IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE EIGHTH DAY OF SEPTEMBER TWO THOUSAND AND ELEVEN Present HON’BLE SRI JUSTICE G. BHAVANI PRASAD S.A.No.751 of 2011 Between: N. Balaraj .. Appellant AND P. Vijayalaxmi & another .. Respondents AND S.A.No.752 of 2011 Between: N. Padmavathi .. Appellant AND P. Vijayalaxmi & another .. Respondents The Court made the following: HON’BLE SRI JUSTICE G. BHAVANI PRASAD S.A.Nos.751 of 2011 and 752 of 2011 COMMON JUDGMENT: The two second appeals are directed against the judgments and decrees in A.S.No.182 of 2009 and A.S.No.183 of 2009, on the file of the XI Additional Chief Judge, (Fast Track Court), City Civil Court, Hyderabad, dated 24.03.2011, by which the judgments and decrees in O.S.Nos.2253 of 2005 and 2255 of 2005, on the file of the II Senior Civil Judge, City Civil Court, Hyderabad, dated 13.04.2009, were confirmed. 2. The appellants are husband and wife and the respondents are common and as the questions of fact and law involved are common and identical, both the second appeals are being disposed of by this common judgment. 3. The factual background for the litigation is that the respondents are the owners of the two properties covered by the two appeals and for running a photo studio and a colour laboratory, the husband and wife/appellants took the premises on lease on 25.09.2003 for a monthly rent of Rs.10,000/- each. The respondents further claimed that the rent was agreed to be enhanced by 10% every year and the appellants made a deposit of Rs.10 lakhs each as interest free security deposit refundable at the time of vacating the premises. The respondents claimed that the tenants defaulted in payment of rent since February, 2005, on which legal notices were issued on 06.05.2005 demanding the arrears of rent. Replies with false allegations were given by the tenants and, therefore, the respondents got issued notices under Section 106 of the Transfer of Property Act, 1882, to vacate. As the appellants did not comply, the suits were filed for eviction and arrears of rents. 4. The appellants, in their respective written statements, admitted the jural relationship, the quantum of rent, the quantum of security deposit and the business in the premises, but claimed that the business actually commenced in the premises in 1987 and that the respondents and the father of the second respondent were borrowing amounts from the appellants which accumulated to Rs.35 lakhs repayable with interest at 12% per annum. As they were unable to repay, the subject properties were agreed to be sold to the appellants for a consideration of Rs.5,02,100/- each on 27.03.1989 and the appellants were surprised to receive the notices, dated 24.07.2003. The dispute was subjected to mediation resulting in unregistered lease deeds in 2003 and the interest accumulated on the loans was adjusted towards the rent even in January, 2005. When the respondents attempted to sell the properties to third parties, the appellants gave police reports and the respondents started demanding Rs.2.75 crores as sale consideration for the property. As the leases are perpetual leases, the appellants sought for declaring them to be so and for consequential permanent injunctions against the respondents and their men from interfering with their possession. 5. The respondents, in their written statements to the counter claims, pleaded that the documents of title were given to the appellants for lamination and not towards any loan. There were never any agreements to sell the properties and, hence, they sought for dismissal of the counter claims. 6. In both the suits, identical issues were framed by the trial Court about the right of the respondents for eviction, arrears of rent, mesne profits, etc., and also about the entitlement of the appellants to the counter claims made for treating the leases as perpetual leases and for consequential permanent injunctions against the respondents. 7. In O.S.No.2253 of 2005, P.W.1 and D.W.1 were examined and Exs.A-1 to A-9 and B-1 to B-5 were marked during trial. Similarly, in O.S.No.2255 of 2005, P.W.1 and D.W.1 were examined and Ex.A-1 to A-8 and B-1 to B-5 were marked. 8. In the judgments of the trial Court, it was found that the notices were duly served on the tenants for which no replies were given by the tenants. The trial Court also found that the appellants/tenants failed to establish the conversion of the lease into a transaction of loan or mortgage or sale for any consideration. The trial Court, apart from commenting on the not so consistent pleas taken in defence, referred to a failure of the appellants to examine any of the elders or witnesses present at the time of the alleged mediations or transactions to support the interested version of the appellants as D.W.1 in each case. The trial Court also found that the appellants did not attempt to obtain any registered mortgage deeds and the alleged deposit of the title deeds for creation of an equitable mortgage was not proved which was not alleged even in the reply notice. The trial Court further referred to the admissions of the tenants in their evidence about the non-payment of rents since February, 2005, and concluded all the issues against the appellants. The trial Court, on the finding of the valid termination of lease, further found the arrears of rent to be subject to adjustment in the amount in deposit to the credit of the matters and no separate damages by way of mesne profits need be paid till the dates of the suits in view of the deposits made. The trial Court left the determination of the future mesne profits to separate applications and it also negatived the request of the appellants for any permanent injunction, more so, in the light of the memo filed by the respondents into Court that they are not alienating the property and as the appellants did not file any suits for recovery of the amounts alleged to be due from the respondents. 9. The said judgments and decrees were challenged and the first Appellate Court, in the judgments impugned in these two second appeals, had again referred to the rival pleadings, contentions and evidence and found that the deposit of Rs.10 lakhs each was only towards security deposit and not as a loan as stated in the stamped receipts themselves. The first Appellate Court also found that mere possession of the documents of title with the appellants cannot lead to any conclusion about any loan from any amounts by the appellants to the respondents. The first Appellate Court further took adverse note of the failure of the appellants in obtaining any document or sale deed in pursuance of the alleged conversion of the transactions and rejecting the plea of the appellants, the first Appellate Court also calculated appropriate amounts that will be due till 31.03.2011 on the basis of an agreement to enhance the rent by 10% per annum. While confirming the judgments and decrees of the trial Court for eviction, the first Appellate Court granted a decree for Rs.10,30,000/- each against the appellants towards the rents/damages due till 31.03.2011. In the event of any default in satisfying that amount, interest was directed to be paid at 9% per annum by 01.06.2011. 10. The appellants primarily questioned in the second appeals the adjudication and decision by the first Appellate Court of the mesne profits payable without taking recourse to the enabling provisions of Order XX Rule 12 of the Code of Civil Procedure, 1908, which contemplated a separate enquiry. The appellants also incidentally questioned their liability for eviction, the findings of the Courts below about the absence of proof of the loan and the absence of the proof of any agreement of sale. They desired the impugned judgments and decrees to be reversed on those grounds. 11. At the time of admission of these two second appeals on 12.07.2011, the substantial questions of law involved in the second appeals were considered to be the two questions raised in the grounds of appeal about adjudication of future mesne profits without reference to the procedure contemplated by Order XX Rule 12 C.P.C. 12. Sri H. Venugopal, learned counsel representing Sri P. Harinath Gupta, learned counsel for the appellants and Smt. Manjari S Ganu, learned counsel for the respondents/decree holders are heard. 13. Though a feeble attempt was made by the appellants to question the conclusions of the Courts below about their liability for eviction and absence of proof of any transaction of loan or agreement of sale, this Court did not formulate any questions on those aspects as arising for consideration in these two second appeals involving any substantial questions of law. In the absence of such formulation, the questions do not arise for adjudication herein. Even assuming that this Court could have framed such points for consideration, such framing could have been only if there existed any substantial questions of law on these aspects, but the findings of the Courts below on the jural relationship between the parties, the validity of the notices, the absence of proof of any conversion of the transactions into one of loan or one of sale are pure findings of fact based on the broad human probabilities arising out of the evidence on record and do not have any semblance of any legal issues involved therein and, therefore, they are beyond the jurisdiction of this Court in considering the second appeals. That leaves the question only of the determination of the future mesne profits in the judgments of the first Appellate Court itself without taking recourse to to the procedure under Order XX Rule 12 C.P.C. 14. Smt. Manjari S Ganu, learned counsel for the respondents/decree holders has not seriously opposed the procedure under Order XX Rule 12 C.P.C being taken recourse to for determination of such mesne profits and, therefore, the question needs no further deeper probe. The first Appellate Court went by the agreement claimed by the plaintiffs about the agreed rent and the further agreement to enhance it by 10% per annum, but if it is a question of determination of mesne profits as defined by Section 2 (12) C.P.C., what should be determined are profits which the person in possession actually received or might with ordinary diligence have received therefrom together with interest on such profits, while not including profits due to improvements made by the person in wrongful possession. As such, different considerations than what has been agreed between the parties towards payment of any rent during the existence of the jural relationship of landlord and tenant between them arise and the agreed rent may not be wholly determinative of the said question. Therefore, the two substantial questions of law framed should be answered in favour of the appellants to relegate the parties to a separate enquiry on these questions. 15. Sri H. Venugopal, learned counsel for the appellants submitted that in the event of the order of eviction, not being interfered with in these second appeals, the appellants may be granted a reasonable time to vacate the premises, which in his opinion may be about one year. Smt. Manjari S Ganu, learned counsel for the decree holders/respondents opposed grant of such length of time, while expressing no objection to confine such grant of time to reasonable limits. It is seen from the admitted facts that there was no default in payment of the agreed rents till February, 2005. It is also admitted that a substantial sum of Rs.10 lakhs each towards an interest free security deposit remained with the respondents upto date, while the tenants were deprived of securing any income or returns from such sums so far. Even during the pendency of the litigation, the tenants appear to have deposited amounts towards rent, without any default and it is submitted by Sri H. Venugopal, learned counsel that there was not an arrear of such amount even for a single month as of now. The running of the photo studio and colour laboratory in the premises is said to be the primary source of livelihood for both the appellants and their family and taking into account all these facts and circumstances, grant of time for nine (9) months may subserve the needs of justice. 16. In the result, the judgments and decrees in A.S.No.182 of 2009 and A.S.No.183 of 2009, on the file of the XI Additional Chief Judge, (Fast Track Court), City Civil Court, Hyderabad, dated 24.03.2011, are set aside to the extent of determination of the future mesne profits directed to be paid with interest in the event of default and the judgments and decrees in O.S.Nos.2253 of 2005 and 2255 of 2005, on the file of the II Senior Civil Judge, City Civil Court, Hyderabad, dated 13.04.2009, are restored on this aspect also. The appellants are granted time for nine (9) months from today to vacate the decree schedule premises and deliver the vacant possession to the respective decree holders. The second appeals are ordered, accordingly, without costs. _____________________ G. BHAVANI PRASAD, J Date: 8th September, 2011 KL HON’BLE SRI JUSTICE G. BHAVANI PRASAD S.A.Nos.751 of 2011 and 752 of 2011 Date: 8th September, 2011 KL