1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 254 OF 2008 AND FIRST APPEAL NO. 24 OF 2009 FIRST APPEAL NO. 254 OF 2008 Shri Oswaldo Jose Coelho Velho, son of late Aleixo Pitagoras Velho, married, of full age, landlord, residing at 1st floor, Velho Building, Panaji, Goa. ... Appellant versus 1. Government of Karnataka, through the Secretary, Information, Tourism & Youth Services Department, Government of Karnataka, Dr. Ambedkar Road, Bangalore-560 001. 2. The Director of Tourism, Government of Karnataka, 1st floor, F-Block, Caveri Bhavan, Bangalore-560 009. ... Respondents Shri R. G. Ramani, Advocate for the Appellant. Shri S. R. Rivonkar, Advocate for the Respondents. 2 FIRST APPEAL NO. 24 OF 2009 1. Government of Karnataka, through the Secretary, Information, Tourism & Youth Services Department, Government of Karnataka, Dr. Ambedkar Road, Bangalore 560 001. 2. The Director of Tourism, Government of Karnataka, 1st Floor, F-Block, Caveri Bhavan, Bangalore – 560 009. ... Appellants versus Shri Oswaldo Jose Coelho Velho, son of late Aleixo Pitagoras Velho, married, of full age, landlord, residing at 1st floor, Velho Building, Panaji, Goa. ... Respondent Shri S. R. Rivonkar, Advocate for the Appellants. Shri R. G. Ramani, Advocate for the Respondent. CORAM : N. A. BRITTO, J. DATE : 26TH NOVEMBER, 2010. 3 JUDGMENT These appeals can conveniently be disposed off by this common Judgment. 2. Both the appeals are directed against Judgment dated 30-6-2008 in Special Civil Suit No.67/2002. 3. The First Appeal (254/2008) has been filed by the plaintiff/ landlord against the said Judgment disallowing his claim for recovery of the difference in rent i.e. Rs.18,411/- from April, 1999 till the date of filing of the suit. The second appeal (24/2009) has been filed by the defendants/tenant against the Judgment ordering their eviction. 4. There is no dispute that the plaintiff-landlord in the said civil suit had put the defendant-tenant in possession of the suit premises pursuant to a lease deed dated 9-4-1997. There is also no dispute that in terms of clause 3(a) of the said lease deed the tenant was required to pay regularly and punctually monthly rent of Rs.8,410/- on or before the fifth day of every month subsequent to which it related, and in terms of clause 4 (b) was required to pay 50% of the municipal taxes within fifteen days from the demand made by the landlord. 5. Clause 4 of the lease deed reads as follows: “after the expiry of the lease deed i.e. 8-4-1999 the lease shall be renewed for a further period of 3 (three) years. Rent enhancement will be as assessed and approved by the Public Works Department, Government of Goa”. 6. The case of the plaintiff was that the said lease was granted for two years commencing from 9-4-1997 till 8-4-1999 and it was stipulated that after the expiry of the same on 8-4-1999 the lease shall be renewed for a further period of three years and the rent enhancement would be assessed and approved by the PWD, Government of Goa, and it was agreed between the plaintiff and defendant No.2 that defendant No.2 after the expiry of the said lease would be bound to pay to the plaintiff the monthly rent assessed by the PWD, Government of Goa from 9-4-1999 onwards. The said lease was duly registered and the original of the same is with defendant No.2. The case of the plaintiff is that the plaintiff entered into several correspondence with defendant 5 No.2 even before the expiry of the lease so that the rent payable from the date of the renewal of the lease would be done well in advance of the expiry of the lease but the defendant No.2 continued to occupy the lease premises under the renewal clause but did not pay the revised rent alleging that the PWD did not assess and approve the rent payable for the renewal period. By letter dated 20-10-1998 addressed to defendant No.2 the PWD informed defendant No.2 that the revised rent of the premises was Rs.26,821/- per month, as according to the plaintiff reference for the revision of the rent was made to defendant No.2 by letter dated 12-10-1998, and although on 25-3-1999 the plaintiff had informed defendant No.2 about the assessment made by the PWD with copy endorsed to defendant No.1, defendant No.1 did not take any action in the matter inspite of reminders dated 9-11-1999 and 15-1-2000. The case of the plaintiff is that the plaintiff had a discussion with defendant No.2, and as a compromise agreed to receive from defendant No.2 a monthly rent of Rs.23,000/- per month but even that rent was not paid, and as the settlement was in sight, the plaintiff did not take any immediate action but sent a reminder to defendant No.1 dated 7-8-2001 and as no action was taken a legal notice was sent dated 4-4-2002 but inspite of that no action was taken by the defendants. 6 7. According to the plaintiff, defendant No.2 is occupying the suit premises under the renewal clause contained in the lease dated 9-4-1997 under which the lease was to be renewed for a period of three years commencing from 9-4-1999, and, therefore defendant No.2 was liable to pay to the plaintiff a monthly rent at the rate of Rs.26,821/- from April, 1999 onwards but defendant No.2 paid only Rs.8,410/- as interim rent and therefore defendant No.2 short paid to the plaintiff monthly rent at the rate of Rs.18,411/- per month, and, therefore the plaintiff was entitled to recover from the defendants the difference in rent at the rate of Rs.18,411/- from April, 1999 till the date of filing of the suit. According to the plaintiff, the plaintiff was willing and ready to grant further renewal for equal periods of three years. The plaintiff therefore sought for specific performance of the agreement dated 9-4-1997 and to recover the difference in rent at the rate of Rs.18,411/- per month from April, 1999. Plaintiff also sought for eviction of the defendants as well as for mesne profits from the date of filing of the suit. 8. The defendant has admitted the execution of the said agreement and further admitted that as per the agreement, after the expiry of the lease deed, the lease was to be renewed for a further period 7 of three years and the rent was to be enhanced as assessed and approved by the PWD but the defendant pleaded that it is incorrect that they were bound to pay to the plaintiff the monthly rents at the rate assessed by the PWD from 9-4-1999. The defendant admitted that they had initiated action as early as in October, 1998 to get the rents fixed by the PWD and the rent was fixed at Rs.26,821/- per month which was on the higher side and they also approached the PWD to review the fixation of rent and in the meanwhile the plaintiff had approached the Additional Rent Controller for fixation of fair rent but on his own withdrew his application to settle the matter amicably. The defendants claimed that they have become statutory tenants and are governed by the GDD Rent Control Act and as such the Court had no jurisdiction to order the eviction of the defendants. 9. The learned trial Court framed several issues. The plea of lack of jurisdiction was covered by issue No.7 and has been dealt with by the learned trial Court in para 12 of the Judgment observing that in view of the amended Section 3 of the Goa, Daman and Diu Buildings(Lease, Rent and Eviction) Control Act, 1968 w.e.f. 19-4-1994 the provisions of the said Act would not be applicable as the rent agreed 8 to be paid was more than Rs.5000/-. There is no grievance at all made on that aspect of the case or the said finding. However, the learned trial Court appears to have been confused as regards the status of the tenant, sometimes referring to the tenant as statutory tenant and at other times as a tenant holding over and at the same time holding that the suit would be governed by the Transfer of Property Act, 1882. That apart, both the parties appear to accept the status of the tenant, as that of a tenant holding over under Section 116 of the Transfer of Property Act, 1882 and they also accept that their rights are governed by the provisions of Transfer of Property Act, 1882. The status of the tenant as a tenant holding over has to be considered not because the landlord accepted the rent of Rs.8,410/- per month after 8-4-1997 which according to the landlord, he accepted under protest, but because for the next three years or so the landlord took no action for the tenant's eviction and on the contrary assented to their continuing in possession until the sending of notice dated 4-4-2002 which the defendants received on 8-4-2002, on the pious hope that the tenant would pay the rent assessed by the PWD or at least Rs.23,000/- as agreed by him. Shri Rivonkar, learned Counsel appearing on behalf of the defendant concedes that the relations between the plaintiff and the defendant were governed by the Transfer of Property 9 Act, 1882. By this notice dated 4-4-2002, the landlord informed the tenant about the withdrawal of the concession made by him to accept reduced rent of Rs.23,000/- and terminated the lease which according to the landlord was renewed under the renewal clause No.4 from the expiry of the tenancy month ending April, 2002, and called upon the tenant to deliver vacant possession and also claimed rent at the rate of Rs.26,821/- per month commencing from April, 1999 after making due adjustments of the interim rents paid to the landlord. 10. As regards the First Appeal (254/2008), Shri S. R. Rivonkar, learned Counsel on behalf of the tenant has supported the Judgment of the learned trial Court particularly the observation that the plaintiff was asking the defendants to pay enhanced rent without the lease having been renewed for the period between 8-4-1999 to 8-4-2002. Shri Rivonkar, learned Counsel submits that there was no rent agreement after 8-4-1999 between the landlord and the tenant and the tenant continued to pay the rent at the rate of Rs.8,410/-. Learned Counsel further submits that the landlord did not wish the tenant to be thrown out and did not object to the tenant's continuation in the suit premises. Learned Counsel submits that the landlord cannot claim rent at the rate of Rs.26,821/- when there 10 was no agreement between the landlord and the tenant, and, therefore the tenant was not liable to pay Rs.26,821/- by way of rent. 11. Shri R. G. Ramani, learned Counsel on behalf of the landlord submits that by virtue of clause 4, the defendants had agreed to pay such rent as was assessed by the PWD which they were liable to pay, and if at all another agreement remained unexecuted it was because the defendant did not honour their commitment to pay the rent as agreed upon, to be assessed by the PWD. Learned Counsel submits that the defendants cannot be allowed to take advantage of their own wrong and that the plaintiff took every step in order to help the defendant but the same very steps are now being used by the defendants as against the plaintiff. Learned Counsel submits that the learned trial Court could not have denied to the plaintiff difference of rent at Rs.18,411/-. As far as the mesne profits are concerned, after the filing of the suit, learned Counsel submits that an inquiry could have been ordered to be held in terms of Order 20 Rule 12, C.P.C. Shri Ramani, submits that mesne profits prior to the filing of the suit ought to have been assessed, as assessed by the PWD, and in support of the said submission, Shri Ramani has placed 11 reliance on Corporation of Madras v. M. K. Buhari((2000) 9 SCC 497) wherein the Hon'ble Supreme Court observed as follows:- “6. From the facts stated above, it is apparent that there was no reason for the learned Single Judge as well as for the Division Bench not to award mesne profits @ Rs.4000/- per month and to award compensation at the rate which was the rent payable by the respondent prior to the expiry of the lease period. Once the lease was not renewed, the respondent was not authorized to retain the possession of valuable property and was required to pay reasonable compensation for its unauthorized occupation. It appears that the Division Bench has not considered the letter dated 4-5-1976 written on behalf of the respondent that they had deposited Rs.16,000/- towards security deposit and advance rent as desired by the Corporation and hence mesne profits cannot be less than Rs.4000/- per month. The Division Bench has also not properly appreciated the notices dated 2-8-1976 and 14-2-1978 issued by the Corporation, demanding damages @ Rs.8000/- per month wherein all facts are narrated, which clearly reveals that the respondent has agreed to pay rent of the suit premises @ Rs.4000/- per month(emphasis supplied)”. 12 12. On the other hand, Shri S. R. Rivonkar, learned Counsel appearing on behalf of the defendants has placed reliance on certain observations made in three Judge Judgment of the Apex Court in the case of Union of India v. Banwari Lal & Sons(P) Ltd.((2004) 5 SCC 304) wherein the Apex Court has stated as follows:- “In Rao, Kameshwara: Law of Damages & Compensation(5th edition., Vol. I, p. 528), the learned author states that right to mesne profits presupposes a wrong whereas a right to rent proceeds on the basis that there is a contract. But there is an intermediate class of cases in which the possession though not wrongful in the beginning assumes a wrongful character when it is unauthorisedly retained and in such cases, the owner is not entitled to claim mesne profits but only the fair rent. In the present case, in view of the permission granted by this Court enabling the appellant to use and occupy the property up to 31-3-1993, it cannot be said that the possession of the appellant was illegal and wrongful and in the nature of trespass. In the circumstances, damages were claimable not on the basis of mesne profits but on the basis of fair rent. Even assuming for the sake of arguments that the arbitrator was right in applying income/profit method, the arbitrator has erred in not 13 taking into account the expenses which the appellant was required to bear for maintenance of the property(including payment of taxes). 13. In my view, the above said observations of the Apex Court would not be applicable to the facts of the case at hand. In this case the defendant-tenant was put in possession by the plaintiff-landlord pursuant to lease deed dated 9-4-1997. For the first two years the defendant-tenant paid the stipulated rent of Rs.8,410/- upto 8-4-1999 and there is no dispute about it. Thereafter, the defendant-tenant continued with the possession of the suit premises and impliedly with the consent of the plaintiff-landlord but did not pay the rent agreed to be paid i.e. as assessed by the PWD. Clause 4 of the lease deed clearly shows that the lease would be renewed for another three years but the defendant-tenant would pay the rent as assessed by the PWD. 14. The learned trial Court declined to grant mesne profits as claimed for by the plaintiff at the rate of Rs.18,411/-(Rs.26,821/- minus Rs.8,410/-) on the specious ground that the plaintiff was already receiving the rent of Rs.8,410/- from the defendant in respect of the leased premises. This finding is fallacious. If the plaintiff was receiving 14 the said rent of Rs.8,410/-, it was the rent which was stipulated for the first two years and certainly not from 8-4-1997. The defendants had agreed to pay the rent as assessed by the PWD after 8-4-1999. The only plea which was taken by the defendant was that the rent as assessed by PWD was excessive. This plea was required to be turned down immediately because of clause 4. Once the rent was assessed by the PWD as agreed upon the tenant had no option but to pay the same. In my view, clause 4 of the agreement between the parties had clearly stipulated that after the expiry of the lease on 8-4-1999 the lease would be renewed for a further period of three years and the rent enhancement would be assessed and approved by the PWD, Government of Goa. If at all, the lease remained without being renewed formally after 8-4-1999 it was because the tenant did not honour the stipulation of clause 4 and pay the rent to the landlord as assessed by the PWD. The rent assessed by the PWD at Rs.26,821/- had to be considered for all practical purposes as agreed rent to be paid by the tenant after 8-4-1999, and for a period of three years which the tenant failed to pay to the landlord. Again, if at all, the lease deed remained without being renewed, it was because the tenant did not honour the said stipulation in clause 4 of the said lease deed. In any event, the execution of the renewal lease deed was a matter 15 of formality. The tenant was bound to pay the said rent of Rs.26,821/- as agreed upon by virtue of clause 4 of lease deed dated 9-4-1997 which the tenant failed to pay and the plaintiff therefore, in my view, was entitled to recover the said sum from the tenant either being the rent agreed upon or past mesne profits for the period from 8-4-1999 to 8-4-2002, and since a sum of Rs.8,410/- was being accepted by the landlord, the defendant was bound to pay the difference in the sum of Rs.18,411/- per month from April, 1999 to April, 2002. It is understandable that the first part of prayer (a) of the plaint could not have been granted in favour of the plaintiff because the period itself had expired, when the said prayer was made, but the claim of the plaintiff for difference in rent and/or mesne profits at the rate of Rs.18,411/- sought by the plaintiff in terms of prayer (a) could not have been denied to the plaintiff. The defendant as tenant could not have been allowed to take advantage of his own wrong by not paying the rent as assessed by PWD, as agreed upon between the parties saying that it was excessive and then turn around and say that the tenant did not pay the same because the agreement was not renewed. Therefore, First Appeal No.254/2008 deserves to succeed in terms of prayer (a) and the claim of the plaintiff for a sum of Rs.18,411/- either by way of 16 difference in rent payable or mesne profits from April, 1999 to April, 2002 deserves to succeed. 15. As regards the second appeal filed by the tenant (24/2009), it may be stated that the tenant had not paid the stipulated rent at the rate of Rs.26,821/- as assessed by the PWD and the tenant continued to tender Rs.8,410/- which was accepted by the landlord as interim rent. This in fact was payable for the first two years. 16. Shri Rivonkar, learned Counsel appearing on behalf of the tenant would submit that the said notice is defective and the suit is defective because it is based on defective notice. Learned Counsel further points out that the case of Nopany Investments(P) Ltd. v. Santokh Singh(HUP)((2008) 2 SCC 728) would apply to a case where no notice is given. On the other hand, Shri Ramani, learned Counsel relying on the aforesaid decision has submitted that filing of an eviction suit under general law is itself a notice to quit on the tenant. Learned Counsel further submits that the only plea taken by the defendant was by way of protection of the Rent Act which plea has been held against the tenant and the same is now not pursued any further, and, therefore the 17 tenant cannot be heard to say that either the notice is bad or the suit filed based on a defective notice is not maintainable. 17. I am of the view that there is absolutely no merit in the submissions made by Shri Rivonkar, learned Counsel on behalf of the tenant. The relations between the plaintiff and the defendant are governed by the Transfer of Property Act, 1882. The plaintiff has put an end to that relationship between the plaintiff and the defendants by notice dated 4-4-2002. The only plea taken by the tenant was a plea of protection in terms of the Rent Act referred to herein above which protection has been denied to the tenant as the provisions of the said Act are not applicable to the case of the tenant. No other plea was taken by the tenant inasmuch as the plea of vagueness of notice is again a vague plea which is not at all required to be considered by this Court. This is a case where, as already stated, the relations between the parties are governed by the general law of the Transfer of Property Act, 1882. A notice was sent calling upon the tenant to hand over vacant possession of the suit premises and the suit itself as observed by the Apex Court in the case of Nopany Investments(P) Ltd. v. Santokh Singh(HUF)(supra) is a notice to quit on the tenant. No notice was in fact required in such a 18 case. There is no defect in the notice. The suit itself is the notice. The tenant therefore has no right to continue to occupy the suit premises and the order of eviction therefore cannot be faulted. 18. A grievance was made by learned Counsel Shri Ramani that the stay was granted subject to payment of arrears from April, 1999 at the rate of Rs.16,000/- per month which are not being paid/deposited by the tenant. I need not enter into this controversy since both the appeals are being disposed of finally. 19. As a result of the above discussion, the First Appeal No.254/2008 succeeds and the First Appeal No.24/2009 fails. Miscellaneous Civil Applications Nos.466/2010, 17/2010, 19/2010 and 497/2009 shall accordingly stand disposed off. The plaintiff-landlord is held entitled to recover from the defendant-tenant Rs.26,821/- from 8-4-1997 to 7-4-2002 either by way of agreed rent or past mesne profits, for the said period. Since Rs.8,410/- were already paid, the plaintiff- landlord is held entitled to recover the differences i.e. Rs.18,411/- for the said period, in terms of prayer (a) of the plaint. Mesne profits from the date of the suit shall be assessed by the Court in terms of Order 20, Rule 19 12, C.P.C. The plaintiff-landlord would be entitled to withdraw/adjust the amount deposited/paid by the defendant-tenant calculated at the rate of Rs.18,411/- for the period from 8-4-1997 to 7-4-2002 after the expiry of the appeal period. 20. Considering the facts, there shall be no costs. 21. Learned Counsel on behalf of the appellants-tenant prays for stay of operation of this Judgment. Shri R. G. Ramani, learned Counsel on behalf of the landlord objects. Considering the facts of the case, in my view, this is not a fit case for grant of stay. Prayer is rejected. N. A. BRITTO, J. RD