CR No.3675 of 2011 (O&M) - 1 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH (1) CR No.3675 of 2011 (O&M) Date of decision:31.05.2011. Ranjit Singh Rana ...Petitioner Versus Manpreet Phulka and others ...Respondents (2) CR No.3676 of 2011 (O&M) Date of decision:31.05.2011. Shahina Rana ...Petitioner Versus Manpreet Phulka and others ...Respondents (3) CR No.3677 of 2011 (O&M) Date of decision:31.05.2011. Shahina Rana ...Petitioner Versus Manpreet Phulka and others ...Respondents CORAM: HON’BLE MR. JUSTICE RAKESH KUMAR JAIN Present: Mr. Arun Palli, Senior Advocate, with Mr. Divanshu Jain, Advocate, for the petitioner(s). Mr. M.L.Sarin, Senior Advocate, with Ms. Hemani Sarin, Advocate, for the respondent(s). ***** Rakesh Kumar Jain, J. A bunch of three revision petitions, namely, i) CR No.3675 of 2011 titled as `Ranjit Singh Rana Vs. Manpreet Phulka and others', ii) CR No.3676 of 2011 titled as `Shahina Rana Vs. Manpreet Phulka and others' and iii) CR No.3677 of 2011 titled as `Shahina Rana Vs. Manpreet Phulka and others' are being disposed of by this common order because question involved in all the aforesaid revision petitions is the same. CR No.3675 of 2011 (O&M) - 2 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** Respondents Manpreet Singh Phulka and others are the landlords of SCO Nos.491-92, Sector 35-C, Chandigarh who have let out three portions of the said building to the petitioner(s)/tenant(s) which are detailed as under: - i) In CR No.3675 of 2011, tenant Ranjit Singh Rana is occupying half portion of the basement towards right side at a monthly rent of `7,738/- since 1993; ii) In CR No.3676 of 2011, tenant Shahina Rana is occupying half portion of the basement towards left side at a monthly rent of `7,738/- since 1993; and iii) In CR No.3677 of 2011, tenant Shahina Rana is occupying half portion of the ground floor of the building at a monthly rent of `14,775/- since 1993; The landlords filed three separate eviction petitions in respect of all the three tenancies on the ground of non-payment of arrears of rent and personal necessity. The eviction petition in respect of both the portions of the basement was allowed on 14.08.2010 and the eviction petition regarding the ground floor was allowed on 29.09.2010. The tenants in respect of all the three tenancies filed statutory appeals along with the application for stay and the landlords filed application for payment of mesne profits. In respect of the basement, the landlords claimed `75,000/- per month for each half portion and the for half portion of the ground floor, they claimed `2,00,000/- per month. The application for mesne profits in respect of the basement was decided by Shri Lalit Batra, Appellate Authority, Chandigarh vide his order dated 11.05.2011 by which the tenants were directed to pay `50,000/- per month for each half portion to the landlords w.e.f. 14.08.2010 within a period of 20 days i.e. up to 31.05.2011 and the application for mesne profits in respect of half portion of the ground floor was decided by Shri S.K.Goel, Appellate Authority, Chandigarh on 13.04.2011 and the tenant was directed to pay the mesne profits @ `73,875/- per month which was allowed to be withdrawn by the landlords on furnishing security before the Rent Controller. Aggrieved against the aforesaid orders of the Appellate Authority, CR No.3675 of 2011 (O&M) - 3 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** these three revision petitions, which have been mentioned in the beginning of this order, have been filed before this Court. Learned counsel for the tenants has submitted that the learned Appellate Authority has committed an error of law in assessing the mesne profits @ `50,000/- per month for each half portion of the basement and @ `73,875/- per month for half portion of the ground floor. It is submitted that there was no evidence led by the landlords depicting the actual prevalent rate of rent of the half portion of the basement and half portion of the ground floor in the vicinity of the demised premises and as such, the learned Appellate Authority has erred in assessing the amount of mesne profits on the basis of guesswork. In support of his submissions, he has relied upon the following judgments: - i) M/s. Atma Ram Properties (P) Ltd. v. M/s. Federal Motors Pvt. Ltd., 2005(1) S.C.C. 705; ii) Anderson Wright and Co. v. Amar Nath Roy and others, 2005(3) P.L.R. 666; and iii) State of Maharashtra and another V. M/s. Super Max International Pvt. Ltd. & Ors., 2009(2) R.C.R. (Rent) 246. In reply, learned counsel for the landlords has submitted that the landlords have produced both registered and unregistered lease deeds of the adjoining premises, whereas the tenants have not led any evidence. The following is the chart of the evidence which was led by the landlords: - Sr. No. Building No. Document Rent (per month ) + Area lease out 1. SCO Nos.425-426 Lease deed dated 28.03.2008 `4,50,000/- (Basement + Ground Floor) 2. SCO Nos.423-424 Lease deed dated 16.07.2010 `3,50,000/- (1800 Sq. Ft.) 3. SCO Nos.489-490 Lease deed dated 15.07.2008 `6,50,000/- (Basement + Ground Floor) 4. SCO Nos.403-404 Lease deed dated 29.06.2010 `2,75,000/- (Ground Floor + space for DG on Second Floor) 5. SCO Nos.427-428 Leave & License Agreement dated 15.03.2010 `3,50,000/- (1900 Sq. Ft. Ground Floor) CR No.3675 of 2011 (O&M) - 4 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** Learned counsel for the landlords has also relied upon the following judgments: - i) Surinder Kumar v. Rattan Lal, 2006(2) Rent Control Reporter 26; ii) Surinder Singh v. Dr. Davinder Mohan, 2006(2) Rent Control Reporter 486; iii) Surinder Singh v. Dr. Davinder Mohan, 2008(2) Rent Control Reporter 90; iv) Pradeep Kumar v. Hajari Lal, (2008) 3 Supreme Court Cases 299; v) Crompton Greaves Ltd. v. State of Maharashtra, (2005) 11 Supreme Court Cases 547; and vi) Civil Revision No.8239 of 2010 titled as `Amrit Pal Singh v. The Jammu and Kashmir Bank Ltd.' decided on 21.02.2011. Learned counsel for the landlords has contended that the learned Appellate Authority has assessed the mesne profits after taking into account the prevalent market rent as the registered lease deed dated 16.07.2010 pertains to the covered area of 1800 Sq. Ft. of ground floor which was let out for `3,50,000/- per month. The 30% of the said rent was considered to be the rent of the basement which comes to `1,00,000/- per month and since the mesne profits were to be assessed in respect of half portion of the basement, therefore, it has been assessed @ `50,000/- per month and in respect of half portion of the ground floor, the learned Appellate Authority had multiplied the rent of `14,775/- with 5 and granted mesne profits @ `73,875/- per month. Thus, it is submitted that there is no error in the approach of the learned Appellate Authority while passing the impugned orders. I have heard both the learned counsel for the parties and perused the available record with their able assistance. The facts of this case are not much in dispute nor there is any dispute about the principle of law which has been laid down by the Supreme CR No.3675 of 2011 (O&M) - 5 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** Court in M/s. Atma Ram Properties (P) Ltd.'s case (supra) that after the order of eviction, the tenant is liable to pay mesne profits as determined by the Appellate Authority. In these cases, the question is only with regard to mode of assessment of mesne profits. Admittedly, the tenants has not led any evidence in respect of the prevailing market rent in the vicinity of the demised premises. The entire evidence has been led by the landlords which has been referred to here-in-above in the chart. In these cases, the entire basement and half portion of the ground floor is in possession of the tenants since the year 1993. They were paying rent @ `7,738/- per month for each half portion of the basement and @ `14,775/- per month for half portion of the ground floor which is basically double the amount. The learned Appellate Authority, while assessing the mesne profits, has taken into account two registered lease deeds dated 16.07.2010 and 15.03.2010 of SCO Nos.423-424 and SCO Nos.427-428 respectively which pertains to letting out of ground floor @ `3,50,000/- per month. The tenants themselves were paying double the amount for ground floor, whereas the learned Appellate Authority has only considered 1/3rd for the rent of the basement i.e. 30%. Otherwise, in the case of M/s. Atma Ram Properties (P) Ltd. (supra), the rent was enhanced from `371.90p. per month to `15,000/- per month, in the case of Anderson Wright and Co. (supra) the rent was @ `853.87p. per month which was enhanced to `85,170/- per month (100 times), in Surinder Singh's case (supra), the rent was enhanced from `1,500/- per month to `18,000/- per month (12 times), in Pradeep Kumar's case (supra), the rent was enhanced from `600/- per month to `6,000/- per month (7 times), in Crompton Greaves Ltd.'s case (supra), the rent was enhanced from `2.11p. per Sq. Ft. to `65/- per Sq. Ft. (more than 30 times) and in the case of State of Maharashtra and another (supra), the rent was enhanced from `5236.58p. to `5,40,000/- per month. In the latest decision of the Supreme Court in the case of Mohammad Ahmad & another v. Atma Ram Chauhan and others, Civil Appeal No.4422 of 2011 arising out of S.L.P. (C) No.6319 of 2007 decided on 13.05.2011, it is observed that “according to our considered view, majority of these cases are filed because landlords do not CR No.3675 of 2011 (O&M) - 6 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. So before saying omega, we deem it our duty and obligation to fix some guidelines and norms for such type of litigation, so as to minimize landlord-tenant litigation at all levels. These are as follows: - i. The tenant must enhance the rent according to the terms of the agreement or at least by ten percent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently. ii. Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only. iii. The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord. iv. But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties. v. If present and prevalent market rent assessed and fixed between the parties is paid by the tenant then landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus, for a period of 5 years, the tenant shall enjoy immunity from being evicted from the premises. CR No.3675 of 2011 (O&M) - 7 - CR No.3676 of 2011 (O&M) CR No.3677 of 2011 (O&M) ***** vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter. vii. The rent so fixed should be just, proper and adequate, keeping in mind, location, type of construction, accessibility with the main road, parking space facilities available therein etc. Care ought to be taken that it does not end up being a bonanza for the landlord.” In our case, we are only concerned with the first guideline in which the Supreme Court has held that the tenant must enhance the rent according to the terms of the agreement or at least by ten percent after every three years and if the rent is too low in comparison to market rent, having been fixed almost 20 to 25 years back, then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas. After discussing the entire facts and law of all these cases, I am of the considered opinion that there is no error in the orders passed by the Appellate Authority assessing the mesne profits of the demised premises. Hence, the present revision petitions are found to be without any merit and as such, the same are hereby dismissed. No costs. A photocopy of this order be placed on the files of other connected cases. May 31, 2011. (Rakesh Kumar Jain) vinod* Judge