* IN THE HIGH COURT OF DELHI AT NEW DELHI % [CASE NUMBER] + Date of Decision: 20th December, 2010 # HOLIDAY HOME Appellant ! Through: Mr. [ENTITY], Sr. Advocate with Mr. [ENTITY], Advocate. Versus $ R.P. KAPUR [ENTITY] Respondent ^ Through: Mr. [ENTITY], Advocate CORAM: * HON'BLE MR. JUSTICE [ENTITY] 1. Whether Reporters of local papers may be allowed to see the judgment? (No) 2. To be referred to the Reporter or not? (No) 3. Whether the judgment should be reported in the digest? (No) JUDGMENT
[ENTITY], J:
This is an appeal filed by the appellant, who was a tenant of premises no. A-2/11, Safdarjung Enclave, New Delhi (hereinafter to be referred as the premises in suit) of the respondent herein, against the judgment and decree dated 18th July, 2007 whereby the suit filed by the respondent-landlord for possession, damages/mesne profits etc. in respect of the suit premises had been decreed.
2. The respondent-plaintiff(hereinafter to be referred as the plaintiff) had filed a suit for recovery of possession, damages, mesne profits for unauthorized use and occupation of the premises in suit against the appellant(hereinafter to be referred as the defendant), inter-alia, on the allegations that the premises in suit were let out to the defendant for lodging purposes only but the defendant had not only started using the same for non-residential purposes, which was against the terms of the perpetual lease executed in favour of the plaintiff by the President of India, but had also illegally sub-let a portion of the premises in suit to Abacus Computer for commercial purposes and substantial damages to the premises had also been caused. It was also pleaded that even though the contractual tenancy of the defendant had expired by efflux of time in the year 1983 still it terminated the tenancy of the defendant vide notice dated 28th February, 1995 whereby the defendant was called upon to vacate the premises in the suit on the expiry of the 30th April, 1995. Since the defendant did not comply with that notice the plaintiff had to approach the Court of law and the suit was filed on 04-08-95 for the relief of possession etc. In the plaint, it was also claimed by the plaintiff that since the defendant had caused substantial damage to the premises in suit it was also liable to restore the premises to its original condition in which the same were let out to it. A decree of permanent injunction was also prayed for restraining the defendant from parting with the possession of the premises in suit to some third party.
3. The defendant contested the suit, inter-alia, on the grounds that the plaintiff had no locus standi to file the suit since it was not the owner of the premises in suit and that in any case the suit for possession could not be decreed since no notice of termination of the defendants tenancy had been served upon it. It was denied that the premises in suit had been sub-let to anyone or that the same were being misused. Violation of the suit for the purpose of Court fee and jurisdiction was also challenged. The defendant had also pleaded that it had been permitted by the plaintiff to use the premises in suit for the purpose for which it was being used, namely, for running a lodging house and not only that, the plaintiff had also permitted the defendant to spend huge money for carrying out improvements in the premises for making it fit for running a lodging house and accordingly the defendant had spent more than ` 25 lacs in carrying out additions and alterations and improvements more than 15 years back and further that it had been agreed between the parties that the defendant shall not be evicted from the premises in suit for any reason whatsoever unless the plaintiff would pay to the defendant the said amount which had been spent by it on additions, alterations and improvements. Regarding the relief of mesne profits it was prayed that a preliminary decree may be passed as provided in [SECTION] [ACT]) and thereafter a final decree should be passed.
4. The pleadings of the parties had led to the framing of the following issues by the learned trial Judge:-
"1. Whether the plaintiff has no locus standi to file the present suit? OPD.
2. Whether the suit has been properly valued for the purpose of Court fee and jurisdiction? OPD.
3. Whether the plaintiff is entitled for rent of suit property, if so, for which period and for what amount? OPP 3A. Whether the plaintiff is entitled for recovery of possession of the premises A-2/11, Safdarjung Enclave, New Delhi?
4. Whether the plaintiff is entitled for mesne profit/damages for the use and occupation of suit property, if so, for which period and at what rate? OPP
5. Whether the plaintiff is entitled for mandatory injunction, as prayed for? OPP
6. Whether the plaintiff is entitled for permanent injunction, as prayed for? OPP
7. Relief.
5. Thereafter from the side of the plaintiff Shri [ENTITY], karta of the plaintiff [ENTITY] appeared in the witness box in support of his case and he also examined his advocate who had sent a notice of the termination of defendants tenancy while the defendant firm examined as many as nine witnesses including one of its partners Shri [ENTITY]. The learned trial Court after examining the evidence adduced by the parties and considering the arguments advanced by their counsel passed a decree for possession of the premises in suit in favour of the plaintiff with a direction to the defendant to restore the premises to its original condition. A decree for ` 9,000 on account of arrears of rent for the month of April, 1995 was also passed in favour of the plaintiff. The defendant was also directed to pay mesne profits @ of ` 18,000 per month with effect from 1st May, 1995 till the date of delivery of possession of the premises in suit to the plaintiff. A decree for permanent injunction was also passed against the defendant restraining it from using the premises in suit for commercial purposes or from parting with its possession or creating any kind of third party interest. It was also decreed that in case the defendant would failed to pay the arrears of rent and mesne profits within a period of two months interest thereupon at the rate of 18% per annum would become payable from the date of the institution of the suit till realization of the decreed amount.
6. The defendant felt aggrieved with the judgment and decree passed against it by the trial Court and therefore, the present appeal was filed by it impugning the correctness thereof.
7. I have gone through the evidence before the trial Court and the impugned judgment and have also considered the submissions made by the appellants senior counsel Shri [ENTITY] and respondents counsel Shri [ENTITY].
8. The admitted facts emerging from the pleadings, evidence adduced in the trial and the submissions made during the hearing of the present appeal by the counsel for the parties are that the land underneath the premises in suit were leased out to the plaintiff by the Delhi Development Authority vide Perpetual Lease Deed Ex.DW-9/1 and the premises in suit were let out by the plaintiff to the defendant firm in the year 1980 for a period of three years at a monthly rent of Rs.9,000/- and further that the defendant had not vacated the premises in suit after the expiry of the initial period of tenancy of three years and it has been paying the agreed rent to the plaintiff.
9. The learned senior counsel for the defendant-appellant, however, seriously challenged the plaintiffs right to get the premises in suit vacated from the defendant, which has been upheld by the trial Court while decreeing the suit, mainly on two grounds. The first ground of challenge put in the forefront by Mr. [ENTITY], learned senior counsel for the appellant, was that the perpetual lease in respect of the land underneath the building which was let out to the defendant having admittedly been cancelled way back in the year 1972 and the premises re-entered also (symbolically) in the year 1984, as had been confirmed during defendants evidence by the official from Delhi Development Authority examined by the defendant as DW-9, the plaintiff could not have been given a decree of possession in respect of the property which belonged to the Government. In support of this submission Mr. [ENTITY] drew my attention to the cross-examination of PW-1 Shri [ENTITY], who was the karta of plaintiff, [ENTITY]), and also the defendants landlord, where he had admitted that the lease of the premises in suit had been cancelled by the DDA on account of misuse. My attention was also drawn to the evidence of defence witness DW-9, an official from DDA, who had deposed that the lease of the premises in question stood cancelled in the year 1972 but later on the Lt. Governor had restored the same on certain conditions but since the plaintiff had not fulfilled those conditions the termination of the lease was maintained by the Lt. Governor and formal possession was taken over by the Junior Engineer on 13/07/84 and eviction proceedings were ordered to be initiated by the Estate Officer under the [ACT] Mr. [ENTITY] contended that even though physical possession of the premises was not taken over from the plaintiff but for all practical purposes it stood taken over from the plaintiff and the defendants possession became the possession under the paramount lessor and so the trial Courts view that since physical possession had not been taken over by DDA the plaintiff could get a decree of possession was not legally correct. It was also contended that the trial Court had placed reliance on some judgments on the principle of estoppel embodied in [SECTION] of the [ACT] where the tenanted premises had not been re-entered by the paramount lessor, as is the position in the present case, and so those judgments had no application and had been wrongly relied upon by the trial Court while coming to the conclusion that the defendant was estopped from challenging the title of the plaintiff because of it having admitted that it had been let out the premises in dispute by the plaintiff. In support of this contention reliance was placed on two judgments of this Court reported as [PRECEDENT] [PRECEDENT] and one judgment each of Patna and Madras High Courts reported as [PRECEDENT] and [PRECEDENT]. The second ground of challenge seriously put forth was that the plaintiff had in any case failed to proved that the defendants tenancy had been terminated before the filing of the suit for possession. On the point of non-service of notice of termination of defendants tenancy Mr. [ENTITY] cited one judgment of the Supreme Court in "[PRECEDENT]. It was also argued by the learned senior counsel that even though the plaintiff itself had prayed for passing of a preliminary decree of mesne profits as provided under [SECTION] [ACT] the trial Court had proceeded to straightaway award mesne profits @ Rs.18,000/- p.m. for the period after the filing of the suit till delivery of possession without holding any enquiry which was mandatory and that having not been done the decree for mesne profits the said period is liable to be set aside. Another contention was that issue no. 3A regarding the prayer of possession decree was framed by the trial Judge at the back of the parties while writing the judgment which was not permissible. Mr. [ENTITY] also submitted that even though the defendant had pleaded that a sum of Rs.25 lacs had been spent by the defendant on additions and alterations in the premises in dispute on the understanding with the plaintiff that it shall reimburse that much amount to the defendant whenever it shall be asked to deliver back the possession to the plaintiff but the trial Court had totally ignored that plea and passed the decree of possession in favour of the plaintiff.
10. On the other hand, learned counsel for the plaintiff while not disputing that DDA had cancelled the lease of the land and had also ordered initiation of proceedings for eviction against the plaintiff in 1984 argued that the defendant-appellant could not be permitted to argue that DDA had exercised its right of re-entry after cancellation of the lease in favour of the plaintiff since no such case was pleaded by it in the written statement and in any case the trial Court had rightly held that the defendant having taken the premises on rent from the plaintiff could not take such a plea in the suit for possession filed by its landlord. In any event, counsel further contended, since the physical possession of the premises in dispute had not been taken over by DDA till date the right of the plaintiff as a landlord to seek possession of the tenanted premises from the tenant does not get extinguished. In support of this submission on the applicability of the principle of estoppel in the facts and circumstances of this case Mr. [ENTITY] cited four judgments of this Court reported as [PRECEDENT] [PRECEDENT]. Another submission made was that the defendant had moved an application during the trial for amendment in its written statement after the evidence of DW-9 had been recorded to plead the fact of re-entry by DDA and that application was allowed by the trial Court but that order was set aside by this Court order dated 23rd August,2006 when challenged by the plaintiff and in that order this Court had observed that the defendant could not have any benefit from the re-entry by DDA since it had admittedly been inducted as a tenant by the plaintiff and so the cancellation of the lease of the land by DDA had no effect on the right of the plaintiff to claim back possession of the tenanted premises. That finding, counsel contended, became final and cannot be re-considered on the principle of res judicata. In support of this submission Mr. [ENTITY] cited two decisions of the Supreme Court in "[PRECEDENT] and " [PRECEDENT]. Regarding the service of notice upon the defendant terminating its tenancy it was contended that the plaintiff had duly proved service of notice of termination of defendants tenancy and the trial Court had rightly held so and no fault can be found in the impugned judgment. Regarding the argument that without an enquiry into the rate of mesne profits the same could not be awarded by the trial Court the submission of Mr. [ENTITY] was that since the original rent in respect of the premises in dispute was settled at Rs.9,000/- p.m. way back in the year 1980 the trial Court could have very well fixed the mesne profits @ Rs.18,000/- in the year 2006 w.e.f. 1995, without holding any enquiry, taking judicial notice of the huge escalation of rents in Delhi over the years and particularly in the posh areas like the colony where the premises in suit is situated.
11. In response to the submission of the counsel for the plaintiff that the defendant could not be permitted to take the plea, in the absence of pleadings, that since the DDA had re-entered the premises and the plaintiff had no right to maintain the suit for possession the learned senior counsel for the defendant submitted that since the fact of re-entry by DDA came to light only when DDAs official(DW-1) during his evidence brought on record that fact from DDAs file in respect of the premises in dispute the same could be taken note of and dealt with by the Court as a subsequent event, even if no such plea was there in the written statement, although at one stage, counsel submitted, the defendant had sought to plead such fact during the trial by moving an amendment application but that application was dismissed. Reliance in support of this submission was placed on a judgment of this Court reported as [PRECEDENT] which decision, as noticed earlier, was also relied upon for the proposition that after the DDA had exercised its right of re- entry the plaintiff could not maintain the suit for possession and also that with the cancellation of the lease in favour of the plaintiff it had ceased to be the owner of the premises in suit. It was also contended that even though the DDA had not taken over actual physical possession of the premises in dispute it having taken constructive possession, as deposed to by DW-9, the right of the plaintiff would still get extinguished to claim possession from the defendant since the acts of taking of constructive possession and actual possession by a paramount lessor are at par as far as the lessee, which the plaintiff was in this case, are concerned and, therefore, the possession of the premises in dispute by the defendant after the order of re-entry by DDA has to be considered to be the possession under the superior lessor ,namely, Delhi Development Authority. Mr. [ENTITY] also argued that now in the year 2007 the Estate Officer had served a notice upon the defendant-appellant to show cause as to why it should not be evicted from the premises in disputer being in unauthorized occupation of the premises belonging to and under the management of the Government and its copy had been placed on record alongwith an application dated 11th July,2009 under [SECTION] [ACT] and the counsel for the respondent had on 21st September,2009 consented that that document could be considered by this Court while deciding this appeal. So, even this development has to be taken note of by this Court, contended Mr. [ENTITY], as a subsequent event taking place during the pendency of this appeal. Mr. [ENTITY] also submitted that since in the Single Judge Bench decision of this Court cited by him reported as [PRECEDENT] it was held that with the re-entry of the tenanted premises by the Government, the superior lessor, the landlord ceased to be the owner and so could not maintain eviction case against his tenant while in another Single Judge Bench of this Court cited from the other side and which is reported as 2000(III) [ACT] it has been held that mere re-entry is of no consequence unless actual possession is taken over by the superior lessor. Thus, there is apparent conflict in these two decisions of two co-ordinate Benches and, therefore, Mr. [ENTITY] contended, this Court could refer the matter to a larger Bench instead of following one or the other of the two conflicting judgments.
12. Regarding the plea of res judicata taken by the counsel for the respondent-plaintiff Mr. [ENTITY] submitted that the order relied upon by the respondent was challenged before the Supreme Court but the Special Leave Petition was withdrawn but while permitting withdrawal of that petition the Supreme Court had observed in its order dated 29th September,2006 that no observation made by the High Court in the impugned order dated 23rd August,2006 shall prejudice the case of any of the parties during the trial and, therefore, there was no question of any observation of this Court operating as a bar against re-consideration of the same point regarding applicability of [SECTION] of the [ACT] by the Court on the principle of res judicata.
13. When confronted with this situation, Mr. [ENTITY], the learned counsel for the respondent-plaintiff did not pursue his submission based on the principle of res judicata.
14. In my view, the mere fact that the Delhi Development Authority had cancelled the lease in respect of the land underneath the premises in dispute in the year 1972 because of misuser and had also ordered initiation of eviction proceedings against the plaintiff- landlord under the [ACT] in the year 1984 that would not entitle the defendant-tenant to resist the plaintiff-landlords prayer for a decree of possession after termination of its tenancy since there is nothing on record to show that actually any eviction proceedings had been initiated against the plaintiff by DDA or that any eviction order had been passed against it by the Estate Officer. The initiation of eviction proceedings against the defendant-tenant under the [ACT] in the year 2007 cannot come to its rescue since it is the eviction of the plaintiff- lessee by the title paramount i.e. Delhi Development Authority which would have made the difference as far as the plaintiffs right to claim possession from the defendant is concerned. In this regard a useful reference can be made to a judgment of the Supreme Court in "[PRECEDENT] in which the facts were that the tenant of the disputed shop had sublet the same and because of that subletting the landlord, which was a Trust, had initiated eviction proceedings against the tenant. The tenant had also initiated separate proceedings against his sub-tenant for eviction on account of non-payment of rent for some period. The sub-tenant had attorned directly in favour of the owner-Trust and a direct tenancy agreement had also been executed between them. The sub-tenant had resisted the eviction petition filed against him by his landlord on the ground of his having attorned directly in favour of the superior lessor i.e. the owner Trust. Accepting that plea, the trial Court dismissed the eviction petition. However, the High Court held that the sub-tenant could not have directly attorned in favour of the Trust and eviction of the tenant was ordered. The sub-tenant then approached the Supreme Court but his appeal was dismissed and it was observed that mere institution of a suit for eviction by the Trust against its tenant will not amount to eviction of the tenant by title paramount and that the relationship between the Trust and its tenant would not come to an end unless and until the eviction case filed by the Trust was decreed and that decree had attained finality. In the present case, as noticed already, there is nothing on record to show that DDA had initiated any proceedings for eviction of the plaintiff under the provisions of the [ACT] and so there is no question of eviction of the plaintiff by title paramount. Consequently, the defendant was estopped from contending that after creation of the tenancy with the plaintiff its title to the premises in dispute had extinguished because of its eviction by title paramount. And in view of the said decision of the Supreme Court in [ENTITY] case(supra) the defendant-appellant cannot get any benefit from the judgment of this Court reported as [PRECEDENT] cited by its counsel and I need not go into the question whether any reference needs to be made to larger Bench on this aspect for the reason put forth by Mr. [ENTITY]. It is also significant to note that PW-1 had in his cross-examination claimed that his request for restoration of the lease was pending consideration before the Lt. Governor. That fact was not disputed by the defendant. It is also clear from the evidence of DW-9 that DDA was in fact only interested in claiming misuser charges for restoring the lease in favour of the plaintiff and that is why no eviction proceedings against the plain tiff appear to have been initiated at all. These facts also support the plea of the plaintiff that the defendant cannot get any benefit from the mere cancellation of plaintiffs the lease by DDA. I am, therefore, of the view that the learned trial Court had rightly rejected the plea of the defendant that the suit for possession was not maintainable because of the cancellation of the lease in respect of the land underneath the premises in dispute in favour of the plaintiff by DDA.
15. I now come to the other point raised on behalf of the defendant
- appellant by its senior counsel. That point was regarding absence of service of notice of termination of defendants tenancy. The plaintiff had examined PW-2 Shri [ENTITY], advocate, who was the son of Shri [ENTITY], advocate who had issued the notice dated 28th February,1995, Ex.PW-1/1. He deposed that he had posted the notice Ex.PW-1/1 by registered post as well as under postal certificate(UPC). He also proved the postal receipts and the AD Card Ex.PW-1/6. From the side of the defendant its partner Shri [ENTITY] claimed in his evidence that the said notice was not received by the defendant firm or any of its partners. Learned trial Court after examining the evidence adduced from both the sides came to the conclusion that the notice dated 28th February, 1995 had been proved to have been received by the defendant - tenant. I have gone through the evidence adduced from both the sides and the discussion of that evidence and the submissions made on behalf of the tenant there, which were urged before this Court also by the defendant- appellants counsel, by the trial Court and its findings and I find myself in full agreement with those findings. Since I am in general agreement with the decision of the trial Court on the issue of termination of defendants tenancy I need not restate the evidence and re-appraise the same in view of the judgment of the Supreme Court in "[PRECEDENT] wherein it was observed that it was not the duty of the appellate Court when it agrees with the view of the trial Court on the evidence either to re-state the effect of the evidence or to reiterate the reasons given by the trial Court and that expression of general agreement with the reasons given by the trial Court would ordinarily suffice.
16. The defendant did not claim before the trial Court that issue should be framed regarding its plea that it had spent lacs of rupees in carrying out additions in the property in dispute and that the landlord had agreed that it will re-imburse that amount in case possession would be demanded and therefore the trial Court was not obliged to return any finding on that aspect. Similarly the framing of issue no.3A by the trial Court while writing the judgment is of no effect since the plaintiff had categorically claimed the relief of possession in the plaint and parties had gone on trial on that claim even in the absence of formal issue having been framed earlier and so even if no such issue had been framed at the time of writing of the judgment that would not have prevented the trial Court in passing a decree of possession. I am, therefore, of the view that the learned trial Court had rightly passed the decree of possession in favour of the plaintiff and against the defendant and the same is, therefore, maintained.
17. As far as the decree for mesne profits passed by the learned trial Court is concerned I am of the view that the same cannot be sustained since no enquiry as contemplated under [SECTION] [ACT] had been ordered to be conducted by the trial Court and without that mesne profits from the date of the filing of the suit till the delivery of the possession could not be awarded. Under [SECTION] [ACT] it is the discretion of the Court to order an enquiry into the mesne profits for the period after the filing of the suit for possession which means no decree for mesne profits can be passed without enquiry and if no enquiry is ordered by the Court plaintiff can initiate separate proceedings in respect of the mesne profits for the period after the filing of the suit for possession of some immovable property. In the present case, now that many years have passed after the initiation of legal proceedings by the plaintiff it would not be proper and in the interest of justice to tell the plaintiff to file an independent suit for recovery of mesne profits and the appropriate course would be to order an enquiry to be got conducted by the trial Court so that both the parties can adduce evidence in support of their respective claims in that regard. This course of action, in fact, should have been adopted by the trial Court itself if mesne profits were to be awarded to the plaintiff. There is no doubt that the Court is entitled to take notice of general escalation in rents in Delhi but that can be done by the Court only when some enquiry is conducted and the Court feels that there is no sufficient evidence from the side of the landlord.
18. The findings of the trial Court on the other issues were not challenged during the hearing of this appeal on behalf of the defendant - appellant and, therefore, the same also stand upheld.
19. In the result, this appeal is disposed of by rejecting the appellants challenge to the impugned judgment and decree of the trial Court except to the extent mesne profits @ ` 18,000 per month have been awarded for the period after the filing of the suit till the handing over of possession of the premises in suit to the plaintiff by the defendant. For determination of the mesne profits the matter is sent back to the trial Court with a direction to get an enquiry conducted in that regard and there shall only be a preliminary decree for the present holding that the plaintiff was entitled to claim mesne profits for unauthorized use and occupation of the premises in dispute by the by the defendant-appellant.
20. The trial Court shall now take up the matter for the purposes of holding an enquiry or getting it conducting by appointing some local commissioner on 1st February, 2011 and all efforts shall be made to conclude the matter finally within a period of six months from that date. Trial Court record be sent back.
[ENTITY],J December 20, 2010 pg/sh