Shri Shashi Chander Tandon and Others vs United India Insurance Company Ltd.

Valmiki J Mehta, J.—The challenge by means of this Regular First Appeal u/s 96 of Code of Civil Procedure, 1908 (Code of Civil Procedure), is to the impugned judgment and decree dated 21.1.2011 which has dismissed the suit of the Plaintiffs/Appellants/landlords for possession against the Respondent/tenant/Defendant with respect to the property admeasuring 1600 Sq. feet bearing No. 4, Community Centre, Naraina Industrial Area, Phase-1, New Delhi.

The admitted facts are that there is a relationship of landlord and tenant between the parties as the suit property was let out to the Respondent by the predecessor-in-interest of the Appellants vide a lease agreement way back in the year 1987. A fresh lease agreement was entered into on 3.8.2006 for three years at a monthly rent of Rs. 24,050/- per month. The lease deed had a renewal clause for a further period of three years subject to 15% increase in rent. The Respondent did exercise an option of renewal, however, that option for renewal was exercised after the expiry of the period of three years. The trial Court dismissed the suit on the ground that since the Respondent has validly exercised the option of renewal, the Respondent cannot be said to be a trespasser inasmuch as the Appellants had No. rights to terminate the tenancy by the legal notice dated 6.11.2008.

In my opinion, the judgment of the Court below is clearly illegal and requires to be set aside. What is required in a suit for possession of such a nature is the existence of relationship of landlord and tenant, the fact that tenancy is a monthly tenancy and the fact that such monthly tenancy has been terminated by means of a notice u/s 106 of the Transfer of Property Act, 1882 and there is No. registered lease deed for the period during which the notice of termination of tenancy has been sent. The admitted facts in the present case are that there is a relationship of landlord and tenant between the parties. The rate of rent which was last paid was Rs. 24,050/- per month, and being more than Rs. 3,500/- per month the premises have No. protection of the Delhi Rent Control Act, 1958. A notice dated 6.11.2008 terminating the tenancy was served upon the Respondent terminating the tenancy w.e.f. 30.11.2008.

Merely because an option of renewal is exercised cannot mean that there is automatically a registered lease deed for the extended period and a properly stamped lease deed has to be executed and registered for the renewal period. As per Sections 17(1)(b) and 17(1)(d) of the Registration Act, 1908 and Section 107 of Transfer of Property Act, 1882, any lease for a period of more than one year has to be only by means of a registered instrument. If there is No. registered instrument then Section 49 of the Registration Act bars the Court from looking at the document meaning thereby No. legal relationship for the fixed period of lease is created on the basis of an unregistered document which was required by law to be registered. The tenancy therefore between the parties continued to be a monthly tenancy as there was No. registered lease deed for a fresh period of three years, and the Appellants/landlords were therefore entitled to terminate the tenancy by sending a legal notice u/s 106 of Transfer of Property Act. I therefore hold that the suit by which possession was claimed of the tenanted premises is entitled to be decreed.

The next issue which arises is that what should be the rate of mesne profits which should be awarded to the Appellants/landlords against the Respondent/tenant after the termination of the tenancy. There is No. dispute that the tenancy stood terminated w.e.f. 30.11.2008. Mesne profits have therefore be calculated from 1.12.2008. The Appellants/landlords led evidence in the trial Court of witness PW-2 one Sh. Jitender Manchanda and who filed and proved on record the lease deed Ex.PW2/1 dated 21.7.2009 for the premises bearing No. B-191, Ground Floor, Block B, Naraina Industrial Area-I, New Delhi. This deed is Ex.PW2/1 is therefore for the same area where the suit premises are situated. The lease deed Ex.PW2/1 is for rent of Rs. 60,000/- per month for an area of 405 Sq. feet i.e. approximately Rs. 150/- per sq. feet. It is not clear from lease deed Ex.PW2/1 as to whether the area in this lease deed is carpet area or super area and therefore I will construe the lease deed against the Appellants by holding that the area which is mentioned is carpet area i.e. the per square feet rent will be a higher figure as compared to the per square feet rent of the suit premises which is 1600 sq. feet of super area. Therefore, with respect to the suit premises, the rate of rent would be approximately in the region of about Rs. 127/- per sq. feet. Further, keeping into account the fact that rate of rent has to be calculated from 1.12.2008 and the lease deed is of July, 2009 i.e. approximately eight months later than the date of termination of tenancy, therefore taking a reasonable increase in rent, then, one can safely reach the conclusion that the rental would be around Rs. 105/- to Rs. 110/- per sq. feet as on 1.12.2008. Taking into account further imponderables qua the location of different properties the rate of rent therefore can be taken at Rs. 100/- per sq. feet. If we take rent of Rs. 100/- per sq. feet as proved by the Appellants/landlords then the Appellants will be entitled to mesne profits of Rs. 1,60,000/- per month, however, the Appellants have only claimed a sum of Rs. 80,000/- per month. Therefore, I restrict the Award of mesne profits to Rs. 80,000/- per month from 1.12.2008 till the date the Respondent hands over the possession of the suit premises to the Appellants.

Accordingly, the appeal is allowed. The suit of the Appellants for possession and mesne profits is decreed. Mesne profits are granted to the extent as stated above. Parties are left to bear their own costs. Decree sheet be prepared. Trial Court record be sent back.