HON’BLE SRI JUSTICE V.SURI APPA RAO C.C.C.A. No.9 of 2000 Date: 18-3-2011 Between A.P. State Financial Corporation, Rep. by its Managing Director, Chirag-Ali-Lane, Hyderabad … Appellant/Defendant and M.Mohan Ram, Rep. by Power of Attorney Holder Sri B.V.Subbaiah … Respondent/Plaintiff HON’BLE SRI JUSTICE V.SURI APPA RAO C.C.C.A. No.9 of 2000 Judgment: This appeal is filed under Section 96 of CPC against the judgment and decree dated 26-8-1999 in O.S.No.1056 of 1998 on the file of the V Senior Civil Judge, City Civil Court, Hyderabad, whereby and whereunder the suit filed by the plaintiff for recovery of Rs.1,94,251=20 ps., was partly decreed for Rs.1,49,252/- with proportionate costs and interest at the rate of 18% per annum from the date of the suit till realization. 2. Aggrieved by the judgment and decree passed by the trial Court the defendant-A.P. State Financial Corporation, Hyderabad, represented by its Managing Director (for short, ‘the Corporation’) filed this appeal. 3. For the sake of convenience, the parties herein are referred to as they are arrayed in the trial Court. 4. The relevant facts leading to this appeal are as follows: The plaintiff is the owner of Flat No.208 in Raghava Ratna Towers, Chirag Ali Lane, Hyderabad. The defendant-Corporation took the flat of the plaintiff and also adjacent Flat No.209 belonging to one Verma on separate lease agreements to locate its branch office. As per the agreed terms of the lease agreement, the period of lease was 5 years with effect from 01-4-1989 with an option for renewal for a further period of 5 years on mutually agreed terms. The agreed rent per month was Rs.3,858/- for the first 3 years with 15% increase thereon for the next 2 years. The common partition wall in the suit flat and Flat No.209 as agreed was removed by the respective owners so as to use them as a single unit and delivered possession of the property to the defendant. The 5 years’ lease period was expired by 01-4-1994 and the rent for the suit flat by that time was Rs.4,442=60 ps. The Power of Attorney of the plaintiff demanded the defendant to vacate or pay enhanced rent if it continues to occupy. The defendant agreed to pay higher rent and asked the Power of Attorney of the plaintiff to wait for some time in view of the time required for processing the proposal for enhancement. The plaintiff thus waited and ultimately demanded by way of letter dated 19-10-1994 for payment of rent at Rs.5.25% per sft., in view of the prevailing rent for similarly situated flat in the same building complex. The Managing Director of the defendant received the said notice. The officials of the defendant orally promised to pay the enhanced rent at the rate of Rs.7,200/- but not made the payments. Therefore, the plaintiff was receiving the cheques under protest and subsequently, issued a registered notice dated 20-01-1997 calling upon the defendant to pay the enhanced rent or damages for use and occupation. But, in the 2nd week of February, 1998 the defendant without prior intimation or notice sent the keys and high-handedly removed the ceiling fans and even damaged the premises and fixtures and sent a cheque subsequently for Rs.60,633=60 ps., towards the arrears of rent at the old rate. The Power of Attorney of the plaintiff received the cheque under protest. The occupation of the defendant on the expiry of lease period i.e., with effect from 01-4-1994 to 23-8-1998 is unlawful. The plaintiff therefore filed the suit for recovery of Rs.1,94,251=20 ps., towards the damages for use and occupation, damage to the building, cost of construction of partition wall after deducting the payments made. 5. The defendant-Corporation filed a written statement admitting that the period of lease was 5 years with effect from 01-4-1989 with an option to renew for a further period of 5 years on mutually agreed terms and also the rate of monthly rent at the time of inception at Rs.3,858/- and further contended that the unregistered lease agreement is inoperative and unenforceable after lapse of 11 months and the question of expiry of lease on 01-4-1994 does not arise as it become monthly tenancy. The plaintiff never demanded to vacate and did not reply to the notice issued since the tenancy was monthly tenancy and the demand made by the plaintiff for payment of rent at the rate of Rs.5.25% per sft., was untenable. During the meeting with the plaintiff it was informed that the defendant does not wish to continue in the premises and a letter to that effect is being sent. The defendant issued registered letter dated 03- 12-1997 intimating that the premises is being vacated and as the representative of the plaintiff refused to take keys when vacated the premises on 20-01-1998, sent the keys by registered post and sent a cheque for Rs.60,633=60 ps., with a letter dated 13-02-1998 being the rent till the date of vacating the premises and the plaintiff accepted the same without any protest. The defendant therefore contended that the occupation of the defendant was not unlawful. Therefore, the plaintiff is not entitled for any damages for use and occupation of the premises. 6. On the basis of the pleadings of both the parties, the trial Court framed the following issues: 1. Whether the plaintiff is entitled for recovery of the suit amount with interest and costs ? 2. Whether the terms and conditions of unregistered lease deed are enforceable ? 3. What is the monthly rent ? 4. To what relief ? 7. On behalf of the plaintiff, P.Ws.1 and 2 were examined and Exs.A-1 to A-26 and X-1 to X-6 were marked. D.W.1 was examined on behalf of the defendant-Corporation and Exs.B-1 to B-10 were marked. 8. Considering the oral and documentary evidence let in by both the parties, the trial Court decreed the suit in part as stated above. 9. Aggrieved by the judgment and decree, the defendant filed this appeal. 10. The learned counsel for the appellant-defendant (Corporation) submitted that the findings of the trial Court are beyond the scope of the suit and the issues framed. It is further contended that the suit claim is barred by limitation. The said aspect was raised before the trial Court at the time of hearing of the suit but the same was not considered and failed to give findings on the question of limitation. It is further submitted that after the expiry of the lease the tenancy becomes month to month and as the plaintiff accepted the rent every month without any protest from 01-4-1994, the question of payment of damages does not arise. Therefore, the judgment and decree passed by the trial Court are liable to be set aside. 11. On the other hand, the learned counsel for the respondent- plaintiff submitted that the defendant agreed to pay the enhanced rent and requested time for processing the file. The plaintiff therefore waited for considerable time and issued notice. After that the defendant handed over the keys and issued a cheque towards the arrears of rent and that the plaintiff received the amount under protest. Therefore, the plaintiff is entitled for damages for the period of illegal occupation by the defendant. It is further submitted that there are no grounds to interfere with the judgment and decree passed by the trial Court. 12. The points that arise for consideration in this appeal are: 1. Whether the plaintiff is entitled for Rs.20,000/- towards damage caused to the building, fixtures and cost of ceiling fans and Rs.25,000/- towards cost of reconstruction of the partition wall ? 2. Whether the defendant was in illegal occupation of the premises after the expiry of the lease period with effect from 01-4-1994 ? 3. Whether the plaintiff is entitled for damages for use and occupation of the premises after the expiry of the lease period ? 13. Point No.1:- The trial Court disallowed both the claims i.e., Rs.20,000/- towards damage to the building, fixtures and cost of ceiling fans and Rs.25,000/- towards cost of reconstruction of the partition wall. The lease agreement executed between both the parties, which is marked as Ex.A-1, clearly indicates that the respective owners shall remove the partition wall at their own expenses at the time of occupation by the defendant and the agreement is silent about the reconstruction of the partition wall at the time of vacating the premises. 14. D.W.1 Senior Branch Manager of the defendant-Corporation had clearly stated in his evidence that there is no clause in the agreement to reconstruct the removed partition wall or to pay the cost of the reconstruction. On this aspect, the evidence of D.W.1 was not challenged by the plaintiff. D.W.1 further deposed that the defendant handed over all fixtures under the original of Ex.B-10 to the landlord on 24-9-1998. The fixtures and fitting which were handed over to the plaintiff are described as items 1 to 5 in Ex.B-10. 15. Admittedly, Ex.B-10 letter containing the items handed over to the plaintiff acknowledged by the father of the plaintiff, which clearly shows that 15 ceiling fans and other fixtures and fittings were handed over to the plaintiff. On this aspect also, the evidence of D.W.1 was not challenged by P.W.1 by way of cross-examination. 16. The trial Court is therefore rightly held that the plaintiff is not entitled for the damages towards the fixtures and ceiling fans and construction of partition wall at the time of vacating the premises. 17. Points 2 and 3:- As seen from the averments of the plaint and the written statement filed by the defendant, the lease period for the premises commenced from 01-4-1989 for 5 years with an option to renew for further period of 5 years on mutually agreed terms and the agreed rate of rent per month at the time of inception is Rs.3,858/-. Admittedly, the first 5 years’ period of lease entered into both the parties under Ex-A-1 expires by 01-4-1994. The plaintiff contended that after the expiry of the first 5 years’ lease period, the rent payable by the defendant was Rs.4,443=60 ps., as per the agreement. But the evidence of P.W.1 shows that the defendant was asked to vacate the premises or to pay the enhanced rent if he continues to occupy and that the defendant agreed to pay the enhanced rent. But, contrary to the terms of Ex.A-1 agreement i.e., the payment of 15% increase after the expiry of 4 years period, it seems the plaintiff demanded for payment of rent at Rs.5.25% per sft., basing on the prevailing rent for similarly situated flats in the same building-complex, for which admittedly there was no agreement and the defendant never agreed for payment of rent at 5.25% per sft., after the expiry of the first 5 years’ period of lease. The plaintiff also did not produce any kind of evidence to prove that he is entitled for the rent at 5.25% per sft., after the expiry of the first 5 years’ period of lease i.e., with effect from 01-4-1994. The plaintiff contended that the defendant orally promised to pay the enhanced rent at Rs.7,200/-. 18. The evidence of D.W.1 shows that they never agreed for enhancement of the rent at Rs.7,200/-. D.W.1 clearly stated in his evidence that the demand for enhancement of rent by the plaintiff is unreasonable and there is no parking space, therefore they did not accept for enhancement of rent. D.W.1 has further stated that on receipt of Ex.A-4 letter he intimated to the head office about the demand of the plaintiff for enhancement of rent and the head office instructed him to arrange for a meeting with the landlord vide letter dated 10-02-1997 and by way of the said letter he requested the landlord to attend the meeting on 17-02-1997 but the landlord did not choose to attend the meeting on 17-02-1997. Subsequently, the plaintiff received the rent for the month of December, 1996. The defendant also obtained a letter from the maintenance manager to the effect that a particular premises in the first floor was vacant since 3 years from the date of said letter and at the time of vacating the premises also, the landlord or his agent were not attended though the defendant intimated the plaintiff by way of letter dated 03-12-1997. The evidence of D.W.1 clearly indicates that as the defendants are not willing for enhancement of rent they vacated the premises as the plaintiff is not accepting the same as per the agreed terms. 19. The evidence of the plaintiff as P.W.1 clearly indicates that since the defendant-Corporation did not enhance the rent though the plaintiff issued notice in the month of October, 1994 demanding enhancement of rent at the rate of 5.25% per sft., the defendant did not choose to enhance the rent in spite of receipt of the notice and was sending the same rent by way of cheques and he received the same. P.W.1 further admitted that on 03-12-1997 the defendant intimated them that they are not agreeing for enhancement of rent under Ex.A-8 and also intimated by way of another letter dated 16-02-1998 that they have already vacated the premises on 28-01-1998 while enclosing the cheque for Rs.60,633=60 ps., towards the arrears of rent at the old rate. 20. As seen from Ex.A-1 agreement entered into between both the parties there is no specific or any clause intimating the plaintiff is entitled for damages after the expiry of the lease period. Clause (2) of the agreement clearly indicates that the plaintiff is entitled for increase of rent at 15% after the expiry of the first 3 years of period and it was not stipulated anywhere in Ex.A-1 agreement regarding the payment of damages for the occupation of the premises after the expiry of the period of lease. 21. The evidence of D.W.1 clearly indicates that that the plaintiff himself did not turn up for talks regarding the enhancement of rent. In the evidence P.W.1 has clearly admitted that he was not present at that time and his son’s father-in-law received the letter and cheque from the defendant. 22. Therefore, it is clear that the plaintiff himself was out of country and did not choose to attend the meeting though received the letter from the defendant-Corporation for negotiations for enhancement of rent and when there was no specific provision in Ex.A-1 agreement for payment of demages after the expiry of the lease period the plaintiff is not entitled for any damages as claimed by him. The plaintiff himself admitted that his son’s father-in-law received the arrears of rent and also acknowledged the fixtures and fans at the time of taking delivery of properties. Therefore, the judgment of the trial Court in awarding the damages is unsustainable. 23. In view of the aforesaid reasons, the appeal is allowed and the judgment and decree passed by the trial Court are set aside and consequently, the suit O.S.No.1056 of 1998 filed by the plaintiff is hereby dismissed, in the circumstances, without costs. _____________________ V.SURI APPA RAO, J. 18th March, 2011. Ak HON’BLE SRI JUSTICE V.SURI APPA RAO C.C.C.A. No.9 of 2000 (P.D. judgment) 18th March, 2011.