Union of India (UOI) vs Claridges Hotel Pvt. Ltd. and Others

Valmiki J Mehta, J.—By means of the present first appeal u/s 96 of the Code of Civil Procedure, 1908 (CPC), the Union of India challenges the impugned judgment and decree dated 30.9.1981 whereby the trial Court has decreed the suit of the Respondents/Plaintiffs and held that the Appellant/Union of India is disentitled to a higher ground rent of Rs. 2, 33,444/- per annum.

The facts of the case are that the premises being the land at 12, Aurangzeb Road, New Delhi was let out to the predecessor in interest of the Respondent and whereafter it is the Respondent as per the agreement between the parties who became lessee of the subject plot of land.

It appears that there were some breaches of excess coverage/construction as alleged by the Appellant/Defendant from the year 1958 onwards. Disputes and differences arose because the Respondents/Defendants denied the allegations of the Appellant of excess coverage and violation of the terms of the lease.

The trial Court by the impugned judgment has held that the Appellant failed to prove excess coverage and there is a finding of fact that there is no excess coverage and the coverage is only in terms of a sanctioned plan.

Before this Court, the learned Counsel for the Appellant has argued that the trial Court has committed a clear cut illegality in ignoring the letters dated 15.6.1976 (Ex.P3) and 28.6.1976(Ex.P4) issued by the Appellant to the Respondents whereby higher ground rent was claimed on account of the breaches by the Respondents of the terms of the lease. The learned Counsel for the Appellant has further drawn my attention to the letter dated 9.7.1976 (Ex.PX1) whereby Respondents/Plaintiffs accepted the terms and conditions of the letters dated 15.6.1976 and 28.6.1976 and prayed for cancellation of the re-entry ordered with respect to the leased plot on their paying the amount claimed pursuant to the letters dated 15.6.1976 and 28.6.1976.

In response the learned Counsel for the Respondents/Plaintiffs has drawn the attention of this Court towards the letter dated 4.8.1976 (Ex.P5) written by the Appellant to the Defendant which reads as under:

Sir,

With reference to your letter No. G-001/13/A.O./76 dated 8.7.1976 on the above subject, I am to inform you that the lessor has been pleased to withdraw re-entry exercised by him vide this office letter No. LI-9/12(5)/67 dated 13.7.1973. Your ownership and titles in the premises mentioned above are hereby restored to you. You are now bound by the covenants of the original perpetual lease.

Yours faithfully,

(U.N. BHUYAN)

DY. LAND & DEVELOPMENT OFFICER

for and on behalf of the President of India

It is argued that the last line of this letter clearly shows that the parties would henceforth be bound by the original covenants of the original perpetual lease i.e. the Respondents were liable only to pay the lease rent and not the enhanced rent stated in the letters dated 15.6.1976 and 28.6.1976.

In my opinion, the argument as raised by the learned Counsel for the Appellant deserves acceptance and the argument as raised by the learned Counsel for the Respondents merits rejection. This is for the reason that the entire issue hinges with respect to the claim of the higher ground rent per annum which is dependent upon not only on the existence of breaches, but on the fact that the factum of breaches were accepted by the Respondents/Plaintiffs when it sent the letter dated 9.7.1976 (Ex.P1) unconditionally accepting the terms and conditions of the letters dated 15.6.1976 (Ex.P3) and 28.6.1976 (Ex.P4) written by the Appellant to the Respondents. Of course, it was open to the Respondents/Plaintiffs to urge that the contents of the letter dated 15.6.1976 and 28.6.1976 were incorrect and were disputed and the facts stated in the same are challenged. The Respondents/Plaintiffs, however, did not do so and on the contrary unconditionally accepted the terms and conditions of the two letters dated 15.6.1976 and 28.6.1976. Consequently, it does not lie in the mouth of the Respondents/Plaintiffs who got the benefit of cancellation of re-entry orders which was otherwise proposed by the Appellant but was agreed not to be enforced subject to the Respondents paying of the amounts as stated in the letters dated 15.6.1976 and 28.6.1976. For the Respondents to now contend that though they got benefit of cancellation of the re-entry, yet, they should not be held to be bound by the terms and conditions of the letters dated 15.6.1976 and 28.6.1976 would be to allow them to back out of the agreement of which they took benefit of. The argument of the Respondents with reference to the last line in the letter dated 4.8.1976 (Ex.P5) that the Respondent was bound by the covenants of the original perpetual lease, was actually and only with respect to the general covenants of the lease deed and not touching the aspect of enhanced ground rent per annum. In fact, that the argument of the learned Counsel for the Respondents/Plaintiffs is misconceived is clear from the fact that the parties even before the issuance of the letters Ex.P3 and Ex.P4 were not paying the original ground rent as stated in the original perpetual lease but was paying a higher ground rent because subsequent to the grant of the original perpetual lease, the purpose of land use was converted from residential to commercial and it was a higher ground rent being paid after conversion of the use of the land from residential to commercial. If the argument of the Respondents is accepted that ground rent as stated in the original lease deed is payable then it would mean that the enhanced ground rent on conversion of land use to commercial cannot be claimed by the Appellant and which therefore shows the absurdity of the argument.

In view of the above, the impugned judgment and decree is clearly erroneous and causes grave injustice to the Appellant. The impugned judgment and decree wrongly holds that the Appellant is not entitled to claim and that the Respondent is not bound to pay the enhanced ground rent per annum as mentioned in the letters Ex.P3 and Ex.P4 dated 15.6.1976 and 28.6.1976, respectively. Accordingly, the appeal is accepted and the impugned judgment and decree dated 30.9.1981 is set aside. The suit of the Respondent/Plaintiff accordingly disputing the claim of higher ground rent per annum stands dismissed. Decree sheet be drawn up accordingly. Trial Court record be sent back. Parties are left to bear their own costs.