J.K. Lakshmi Cement Ltd v. Shri Rishi Khanna

4. Whether the plaintiff is entitled to any amount on account of increase of municipal tax? if so, at what amount? OPP

5. Whether the defendant had validly exercise the option to renew the lease period vide letter dt. 17.10.1996, as pleaded in the written statement, if so, its effects? OPD

6. Relief.”

7. In order to prove the case, the respondent/plaintiff himself appeared as PW[1] and Mr. K.K. Verma was examined as PW[2]. The appellant/defendant, however, examined four witnesses. With respect to issue No.1, the Trial Court had held that after the termination of three years from 14.01.1994, the appellant/defendant did not have any right to continue with the possession. - 7 -

8. The Trial Court after appreciating the material available on record and after perusal of Clause 4 of the agreement dated 23.08.1994 had held that until and unless a fresh lease deed was executed after the expiry of three years, the appellant/defendant did not have any automatic right for the continuation of the tenancy. The Trial Court‟s reasoning regarding the said contention reads as under:- “The contention the defendant that lease deed does not stipulate that in case fresh lease deed is not executed after the initial three years, the lease shall stand determined, the said contention appears to be without reasonable basis as plain reading of clause 4 of 'Mark A' show that, lease "could be" renewed for another two consecutive periods of three years each and then for two years itself making, the total tenure of lease deed of 11 years, pre-supposes an express agreement by way of document for renewal of the lease. If it had been so that fresh lease deed is not required to be executed after the expiry of three years then what was the need for defendant to file a suit for specific performance seeking renewal of the lease. The construction of clause 4 of the lease deed gives an impression that again parties had to execute a fresh lease deed on the expiry of the term of three years. It does not give an unilateral authority to the lessee to renew for further term. Clause 4 of the lease pre supposes mutuality, between the parties by way of bilateral written agreement documenting the lease for further renewal. Hence, supposition on the part of the defendant that: lease deed does not stipulate that in case fresh lease deed is not executed after initial period of three years, the lease shall stand determined is baseless. Thus, the occupation of the defendant after the termination of three years from 14.01.1994 would not create a tenancy. It is crystal clear from the law laid down in the judgments filed by the plaintiff that tenancy of the defendant stood determined by efflux of time on the expiry of three years w.e.f. 14.01.1994. Accordingly, this issue is decided: in::favour of plaintiff and against the defendant.”

9. With respect to the issue, whether the respondent/plaintiff was entitled to damages for use or occupation and at what rate etc., the Trial Court has held as under:- “2. As per plaint, defendant approached the plaintiff for taking the property i.e. flat No. 204 E, situated on 2nd Floor in the building known as Milap Niketan situated at 8-A Bahadur Shah - 8 - Zafar Marg, New Delhi measuring about 350 sq ft. of super area along with right of bathroom and use of passage, stairs, lifts, entrance etc. on rent (hereinafter referred as tenanted premises). The monthly rent of the said premises at the time of service of notice of termination of tenancy was Rs. 10,584/- per month @ 30.24 per sq ft for 350 sq ft. super area. In addition to the rent, the defendant was to pay service charges for running and maintaining the lifts, common staircase and passages including light and power and also for water in bathroom and for water for drinking and other uses as may be applicable from time to time which at that time was 0.25 per sq ft per month of a super area. The lease deed was executed between the plaintiff with M/s Straw Products Ltd. And the name of the company was changed to M/s J.K. Corp. Ltd.”

10. The Trial Court, therefore, decreed the suit in favour of respondent/plaintiff in the following terms:- “Plaintiff is entitled to relief of mesne profit / damage for the use and occupation of the suit property pursuant to the termination of the tenancy vide notice under Section 106 TPA dt. 21.07.1998 on the following rates i.e. -Upto December, 2001 @ Rs. 125 per sq ft. -From January, 2002 to December, 2002 @ Rs. 100/per sq ft. -From January, 2003 to 25.09.2004 @ Rs. 80/- per sq. ft. The above amount so calculated is to be reduced by part payment made by defendant after termination of tenancy for the relevant period. Plaintiff is entitled to interest @ 9% on the recoverable amount after deduction of the payment made by the defendant from the date it becomes due. Plaintiff is further entitled to Municipal Taxes as per Ex. PW- 1/14 to Ex. PW-1/19. Plaintiff is entitled to the cost of the suit. Plaintiff is directed to file deficient Court fees for the purpose of preparation of decree. File be consigned to Record Room.”

11. Being aggrieved by the judgment and decree passed by the Trial Court, the appellant/defendant preferred an appeal. The first Appellate Court has re-appreciated the evidence and material available on record and it has found that in order to give effect to the renewal of - 9 the lease, a document was to be executed evidencing the renewal of the agreement or the lease. Since the same was not done, therefore, the first Appellate Court has found that the concept of automatic renewal of lease could not be introduced. The determination of mesne profit was also found to be in accordance with law and accordingly, the same was also affirmed.

12. Thus, the first Appellate Court vide impugned judgment and decree dated 23.10.2021 partly allowed the appeal and upheld the judgment and decree of the Trial Court qua the issue nos. 1, 2 and 3 and set aside the judgment and decree qua issue no. 4. Aggrieved thereto, the appellant/defendant preferred the instant second appeal.

13. Mr. Dayan Krishnan, learned senior counsel appearing for the appellant/defendant submits that Clause 4 of the lease deed stipulates automatic renewal for a period of eleven years from the date of execution of the lease deed. He then contends that the lease cannot be terminated prior to the expiry of eleven years and according to him, the Courts below have gravely erred while not appreciating the provisions of Section 53A of the Transfer of Property Act, 1882 [“Act”] in its right perspective. He places reliance on the decision of the Supreme Court in the case of Maneklal Mansukhbhai v. Hormusji Jamshedji Ginwalla and Sons 1, Union of India and Ors. v. K.C. Sharma and Ors.2, Shrimant Shamrao Suryavanshi v. Prahlad Bhairoba[3] and K.B. Saha & Sons (P) Ltd. v. Development Consultant Ltd.4.

14. He further argued that the Trial Court and the first Appellate Court failed to appreciate that the lease deeds as relied upon by the AIR 1950 SC 1.

- 10 respondent/plaintiff were unregistered and the same ought not to have been looked into while determining the question of mesne profits. He submitted that if a document is inadmissible in evidence for want of registration, then it cannot be used for the purpose of proving an important clause contained in the document. He further submitted that there is no basis for awarding the mesne profits as no evidence was led to justify the claim by oral or documentary evidence.

15. Learned senior counsel further argued that the Trial Court and first Appellate Court had granted an exorbitant interest at the rate of 9% per annum, however, no evidence was led by the respondent/plaintiff to be entitled to such interest. Therefore, on the anvil of the aforenoted submissions, learned senior counsel submitted that the instant appeal deserves to be admitted as it raises substantial questions of law.

16. Per contra, Mr. R.K. Saini learned counsel appearing for respondent/plaintiff submitted that the instant appeal raises no substantial question of law. He argued that the postulates of the lease agreement nowhere envisaged the automatic renewal of the lease agreement after the expiry of three years. He further argued that without the express agreement in writing regarding the renewal of the lease, the concerned lease agreement cannot be automatically renewed and that too only at the instance of the appellant/defendant.

17. Learned counsel further submitted that as far as the question of the entitlement of the mesne profits on the anvil of the lease agreement is concerned, the same depends upon the rate as prescribed in the lease agreement and thus, it is a question of fact and not a substantial question of law. He submitted that the issue of grant of interest is at the discretion of the Trial Court and without the same being shown to be as arbitrary and illegal, the discretion of the Trial Court cannot be - 11 readily interfered and moreover, the same is not a question of law.

18. I have perused the record and given thoughtful consideration to the arguments advanced at Bar.

19. The appellant/defendant has preferred the instant appeal under Section 100 of Civil Procedure Code, 1908 (CPC) and proposes the following substantial questions of law:i) Whether the possession of the Appellant can be termed as „unauthorised‟ or „unlawful‟ in view of the plea of part performance raised in the Written Statement? ii) Whether the Ld. Courts below erred in relying upon unregistered lease agreements to award mesne profits, in view of their apparent inadmissibility as primary evidence? iii) Whether the Ld. Courts below erred in failing to rely upon the duly proved lease agreements produced by the Appellant to demonstrate the prevailing rate of rent for the purposes of computing mesne profits? iv) Whether the Ld. Courts below erred in mechanically awarding penal rate of interest at the rate of 9% per annum against the Appellant?

20. Before proceeding further, it is pertinent to refer to Section 53A of the Act, which is at the fulcrum of the entire controversy, that reads as under: “53A. Part performance.—Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, - 12 and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2***, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]”

21. The plain reading of Section 53A of the Act shows that certain rights in favour of the transferee are created by the provision subject to fulfilment of various conditions stipulated therein including a part performance of the contract, however, this right is not indefeasible and is subject to certain restrictions. The underlying purport of the provision is to render protection to the possession taken in furtherance of any agreement of transfer.

22. The essential conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53A of the Act have been culled out by the Supreme Court in the case of Shrimant Shamrao Suryavanshi and Anr. v. Pralhad Bhairoba Suryavanshi and Anr. 5, which read as under:- “16. (1) there must be a contract to transfer for consideration of any immovable property; (2) the contract must be in writing, signed by the transferor, or by someone on his behalf; (3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

- 13 - (4) the transferee must in part-performance of the contract take possession of the property, or of any part thereof; (5) the transferee must have done some act in furtherance of the contract; and (6) the transferee must have performed or be willing to perform his part of the contract.”

23. The purpose of Section 53A of the Act, which is routed in the phraseology of the said Section, provides for a shield of protection to the proposed transferee to remain in possession against the transferor who has agreed to transfer the immovable property to the transferee if the proposed transferee satisfies other conditions stipulated in Section 53A of the Act. Moreover, that protection is available as a shield only against the transferor, the proposed vendor, and would disentitle him from disturbing the possession of the proposed transferees who are put in possession pursuant to such an agreement. This position of law finds force in the decision of the Supreme Court in the case of State of U.P. v. District Judge and Anr. 6. Moreover, it is a settled position of law that the transferee cannot claim a right higher than what is provided in the ultimate document/agreement.

24. In the instant case, the claim of the appellant/defendant is essentially based on Clause 4 of the Agreement, which reads as under:- “That the present lease is for a period of three years commencing from 14th January, 1994 and it can be renewed by the lessee for further two periods of three years successively and then for two years, after increasing the rent by 20% (twenty percent) on the last rent paid each time the lease is renewed for three years/ two years, and fresh lease deed will be executed at each such time, further extension, if any, after the expiry of 11

- 14 years shall be only on the terms and conditions as may be mutually agreed upon between the lessor and the lessee at that time and a fresh lease deed will executed."

25. A bare reading of the aforesaid Clause would indicate that it requires the execution of a fresh lease deed for renewal of the contract. The Supreme Court in the case of State of U. P. and Anr. v. Lalji Tandon and Anr.[7] has discussed the difference between the word „renewal‟ and „extension‟ and held as under:- "There is a difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease, again in accordance with the covenant for renewal contained in the original lease. In the case of extension it is not necessary to have a fresh deed of lease executed, as the extension of lease for the term agreed upon shall be a necessary consequence of the clause for extension. However, option for renewal consistently with the covenant for renewal has to be exercised consistently with the terms thereof and, if exercised, a fresh deed of lease shall have to executed between the parties. Failing the execution of a fresh deed of lease, another lease for a fixed term shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for year by year or month by month, as they case may be."

26. In paragraph No.30 of the aforesaid decision, which has rightly been placed reliance by the learned counsel appearing for the respondent/plaintiff, it has been held that in order to give effect to the renewal of a lease, a document has to be entered into evidencing the renewal of the agreement or lease as the case may be and there is no concept of automatic renewal of the lease by the mere exercise of an option by the lessee. The requirement of a positive act of renewal is pre-conditioned in the Clause.

27. Moreover in the case of Provash Chandra Dalui and Anr. v.

- 15 - Biswanath Banerjee and Anr.8, wherein, the Supreme Court considered the difference between “extension” and “renewal” of a lease observed as under:-

28. Furthermore, in the case of Hardesh Ores Pvt. Ltd v. M/s. Hede and Company[9] it was held that in order to give effect to the renewal of a lease, a document has to be executed evidencing the renewal of the agreement or lease, as the case may be, and there is no concept of automatic renewal of lease by the mere exercise of an option by the lessee. Paragraph no.31 of the said decision reads as under:

29. It is thus seen that the Courts below have rightly negated the arguments of the appellant/defendant on the anvil of Section 53A of the Act as admittedly in the instant case, after the expiry of a period of three years, no fresh lease deed has been executed. The automatic

- 16 invocation of the aforesaid Clause 4 by the appellant/defendant in the absence of express renewal of the lease deed will not create any right in its favour. The denial of execution of the renewal of the lease, whether justified or otherwise, would be a different matter and is not the aspect to be adjudicated in the instant case. Since admittedly, the respondent/plaintiff filed the civil suit for specific performance which appears to have been withdrawn, nevertheless, if the appellant/defendant had any right, whatsoever, on the basis of the renewal clause in the lease agreement, the appellant/defendant was at liberty to resort to the said remedy as available in law, which is not the case here.

30. In any case, without there being any fresh lease agreement evidencing the renewal of the lease deed, or in the absence of a finding by the competent Court, the Court on its own cannot alter the terms of the agreement and renew the period of tenancy by judicial interpretation. Accordingly, the arguments justifying the possession of property on the anvil of Section 53A of the Act stand rejected.

31. So far as the question of mesne profits is concerned, the first Appellate Court in paragraph no. 11 has clearly held that the mesne profit has not been awarded on the basis of the lease agreement. In paragraph nos.11-14, the findings have been rendered as under:

Court has to undertake a comparative assessment of the nature, - 17 location, age, condition etc. of the suit schedule premises, on the one hand, and the similar characteristics of the premises in the surrounding area, on the other, as it is very difficult to find the premises of similar nature, size and quality at the same location.

12. Regarding the mesne profits, PW-1 has claimed damages at the market rate in the following manner:a. upto December 2001 @Rs.125 per sq.ft. per month b. from January 2002 to December 2002 @Rs. l 00 per sq.ft. per month c. from January 2003 to 25.09.2004 @Rs.80 per sq.ft. per month

13. In order to prove his plea, PW-I has relied on lease deeds Ex. PW 1/1 0 to Ex. PW 1/13 which are basically objected by the defendant on the ground that these lease deeds cannot be relied being unregistered and insufficiently stamped documents and has relied on judgment titled as Jiwan Industries (P) Ltd. Vs. Smt. Kamlesh Rani Budhiraja (2014) 3 HC Cases (Delhi) 640 wherein it has been held that "It is settled law that an unregistered lease deed can be looked into only for collateral purpose and collateral purpose cannot be interpreted to include therein the terms and conditions by which parties are related to each other as landlord and tenant. Collateral purpose basically is to show the nature of possession i.e. tenant has not illegally entered into possession but has legally entered into possession. All other terms and conditions between the landlord and tenant as stated in the registered lease deed whether it be for the period of lease, or the rate of rent or area of tenancy or other terms and conditions, the same cannot be looked into in view of the specific bar of Section 49 of the Registration Act."

14. As observed earlier, the plaintiff claimed mesne profit from the defendant for the unauthorized possession of the demised premises and PW-I has relied on lease deeds of neighboring properties to prove the prevalent rate of rent and in that situation, the rate of rent agreed between the parties qua the other properties will definitely come within the ambit of term 'collateral purpose' in the present situation since the judgment itself states that "collateral purpose cannot be interpreted to include therein the terms and conditions by which parties are related to each other as landlord and tenant". Here the stress is on the words "related to each other as landlord and tenant" which makes it - 18 specific to the situation in question and not at large. PW-1 has relied on lease deed Ex. PW1/10 to Ex. PW1/13 to prove the prevalent rate of rent in the area surrounding the demised premises at the relevant time and they are not being relied to prove the rate of rent agreed between the parties inter-se. 14.[1] Section 49 deals with the effect of non-registration of documents which are compulsorily registrable under Section 17 of the Registration Act and Transfer of Property Act. Section 49(a) of the Registration Act declares that an unregistered document which is compulsorily registrable cannot 'affect' any immovable property comprised therein. The word 'affect' has been explained by the full bench judgment of the Hon'ble Madras High Court in "Muruga Mudallar and Ors Vs. Subba Reddiar, AIR 1951 Madras 12" as so relied by the Hon'ble Supreme Court in judgment titled as "Korukonda Chalapathi Rao & Anr. Vs. Korukonda Annapurna Sampath Kumar, 2021 JC (SC) 3088":- ".... the verb "affect" in Section 49 is only a compendious term employed by the Legislature to express the meaning of the longer phrase "purporting or operating to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest whether vested or contingent to. ".....The other consequence of non-registration is to prohibit the document from being received not "in" evidence, but "as" evidence of any transaction affecting such property. The emphasis on the word "as" was, in my opinion, rightly laid by Venkatsubba Rao J. in Saraswathamma Vs. Paddayya, 46 Mad. 349: (AIR 1923 Mad 297), where the learned Judge observed: " What is prohibited by the section is receiving a document as evidence of a transaction, not merely receiving it in evidence, i.e., as a piece of evidence having a bearing on the question to be ultimately decided" -* In other words, the prohibition is to prevent a person from establishing by the use of the document in evidence a "transaction, affecting Immovable property". A person should not be permitted to establish indirectly by use of the document what he is prevented from doing directly under clause (a)." 14.[2] It was further observed in Korukonda Chalapathi Rao & Anr. Vs. Korukonda Annapurna Sampath Kumar (supra) that "... The unregistered document can be used as evidence of any collateral transaction. This is however subject to the condition that the said collateral transaction should not itself be one which - 19 must be effected by a registered document". In view of the aforesaid discussion, I conclude that the objection of the appellant regarding non registration of lease deeds relied by the respondent is without any consequence since Ex. PW1/10 to Ex. PWI/13 are not relied upon to prove the agreement between the parties inter-se. "

32. The first Appellate Court has rightly held that mesne profits were to be calculated on the basis of the advantage a person in unlawful occupation gets by the use of the property. Furthermore, the first Appellate Court rightly relied upon the decision of Korukonda Chalapathi Rao & Anr. v. Korukonda Annapurna Sampath Kumar10 to come to the conclusion that an unregistered document can be used as the evidence of any collateral transaction subject to the condition that the said collateral transaction should not itself be one which must be affected by a registered document. It is, thus, seen that even the argument with respect to registration/ non-registration of the document will be of no avail as the same also does not raise any question of law much less a substantial question of law. Furthermore, it has been rightly held by the first Appellate Court in paragraph no. 16 that the Trial Court had not only considered the lease deeds but also undertook the comparative assessment of the nature, location, age, condition etc. of the suit property as compared to the surrounding properties. Thus, all relevant considerations have been taken into account while adjudicating the factual questions and no infirmity has been pointed out in the same.

33. So far as the arguments with respect to the prevailing rate are concerned, the first Appellate Court has considered in paragraphs Nos.15 to 19 held as under: "15. In order to prove the market rate of rent, defendant also led evidence in the form of lease deed Ex. PW2/D-l to Ex. PW2/D-4,

- 20 all related to the Guiab Bhawan and undisputedly Milap Niketan i.e. the suit property and Guiab Bhawan are located on the same stretch. However this is also admitted fact that defendant chose premises on rent in Milap Niketan considering its location, furnishing, convenience etc. The logical deduction from the said testimony could be that strategically Milap Niketan cannot be considered to be at par with the Gulab Bhawan.

16. Apart from relying on the lease deeds, the Ld. Trial Court had also considered the comparative assessment of the nature, location, age, condition, etc. of the suit schedule premises, on the one hand, and the similar characteristics of the premises in the surrounding area, on the other, as it is very difficult to find the premises of similar nature, size and quality at the same location. The observation of the Ld. Trial Court that "It is not necessary that building/ property on the same stretch would fetch identical rent. Even on the same stretch, rent differ on account of location of building, floor, size, soundness, etc. As such, same stretch parameter projected by the defendant is not a criteria to assess correctly the rent of the suit property for the contemporary period. For that purpose, credence can be lend to the testimony of DW-1 who deposed that there were lot of variations in the rent in various premises of Bahadur Zafar Marg. DW-1 admitted that defendant chose premises on rent in Milap Niketan considering its location, furnishing, convenience, etc. which negates the same stretch parameter projected by the defendant." Further it is not the contention of the appellant that the lease deeds so relied by the respondent are forged and fabricated.

17. In view of abovesaid reasons, I conclude that this court fails to find any infirmity in the finding of the Ld. Trial Court on the issue nos. 1, 2 and 3 and same are hereby upheld. Needless to state that the payment will be subject to the adjustment of the security deposit as per clause 5 of the lease deed dated 23.08.1994 Ex. PW 1/2.

18. Coming to findings on issue no. 4, the Ld. Trial Court granted enhanced house tax on the basis of documents Ex. PWl/14 and Ex. PW1/19 which are the demand notices / assessment letters / receipt issued by the MCD however PW-1 has not given any details as to how and from which period the claim is made up nor has furnished any details as to what was original house tax and when it was increased. Henceforth, I find force in the challenge of the appellant regarding the grant of enhanced house tax and same is accordingly set aside. - 21 -

19. Regarding other contention of the appellant that the plaintiff has not established his right in the demised premises and he had also moved an application under Order XIV Rule 5 CPC for framing of additional issues regarding the competency of plaintiff to continue with the present proceedings. Admittedly, defendant is tenant in the demised premises and the meaning of the term "owner" is vis a vis the tenant i.e. the owner should be something more than the tenant. Section 116 of Indian Evidence Act preclude the respondent from denying the ownership of the petitioner. It puts an embargo on a tenant of immovable property, during continuance of his tenancy, to deny the title of his landlord at the beginning of tenancy. Once a tenant is always a tenant and a tenant cannot deny his landlord's title. Secondly, the plaintiff certainly has better right in the demised premises than the defendant who was only a tenant. Thirdly, the defendant has not suggested as to who is his landlord if not the plaintiff. Fourthly, the contention of the defendant regarding the sale transaction between plaintiffs has already been rightly considered vide order dated 05.12.2007. "

34. Thus, the finding with respect to the prevailing rate, based on the lease agreements presented during the trial, is also a finding of fact and, therefore, does not raise any substantial question of law. Moreover, the finding of fact is not based on an error or misreading of law so as to give rise to any question of law.

35. Furthermore, so far as the argument with respect to the award of 9% interest per annum on the recoverable amount is concerned, the same also deserves to be rejected. In the face of the settled proposition of law that the interest forms an integral part of the mesne profits, it could be observed that once the Court awards mesne profits, the interest accruing thereon has to be allowed as a necessary corollary thereof in the computation of the mesne profits itself. A tenant cannot be permitted to urge that mesne profits, which in fact, ought to have been paid years ago, should not bear any interest. In this regard, reference may be made to the ratio laid down in paragraph nos. 64 and - 22 - 65 of Consep India Pvt. Ltd. v. CEPCO Industries Pvt. Ltd.11 wherein, this Court, after examining the decision of the Supreme Court in State Bank of Bikaner and Jaipur v. I.S. Ratta and Ors.12 observed as under:-

- 23 wrong possession appropriating income from the property himself gets the benefit of the interest on such income. In the present case the Devasthanam was entitled to possession from and after June 7, 1933 i.e., when the Act came into force and the Devasthanam Committee was appointed. The Mahant having wrongfully resisted the claim of the Devasthanam to possession without surrendering the property, was admittedly bound to pay mesne profits. This, it may be stated, is not disputed. The question raised are, however, two: (1) when is the aggregation of the principal amount of the mesne profits and the interest thereon to be made for the purpose of the total carrying further interest? (2) What is the rate of interest to be charged. The learned trial Judge allowed interest at 6 per cent for the calculation of interest which is part of RFA No.20/2016 mesne profits. Having calculated mesne profits on this basis he aggregated the amount of mesne profits, i.e., income from the several items of property plus the interest on it up to the date of the plaint i.e., January 10, 1946. On the total sum so ascertained he decreed interest at 6 per cent till the date of his decree i.e., March 28, 1952. He passed a decree for this sum with further interest at 6 per cent till the date of realisation."

17 The aforesaid issue is no longer res integra that interest on mesne profits could be paid. The next question, therefore, would be as to what would be the appropriate rate of interest. The learned Trial Court has awarded 16.5% p.a., interest on the rent. In the aforesaid case decided by the Supreme Court 6% interest was held to be a reasonable interest. In the said case it was held that: "In any event, if the Trial Court in its discretion awarded interest at 6 per cent, and that is admittedly not per se an unreasonable rate, there was no compelling equity in the Mahant to justify interference with that discretion."

18. Considering the facts and circumstances of the case we consider that direction to pay interest @ 16.5% p.a was on the higher side. We, in the facts and circumstances of the case, deem it proper to fix the rate of interest payable by the appellant to the respondents towards the arrears of mesne profits from the date of decree till the date of possession at 12% p.a. Ordered accordingly. The amount paid in excess shall be returned by the respondents to the appellant, failing which security furnished for restitution shall be enforced and the amount which is lying with the Trial Court amounting to Rs.40 lakhs and TDS amount of Rs.[5] lakhs - 24 shall be returned to the appellant. The appeal stands disposed of in terms of the aforesaid order.”

65. In the facts and circumstances, the learned trial court, in my view, has rightly held that the respondent is entitled to mesne profits at the rate of Rs.50/- per sq. ft. per month, i.e., Rs.45,000/- per month with effect from the month of November, 2005 till the vacation of the tenanted premises. As held by the Division Bench in the RFA No.20/2016 I.S. Ratta's case (supra), interest is liable to be awarded on mesne profits. The only question, therefore, which remains to be considered is what would be the appropriate rate of interest on the mesne profits awarded by the learned trial court. The learned trial court has awarded 12% p.a. interest on the rent. Considering the facts and circumstances of the case, it is deemed appropriate to fix the rate of interest payable by the appellant to the respondent towards the arrears of rent and mesne profits @ 9% p.a. throughout.”

36. In the present case, the Trial Court, in its discretion, has awarded simple interest of 9% per annum towards the arrears of mesne profits. In the facts of the present case, the grant of interest at the rate of 9% per annum can neither be termed as arbitrary nor exorbitant. Thus, this Court does not find any reason to interfere with this discretion of the Trial Court.

37. The exposition of law under Section 100 of CPC clearly elucidates that the second appeal can only be entertained if it raises a substantial question of law. Pertinently, it is the settled exposition of law that as a Court of the second appeal, the Court would not interfere in the impugned judgment on the ground of erroneousness of the findings of fact, however gross or inexcusable the error may seem to be.13 It is pertinent to point out that after the amendment in 1976, the scope of the second appeal under Section 100 CPC was further curtailed and only in cases wherein substantial questions of law arise, the second appeal is permissible. A second appeal under Section 100 Ramratan Shukul v. Mussumat Nandu (1892) 19 Cal 249 (252) (PC). - 25 - CPC is now confined to cases where a question of law is involved and such question must be a substantial one. The said curtailment of the scope of a second appeal is a conscious curtailment by the legislature for the refinement of the civil procedure and is meant to prevent reagitation of factual issues before different forums.

38. At this juncture, it is pertinent to note that both the Courts below are at ad-idem with respect to the non-automatic renewal of the lease and other aspects. There are concurrent findings as regards the reading of Clause 4. Notably, the rigors of Section 100 CPC are more stringent when the second appeal is filed assailing the concurrent findings of the Courts below. In Bholaram v. Ameerchand14, the second Appellate Court set aside the impugned judgment on the ground that the findings are perverse and in disregard of the material available on record. However, the Supreme Court, while setting aside the concerned High Court judgment, held that even if we accept the rationale of the concerned High Court, at best, it could be termed as an error in findings of fact but that itself would not entitle the High Court to interfere in the absence of a clear error of law.

39. In the case of Thiagarajan v. Sri Venugopalaswamy B. Koil15, the Supreme Court observed that where the findings of the fact by the lower appellate court are based on evidence, the second appellate court cannot ouster such finding and substitute it with its own finding on reappreciation of evidence merely on the ground that another view was possible. The Supreme Court further observed that it is the obligation of the Courts of law to further the clear intendment of the legislature and not frustrate it by excluding the same.

40. No doubt, interference in the concurrent findings of the fact is

- 26 permitted but only in exceptional circumstances. As a second appeal is not the third trial on facts and the first appellate court is final arbiter of facts, this interference by the second Appellate Court is rarity rather than regularity. In the case of Jai Singh v. Shakuntala 16, the Supreme Court held that it is permissible to interfere even on questions of fact but it has to be done only in exceptional circumstances. The Court observed as under:-

41. In P. Chandrasekharan v. S. Kanakarajan 17, the Supreme Court laid down the exposition of law that interference in the second appeal is permissible only when the findings are based on a misreading of evidence or are so perverse that no person of ordinary prudence could take the said view. Moreover, the Court must be conscious that intervention is permissible provided the case involves a substantial question of law.

42. Therefore, on a careful consideration of the legal position and circumstances specific to the case in hand, this Court is not inclined to interfere with the findings of the learned Trial Court and first Appellate Court as the instant batch of appeals raises no substantial question of law. AIR 2002 SC 1428.

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43. Accordingly, the appeals stand dismissed.

44. All pending applications are also disposed of accordingly. No costs.

PURUSHAINDRA KUMAR KAURAV, J NOVEMBER 27, 2024