IN THE HIGH COURT OF DELHI AT NEW DELHI
CS(OS) 2591/2011
Date of decision:
31.01.2013
IN THE MATTER OF:
CHANDER KIRTI RANI TANDON
versus
M/S VXL LODGING N BOARDING SERVICES PVT LTD
CORAM
HON'BLE MS.JUSTICE HIMA KOHLI
Citation: 197(2013)DLT266
The plaintiff has instituted the present suit against the defendant
for possession of the first and second floors of the residential premises
bearing No.S-20, Greater Kailash-I, New Delhi, and for recovery of
arrears of rent to the tune of `7,25,000/-, apart from future damages
w.e.f. October, 2011, for the illegal use and occupation of the demised
premises alongwith interest thereon.
CS(OS) 2591/2011
Page 1 of 18
2.
The brief facts of the case are that the plaintiff is the
owner/landlady of premises bearing No.S-20, Greater Kailash-I, New
Delhi, and is residing on the ground floor.
As per the plaintiff, Shri
Ajay Kapoor, Director of the defendant/company had approached her
through a property broker in December, 2009 for taking on lease the
first and second floors of the demised premises, to which the plaintiff
was agreeable. As a result, a Lease Deed dated 24.12.2009 was
executed between the parties (Ex.PW1/1).
3.
As per Clause-1 of the Lease Deed, the first and second floors of
the demised premises were let out by the plaintiff to the defendant on
a monthly rent of `1,45,000/-, exclusive of the electricity and water
charges and the rent was payable in advance on the seventh day of
each calendar month. The tenure of the Lease Deed was for a period of
three years, commencing from 01.01.2010 and ending on 31.12.2012.
The defendant had paid one month‟s rent in advance to the plaintiff
after deducting the TDS. As per Clause-4 of the Lease Deed, the
plaintiff received a sum of `2,90,000/- towards interest free security
deposit, which was refundable at the time of handing over vacant
physical possession of the demised premises by the defendant.
CS(OS) 2591/2011
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Clause-25 of the Lease Deed stipulated that if the defendant/lessee
failed to pay the monthly rent, as agreed upon for a period of one
month, the lease would stand automatically terminated without any
notice and the plaintiff/lessor would be entitled to take over the
possession of the demised premises. Clause 25 of the Lease
Agreement also stipulated that in case the rent cheques bounce, the
lessee would be liable to pay a penalty of ₹10,000/- per day, in
addition to the monthly rent.
4.
The plaintiff has averred that the defendant had issued her
advance cheques towards the monthly rent for the period till
December, 2012 but when the said cheques were presented for
encashment, they were dishonoured on a number of occasions. It was
submitted that upon the commencement of the lease, the first cheque
which was for the month of January, 2010, when presented by the
plaintiff on 08.01.2010, was dishonoured by the defendant‟s banker
with
the
remarks,
“insufficiency
of
funds”
and
thereafter,
the
defendant had paid the rent for the said month in cash. Similarly, for
the next month also, the second cheque of the defendant, when
presented by the plaintiff, was dishonoured and this pattern was
repeated for the subsequent months as well.
CS(OS) 2591/2011
Page 3 of 18
5.
Learned counsel for the plaintiff submitted that from the
beginning of the year 2011, the defendant became very irregular in
the payment of rent and as a number of cheques issued by it were
dishonoured by its banker upon being presented and for every such
cheque, charges were levied on the plaintiff by her banker, she started
depositing the cheques only after verifying from the staff of the
defendant as to whether the same ought to be presented to the bank
or not. The details of the manner in which the plaintiff had presented
the rent cheques on receiving instructions from the defendant for the
period from January, 2011 till April, 2011, have been set out in para 7
of the plaint.
6.
Counsel for the plaintiff further submitted that not only did the
defendant fail to make timely payment of the rent, but it also
defaulted in issuing a TDS certificate to the plaintiff for the period
w.e.f. 01.04.2010 to 31.03.2011 and it was only after the present suit
was instituted and summons were issued to the defendant, did it
deposit the TDS for the aforesaid period with the Income Tax
Department in February, 2012, except for one month for which, TDS
has still not been deposited.
When the defendant failed to pay the
rent for the month of May, 2011, the plaintiff was constrained to
CS(OS) 2591/2011
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address a letter at their registered office, terminating the lease of the
premises. Upon receiving the said notice, officers of the defendant
assured the plaintiff of timely payment, but even after giving the said
assurance, none of the post dated rent cheques issued by the
defendant were honoured by its banker and all the cheques w.e.f. May,
2011 till August, 2011 were dishonoured on being presented. It was
thus submitted by learned counsel that the defendant was in arrears of
rent for the months of May, 2011 to September, 2011.
7.
To establish the status of the cheques of rent issued by the
defendant and presented for encashment, the plaintiff has filed a copy
of her bank statement maintained with the Punjab National Bank,
Greater Kailash Branch, marked as Ex.PW1/A and enclosed with her
affidavit by way of evidence (Ex.PW1/X). The original cheques issued
by the defendant towards payment of rent for the months of June and
July, 2011, which were dishonoured, have also been filed by the
plaintiff and exhibited as Ex.PW1/B and Ex.PW1/C. The original return
memos of the aforesaid cheques issued by the bank are exhibited as
Ex.PW1/D and Ex.PW1/E.
8.
Counsel for the plaintiff contended that the defendant had not
even cleared the arrears of the electricity charges of the two meters
CS(OS) 2591/2011
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installed on the first and second floors of the demised premises and as
per the demand letter dated 10.01.2012, issued by the BSES for the
first floor of the demised premises, a sum of `37,540/- was shown as
outstanding (Ex.PW1/2) and similarly, another demand letter dated
10.01.2012 for the second floor showed an outstanding amount of
`17,180/- (Ex.PW1/3).
The electricity bills of the first and second
floors of the demised premises have been filed and marked as
Ex.PW1/4
and
Ex.PW1/5.
Finally,
on
account
of
a
threat
of
disconnection, the plaintiff was constrained to make the payment of
the aforesaid outstanding electricity bills. The payment receipts dated
09.02.2012, issued by the BSES have been marked as Ex.PW1/6 and
PW1/7. Similarly, the plaintiff has claimed that the defendant had not
cleared the outstanding water charges with respect to the second
floor. A copy of the bill dated 31.01.2012 for a sum of `15,857/- raised
by the DJB has been filed by the plaintiff and is marked as Ex.PW1/8.
The plaintiff has stated that as the said bill also remained unpaid by
the defendant, she had to clear the same by issuing a cheque for
`15,857/- dated 21.02.2012.
9.
Finally, in view of non-payment of rent by the defendant and on
account of violation of other terms and conditions of the Lease Deed,
CS(OS) 2591/2011
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the plaintiff despatched a legal notice dated 06.09.2011 to the
defendant at its registered office situated at E-214, Greater Kailash-II,
New Delhi and also at the tenanted premises. The said notice was also
sent via e-mail to the defendant at the e-mail ID, as given on its
official website. A copy of the e-mail is filed and marked as
Ex.PW1/12. To establish the e-mail ID of the defendant, the plaintiff
has filed a print out of a page from its official website which is marked
as Mark „A‟ and „B‟. The carbon duplicate of the aforesaid legal notice,
which was dispatched by the plaintiff to the defendant is marked as
Ex.PW1/13. The aforesaid notices that were despatched at both the
aforesaid addresses of the defendant were however returned by the
postal authorities.
The notice despatched at the registered office of
the defendant was returned with the remarks „premises locked‟ and
the one despatched at the tenanted premises of the defendant was
returned with the remarks 'unclaimed'. The AD Cards, envelopes and
postal receipts of the legal notice are marked as Ex.PW1/14 (colly). It
is however stated that the notice sent by e-mail was duly delivered to
the defendant but neither did it reply to the said notice, nor did it clear
the arrears of the rent/occupation charges.
CS(OS) 2591/2011
Page 7 of 18
10.
Learned counsel for the plaintiff submitted that although the
plaintiff was not under an obligation to issue a legal notice to the
defendant for terminating the Lease Deed in terms of Clause 25 of the
Lease Deed, which stipulated that non-payment of the monthly rent
for a period of one month would result in an automatic termination of
the tenancy, the aforesaid legal notice was issued to the defendant by
way of abundant caution. She further stated that in view of the very
same Clause-25, which stipulated that in case the rent cheques given
by the defendant would bounce, it would be liable to pay a penalty of
`10,000/- per day in addition to the monthly rent, the plaintiff is
entitled to claim penalty @ `10,000/- per day from the defendant over
and above the outstanding monthly rent. As a result, the plaintiff has
prayed for a decree of possession of the demised premises which is
alleged to be under the unauthorized occupation of the defendant,
alongwith damages for use and occupation of the demised premises
@`4,45,000/- per month from the month of October, 2011 onwards till
vacation thereof, while confining her claim to `1,45,000/- per month
towards arrears of rent for the period from May, 2011 to September,
2011 alongwith interest thereon. Additionally, the plaintiff has sought
recovery of the electricity and water charges in respect of the demised
premises that had to be borne by her due to non-payment of the same
CS(OS) 2591/2011
Page 8 of 18
by the defendant during the pendency of the suit, apart from costs of
the suit.
11.
The present suit was instituted by the plaintiff on 03.10.2011,
and was listed for admission on 17.10.2011. Summons were issued to
the defendants, returnable for 05.01.2012. On the aforesaid date, on
the
interim
application
filed
by
the
plaintiff,
registered
as
I.A.No.16644/2011, the defendant was directed not to part with the
possession of the demised premises. On 05.01.2012, Mr. Sayed
Hasan, Advocate, had appeared on behalf of the defendant and had
undertaken to file his Power of Attorney within three days. On the said
date, in his submission to the Joint Registrar he had stated that a
complete set of the paper book had not been furnished to him and
some papers from his paper book were missing, which were thereafter
furnished to him on the same date. The defendant was directed to file
a written statement within four weeks, whereafter the plaintiff was
directed to file the replication and the suit was adjourned to
17.04.2012 for the parties to conduct admission and denial of
documents.
12.
Thereafter, the plaintiff had filed an application under Order XV-
A read with Section 151 CPC, registered as I.A. No. 1255/2012 stating
CS(OS) 2591/2011
Page 9 of 18
inter alia that the defendant had not filed the written statement and
further that it had locked the demised premises and that it owed her
arrears of rent to the tune of over `13,05,000/-, if calculated at the
rate of the last paid rent, i.e., @`1,45,000/- per month. By the
aforesaid application, the plaintiff sought directions to the defendant to
deposit the arrears of rent totalling to `13,05,000/- and continue
paying damages for the use and occupation of the demised premises
at the same rate. Despite service of the aforesaid application on the
defendant, none had appeared on its behalf. Consequently, vide order
dated 15.03.2012, the defendant was directed to deposit with the
Registrar General arrears of rent
@ `1,40,000/- per month after
deducting the TDS w.e.f. May, 2011 till the date of passing of the
order, within four weeks. Besides the above, the defendant was also
directed to continue depositing the current rent @ `1,40,000/- per
month on a monthly basis, failing which the plaintiff was granted
liberty to file an application for striking off the defence of the
defendant.
13.
A perusal of the order sheets reveal that the defendant had
failed to appear or contest the present suit and finally vide order dated
01.08.2012, it was proceeded against ex-parte and the plaintiff was
CS(OS) 2591/2011
Page 10 of 18
called upon to file an affidavit by way of evidence. On 27.09.2012, the
plaintiff had appeared before the Joint Registrar as PW1 and had
tendered her affidavit by way of evidence as her examinationin-in-
chief. The said affidavit is marked as Ex.PW1/X. The plaintiff identified
her signatures on the said affidavit and also tendered documents in
evidence that were exhibited as Ex.PW1/1 to PW1/14 and Mark-A & B.
After closing the said ex-parte evidence, the suit was placed before the
Court for final arguments.
14.
The Court has heard the counsel for the plaintiff and has perused
the averments made in the plaint, the affidavit by way of evidence
filed by the plaintiff and the documents that have been placed on
record.
15.
In view of the aforesaid unrebutted testimony of the plaintiff, as
discussed above and having regard to the evidence placed on record
both documentary and oral, it is held that the defendant is in
unauthorized occupation of the demised premises and has failed to
vacate the same in spite of a valid legal notice of termination of
tenancy, which was duly served upon it. The defendant is also held to
be in arrears of rent for a sum of `7,25,000/- w.e.f. May, 2011 to
CS(OS) 2591/2011
Page 11 of 18
September, 2011 calculated @ `1,45,000/- per month in terms of the
Lease Deed.
16.
Though the plaintiff has claimed recovery of penalty from the
defendant @ `10,000/- per day for the unauthorized use and
occupation of the demised premises in terms of Clause 25 of the Lease
Deed, in addition to the monthly rent w.e.f. October, 2011, in the
course of arguments, learned counsel for the plaintiff had submitted
that the plaintiff does not insist on recovery of penalty at the above
rate. Instead, she had requested the Court to take judicial notice of
the increase of rentals in Delhi for purposes of determining the mesne
profits payable by the defendant as the plaintiff had not led any
evidence on this aspect.
17.
There are a catena of decisions that have held that while
determining mesne profits, the Courts are well entitled to take judicial
notice of the increase of rentals of the area where the property is
situated under Sections 56 and 57 of the Indian Evidence Act, 1872.
Some of the decisions on the aforesaid lines are catalogued as below:-
(i) Bakshi Sachdev (D) by LRs vs. Concord; (I) 1993 (1) Raj LR
563.
(ii) Vinod Khanna and Ors. vs. Bakshi Sachdev (Deceased) through
LRs and Ors; AIR 1996 (Delhi) 32 (DB)
CS(OS) 2591/2011
Page 12 of 18
(iii) Motor & General Finance Ltd. vs. Nirulas and Ors.; 92 (2001)
DLT 97
(iv) Anant Raj Agencies Properties vs. State Bank of Patiala; 2002
IV AD (Delhi) 733 (DB).
(v) National Radio & Electronic Co. Ltd.
Association 122 (2005) DLT 629 (DB)
(vi) State Bank of Bikaner and Jaipur vs. I.S. Ratta and Ors. 120
(2005) DLT 407 (DB)
vs.
Motion
Pictures
(vii) M.R. Sahni vs. Doris Randhawa; 2008(104) DRJ 246
18.
In the case of Anant Raj Agencies Properties (supra), a Division
Bench of this Court was considering a case where the suit premises
was situated in the heart of Delhi and on the basis of the evidence
placed on record, payment of mesne profits in respect of the suit
premises was allowed @ `50/- per sq.ft. per month.
It was further
held that as the suit had remained pending for a period of nine years,
the trial court ought to have taken judicial notice of the manifold
increase of rents in the area in question. While making the aforesaid
observation, the Division Bench had placed reliance on the decision of
the Supreme Court in the case of D.C. Oswal vs. V.K. Subbiah and
Ors. reported as AIR 1992 SC 184.
19.
Placing reliance on the very same judgment in the case of D.C.
Oswal (supra), a Division Bench had observed in the case of Vinod
CS(OS) 2591/2011
Page 13 of 18
Khanna (supra), that the trial court had not committed any illegality in
taking judicial notice of increase of rents and proceeded to determine
the compensation accordingly.
The observations of the Division
Bench in this context are apposite and are reproduced hereinbelow:-
“21. The learned Counsel for the appellants also urged
before us that the learned Trial Court was not justified in
taking a judicial notice of the fact of increase of rents like
the suit property and also in providing `10,000/- per
month as fair amount towards damages/mesne profits in
favour of the plaintiffs. It is true that no substantial
evidence has been led by the plaintiffs in respect of
the increase of rent in the properties like that of the
suit property. However, it is a well known fact that
the amount of rent for various properties in and
around Delhi has been rising staggeringly and we
cannot see why such judicial notice could not be
taken of the fact about such increase of rents in the
premises in and around Delhi which is a city of
growing importance being the capital of the country
which is a matter of public history. At this stage we
may appropriately refer to the Court taking judicial notice
of the increase of price of land rapidly in the urban areas in
connection with the land acquisition matters. Even the
Apex Court has taken judicial notice of the fact of
universal escalation of rent and even raised rent of
disputed premises by taking such judicial in case of
D.C. Oswal v. V.K. Subbiah reported in AIR 1992 SC
184;
22. In that view of the matter we have no hesitation in our
mind in holding that the Trial Court did not commit any
illegality in taking judicial notice of the fact of increase of
rents and determining the compensation in respect of the
suit premises at `10,000/- per month w.e.f. 19.1.1989, in
view of the fact that the rent fixed for the said premises
was at `6,000/- per month as far back as in the year 1974.
CS(OS) 2591/2011
Page 14 of 18
We may, however, note here that the learned Counsel for
the appellants did not seriously challenge the findings of
the learned Judge that `10,000/- per month would be the
fair market rent of the suit premises. Accordingly, in view
of the aforesaid findings arrived at by us the submissions
of the learned Counsel for the appellants in our view have
no substance at all.”
20.
Similarly, in the case of S. Kumar vs. G.K. Kathpalia reported as
1991 (1) RCR 431, a Division Bench of this Court had noticed that
the landlord therein had not led any documentary evidence on the
prevalent market rates of other properties in the area and then gone
on to fix the damages/mesne profits by taking into consideration the
prime location of the suit premises, its proximity to the community
centre and the commercial activity.
21.
The essence of the aforesaid decisions of the Supreme Court and
this Court is that judicial notice of the increase of rents in urban areas
can be taken note of by courts by applying the provisions of Sections
57 and 114 of the Evidence Act, 1872 and while calculating the mesne
profits, certain amount of guess work by the court, is inevitable and
acceptable.
22.
In the present case, considering the fact that the demised
premises is situated in one of the prime residential localities in Delhi,
i.e., Greater Kailash-I, this Court is of the opinion that it would be just,
CS(OS) 2591/2011
Page 15 of 18
fit and proper if an increase of 15% per annum over and above the
contractual rent be awarded to the plaintiff for the first year
commencing w.e.f. 01.10.2011 till 30.09.2012. For the second year of
illegal occupation, i.e., w.e.f. 01.10.2012 onwards, the defendant is
held liable to pay an increase of 15% per annum, over and above the
original contractual rent plus an additional 15% rent that has been
found to be payable for the first year.
Same would remain the
standard of calculating mesne profits for the subsequent period, till the
demised premises is vacated by the defendant and possession handed
over to the plaintiff.
23.
As regards the claim of interest, the plaintiff has sought payment
of interest calculated @ 18 % per annum on the awarded amount.
However, given the facts and circumstances of the present case, the
Court is not inclined to award interest at the rate as claimed by the
plaintiff. Instead, it is deemed appropriate to award simple interest @
10 % per annum on the aforesaid amount for the period of
default/delay in making payment of rent/occupation charges, till
realization. The said interest shall be calculated on the outstanding
rent on a monthly basis, reckoned at the end of each month. The
plaintiff is also held entitled to recover the electricity and water
CS(OS) 2591/2011
Page 16 of 18
charges payable in respect of the tenanted premises.
Besides the
above, the defendant is held liable to issue TDS certificates to the
plaintiff for the amounts deducted by it from the rent paid to the
plaintiff or in the alternate, pay to her amounts so deducted if not
deposited with the Income Tax Department.
24. The plaintiff is thus entitled to a decree in the following terms:-
(i) A decree of ejectment/possession is passed in favour of the
plaintiff and against the defendant in respect of the first and
second floors of the demised premises bearing No.S-20, Greater
Kailash-I, New Delhi, as detailed in the Lease Deed dated
24.12.2009 (Ex.PW1/1).
(ii)
A decree of arrears of rent to the tune of `7,25,000/- for the
period w.e.f. May, 2011 till September, 2011.
(iii)
A decree of mesne profits @ 15% over and above the
contractual rent calculated at the rate of `1,45,000/- w.e.f.
01.10.2011 till 30.09.2012 and @ 15% over and above the
original contractual rent plus additional 15% rent payable for the
first year, from 01.10.2012 till the date of handing over
possession of the demised premises.
CS(OS) 2591/2011
Page 17 of 18
(iv)
Interest @ 10% p.a. is awarded on the aforesaid amount that
shall be payable by the defendant as mentioned in para 23
above, till realization of the awarded amount.
(v)
The plaintiff shall also be entitled to a decree of `70,577/-
towards the electricity and water charges that were payable by
the defendant in respect of the demised premises.
(vi)
The plaintiff shall also be entitled to receive TDS certificate(s) on
the amounts deducted by the defendant towards TDS and
deposited with the Income Tax Department, or in the alternative,
the plaintiff shall be entitled to recover the amount so deducted
by the defendant towards TDS.
(vii) Lastly, the plaintiff shall be entitled to costs of the suit apart
from counsel‟s fees that is quantified at `20,000/-.
Decree sheet be drawn accordingly. The suit is disposed of.
JANUARY 31, 2013
rkb/sk
CS(OS) 2591/2011
(HIMA KOHLI)
JUDGE
Page 18 of 18
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