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22nd July, 2011 DELHI TOURISM & TRANSPORTATION DEVELOPMENT CORPORATION LTD. ...... Appellant
Through: Mr. R.K.Dhawan with Mr. Pulkit Sachdeva &
Mr. Rahul Gaur, Advs.
Through: None.
JUDGMENT
1. Whether the Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest? VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned judgment dated 10.3.2011 which has decreed the suit of the respondent no.1 for possession and mesne profits against the appellant.
2. Before proceeding further, I may state that in Delhi, if the tenant pays rent in excess of Rs.3,500/- per month then the premises are outside the protection of the Delhi Rent Control Act, 1958. This position was extended to apply to the fact situation wherein the tenant had a right to sublet the premises and the sub-tenant was paying rent in excess of Rs.3,500/- per month to the tenant. Meaning thereby even if the tenant is paying rent less than Rs.3,500/- per month to the landlord, but, if the sub- 2011:DHC:3666 tenant is paying to the tenant rent of more than Rs.3,500/- per month, premises have no protection of the Delhi Rent Control Act, 1958. The issue is now settled by a Division Bench judgment of this Court reported as P.S. Jain Company Ltd. Vs. Atma Ram Properties (P) Ltd. 1997 (65) DLT 308. The Division Bench judgment upheld the judgment of a learned single Judge R.C. Lahoti, J (as he when was) in the case of Atma Ram Properties Pvt. Ltd vs. P.S. Jain Company Ltd 1995 (57) DLT 131 holding that premises are outside the protection of the Rent Act if the sub-tenant pays a rent above Rs.3,500/- to the tenant.
3. The facts of the case are that the appellant claims to have taken the premises on license from one M/s. Milani & Co. vide a license deed dated 25.3.1983 exhibited as Ex.DW-1/1. A reference to this license deed shows that the only right of M/s. Milani & Co. mentioned in this license agreement for giving entitlement to the appellant to come into the premises was that M/s. Milani & Co. was stated to be “in exclusive legal occupation” of the suit premises. Subsequently on 7.6.91, M/s. Milani & Co. surrendered the rights in the suit premises in favour of the defendants no. 1 and 2 in the suit and who are arrayed as respondents no. 2 and 3 in the present appeal. The appellant accepted the substitution of Milani & Co. by the defendants no. 1 and 2 and started paying charges to the defendants no. 1 and 2. This becomes clear from the following paragraphs of the written statement of the appellant filed in the Trial Court and also the affidavit by way of evidence filed by it. Para 3 of the preliminary objections of the written statement of the appellant in the Trial Court reads as under:-
written statement and which reads as under:-
affidavits by way of evidence and para 4 of the said affidavit by way of evidence reads as under:-
4. The Trial Court has after considering entire evidence in the case decreed the suit on the ground that the defendants no. 1 and 2 in the suit, respondents no. 2 and 3 herein, were the tenants in the property and the defendant no. 3 in the suit (appellant herein) was the sub-tenant paying charges of 11.95% of the gross profit to its landlords viz. the defendants no.1 and 2/respondents no. 2 and 3. The Trial Court has arrived at a finding of fact that at no point of time the monthly charges which were paid were less than Rs.40,000/- per month. The relevant finding of the Trial Court is contained in Paras 13 to 16 of the impugned judgment and which read as under:-
5. No fault can be found with the aforesaid findings of the Trial Court as it has been established on the record that defendants no. 1 and 2 were the tenants in the premises and to whom the defendant no.3/appellant was paying charges at 11.95% of the gross profit, and which charges were more than Rs.3,500/- per month being at least Rs.40,000/- per month. In fact, the Trial Court in para 25 of the impugned judgment has also noted that the premises are assessed to property tax and the property tax has been assessed taking the ratable value at Rs.40,000/- per month. This aspect was proved in the evidence of PW[1] who placed on record the assessment order no.607/99 dated 21.12.1999 confirming the possession of the defendant no.3 and the ratable value at Rs.40,000/- per month.
6. Learned counsel for the appellant argued the following issues before me:i) There was no privity of contract between the appellant and the defendants no. 1 & 2 and therefore the suit was liable to be dismissed. ii) There was an arbitration clause in the agreement between M/s. Milani and Company and the appellant, and consequently there was also an arbitration clause in the agreement between the appellant and the defendants no. 1 & 2 and which disputes were pending before the Civil Court and therefore the present suit cannot be filed to cause frustration to the rights of the appellant. iii) The Trial Court has erred in granting mesne profits at Rs.44,000/- per month for the ground floor of the suit premises.
7. I am afraid, I am not persuaded by any of the arguments as raised by the learned counsel for the appellant. Firstly, the contention that there is no privity of contract of the appellant/defendant no.3 with the defendants no. 1 and 2 is belied by the averments made by the appellant/defendant no.3 itself in the written statement and in fact also confirmed by its affidavit by way of evidence, and the relevant paras as I have reproduced above, which show that the appellant has paid the necessary charges with respect to the premises to the defendants no. 1 and 2. The Trial Court has also accepted such position by giving the appropriate finding in paragraph 13 of the impugned judgment, and in fact has noted that the appellant admits these facts. Accordingly, there is no strength in the argument that there is no privity of contract between the appellant/defendant no.3 and the defendants no. 1 and 2/respondents no. 2 and 3. So far as the issue that there are disputes pending between the appellant and the respondents no. 2 and 3, such disputes do not take away the right of the landlord to file a suit for possession against its tenant, and who were the defendants no. 1 and 2, and sub-tenant, appellant/defendant no.3 on the ground that the premises were outside the protection of the Delhi Rent Control Act, 1958. In such a suit all that has to be pleaded and proved is that the factum of tenancy in favour of defendants no. 1 and 2 and the fact that defendant no.3/appellant was paying rent in excess of Rs.3,500/- per month to the defendants no. 1 and
2. All this has already been established and as discussed above. The second argument therefore raised by counsel for the appellant also has no merits. So far as the issue of the rate of mesne profits is concerned, the Trial Court has granted mesne profits at Rs.44,000/- per month for 2003 onwards as the legal notice terminating the tenancy was dated 22.5.2003. Surely, the grant of mesne profits at Rs.44,000/- is at a very conservative figure, because if the appellant is paying Rs.40,000/- per month to the defendants no. 1 and 2/respondents no. 2 and 3 from around 1991 then taking the figure of Rs.44,000/- twelve years later in 2003 cannot be at any stretch of imagination be said to be illegal or perverse. Courts have regularly taken judicial notice of increase in rents. Legislature has also accepted this aspect and in Delhi Section 6A of the Delhi Rent Control Act, 1958 allows increase of rent by 10% every three years.
8. In view of the above, I do not find any merit in the appeal. The aforesaid admitted facts do not require any examination of the Trial Court record. The necessary pleadings, affidavit by way of evidence and the license deed between M/s Milani and Company and the appellant are already filed in this Court along with the other documents and the deposition. There is, therefore, no merit in the appeal. Dismissed. JULY 22, 2011 VALMIKI J. MEHTA, J. ak