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$- HIGH COURT OF DELHI EX.P. No.194/2011 SUNITI MADAN Decree Holder
Through Ms. Nandita Rao, Adv.
JUDGMENT
Through Mr.S.K. Gandhi, Adv. with
•
Mr. R. Ganeshan, AGM of Bank of India
1 This petition has been filed by the decree holder Smt. Suniti Madan who is stated to be widow, seeking recovery of possession and mesne profits with regard to the property bearing no.32, Ground Floor,
I. Khan Market, New Delhi. •
2. Certain essential facts which support passing of a peremptory order for recovery of possession are noticed hereinafter:-
(i) The judgment debtor was inducted as a tenant in the suit property by late Shri Ravindera Madan. According to Mr R. Ganeshan, AGM of the judgment debtor who is present in court, the judgment debtor was so inducted almost fifty years ago.
(ii) It appears that Smt. Ravindera Madan, predecessor-in-interest of
2011:DHC:13783 2the decree holder had filed CS (OS) No.2536/1998 in this court against the judgment debtor seeking decree inter alia for possession. This suit had culminated in a compromise which resulted in execution of a registered lease deed dated 13t[1] May, 2002 in respect of the said property.
(iii) The judgment debtor was thus put to notice as back as in the year
(iv) The judgment debtor was also fully aware when it executed the lease deed dated 13th May, 2002 that it had been permitted occupation of the suit property under a binding contract only for a period of ten years till 12th February, 2011. The same was manifested in the following covenants in the lease deed dated 13th of May, 2002 between the parties:- "The lessee from the 12th day of February 2001 for the term of ten years paying therefore unto the lessor during the said term monthly and proportionately for any part of a month the rent at the rate of Rs. 1701- per square feet • amounting to monthly rent of Rs.2,[1] 0,800/- (Rs. Two Lacs Ten Thousand Eight Hundred only) for the first Five years i.e,. from 12.2.2001 to 11.2.2006, thereafter with increase in rent by 25% with effect from 12.2.2006 to 11.2.2011 at a monthly rent of Rs.2,63,5001- (Rs. Two Lacs Sixty Three Thousand Five Hundred only)/ The rent of the premise to be paid on or before the 7th day of each calendar month in advance for which rent is due AND upon condition of the performance by the lessee of the agreements on the part of the lessee hereinafter contained. - 3xxx xxx xxx
5. PROVIDED ALWAYS and it/s hereby further mutually agreed and declared that the lease of the premises may further be renewed for such term/s and at such rate of rent as may be mutually agreed between the parties hereto. In the event of the lessor not agreeing to further renewal, the lessee shall forthwith on the expiry of the term of the present lease Deed, vacate the premises and hand-over vacant and peaceful possession thereof to the lessor"
(v) The judgment debtor is a banking institution which strictly enforces financial discipline among its customers and clients as well as the contractual liabilities in its favour. Yet, despite full knowledge of the date of termination, it completely slept over the rights of the property owner and took no steps at all for shifting from the demised premises despite full knowledge of the lease tenure. NO In anticipation of the occurrence of the event of lease expiry, the plaintiff caused a notice dated 1 s' November, 2010 to issue to the judgment debtor to vacate the premises on 13th February, 2011, upon the expiry of the lease. The judgment debtor was also informed that upon failure to do so, recourse to legal remedy would be taken.
(vii) The judgment debtor sat over its-response to this communication.
The bank opted to awaken only on 2 nd February, 2011 whereby it displayed its recalcitrant and negligent conduct and stated that it had initiated the process of finding alternative premises by publishing - 4advertisements. It is to be noted that the advertisements were also published only on 11th January, 2011 long after the notice. The complete arrogance of the judgment debtor is apparent from the tenor of the communication dated 2nd February, 2011 wherein it is stated that "till the process is completed, we will be continuing the process of finding out other premises by paying the same rent as per the lease deed dated 13th May, 2002". • A half baked option was given in this letter to the owner of the property that "if you are interested in renewal of the lease with the reasonable increase in the rent, the owner could inform the bank within five days". The decree holder unequivocally conveyed its rejection of the suggestion by the judgment debtor by a letter dated 8" February,
2011.
(viii) In view of the failure of the judgment debtor to vacate the property, CS (OS) No.2536/1998 was necessitated. This suit was also • contested by the judgment debtor by a written statement on completely S untenable grounds. On construction of the entire material placed on record, a decree for possession of the subject property was passed on 24th May, 2011 on admissions of the judgment debtor of this decree has been sought in the present proceedings.
3. When this petition was listed before this court on 8th August, 2011 the matter was adjourned for the judgment debtor to inform this court I* -5about the premises to which it was shifting its business. Instead of doing so, today this court is informed that so far as the identification of alternative premises is concerned, the judgment debtor has merely issued advertisements, without identification of any property.
4. It is submitted by Ms. Nandita Rao, learned counsel for the decree holder that the rental from the suit property is the only source of income of its widowed owner. It is submitted that even the son of the decree • holder is unemployed and is living away from her. • 5. It is contended that occupation of the suit premises by the judgment debtor is mala fide and is resulting in huge financial losses and extreme agony to the decree holder. She has submitted that so far as the prevalent rental rates for properties located identically to the suit premises are concerned, as per a registered lease deed in respect of premises ad measuring 468 sq.ft. being property no.19-B, Khan Market, New Delhi and registered lease deed dated 18th November, 2010 • entered into between Ms. Lalita Parchani & M/s SSIPL Retail Limited, the • tenant had agreed to and is paying a rental of Rs.87,91,360/- annual rent @ Rs.1600/- per sq. ft. which comes to Rs.16,00,000/- These premises are positioned at a location which is in laterally opposite to the suit property.
6. It is submitted by Mr. S.K. Gandhi, learned counsel representing the judgment debtor that Axis Bank for its Khan Market Branch is paying -6a lesser amount.
7. Learned counsel for the decree holder points out that Axis Bank is not located in premises which are located on the corner or positioned as the suit property. It is also submitted that the area is not the same.
8. It may be noted that the judgment debtor has also refuted the decree holder's claim for mesne profit in terms of the prevalent market rate which matter is pending adjudication. As on date the judgment I debtor continues to pay the damages and mesne profit in terms of the lease deed dated 13th May, 2002, which had expired on 11th February, 2011,
9. Prima facie, the amount being paid by the judgment debtor is nowhere near the market rate of rent which is prevalent. Even Axis Bank is paying much more at a higher rate.
10. A plea is taken by Mr. S.K. Gandhi, learned counsel for the judgment debtor that issuance of the warrant of possession would result in extreme difficulty for the reason that there are several lockers which S have to be shifted wherein valuables of the customers of the bank have been stored. The judgment debtor was aware of the fact that its contract comes to an end when it executed the lease deed dated 13th May, 2002. It was reminded of its responsibility to do so by the plaintiff in November, 2010. Even as on date, the judgment debtor is merely resorting to issuance of advertisement without any further steps at all.
I. ii The judgment debtor certainly cannot be permitted to continue to occupy the leased property for the simple reason that it is holding valuables of third parties. Every bank has a contractual and legal duty to ensure that it is in a position to hold the valuables of third parties and upon its inability to do so, call upon its customers or account holders to remove the valuables from their custody. No efforts at all have been taken by the judgment debtor even to ensure the interest of its customers.
12. It is submitted by Mr. S.K. Gandhi, Advocate that the judgment debtor needs a period of two years.
13. The above narration would show that the judgment debtor-bank has taken undue advantage of its occupation and possession of the suit property which is manifested from the proceedings of the suit of 1998 and is trying to take undue advantage of the responsibility and duties which it owes to its customers. This is completely intolerable.
14. A new case received by this court being CS (OS) No.1947/2011 is also listed today wherein in similar facts, it has been noted as follows: "15. The lease is stated to have expired by efflux of time. The plaintiff has also served a statutory notice under section 106 of the Transfer of Property Act dated 291h June, 2011 calling upon the defendant to vacate the suit property and hand over the vacant and peaceful possession to the plaintiff. The defendant has failed to comply with the notice demand.
16. In this background, the present suit for possession/arrears of rent as well as damages and 62\ msene profits has been necessitated.
17. It is this court's experience that most of the banks in this city who are occupying the leased premises are manifesting similar conduct generating unwarranted litigation as a result.
18. Banks strictly enforce contractual obligations in terms of disbursement of financial facilities. There can be no possible reason as to why they should not be called upon to abide by the same discipline where valuable immoveable property which is in their occupation is concerned.
19. In answer •to the court summons, a stand is invariably being taken in court that the banks are required the sanction of Reserve Bank of India before setting up its branch. Such permission from the Reserve Bank of India certainly does not permit the bank to continue to occupy the premises beyond the contractual period for which they have taken premises on lease.
20. The tenancy is invariably by a written and registered document in accordance with law. The lessee bank is aware in advance of the tenure of its contract with the landlord. The litigation could very well be avoided in case action was taken by the tenant bank to identify and negotiate alternate premises well before the expiry of the contract. The same can also be avoided by taking appropriate steps in terms of the initial tenure of the lease, putting forth the request for renewal on such terms as may be acceptable to the owner of the suit premises at a proper time. This would necessitate taking a pragmatic view so far as the rights and interest of the property owner is concerned, keeping in view the rent escalations.
21. The experience of this court has been that such suits are dragged endlessly at the instance of bank. As a result, valuable judicial time is being caused to be expended on matters which raise simple issues of contract. Judicial time is required to be expended not only in the adjudication of the suit claim but also in the execution proceedings necessitated because of non-compliance of the decrees by the banks.
22. In these circumstances, let a copy of this order be forwarded to the Regional Director in the Reserve Bank of India who shall examine this position and examine the possibility of incorporating guidelines or conditions while granting permission to ensure that banks abide by the same contractual discipline which they expect of the public who is approaching them for grant of facilities or otherwise maintain the accounts. Merely, because the bank is discharging public functions or the fact that the facilities of a bank are being utilized by members of the public cannot be used to defeat. valuable contractual rights in immoveable property.
23. It is also not reasonable that a bank can claim permission to run its business in premises which it has no right to occupy. Such permission cannot be granted by the RBI. This is the position when a lease expires by efflux of time or on prior termination. Therefore, it requires examination as to whether banks seeking permission to operate in tenanted premises, ought to be permitted by the RBI to do so only for the period of the lease. Only then banks shall start honouring contractual commitments.
24. A report in this behalf shall be placed by the Reserve Bank of India before this court before the next date of hearing."
15. It is in the fitness of the matter that the present case may also be placed before the Reserve Bank of India.
16. In view of the above, it is directed as follows:-
(i) Warrant of possession of the premises described in para (i) of prayer clause in the petition shall issue, returnable on 3rd November,
2011.
(ii) It is directed that the execution of the warrant of possession shall
AUGUST 10, 2011 aa pTA MITrAL,J C - 10be deferred for a period of two months from today to enable the judgment debtor to make alternative arrangement and to inform its customers/clients of the same.
(iii) Let a copy of this order be sent by the Registry to the Regional
Director in the Reserve Bank of India who may consider the facts noticed above while effecting the consideration in terms of the order passed today in CS (OS) No.2536/1998..0 Dasti. - YCJ cT I I /)e CSb