HIGH COURT OF ORISSA: CUTTACK. R.F.A. NO. 35 of 2009 From the judgment and decree dated 2.12.2008 passed by Shri B.S.Mishra, Civil Judge (Senior Division), Balangir in C.S.No.79 of 2007. --------- United Commercial Bank, Bolangir and others …… Appellants - Versus- Sashikanta Bhammar …… Respondent For Appellants : M/s. B.N.Udgata, S.M.Singh, N.Behera and M.T.Beg For Respondent : M/s. T.Nanda and S.N.Mishra. --------- PRESENT: THE HONOURABLE SHRI JUSTICE B.K. PATEL Date of hearing – 19.10.2011 :: Date of judgment – 27.10.2011 B.K. PATEL, J. Defendants are in appeal against judgment and decree dated 2.12.2008 passed by learned Civil Judge (Sr.Divn.), Balangir in Civil Suit No.79 of 2007. 2. Civil Suit No.79 of 2007 is a suit for eviction and damages. Defendants represent United Commercial Bank. Suit property consisting of land and building belonging to the plaintiff was leased out in favour of defendant no.1-Bank for a period of 5 years at monthly rent of Rs.6370/- by registered lease deed dated 7.12.2001 which has been marked as Ext. 1 and Ext. B. Stipulation with regard to continuance of the lease after expiry of lease period under Clause 4-(f) of the lease deed provides: “If the Lessee shall be desirous of taking a new lease of the demised premises after the expiration of the term hereby granted and of such its desire shall give to the Lessor or leave at his usual or last known place or residence in Balangir a notice in writing not less than one month before the expiration of the term hereby granted to the Lessee a new Lease of the demised premised for a further period of 5(five) years to commence from and after the expiration of the term hereby granted subject to the same terms covenants and condition as are herein contained except this present clause for renewal and fixation of fresh rent as agreed by the parties hereto. The renewal will be made on execution & registration of fresh lease deed.” Before the expiry of the lease period, invoking Clause 4-(f) of the lease deed, defendant Bank issued notice Ext.2 dated 11.9.2006 requesting the plaintiff to take steps for renewal of the lease deed. In response thereto plaintiff issued letters under Exts. 3, 6 and 7 indicating his consent for renewal of the lease on payment of rent at the market rate of Rs.12,740/- per month. Defendant Bank having not responded to plaintiff’s offer, plaintiff issued Advocate notice Ext. 10 to vacate the suit premises. Instead of vacating suit premises defendant Bank sent some pay orders towards rent which the plaintiff refused to accept. However, a sum of Rs.51,282/- was credited by the Bank to the plaintiff’s Savings Bank Account. 3. Plaintiff’s case is that as per the term of the lease deed, on expiry of the lease period, renewal is to be made upon fixation of fresh 2 rent at market rate as agreed by the parties. Fresh lease is to commence on execution of fresh lease deed. Defendant Bank neither responded to plaintiff’s letters for fixation of fresh rent and execution of fresh lease deed nor has vacated the suit premises. The defendant Bank is, therefore, in unauthorized occupation of suit premises after expiry of lease on 31.10.2006. Hence, the Bank is liable to be evicted and also to pay Rs.50,000/- towards damages as well as pendent lite and future damages. 4. Defendants filed written statement denying plaintiff’s claim. According to them, there is no stipulation in the lease deed for payment of rent at market rate. Defendants’ stand is that it was agreed upon between the parties that plaintiff would renew the lease on same terms and conditions for a period of 5 years initially and thereafter for another 5 years with enhancement of rent by 15% during the first 5 years and 20% for the subsequent 5 years. Therefore, rent as demanded by the plaintiff is not in conformity with agreement between the parties. It is pleaded that before execution of lease deed, a confirmatory letter indicating terms and conditions of lease was served on the plaintiff who agreed to the terms of confirmatory letter Ext.A stipulating enhancement of rent at 15 %, and thereafter 20 %, as stated above. Therefore, plaintiff is not entitled to claim fixation of rent as per the market value. Defendant Bank is not only ready and willing to enhance the rent as per the confirmatory letter but also has been paying rent at 3 the enhanced rate. It was the plaintiff who did not accept defendant Bank’s offer for renewal of the lease on payment of enhanced rent as agreed in the confirmatory letter. Negotiation between the plaintiff and defendant Bank failed due to non-cooperation of the plaintiff. Therefore, the suit is liable to be dismissed. 5. On the basis of rival pleadings, the learned trial court settled the following issues: “1. Is the suit maintainable? 2. Is there any cause of action for the suit? 3. Has the plaintiff violated the terms and conditions of the lease deed? 4. Is the plaintiff entitled to damages? 5. Is the defendant no. 1 liable to vacate the suit land? 6. Is the plaintiff entitled to relief (s) sought for?” 6. In order to substantiate his case plaintiff examined himself as P.W. 1 and relied upon documents marked Exts.1 to 17 whereas defendants examined two witnesses and relied upon documents marked Exts. A to E. On appraisal of evidence on record upon reference to stipulation under Clause 4-(f) of the lease deed, learned trial court answered the issues in favour of plaintiff and decreed the suit directing defendants to deliver vacant possession of suit land and also pay one lakh rupees towards damages. 7. It was strenuously argued by learned counsel for the appellants that in recording his findings learned Civil Judge (Sr.Divn.) 4 should not have confined the scope of the lease to the contents of the lease deed only. Contents of the lease deed should have been appreciated upon reference to and in the context of circumstances which culminated in the execution of the lease deed. It was argued that before execution of the lease deed defendant Bank issued confirmatory letter Ext.A containing terms of the lease which was accepted by the plaintiff. Confirmatory letter specifically stipulated that lease may be extended at the option of the Bank for a further period of 10 years on the same terms and conditions with increase in rent for first 5 years at 15% and next 5 years at 20%. Defendant Bank having sent notice for extension of lease period much prior to the expiry of the present lease period and also having paid enhanced rent as agreed by the plaintiff in the confirmatory letter, the impugned judgment and decree are liable to be set aside. 8. In reply, it was contended by the learned counsel for the respondent that before execution of lease deed there was negotiation between the parties in course of which offers and counter offers were made. However, terms agreed upon by both the parties were incorporated in the lease deed which was registered. Both the parties are bound by the lease deed. As Clause 4-(f) of the lease deed clearly stipulates for fixation of fresh rent as agreed upon by parties for renewal of the lease, defendant Bank is not entitled to place reliance on extraneous material like the confirmatory letter. 5 9. There is no dispute between the parties that Clause 4-(f) of the lease deed provides for renewal of lease after expiry of initial lease period of five years at the option of the lessee i.e. defendant Bank. Period of lease under Ext.1 and Ext.B expired on 31.10.2006. Admittedly, defendant Bank sent the notice Ext.2 dated 11.9.2006 to the plaintiff conveying desire for renewal of lease for a further period of five years invoking Clause 4-(f) of the lease deed. As per Clause 4-(f) of the lease deed, in such circumstances, lease was to be renewed for further period of five years on the same terms and conditions as contained in lease deed Ext.1 except Clause 4-(f) for renewal and “fixation of fresh rent as agreed by the parties”. Dispute between the parties is confined to interpretation of term for “fixation of fresh rent as agreed by the parties”. Plaintiff’s stand is that he is entitled to rent at the market rate. Stand of the defendant Bank is that before execution of lease deed Ext.1 parties had agreed with regard to rate of enhanced rent to be paid for five years after expiry of initial lease period of five years and also rate of enhanced rent for further period of five years thereafter. 10. Plaintiff, examined as P.W.1, admits in his cross- examination in categorical terms that defendant Bank issued confirmatory letter Ext.A indicating certain terms and conditions and the plaintiff signed in the confirmatory letter indicating his consent to the terms and conditions mentioned therein. It is also in the evidence of 6 plaintiff that Ext.A contained a clause that the Bank would renew its lease period every five years and that 15% enhanced rent would be paid upon renewal of lease and that rent would be enhanced up to 20% after 10 years on renewal for another five years. Plaintiff also admits in cross-examination that lease deed Ext.B does not contain condition that fixation of rent will be made on the basis of market value after renewal of lease. Plaintiff also does not dispute that after expiry of lease period defendant Bank is making payment of rent in the shape of Pay Order at 15% enhanced rate. However, plaintiff’s stand is that the expression “fixation of fresh rent as agreed by the parties” does not refer to rate as agreed in the confirmatory letter, but it means that parties were required to negotiate regarding rate of enhanced rent payable after expiry of initial lease period. Simple grammatical connotation of language in Clause 4-(f) of the lease deed does not support the stand. 11. It is not disputed that execution of lease deed Ext.B was preceded by negotiation between the parties in course of which specimen confirmatory letter Ext.A was issued by the defendant Bank to the plaintiff and plaintiff put his signature in the confirmatory letter in token of acceptance of the terms of Ext.A and submitted to the Bank. Ext.A also bears signature Ext.A/1 of D.W.2 the then Branch Manager of the Bank in confirming acceptance of offer made by the plaintiff. Stipulations with regard to payment of rent during the initial lease 7 period as well as subsequent period as contained in Clauses 2 and 3 of Ext.A read : Clause 2 – The monthly compensation payable by you for the said premises shall be Rs.3.50/sqft carpet area 1884 sqft. Rs.6590/- (total compensation) w.e.f. dt.12.11.2001 (date of possession). Rent for service charges will be levied latest by dt.12.11.2001 on date of possession whichever is earlier. Clause-3 - The period of lease shall be 5 years certain with an option in favour of the Bank to continue for further period of 5+5 years on the same terms and conditions with increase in total compensation for 1st 5 years at 15% for next 5 years at 20%. Thus confirmatory letter not only provides for the amount of rent for the initial period but also manner of calculation of enhanced rate of rent for 10 years after expiry of initial period of lease. 12. It is pertinent to note that the expression “fixation of fresh rent as agreed by the parties” under Clause 4-(f) of the lease deed is in the past tense. The expression does not mean fixation of fresh rent as shall be or would be or may be agreed by the parties in future. In view of the terms under confirmatory letter Ext.A, it is not open for plaintiff to urge that manner of fixation of fresh rent upon renewal has not been agreed upon by the parties. Parties having already agreed under Ext.A that there will be enhancement of rent by 15% during the first five years of renewed lease period, plaintiff is bound by terms of lease deed Ext.B and his offer which has been confirmed by defendant Bank in Ext.A. Confirmatory letter is an integral part of and is not extraneous to the lease deed. 8 13. In accordance with the terms of lease deed defendant Bank not only conveyed option for renewal of the lease deed but also is paying rent at the enhanced rate as agreed and stipulated in Ext.A. Therefore, defendant Bank cannot be said to have violated the terms and conditions of the lease deed so as to entitle the plaintiff for the decree of eviction and damages. Trial court has failed to appreciate the facts and circumstances of the case and findings recorded by the trial court are not borne out by materials on record. 14. Therefore, the impugned judgment and decree dated 2.12.2008 passed by learned Civil Judge (Sr.Divn.), Balangir in Civil Suit No.79 of 2007 is set aside which stands dismissed. Appeal is allowed with cost. ………………….. B.K. Patel, J. Orissa High Court, Cuttack, Dated 27th October,2011/Aswini 9