Whether interest is integral part of mesne profits?

As regards the claim for interest on mesne profits, in I.S. Ratta (supra), relying upon the judgment of the Supreme Court in Mahant Narayana Dasjee Varu and Ors. v. The Board of Trustees, the Tirumalai Tirupathi Devasthanam MANU/SC/0322/1964 : AIR 1965 SC 1231, it was held that interest is an integral part of the mesne profits and, therefore, the same has to be allowed in the computation of mesne profits itself. Paragraphs 16 to 18 of the said judgment are apposite and are reproduced hereunder:

16. Having decided the aforesaid question in the aforesaid manner, we proceed to deal with the next contention of Counsel appearing for the appellant that the interest awarded by the learned Trial Court for the damages is unknown in law. We have given our anxious consideration to the aforesaid contention of Counsel appearing for the appellant. The said contention is however, liable to be rejected straightaway in view of the settled position of law in that regard in the decision of the Supreme Court in Mahant Narayana Dasjee Varu and Ors. v. The Board of Trustees, the Tirumalai Tirupathi Devasthanam reported inMANU/SC/0322/1964: AIR 1965 SC 1231. The Supreme Court in the said decision held that Section 2(12) of the CPC has defined what 'mesne profits' is. It was also held in the said judgment that interest is an integral part of the mesne profits and, therefore, the same has to be allowed in the computation of mesne profits itself. The following paragraph from the judgment is relevant to be extracted which accordingly stands quoted herein:

The last of the points urged was that the learned Judges erred in allowing interest up to the date of realisation on the aggregate sum made up of the principal and interest up to the date of the decree, instead of only on the principal sum ascertained as mesne profits. For the purpose of understanding this point it is necessary to explain how interest has been calculated by the learned Judges. Under Section 2(12) of the Civil Procedure Code which contains the definition of "mesne profits", interest is an integral part of mesne profits and has, therefore, to be allowed in the computation of mesne profits itself. That proceeds on the theory that the person in wrong possession appropriating income from the property himself gets the benefit of the interest on such income. 

REPORTABLE
IN THE HIGH COURT OF DELHI AT NEW DELHI

DATE OF DECISION: March 26, 2010
RFA 329/2007 and CM Nos.16188/2007 and 17682/2007

M/S. CONSEP INDIA PVT. LTD Vs  M/S. CEPCO INDUSTRIES PVT. LTD.

CORAM:
 HON'BLE MS. JUSTICE REVA KHETRAPAL
  Citation: (2010)ILR 3Delhi766

1. This appeal is directed against the judgment and decree dated 23rd
1.
May, 2007 passed by the learned Additional District Judge in a suit for
ejectment, recovery of mesne profits and permanent injunction filed by
the respondent against the appellant herein.
RFA 329/2007
Page No. 1 of 44
2.
The facts as they emerge from the record are that the appellant
was inducted as a tenant under the respondent with respect to one big
hall, one office room and one WC, all measuring 900 sq. ft. with a
common passage on the second floor of property No.F-14/15,
Connaught Place, New Delhi of the respondent. The said premises were
let out by the respondent to the appellant by an agreement dated 1st
December, 1976, whereunder the appellant had agreed to pay rent to the
respondent at the rate of Rs.2,700/- p.m. for the first three years and at
the rate of Rs.3,240/- p.m. for the next two years and at the rate of
Rs.3,780/- p.m. to the respondent after five years of 01.12.1976, i.e.,
with effect from 01.12.1981.
3.
On or about 29th November, 1983, the appellant instituted a
petition in the Court of the Rent Controller, Delhi under Sections 6 and
9 of the Delhi Rent Control Act, 1958 against the respondent, inter alia,
for the determination of the standard rent of the suit premises. In the
said petition, the appellant in para 11 against the column “Monthly rent
together with details of House-Tax, Electricity, Water and other
charges paid by the tenant” stated: “Rs.3,780/- P.M. exclusive of
water and electricity charges”. The said petition for determination of
standard rent filed by the appellant against the respondent remained
RFA 329/2007
Page No. 2 of 44
pending till 1st September, 1997 when the same was dismissed as
withdrawn.
4.
In the meanwhile, on account of the fact that the appellant had
stopped payment of rent in spite of a notice of demand, the respondent
herein, in or about the year 1984, instituted a petition for eviction of the
appellant from the aforesaid premises under Section 14(1)(a) of the
Delhi Rent Control Act, 1958. It was, inter alia, stated in the said
petition that the rent of the premises was Rs.3,780/- p.m. and that
initially the premises were let out by the respondent to the appellant by
an agreement dated 01.12.1976 as per which the rent was Rs.2,700/-
p.m. for the first three years, Rs.3,240/- p.m. for the next following two
years and Rs.3,780/- p.m. for the following two years. It was further
stated in the petition that the appellant, who was paying a rent of
Rs.3,780/- p.m. to the respondent with effect from 01.12.1981, had
stopped paying the rent with effect from 1st September, 1982.
5.
The appellant filed a written statement/reply to the aforesaid
petition for eviction filed by the respondent, in which the appellant did
not dispute the agreement of 01.12.1976 and the agreement with the
respondent to pay rent at Rs.2,700/-, Rs.3,240/- and Rs.3,780/- p.m. as
aforesaid, but alleged that there was a prohibition under Section 4 of the
RFA 329/2007
Page No. 3 of 44
Delhi Rent Control Act to the periodical increase of rent in such
manner.
6.
The aforesaid petition for eviction filed by the
respondent
against the appellant was decided by the Court of the Additional Rent
Controller by order dated 7th March, 1999, in which it was, inter alia,
held that the appellant was liable to pay rent at the rate of Rs.3,780/-
p.m. which he had agreed to pay and in fact paid for one year since
December, 1981. The learned Additional Rent Controller also held the
appellant to be in default of payment of rent and being a case of first
default, gave a liberty to the appellant to pay the arrears of rent.
7.
The appellant preferred an appeal from the aforesaid order to the
Rent Control Tribunal, Delhi, which was decided by the order dated 6 th
December, 2003. The Tribunal, inter alia, held that on the date of the
issuance of the notice of demand by the respondent to the appellant,
there was no rent due from the appellant to the respondent and for the
aforesaid reason the order of the Additional Rent Controller could not
be sustained.
8.
Subsequently, on 21st September, 2005, the
respondent got
issued a legal notice of the said date to the appellant, determining the
tenancy of the appellant and informing the appellant that upon its failure
RFA 329/2007
Page No. 4 of 44
to vacate the premises in spite of determination of its tenancy, it shall be
liable to pay mesne profits/damages for use and occupation at the
prevalent letting value of the premises from time to time, which
presently was Rs.150/- per sq. ft. p.m., together with interest at the rate
of 24% p.a. on arrears thereof. In the said legal notice, it was asserted
by the respondent that the appellant had been illegally paying rent at the
rate of Rs.2,700/- p.m. only to the respondent and as such Rs.38,880/-
were the arrears of rent which the appellant was liable to pay. The
appellant, it was further stated, was also liable to pay mesne
profits/damages for use and occupation for the month of November,
2005 to the respondent at the rate of Rs.1,35,000/- p.m. and thus, in all,
a sum of Rs.1,73,880/- was due from the appellant to the respondent.
The said notice was duly served on the appellant, to which the appellant
got sent a reply dated 5th October, 2005.
9.
On the appellant's failing to vacate the premises in spite of the
determination of its tenancy, the respondent instituted the aforesaid suit,
being Suit No.175 of 2005 for ejectment, recovery of mesne profits and
permanent injunction against the appellant.
10.
In the written statement filed by the appellant to the suit instituted
by the
respondent, the appellant raised a number of preliminary
RFA 329/2007
Page No. 5 of 44
objections to the maintainability of the suit, inter alia, being that the suit
was ill-conceived and had been filed with malafide intentions and
ulterior motives – all as a counter-blast to the dismissal by the Rent
Control Tribunal, vide its order dated 6th December, 2003, of the
original petition for eviction filed by the respondent–landlord in or
around 30th November, 1983; that the plaint was a repetition of, if not
identical to, the case made out by the appellant before the Rent Control
Tribunal on which orders had already been passed by the Tribunal on 6th
December, 2003; that the suit was not maintainable and was liable to be
dismissed as the contents of the alleged notice dated 21st September,
2005 were at variance with what was stated by the respondent before
the learned Rent Control Tribunal; that the suit was instituted without
any cause of action and was mischievous in nature; that the suit had
been signed and filed by CEPCO Industries Pvt. Ltd. whereas the lease
agreement dated 1st December, 1976 was executed with CYCLE
Equipment Pvt. Ltd. – and not with CEPCO Industries Pvt. Ltd.; that the
suit was untenable and non-maintainable as the relief sought for fell
within the ambit of the Delhi Rent Control Act and not within the
jurisdiction of Civil Courts; that the respondent was protected against
eviction under the provisions of Section 14 of the Delhi Rent Control
RFA 329/2007
Page No. 6 of 44
Act and there was an express bar on the jurisdiction of the Civil Court
laid down by Section 14(1) of the said Act.
11.
On merits, it was stated that the appellant was a tenant under
CYCLE Equipment Pvt. Ltd. and not under CEPCO Industries Pvt. Ltd.;
the petition for determination of the standard rent was withdrawn by the
respondent only due to limitation and keeping in mind that the
respondent was bound to pay not more than the initial agreed rent of
Rs.2,700/- p.m., which was upheld by order dated 8th May, 1986 by the
Additional Rent Controller.
It was denied that a new contractual
tenancy had come into force between the respondent and M/s. CYCLE
Equipment Pvt. Ltd. or that there existed any contractual tenancy
between the respondent and CEPCO Industries Pvt. Ltd. as purportedly
implied in the plaint. It was contended that the suit was an abuse of the
due process of law and totally mischievous, the eviction petition of the
respondent on the ground of non-payment of 12 months outstanding rent
at the rate of Rs.3,780/- p.m. with effect from 1st September, 1981
having been dismissed by the learned Rent Control Tribunal. It was
emphatically denied that the appellant had ever increased the rent, as
alleged, from Rs.2,700/- to Rs.3,240/- or to Rs.3,780/-, and stated that if
payments by cheques in excess of Rs.2,700/- had been made it was only
RFA 329/2007
Page No. 7 of 44
out of duress and ignorance of the law. It was also stated that no rent
was outstanding as “on the date of the issuance of the notice of demand”
and that the respondent-landlord, by his own written admission, had
himself admitted that his earlier statement, vide notice of demand dated
22nd September, 1983, of 12 months outstanding rent being due was not
correct and that he in fact had received rent for the period between
27.09.1982 and 12.08.1983 by way of 12 cheques amounting to
Rs.45,360/-. It was submitted that that the eviction petition filed by the
respondent-landlord had been rightly dismissed by the learned Rent
Control Tribunal by its order dated 6th December, 2003 in RCA
No.206/1999. It was denied that the appellant-tenant was subsisting on
a month-to-month tenancy and that the tenancy of the appellant-tenant
stood determined after 15 days of the notice dated 21st September, 2005
(received on 26th September, 2005). It was submitted that the suit was
untenable and non-maintainable and had been filed as all earlier
attempts by the respondent-landlord to force the appellant-tenant to pay
an enhanced monthly sum of Rs.3,780/- had failed. The notice dated
21st September, 2005 was invalid and not in accordance with law while
the suit instituted by the respondent-plaintiff was misconceived and
liable to be rejected.
RFA 329/2007
Page No. 8 of 44
12.
In replication, the respondent-landlord reiterated and reaffirmed
the averments made in the plaint while controverting and denying the
averments made in the written statement. On 19.12.2006, from the
pleadings of the parties, the learned trial court culled out nine issues for
the adjudication of the suit.
13.
Arguments were advanced by Mr. Saurabh Kirpal, the learned
counsel for the appellant and Mr. B.B. Gupta, the learned counsel for
the respondent on the findings given by the learned trial court on the
nine issues framed for the trial of the suit, to which I now propose to
advert.
14.
Issues No.1 and 2
Issues No.1 and 2 were dealt with together by the learned trial
court. The said issues read as under:-
“Issue No.1: Whether the suit is barred by the
provisions of DRC Act as alleged in the written
statement? OPD.
Issue No.2: Whether the rent is Rs.2,700/- as
claimed by the defendant in the written
statement or the rent is Rs.3,780/- as claimed by
the plaintiff? OP Parties.”
15.
At the outset, it may be noted that the onus of proving Issue No.1
was placed upon the appellant whereas the onus of proving Issue No.2
was upon both the parties. The relevant provision of law is Section 3(c)
RFA 329/2007
Page No. 9 of 44
of the Delhi Rent Control Act, 1958 (as amended with effect from
01.12.1988), which provides that the said Act would not apply to any
premises whose monthly rent exceeds Rs.3,500/- per month.
16.
On the behalf of the appellant-tenant, it was argued that the
relationship between the appellant and the respondent was governed by
the Delhi Rent Control Act because the initial agreed rate of rent was
Rs.2,700/-. The suit was barred by the provisions of the Act as after the
order of the learned Rent Control Tribunal the appellant was required to
pay rent at the rate of Rs.2,700/- p.m. and as such the premises is not
taken out of the purview of the Act. It was submitted that the appellant
had been compelled to pay rent at Rs.3,780/- p.m. with effect from
01.12.1981 under pressure and the increase of rent was illegal and
arbitrary.
17.
Mr. B.B. Gupta, the learned counsel for the respondent-landlord,
on the other hand, argued that the onus of proving the rate of rent was
upon both the parties, and not upon the respondent alone. He submitted
that the respondent had discharged the onus placed upon him, but the
appellant had miserably failed to discharge its onus. In support of this
contention, Mr. Gupta placed reliance upon the admissions, expressly
and impliedly made by the appellant admitting that he had made
RFA 329/2007
Page No. 10 of 44
payment of rent at the rate of Rs.3,780/- p.m. till November, 1983, as
contained in the following documents:-
(i) The lease agreement dated 01.12.1976 (Exhibit RW-1/1).
(ii) The petition under Sections 6 and 9 of the Delhi Rent
Control Act filed by the appellant on 29.11.1983 (Exhibit
PW-1/3).
(iii)
The order dated 1st September, 1997 (Exhibit PW-1/4)
passed by the learned Additional Rent Controller
regarding the unconditional withdrawal of the aforesaid
petition.
(iv)
Notice of demand dated 22nd September, 1983 sent to the
appellant by the respondent.
(v)
Petition under Section 14(1)(a) of the Delhi Rent Control
Act filed by the respondent against the appellant (Exhibit
PW-1/5).
(vi)
Written statement filed by the appellant to the aforesaid
petition (Exhibit PW-1/6).
(vii) The statement made by the appellant RW-1 Shri M.K.
Bhagwagar (Exhibit PW-1/7).
(viii) The judgment of the learned Additional Rent Controller
RFA 329/2007
Page No. 11 of 44
dated 07.03.1999 (Exhibit PW-1/8).
(ix)
The judgment of the learned Additional Rent Control
Tribunal dated 06.12.2003 (Exhibit PW-1/9).
18.
Before I advert to the admissions allegedly contained in the
aforesaid documents, it may be noted that the learned counsel for the
respondent placed reliance upon the provisions of Sections 17 and 58 of
the Indian Evidence Act and the following judgments rendered by this
Court and by the Supreme Court to contend that judicial admissions by
themselves can be made the foundation of the rights of the parties and
an admission made by a party to the lis is admissible against him
proprio vigore:-
(i)
Draegerwerk Aktiengesellschaft vs. Usha Drager Pvt. Ltd. &
Anr. 136 (2007) DLT 355.
(ii)
Sangramsinh P. Gaekwad and Ors. vs. Shanta Devi P.
Gaekwad (Dead) Through LRs and Ors. (2005) 11 SCC 314.
(iii) Gautam Sarup vs. Leela Jetly and Ors. (2008) 7 SCC 85.
(iv) Steel Authority of India Ltd. vs. Union of India and Ors. (2006)
12 SCC 233.
(v)
Uttam Singh Duggal & Co. Ltd. vs. United Bank of India and
Ors. (2000) 7 SCC 120.
RFA 329/2007
Page No. 12 of 44
(vi)
Claridges Hotel Pvt. Ltd. vs. M/s. M.M. Bhagat & Company
2001 IV AD (DELHI) 790.
19.
Having considered and weighed the rival submissions of the
parties and gone through the records and the aforesaid decisions, I am of
the view that the respondent has discharged the onus placed upon it of
proving that the rent of the premises was Rs.3,780/- p.m. I say so for
the following reasons.
20.
The lease agreement dated 01.12.1976 (Exhibit RW-1/1) is an
admitted document, the legality and validity whereof are not in dispute.
The appellant itself has filed this document and placed reliance upon it.
A bare perusal of Clause 1 and Clause 10 thereof make it abundantly
clear that the monthly agreed rate of rent at the time of the
determination of the tenancy of the appellant was above Rs.3,500/- p.m.,
i.e., Rs.3,780/- p.m. Clause 1 of the lease agreement provides as under:-
“That the Lessor hereby demised to the lessee all
that of portion of second floor adjacent to the
office of Brady & Company having an area of
900 square feet with a facility to use the
bathroom and service room and fixtures for a
period of three years paying therefor during the
said term the monthly rent of Rs.2,700/- per
month only excluding water and electricity
charges payable in advance by the 10th day of
every English Calender month. The tenancy
month shall commence from the 1st day of every
such month.”
RFA 329/2007
Page No. 13 of 44
21.
The provisions with regard to the increase of rent are mentioned
in Clause 10 of the Lease Deed, which reads as under:-
“The Lease is hereby granted for the three years
fixed lease. Further extension of two years will
be on the terms and conditions as stipulated in
this agreement with increase of rent by 20% of
the existing rent. All further extension will also
be on the same terms and conditions with
increase of rent by 20% after every two years
period of Lease Agreement hence onwards.”
22.
From the above undisputed document, it stands clearly proved
that the rate of rent at the time of determination of the tenancy was
Rs.3,780/- p.m. as alleged by the respondent. I am fortified in coming
to this conclusion from the standard rent petition filed by the appellant,
bearing No.SR-52/83 (Exhibit PW-1/3), wherein the appellant had
specifically stated in para 11 that the rate of rent was Rs.3,780/- p.m.,
exclusive of water and electricity charges. Again, in para 18(a), it was
stated that the contractual tenancy came into force on 01.12.1981 at the
rate of Rs.3,780/- p.m., exclusive of water and electricity charges. It
was further stated:
“This agreed rate of rent is exorbitant, excessive,
unreasonable and out of all the proportion to the
reasonable cost of construction including the cost
of land on which the whole building is
constructed.”
RFA 329/2007
Page No. 14 of 44
23.
The aforesaid petition filed by the appellant under Sections 6 and
9 of the Delhi Rent Control Act was unconditionally withdrawn by the
appellant on 01.09.1987 (Exhibit PW-1/4). The necessary inference, to
my mind, is that the appellant abandoned its claim for determination of
standard rent (Order XXIII Rules 1 and 1A CPC). The plea of the
appellant that the said petition was withdrawn as it was barred by
limitation appears to me to be clearly untenable as the same is
unsupported by any such evidence on the record. Even assuming it to
be so, it does not now lie in the mouth of the appellant to contend that
the rate of rent was not Rs.3,780/- p.m. as admitted by him in the
petition itself.
24.
Next, reference may be made to the notice of demand dated 22nd
September, 1983 sent by the respondent to the appellant demanding the
arrears of rent at Rs.3,780/- p.m. Based upon the said notice, as stated
above, a petition under the provisions of Section 14(1)(a) of the Delhi
Rent Control Act was filed by the respondent (Exhibit PW-1/5), stating
therein that the tenant had stopped paying the rent with effect from
01.09.1982. The appellant-tenant filed a written statement (Exhibit
PW-1/6) to the said petition, wherein in paragraph 5 of the preliminary
objections, it was admitted that the rent was increased to Rs.3,780/-
RFA 329/2007
Page No. 15 of 44
p.m., but asserted that there was a prohibition under Section 4 of the
Delhi Rent Control Act to such increase. In reply to para 11 of the
eviction petition also, wherein the rate of rent was again stated to be
Rs.3,780/- p.m., the increase was stated to be illegal and it was
submitted that the appellant was not liable to pay more than Rs.2,700/-
p.m. Similarly, in para 18(a) of the written statement, the payment was
admitted and again it was submitted that the rate of Rs.3,780/- p.m. was
violative of the standard rent.
25.
The admissions made in the statement of the appellant-tenant as
RW-1 before the learned ARC, Delhi on 09.07.1987 (Exhibit PW-1/7)
are also significant which read as follows:-
“As per the lease, the respondent company was
to abide by the same terms and conditions of
perpetual lease as entered into between the
parties and L&DO. Again said: The petitioner
and respondent. As per after the initial period of
three years the rent was to be increased by 20%
and, thereafter, after every two years rent was
increased by 20%. Therefore, after three years
the rent was increased from Rs.2,700/- to
Rs.3,240/- and then after a further period of two
years the rent was increased from Rs.3,240/- to
Rs.3,780/-. This increase in rent was and is
illegal and the same cannot be increased from
Rs.2,700/- to Rs.3,240/- or Rs.3,780/-.
.................... The monthly rent used to be paid by
cheques but the landlord was invariably reluctant
in issuing stamped receipts for the same. Over a
period of 82 months from 1.12.1976, I have with
RFA 329/2007
Page No. 16 of 44
me only 10 receipts which the landlord would
give with great reluctance and would cover 3/4
months in one receipt. In respect of monthly
rentals I have paid 12 nos. cheques amounting to
Rs.3,780/- each or the details of cheques nos.
details of the cheques dates and the amount are
available on record. In 1986/96 and petitioner
has issued a overall statement which is totally
false.”
26.
The above deposition, to my mind, affirms that the rate of rent as
per the lease deed was Rs.3,780/- p.m., which was being paid by the
appellant by cheques. The only grievance of the appellant before the
learned ARC, Delhi was that the rent so increased was arbitrary and
illegal and in violation of the provisions of Section 4 of the Rent Control
Act. The learned ARC, by her judgment dated 7th March, 1999 (Exhibit
PW-1/8), adjudicating upon the dispute between the parties as to
whether standard rent was liable to be paid by the tenant or as to
whether the landlord was entitled to recover the agreed rent in
accordance with the Lease Deed, in paragraphs 12 and 16 held as
under:-
Paragraph 12
“12. I, therefore, hold that the respondent was
liable to pay the rent @ Rs.3,780/- per month
which he had agreed to pay and in fact paid for
one year since December 1981 as admitted by
him as RW1.
RFA 329/2007
Page No. 17 of 44
Paragraph 16
16. However, the present case is one of first
default. Having come to the conclusion that the
rate of rent was Rs.3,780/- per month and not
Rs.2,700/- per month, the order u/s 15(1) of the
DRC Act has to be modified and in order that the
respondent be entitled to the protection of section
14(2) of the DRC Act, it is directed that the
respondent shall pay or deposit the entire arrears
of rent @ Rs.3,780/- w.e.f. 1.9.1982 upto the
month preceding the month in which the deposit
is made within one month of the date of this
order. The respondent shall be entitled to adjust
the amounts already deposited vide orders u/s
15(1) of the DRC Act passed on 14.3.1986 and
8.5.1986.”
27.
Aggrieved and dissatisfied by the judgment of the learned
Additional Rent Controller, the appellant-tenant preferred an appeal to
the Additional Rent Control Tribunal. It would be apposite at this
juncture to note that in the appeal itself (Ground 21), it is again stated by
the appellant that the last paid rent was Rs.3,780/- p.m., which was not
the initially agreed rent. This, by itself, is sufficient to show that the
appellant was paying rent at the rate of Rs.3,780/- p.m.
28.
Adjudicating upon the appeal filed by the appellant-tenant, the
Additional Rent Control Tribunal in paragraph 10 of his judgment dated
06.12.2003 (Exhibit PW-1/9) held as follows:-
“10. The demand in the notice is of Rs.45,360/-.
This demand has been met by the 12 cheques
RFA 329/2007
Page No. 18 of 44
which were mentioned in the reply notice. There
was no else demand for which the respondent can
prefer the petition u/s 14(1)(a) of the DRC Act
(sic.). Assuming for the sake of arguments
respondent had made any demand of any
previous rent due which was not depicted in the
notice then it was the duty of the respondent to
make a demand of the said rent. When a specific
demand is made and the specific demand is met
then for any other dues if such payments are
adjusted then the demand as expressed in the
notice cannot be said to be demand within the
meaning of section 14(1)(a) of the DRC Act.
Therefore, ingredient of demand of previous dues
was missing and once the ingredient of demand
was missing there cannot be any cause of action
to the respondent to prefer the petition u/s
14(1)(a) of the DRC Act. The court below while
passing the impugned order has not looked into
this vital aspect of the matter. The court below
went with the alleged adjustment. Respondent
was to prove by standard evidence that what was
adjusted was also due. The standard evidence is
lacking. Respondent has simply submitted a
statement of account which is no evidence in the
eye of law. In this view of the matter the court
below was not justified even considering the
statement of account as have been submitted.
(sic.) I need not refer to the other evidence as on
the face of the demand, petition of the respondent
cannot stand.
11. In view of the foregoing discussion the
order of the court below cannot be sustained.
The averments have been set out with regard to
the rate of rent. This court has nothing to do with
the same as what has been demanded same has
been met and cause of action as was required u/s
14(1)(a) of the DRC Act was not there.
Therefore, I need not refer the arguments with
regard to the locus standi of the respondent since
RFA 329/2007
Page No. 19 of 44
the petition is being dismissed.
12. Accordingly, appeal is allowed.
The
impugned order is set aside. The petition of the
respondent is dismissed.”
29.
From the above findings of the learned Additional Rent Control
Tribunal, Delhi, it is clear that the Tribunal did not at all touch the
aspect of the rate of rent nor altered the same from Rs.3,780/- to
Rs.2,700/- as prayed for by the
appellant and the prayer for
modification of the rate of rent was not granted.
30.
Thus, significantly, in the instant case, the notice of demand was
raised at the rate of Rs.3,780/- p.m. and the rent paid in consequence
thereof was at the rate of Rs.3,780/- p.m. This is crystal clear from the
order of the learned Additional Rent Control Tribunal (Exhibit PW-1/9),
wherein it is recorded that payment of arrears of rent was sought by
notice dated 22.09.1983 from 01.09.1982 to 31.08.1983, i.e., for a
period of 12 months and a total payment of 12 number of cheques at the
rate of Rs.3,780/-, totalling Rs.45,360/- had been paid (Rs.3,780/- x 12
= Rs.45,360/-) and as such there was no cause of action. It was on that
ground that the eviction proceedings were dismissed and the appeal
allowed.
31.
A perusal of the record also shows that the plea that the payment
was being made by the appellant “under pressure” was raised for the
RFA 329/2007
Page No. 20 of 44
first time in the eviction proceedings. It was however not elaborated
either in the pleadings in the eviction proceedings or in the course of
evidence, as to what was the nature of the pressure being exerted upon
the appellant and as a matter of fact nothing has been placed on the
record by the appellant to show that any amount was paid by him under
protest. The same remains a bald allegation. It is settled law that
where an averment is made that payment was made under pressure or
protest, all the particulars thereof are required to be pleaded (Order VI
Rule 4 CPC) and duly proved in the course of evidence. In the absence
of pleadings and proof, the plea of pressure is, therefore, of no avail to
the appellant.
32.
Mr. Saurabh Kirpal, the learned counsel for the appellant also
contended that the trial court has based its judgment on some form of
res judicata, in that, the trial court has held that the finding of the
Additional Rent Controller (ARC) that the rent of premises was
Rs.3,780/- has become final between the parties. He further contended
that this is on the basis that the Tribunal which was hearing an appeal
from the decision of the ARC has not disturbed this finding of the ARC.
Hence, as per the learned trial court the decision of the ARC has
become final and binding and cannot be challenged.
RFA 329/2007
Mr. Kirpal
Page No. 21 of 44
submitted that this finding ignores the fact that the appeal was allowed
by the Tribunal and as such there was no question or occasion for the
appellant to file an appeal from the order of the Tribunal.
The
observations of the Supreme Court in the case of Deva Ram vs. Ishwar
Chand (1995) 6 SCC 733, which are extracted herein below, were relied
upon by the counsel for the appellant in support of his contention that
the judgment of the trial court was untenable:-
“27. Thus, an appeal does not lie against mere
'findings' recorded by a court unless the findings
amount to a 'decree' or 'order'. Where a suit is
dismissed, the defendant against whom an
adverse finding might have come to be recorded
on some issue has no right of appeal and he
cannot question those findings before the
appellate court. (See Ganga Bai v. Vijay
Kumar).
28. In Midnapur Zamindari Co. Ltd. vs.
Naresh Narayan Roy, it was observed as under:-
“Their Lordships do not consider that this
will be found an actual plea of res
judicata, for the defendants, having
succeeded on the other plea, had no
occasion to go further as to the finding
against them: but it is the finding of a
court which was dealing with facts nearer
to their ken than the facts are to the Board
now, and it certainly creates a paramount
duty on the appellants to displace the
finding, a duty which they have now been
able to perform.”
33.
The aforesaid contention of the learned counsel for the appellant,
RFA 329/2007
Page No. 22 of 44
in my opinion, is devoid of merit though undoubtedly the proposition of
law laid down in Deva Ram's case (supra) cannot be undisputed. In the
instant case, the findings of the learned trial court as is clear from a
perusal of the judgment are not based on the principle of res judicata.
Reference has been made by the learned trial court to the judgment of
the Tribunal only with a view to show that the appeal was allowed by
the Tribunal for the reason that there were no arrears of rent payable on
the date of the institution of the eviction petition and thus no ground for
the preferment of the petition under Section 14(1)(a) of the Delhi Rent
Control Act existed and thus the contention of the appellant that his
prayer for reduction of the rent to Rs.2,700/- p.m. from Rs. 3,780/- p.m.
was granted by the Tribunal, was misconceived.
34.
With regard to plea of the suit being barred by the provisions of
the Delhi Rent Control Act, a Division Bench of this Court in Shalimar
Paints Ltd. vs. Bani Jagtiani Trust and Ors. 107 (2003) DLT 58, while
holding that the landlord was competent to increase the rent legally as
per the provisions of Section 6A and Section 8 of the DRC Act, has laid
down that there is no legal bar in the landlord availing the remedy of
filing a suit once the rent stood increased to more than Rs.3,500/-
p.m. Paragraph 22 of the said judgment, which is apposite, is being
RFA 329/2007
Page No. 23 of 44
reproduced hereunder:-
“22. In view of the aforesaid position of law,
we do not find any merit in the submission of the
learned counsel for the appellant that the
respondent cannot avail two remedies for a
single cause of action. Even according to
Ambalal's case (supra) there is no legal bar even
in availing of two remedies but it will not be right
for the landlord to continue two proceedings. In
the instant case the 1st proceeding was initiated
when the rent was less than Rs.3500/- and the
second proceedings were initiated when the rent
was more than Rs.3500/- and the tenancy fell
outside the purview of the Rent Control Act. The
respondent was wholly justified in initiating two
proceedings in the facts and circumstances of
this case.”
35.
It also deserves to be noticed that the plea of fixation of standard
rent under Section 4 of the Delhi Rent Control Act is not available to the
appellant, inasmuch as a Division Bench of this Court in the case of
Raghunandan Saran Ashok Saran (HUF) vs. Union of India & Ors.
2002 (61) DRJ 457 (DB), after delineating the entire history of rent
legislation and examining the various provisions of the Rent Control
Act has taken the view that Sections 4, 6 and 9 of the Delhi Rent
Control Act, which deal with the determination and fixation of standard
rent, have not taken into account the huge difference between the cost of
living in the past and the present times and thus do not pass the test of
reasonableness. The said provisions have thus been adjudged to be
RFA 329/2007
Page No. 24 of 44
“archaic” in nature in that they contain no mechanism to compensate the
landlords and to offset inflation. These provisions relating to standard
rent, therefore, have been held to offend Articles 14, 19(1)(g) and 21 of
the Constitution and ultra vires the Constitution.
36.
Another submission made by Mr. Kirpal on behalf of the
appellant was that even assuming that the respondent-landlord was
entitled to enhance the rent in terms of the lease agreement, the Act
requires a notice to be sent for such an increase. No such notice has
been given in this case. Therefore, even assuming that the increased
rent has been paid, the same has not been enhanced in a manner known
to law. The enhancement is thus contrary to Section 8 of the Delhi Rent
Control Act and hence any increase is void.
37.
Mr. B.B. Gupta, the learned counsel for the respondent relying
upon the judgments rendered in
Ram Prakash (Prof.) vs. D.N.
Shrivastava 162 (2009) DLT 419, Crack Detectives Pvt. Ltd. vs. P.S.
Malhotra 129 (2006) DLT 584, Standard Pharmaceuticals Ltd. vs.
Gyan Chand Jain & Anr. 2002 (62) DRJ 733, National Cooperative
Consumer Federation of India Ltd. vs. Jwala Pershad Ashok Kumar
Chopra and Ors. 74 (1998) DLT 842 and Nopany Investments (P) Ltd.
vs. Santokh Singh (HUF) 2008 (2) SCC 728 contended that the
RFA 329/2007
Page No. 25 of 44
provisions of Section 8 are not applicable to the instant case.
38.
A look at Section 6A and Section 8 of the Act, in my opinion,
clearly shows that the said Section has no application to the instant case
where the Lease Deed itself provided for the increase of the rent from
time to time. Section 6A and Section 8 reads as under:-
“6A. Revision of rent.– Notwithstanding
anything contained in this Act, the standard rent,
or, where no standard rent is fixed under the
provisions of this Act in respect of any premises,
the rent agreed upon between the landlord and
the tenant, may be increased by ten per cent
every three years.”
“8. Notice of increase of rent.– (1) Where a
landlord wishes to increase the rent of any
premises, he shall give the tenant notice of his
intention to make the increase and in so far as
such increase is lawful under this Act, it shall be
due and recoverable only in respect of the period
of the tenancy after the expiry of thirty days from
the date on which the notice is given.
(2)
Every notice under sub-section (1) shall
be in writing signed by or on behalf of the
landlord and given in the manner provided in
section 106 of the Transfer of Property Act, 1982
(4 of 1882).”
39.
Clearly, Section 6A envisages and permits revision of rent by
10% every three years. Such increase, the Section envisages, shall be
made upon the standard rent or where no standard rent is fixed under the
provisions of the Act in respect of any premises, the rent agreed upon
between the landlord and the tenant. As such, it is only the rent agreed
RFA 329/2007
Page No. 26 of 44
upon between the landlord and the tenant which is subject to revision by
10% every three years. This provision clearly can have no application
in a case where in Lease Deed itself provision is made for the increase
of rent and the rent is agreed upon between the landlord and the tenant
by consensus.
40.
In view of the aforesaid, I am of the view that the learned
Additional Trial Judge was justified in holding that there was sufficient
evidence on record to prove that the rent of the tenanted premises was
Rs.3,780/- p.m. w.e.f. 01.12.1981 as claimed in the plaint and the
appellant/defendant had failed to prove that the suit was barred by the
provisions of the DRC Act.
Issues No.1 and 2, in my considered
opinion, were correctly decided in favour of the respondent and against
the appellant.
41.
Issue No.3
Issue No.3 reads as under:-
“Issue No.3: Whether the name of M/s. Cycle
Equipment Pvt. Ltd. has been changed to M/s.
CEPCO Industries Pvt. Ltd., if so, its effect?
OPP.”
42.
The onus of proving this issue was upon the respondent, who
discharged the aforesaid onus by deposing that the respondent Company
was earlier known as 'CYCLE Equipment Pvt. Ltd.'.
RFA 329/2007
The name
Page No. 27 of 44
'CYCLE Equipment Pvt. Ltd.' had been changed to 'CEPCO Industries
Pvt. Ltd.' and the certificate of incorporation as well as the certificate of
the change of the name were incorporated in the Memorandum and
Articles of Association of the respondent Company, which were Exhibit
PW-1/1. The appellant was well aware of the change of the name of
'CYCLE Equipment Pvt. Ltd.' to 'CEPCO Industries Pvt. Ltd.'.
43.
In cross-examination, the testimony of the aforesaid witness
(PW-1) remained unshaken. From the deposition of PW-1 and from the
cross-examination of DW-1, in my view, the learned trial court rightly
decided this issue in favour of the respondent and against the appellant.
In any case, the findings on this issue were not seriously challenged by
the appellant in the course of arguments.
44.
Issue No.4
Issue No.4 reads as under:-
“Issue No.4: whether the tenancy stands
terminated vide notice dated 21.9.2005, if so, its
effect? OPP.”
45.
The findings of the learned trial court on this issue as set out in
paragraph 24 of the judgment are as follows:-
“The onus of this issue was upon the plaintiff.
The plaintiff has proved the notice dated
21.9.2005 as Ex PW1/10 wherein the lease of the
defendant was determined. The service of the
RFA 329/2007
Page No. 28 of 44
said notice is not denied. As the notice was duly
replied vide reply Ex PW1/14 dated 5.10.2005, it
was alleged in the reply that the defendant was
liable to pay rent @ Rs.2,700/- per month which
he has paid upto date and the rate of rent
determined @ Rs.3,780/- by the Ld. ARC, Delhi
has already been set aside by the Ld. Additional
Rent Control Tribunal, Delhi and as such the
legal notice determining the tenancy was not
maintainable. Admittedly the tenancy is a month
to month tenancy which is terminable by a 15
days notice. As per the provisions of section 111
sub section (h) of The Transfer of Property Act,
1882, the said tenancy is determined on the
expiration of a notice to determine the lease. In
the light of my findings on the issue no.1 and 2, it
is held that the rate of rent of the tenanted
premises was Rs.3,780/- on the date of service of
the notice and the lease of the defendant qua
tenanted premises stands determined after 15 day
of service of notice dated 21.9.2005 Ex PW1/10.
As per the reply Ex PW1/14, the said notice was
received on 26.9.2005 by the defendant. The
plaintiff has, therefore, succeeded in proving that
the lease stands determined by notice dated
21.9.2005 and the tenancy stands terminated.
The issue no.4 is decided accordingly in favour
of the plaintiff and against the defendant.”
46.
The above findings on Issue No.4 were also not seriously assailed
by the appellant in the course of arguments and, therefore, I do not
propose to dwell any longer on this issue.
47.
Issues No.5, 6 and 8
Issues No.5, 6 and 8 pertain to the prayer for mesne profits made
in the suit and read as under:-
RFA 329/2007
Page No. 29 of 44
“Issue No.5: Whether the plaintiff is entitled to
the recovery of Rs.1,73,880/- as arrears of rent?
OPP.
Issue No.6: Whether the plaintiff is entitled to
the mesne profits, if so, at what rate and for
what period? OPP.
Issue No.8: Whether the plaintiff is entitled to
the interest on the mesne profits as claimed for?
OPP.”
48.
The onus of proving the aforesaid issues was upon the
respondent. In prayer clause (ii), the respondent has prayed for recovery
of Rs.1,73,880/- with interest at the rate of 24% p.a. from the date of the
institution of the suit till the date of realisation, i.e., Rs.38,880 towards
short fall in the rent for the last three years before the determination of
of the lease and mesne profits at the rate of Rs.1,35,000/- p.m. (i.e.
Rs.150/- per sq. ft. per month) till the institution of the suit, i.e., for the
month of November, 2005.
In prayer clause (iii), the plaintiff has
claimed future mesne profits/damages at the rate of Rs.150/- per sq. ft.
per month, i.e., at the rate of Rs.1,35,000/- p.m. along with interest at
the rate of 24% p.a.
49.
In view of the findings of the learned trial court on Issues No.1
and 2 which have been affirmed by this Court, the learned trial court, in
my view, has rightly held the respondent to be entitled to the aforesaid
amount of Rs.38,880/- calculated @ Rs.3,780/- per month as arrears of
RFA 329/2007
Page No. 30 of 44
rent along with interest at the rate of 12% p.a.
50.
With regard to the claim of Rs.1,35,000/- as mesne profits, the
learned trial court awarded mesne profits at the rate of Rs.50/- per sq. ft.
The contention of the learned counsel for the appellant is that the
determination of mesne profits at the rate of Rs.50/- per sq. ft. per
month by the learned Court was based on no evidence or material
whatsoever, but was simply the ipse-dixit of the respondent. The Court
could at best have passed a decree directing an inquiry into the rate of
mesne profits as contemplated by the provisions of Order XX Rule
12(c) of the CPC. Rather than directing an inquiry, the trial court
simply passed a decree, which was not permissible in law.
51.
Mr. Gupta, the learned counsel for the respondent, on the other
hand, contended that under Order XX Rule 12 CPC, it is the absolute
discretion of the Court either to determine the mesne profits of its own
or to order for an inquiry.
In the present case, the Court after
considering the evidence on record and taking into account the entirety
of the facts and circumstances of the case and the background of the lis
between the parties has exercised its lawful discretion to determine the
mesne profits of its own. Such exercise of discretion by the learned
Court, Mr. Gupta contended, has not been challenged before this Court
RFA 329/2007
Page No. 31 of 44
except in the course of arguments. It was also contended by Mr. Gupta
that the respondent had discharged the onus placed upon it with regard
to proving the rate of damages/mesne profits by leading oral evidence
and also by cross-examining the appellant. The appellant, on the other
hand, had not led any evidence to prove the market rate at the relevant
time.
52.
The learned counsel for the respondent also relied upon a catena
of decisions in support of his contention that while determining mesne
profits the Court is entitled to take judicial notice of the increase of
rentals in Delhi under Sections 56 and 57 of the Indian Evidence Act,
1872, including the decisions of this Court in M.R. Sahni vs. Doris
Randhawa 2008 (104) DRJ 246, National Radio & Electronic Co. Ltd.
vs. Motion Pictures Association 122 (2005) DLT 629 (DB), State
Bank of Bikaner and Jaipur vs. I.S. Ratta & Ors. 120 (2005) DLT 407
(DB), Anant Raj Agencies Properties vs. State Bank of Patiala 2002
IV AD (Delhi) 733 (DB), Motor & General Finance Ltd. vs. M/s.
Nirulas & Ors. 92 (2001) DLT 97, Vinod Khanna and Ors. vs. Bakshi
Sachdev (Deceased) Through LRs and Ors. AIR 1996 (Delhi) 32 (DB)
and Bakshi Sachdev (D) by LRs vs. Concord (I) 1993 Rajdhani LR
563.
RFA 329/2007
Page No. 32 of 44
53.
Specific reference was made to a Division Bench judgment of
this Court in Anant Raj Agencies Properties vs. State Bank of Patiala
2002 IV AD (Delhi) 733, wherein this Court in respect of premises
situated in Connaught Place, New Delhi had, on the basis of the
evidence on record, allowed the payment of mesne profits at the rate of
Rs.50/- per sq. ft. per month for the property in the possession of the
Bank, and further held that since the suit had been kept pending from
15.04.1991 till 08.01.1999, the trial court ought to have taken into
consideration the manifold increase of rent in the area in question and
also taken judicial notice of the same. In doing so, the Division Bench
relied upon the judgment of the Supreme Court in D.C. Oswal vs. V.K.
Subbiah and Ors. AIR 1992 SC 184, where the rent of the premises
was enhanced by the Supreme Court from Rs.275/- p.m. to Rs.400/-
p.m. taking judicial notice of the escalation of rents everywhere.
54.
In Vinod Khanna and Ors. vs. Bakshi Sachdev (Deceased)
Through LRs and Ors. AIR 1996 (Delhi) 32, a Division Bench of this
Court relying upon the D.C. Oswal's case held as under:-
“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 Rupees 10,000/- per month as
fair amount towards damages/mesne profits in
RFA 329/2007
Page No. 33 of 44
favor 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
992 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 Rs.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 Rs.6,000/- per month as
far back as in the year 1974. We may, however,
note here that the learned counsel for the
appellants did not seriously challenge the
findings of the learned Judge that Rs.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.”
55.
In another Division Bench judgment of this Court titled as S.
RFA 329/2007
Page No. 34 of 44
Kumar vs. G.K. Kathpalia 1991 (1) RCR 431, where the respondent
landlord had not led any documentary evidence on the prevalent market
rates of other premises in the vicinity, it was held by the Division Bench
that keeping in mind the prime location of the suit premises, its
proximity to the community centre and commercial activity, a sum of
Rs.25,000/- p.m. would be a just and fair amount by way of
damages/mesne profits from the date of the institution of the suit till the
date of the delivery of the possession of the premises.
56.
In Motor & General Finance Ltd. vs. M/s. Nirulas & Ors. 92
(2001) DLT 97, it was held that where the defendants are prima facie
unauthorised occupants, they cannot be allowed to remain in possession
of the premises without paying any amount. The Court can take judicial
notice of the location of the premises, its area, etc. for the purpose of
awarding mesne profits to the landlord thereof.
57.
In International Pvt. Ltd. vs. Saraswati Industrial Sundictes
Ltd. 1992 (2) RCR 6, this Court held that a certain amount of guess
work in the calculation of mesne profits was inevitable.
58.
In Shri M.R. Sahni vs. Mrs. Doris Randhawa 2008 (104) DRJ
246, while reiterating that the steep increase in the rentals in Delhi is a
matter of fact of which judicial notice can be taken of by the Courts,
RFA 329/2007
Page No. 35 of 44
this Court again emphasized:-
“44. I note that in relation to determination of
mesne profits there is always some element of
guesswork. What has to be ensured is that the
finding has not to be the conjecture of the Court.
As long as there is some evidence to sustain the
same, the finding cannot be faulted.”
59.
In the instant case, on an examination of the records, it transpires
that on behalf of the respondent PW-1 Shri R.N. Aggarwal has tendered
in evidence his affidavit by way of evidence wherein he deposed that
the tenancy of the appellant was determined vide notice dated
21.09.2005 and thereafter the occupation/possession of the appellant
became unauthorised and the appellant was liable to pay mesne
profits/damages for the use and occupation of the premises. He further
stated on oath that the then letting value of the premises was at the rate
of Rs.150/- per sq. ft. per month; that there had been a tremendous
increase in the letting value of the premises, and that ever since the
sealing of unauthorised commercial premises in residential areas had
started, i.e., since the beginning of the year 2006, the rate of letting
value of authorised commercial and/or office premises had increased
manifold. He also deposed that as at present, the letting value of the
premises was Rs.800/- per sq. ft. per month and that the respondent was
also entitled to interest thereon at the rate of 24% p.a. till the date of
RFA 329/2007
Page No. 36 of 44
payment. The testimony of this witness remained unshaken in cross-
examination and barring a few suggestions put to the witness there was
no effective cross-examination on the issue.
60.
In the cross-examination of the appellant (Shri M.K. Bhagwagar,
who appeared in the witness box as RW-1), there was no denial by the
appellant that the ground floor of the premises in question, which were
tenanted, had been let at the rate of Rs.800/- per sq. ft. per month, where
the Pantaloon Showroom was being run. The appellant also did not
choose to lead any evidence in rebuttal to prove the market rate at the
relevant time.
Thus, it is on the record and is not denied by the
appellant that the ground floor of the very same premises is at present
leased out for the purpose of running the Pantaloon Showroom at the
rate of Rs.800/- per sq. ft. per month.
61.
As regards the contention of the learned counsel for the appellant
that it was incumbent upon the Court to have ordered an inquiry into the
mesne profits, the provisions of Rule 12 of Order XX CPC are apposite,
which read as under:-
“12. Decree for possession and mesne
profits.– (1) Where a suit is for the recovery of
possession of immovable property and for rent or
mesne profits, the Court may pass a decree:
(a)
for the possession of the property;
(b)
for the rents which have accrued on the
RFA 329/2007
Page No. 37 of 44
property during the period prior to the
institution of the suit or directing an
inquiry as to such rent;
(ba) for the mesne profits or directing an
inquiry as to such mense profits;
(c)
directing an inquiry as to rent or mense
profits from the institution of the suit
until,–
(i)
the delivery of possession to the
decree-holder,
(ii) the relinquishment of possession by
the judgment-debtor with notice to
the decree-holder through the
Court, or
(iii) the expiration of three years from
the date of the decree, whichever
event first occurs.
(2)
Where an inquiry is directed under clause
(b) or clause (c), a final decree in respect of the
rent or mesne profits shall be passed in
accordance with the result of such inquiry.”
62.
The learned trial Judge has held, and in my view rightly so, that
in view of the provisions of Order XX Rule 12(ba) of the CPC in a suit
for recovery of possession of immovable property and for rent or mesne
profits, the Court while passing decree for possession of the property
may pass a decree for mesne profits or direct an inquiry as to such
mesne profits. The Court has discretion to award future mesne profits if
sufficient evidence is found available on the record by the Court for
determination of the claim of mesne profits and if the Court finds that
the evidence brought on record by the landlord is not sufficient for such
RFA 329/2007
Page No. 38 of 44
determination, the Court may direct an inquiry as to such mesne profits.
63.
In Gopalakrishna Pillai & Ors. vs. Meenakshi Ayal & Ors. AIR
1967 SC 155, it has been held that Order XX Rule 12 of the CPC
enables the Court to pass a decree both for past and future mesne
profits. It was further held that as regards the past mesne profits, the
plaintiff has existing cause of action at the time of institution of the suit
while for future mesne profits though he has no cause of action as on
date of institution of the suit but he can claim such relief of future
mesne profits under Order XX Rule 12 CPC and the Court may award
such relief even if the same is not specifically asked for in the plaint.
64.
As regards the claim for interest on mesne profits, in I.S. Ratta
(supra), relying upon the judgment of the Supreme Court in Mahant
Narayana Dasjee Varu & Ors. vs. The Board of Trustees, the
Tirumalai Tirupathi Devasthanam AIR 1965 SC 1231, it was held that
interest is an integral part of the mesne profits and, therefore, the same
has to be allowed in the computation of mesne profits itself. Paragraphs
16 to 18 of the said judgment are apposite and are reproduced
hereunder:-
“16. Having decided the aforesaid question in
the aforesaid manner, we proceed to deal with
the next contention of Counsel appearing for the
appellant that the interest awarded by the
RFA 329/2007
Page No. 39 of 44
learned Trial Court for the damages is unknown
in law. We have given our anxious consideration
to the aforesaid contention of Counsel appearing
for the appellant. The said contention is however,
liable to be rejected straightaway in view of the
settled position of law in that regard in the
decision of the Supreme Court in Mahant
Narayana Dasjee Varu & Ors. v. The Board of
Trustees,
the
Tirumalai
Tirupathi
Devasthanam, reported in AIR 1965 SC 1231.
The Supreme Court in the said decision held that
Section 2(12) of the CPC has defined what
'mesne profits' is. It was also held in the said
judgment that interest is an integral part of the
mesne profits and, therefore, the same has to be
allowed in the computation of mesne profits
itself. The following paragraph from the
judgment is relevant to be extracted which
accordingly stands quoted herein:
"The last of the points urged was that the
learned Judges erred in allowing interest
up to the date of realisation on the
aggregate sum made up of the principal
and interest up to the date of the decree,
instead of only on the principal sum
ascertained as mesne profits. For the
purpose of understanding this point it is
necessary to explain how interest has been
calculated by the learned Judges. Under
Section 2(12) of the Civil Procedure Code
which contains the definition of "mesne
profits", interest is an integral part of
mesne profits and has, therefore, to be
allowed in the computation of mesne profits
itself. That proceeds on the theory that the
person in wrong possession appropriating
income from the property himself gets the
benefit of the interest on such income. In
the present case the Devasthanam was
entitled to possession from and after June
RFA 329/2007
Page No. 40 of 44
7, 1933 i.e., when the Act came into force
and the Devasthanam Committee was
appointed. The Mahant having wrongfully
resisted the claim of the Devasthanam to
possession without surrendering the
property, was admittedly bound to pay
mesne profits. This, it may be stated, is not
disputed. The question raised are, however,
two: (1) when is the aggregation of the
principal amount of the mesne profits and
the interest thereon to be made for the
purpose of the total carrying further
interest? (2) What is the rate of interest to
be charged. The learned trial Judge
allowed interest at 6 per cent for the
calculation of interest which is part of
mesne profits. Having calculated mesne
profits on this basis he aggregated the
amount of mesne profits, i.e., income from
the several items of property plus the
interest on it up to the date of the plaint i.e.,
January 10, 1946. On the total sum so
ascertained he decreed interest at 6 per
cent till the date of his decree i.e., March
28, 1952. He passed a decree for this sum
with further interest at 6 per cent till the
date of realisation."
17. The aforesaid issue is no longer res
integra that interest on mesne profits could be
paid. The next question, therefore, would be as to
what would be the appropriate rate of interest.
The learned Trial Court has awarded 16.5% p.a.,
interest on the rent. In the aforesaid case decided
by the Supreme Court 6% interest was held to be
a reasonable interest. In the said case it was held
that:
"In any event, if the Trial Court in its
discretion awarded interest at 6 per cent,
and that is admittedly not per se an
unreasonable rate, there was no compelling
RFA 329/2007
Page No. 41 of 44
equity in the Mahant to justify interference
with that discretion."
18. Considering the facts and circumstances
of the case we consider that direction to pay
interest @ 16.5% p.a was on the higher side.
We, in the facts and circumstances of the case,
deem it proper to fix the rate of interest payable
by the appellant to the respondents towards the
arrears of mesne profits from the date of decree
till the date of possession at 12% p.a. Ordered
accordingly. The amount paid in excess shall be
returned by the respondents to the appellant,
failing which security furnished for restitution
shall be enforced and the amount which is lying
with the Trial Court amounting to Rs.40 lakhs
and TDS amount of Rs.5 lakhs shall be returned
to the appellant.
The appeal stands disposed of in terms of
the aforesaid order.”
65.
In the facts and circumstances, the learned trial court, in my
view, has rightly held that the respondent is entitled to mesne profits at
the rate of Rs.50/- per sq. ft. per month, i.e., Rs.45,000/- per month with
effect from the month of November, 2005 till the vacation of the
tenanted premises. As held by the Division Bench in the I.S. Ratta's
case (supra), interest is liable to be awarded on mesne profits. The only
question, therefore, which remains to be considered is what would be
the appropriate rate of interest on the mesne profits awarded by the
learned trial court. The learned trial court has awarded 12% p.a. interest
on the rent. Considering the facts and circumstances of the case, it is
RFA 329/2007
Page No. 42 of 44
deemed appropriate to fix the rate of interest payable by the appellant to
the respondent towards the arrears of rent and mesne profits @ 9% p.a.
throughout.
66.
In view of the aforesaid, the findings of the learned trial court on
Issues No.5, 6 and 8 are upheld with the aforesaid modification in the
rate of interest.
67.
Issues No.7 and 9
Issues No.7 and 9 read as under:-
“Issue No.7: Whether the plaintiff is entitled to
the decree of permanent injunction as prayed
for? OPP.
Issue No.9: Relief.”
68.
In view of the findings of this Court on Issues No.1 to 6 and 8,
there does not appear to be any reason to interfere with the findings
rendered on Issues No.7 and 9, which are a natural corollary to the
findings on the earlier issues and flow from the same. The rate of
interest awarded by the learned trial court, however, is modified to the
extent of 9% throughout.
69.
Before parting with the case, it may be noticed that the learned
counsel for the appellant vehemently pressed for a remand of the case to
the trial court. This Court is unable to see any justification for the same
as the findings of the learned trial court appear to be passed on a correct

appreciation of the facts and the evidence adduced before the trial court
in the light of the law laid down by this Court and by the Supreme
Court.
70.
The judgment of the learned trial court is, therefore, upheld and
the appeal is dismissed with costs.
RFA 329/2007 and CM
Nos.16188/2007 and 17682/2007 stand disposed of accordingly.
REVA KHETRAPAL, J
MARCH 26, 2010

Print Page