annum and not compound interest. This becomes clear from para 51 of the impugned judgment and which para reads as

under:-

“51. The plaintiff shall also be entitled to simple interest @ 8% per annum on the amount of damages/mesne profits payable for each month (after

adjustment of the amount already paid) from the date of expiry of the month for which such damages/mesne profits were payable till the date of

actual payment/realization.â€​

In view of the above, I do not find any merit in the appeal, and the same is therefore dismissed.