T.S. Sawhney & N.P. Singh v. State Bank of India

8. The plaintiff thus, filed the Suit for Possession and for Damages/ Mesne Profits for unauthorized use and occupation of the tenanted premises after the termination of the tenancy amounting to Rs. 15,00,000/-, being the arrears of damages at the rate of Rs. 1,50,000 /-per month. The plaintiff also sought pendente lite and future interest at the rate of 18%p.a. form the Defendant. Further, mesne profits were also sought from the date of eviction till the passing of Final Decree in respect of the Mesne Profits.

9. During the pendency of the Suit, pursuant to Order dated 14.05.2002, the Possession was handed over by the Defendants on 01.06.2002. Consequently, the Suit for Possession was amended, and the relief was limited to the claim for mesne profits/damages on account of unauthorized use and occupation of the Property.

10. The plaintiff claimed damages as under:

1st January 1997 to 31st October 1997 being the prevailing market rent of the adjoining property. Rs. 15,00,000.00 a. Interest @18% per annum on Rs. 15,00,000.00 for the period 01.01.1997 to 31.10.1997 Rs. 23,85,000.00 i. Rental Charges to be paid by the Rs. 4,80,305.00 Digitally bank @Rs. 35/- per sq. ft., being the prevailing market rent, for 13,723 sq. ft. Less paid per month Rs. 38,400.00 Balance Rs. 4,41,905.00

01.11.2001 to 31.05.2002 @Rs 4,80,305.00 p.m. for 7 months Rs. 3,05,44,473.00 33,62,135.00 w.e.f. 01.12.2001 to 31.10.2005 for 47 months Rs. 23,70,305.00

11. The plaintiff has thus, claimed Rs. 6,30,10,701.00 towards mesne profits/ arrears of rent and other charges as stated above.

12. The Defendants in their Written Statement and the Counterclaim No. CC(COMM) 125/2017, while admitting the tenancy and the rate of rent, submitted that the agreed rent was paid till the date of delivery of possession. The Defendant has asserted that the plaintiff has failed to receive the vacant physical possession of the Suit Premises for which the Defendant had from time to time, sent various Notices including the letters dated 08.01.2002, Ex-PW1/D[4], and 30.07.2002, Ex-PW1/D[5]. The Defendant had informed the plaintiff that they are not liable to pay any charges towards rent, damages, hire charges, electricity or water charges, security charges or on any other account whatsoever after 30.11.2001.

13. Further, in terms of the Lease Agreement, the sum of Rs. 2,30,400/has been paid by the Defendant to the Plaintiff towards a six-month deposit which had to be adjusted towards the rent for the last six months of the lease period. After adjusting the rent for the month of November 2001 @ Rs. 38,400/-, a sum of Rs. 1,92,000 remained payable on account of the aforesaid security deposit.

14. A sum of Rs.85,770/- on account of expenses incurred by the Defendant towards whitewashing, repairs, etc., which were the responsibility of the plaintiff are also liable to be reimbursed. The Defendant has also paid electricity bill, water bill from May,2001 onwards which the plaintiff is liable to reimburse to the Defendants. The Defendant had also employed two security guards for the safety of the premises and had paid Digitally Rs.7,500/- per month from December 2001 till May 2002 amounting to Rs.45,000/-, which are also liable to be reimbursed.

15. The Defendants has thus, claimed the following amounts from the plaintiff in its Counter Claim: a. Refund of Security Deposit Rs. 1,92,000.00/b. Expenses incurred by the Defendant on behalf of the plaintiffs towards whitewashing, repairs, etc. Rs. 85,770.00/c. Electricity bills for December 2001, February 2002, and May 2002. Rs. 27,961.00/d. Water Bills from 05.11.2001 till 29.01.2002 Rs. 9,444.00/e. Payment made to two security guards for safety of the premises from 12.2001 to 05.2002 @ Rs. 7,500.00/- p.m. Rs. 45,000.00/- Total Rs. 3,60,175.00/-

16. The Defendant has thus, sought the Decree of Specific Performance of Execution of the Lease Deed for a further period of 5 years and recovery of Rs.3,60,175/- towards principal and Rs. 1,62,078/- towards interest total amounting to Rs.5,22,253/-, along with pendente lite and future interest @ 15% p.a. Suit No. 390/2003 (renumbered as CS(COMM) 513/2016) in Regard to Service Agreement: Digitally

17. In this Suit, the plaintiff is a registered partnership Firm by the name of Sawhney Brothers. Mr. T.S. Sawhney is one of the partners of the said firm and is competent to sign, verify and file the present Suit.

18. It is stated in the plaint that the Suit Property was let out by Sh. T.S. Sawhney and Sh. N.P. Singh vide Lease Deed dated 01.08.1992, Ex. PW1/1, to the Defendant.

19. The plaintiff Firm entered into the Service Agreement dated 23.01.1987 when the Suit Premises were taken from M/S Sawhney Export House vide Lease deed dated 23.01.1987. The Defendants had continued in possession of the Suit Premises as tenants under the renewed Lease Deed dated 01.08.1992.

20. The plaintiffs herein entered into an Agreement dated 23.01.1987, for providing services in the nature of furnishing the entire premises by way of providing furniture, fixture, carpeting, window AC and bedding etc. as per the requirement of the Defendants. This Service Agreement was for an initial period of 5 years and a fresh Lease Agreement dated 01.08.1992, Ex. PW1/16, was entered into between the parties for the purpose of residential Staff Training Centre in the Suit Premises. The Service Agreement dated 01.08.1992 expired on 31.12.1996 and was terminated accordingly since the Defendant did not exercise the option of further renewal of the Agreement by the parties as per Clause 4 of the Agreement.

21. In terms of the Lease Agreement dated 01.08.1992, the Defendant was required to handover the possession of the movable Property and all the services provided in the nature of furniture, fixture, carpeting, window AC and bedding etc. to the plaintiff. Digitally

22. The Defendant vide letter dated 13.03.1997 sought extension of the Service Agreement for another period of 5 years but the plaintiffs declined the same as the landlord of the property had not granted further Lease for the tenanted premises to the Defendant. It was also informed that in case the Lease Deed of the Defendants in respect of the Suit Premises was extended, the plaintiffs shall consider the renewal of the Service Agreement. The Defendant however did not respond thereafter, and the plaintiff was left with no option but to withdraw its services with effect from 15.08.1998, Ex- PW1/9. However, the Defendant forcibly continued into the Suit Premises and to avail the services as provided by the plaintiff.

23. Subsequently, the Defendant approached the plaintiff for regularization of the Services. The plaintiff demanded the service charges at the rate of Rs. 10 per square foot of the covered area of the building as was the rate that prevailed in the market in January,1998. After various meetings, the rate was reduced to Rs. 8 per square foot, in the Meeting held on 06.11.2000.

24. The plaintiff intimated the Defendant to make necessary Agreements for extension of the necessary Services at the rate agreed inter se the parties and requested to take a decision at the earliest, of the offer failing which it shall remove all the movable properties from the Suit Premises. It was also informed that if the Defendant failed to take any steps or did not permit the plaintiff to remove the movable property, it shall be liable to pay service charges at the rate of Rs. 8 per sq. ft. along with interest at the rate of 21% p.a. till the services were used by the Defendant. Digitally

25. The Defendant did not come forward to enter into a fresh Agreement on the service rate of Rs. 10 per sq. ft. of the covered area and paid the service charge up to 31.10.2001 at the old rate.

26. The plaintiffs have claimed that the Defendant in terms of the Agreement dated 01.08.1992 was required to handover the movable properties in its original condition, which were found damaged at the time of taking possession on 31.05.2002.

27. The plaintiff has claimed that it is entitled to damages as the movables were not recovered in a fit condition. The plaintiff has estimated the damages as Rs. 48,39,160/- and has thus, demanded the said amount vide its Legal Notice dated 20.09.2002.

28. The damages thus, claimed on account of the furniture, fixture, carpeting, window AC and bedding etc. by the plaintiff are as under: i. Service Charges to be paid by the SBI @ Rs. 8/- per sq. ft. for 13,723 sq. ft. per month Rs. 1,09,784.00 p.m. ii. Less Paid @ Rs. 39,600/- p.m. Rs. 39,600.00 p.m. iii. Net Amount payable per month Rs. 70,184.00 p.m.

70,184/- p.m. Rs. 40,70,672.00 i. Interest @ 18% p.a. with quarterly rest on Rs. 40,70,672.00/- w.e.f. 31.01.1997 to 31.10.2002 Rs. 24,72,933.00

Digitally period w.e.f. 01.11.2001 to 31.05.2002 @ Rs. 1,09,784/- p.m. i. Interest @ 18% with quarterly rest on Rs. 7,68,488.00 w.e.f. 31.11.2001 to 31.10.2002 Rs. 92,218.00/- Total Rs. 74,74,495.00/-

29. The plaintiff has submitted that despite the service of the Legal Notice, the Defendant has failed to pay the damages; hence the Suit has been filed for recovery of Rs. 77,32,895, which includes interest at the rate of 18% p.a. on account of breach of the Service Agreement.

30. No Counter Claim has been filed by the defendant. Suit No. 391/2003(renumbered as CS(COMM) 1360/2016) For Service Agreement for ACs, etc:

31. The plaintiff, Sawhney Builders Pvt. Ltd., has filed a Suit for recovery of Rs.1,03,79,520/- on account of the breach of Service Agreement dated 01.08.1992 for providing the service of Central Air Conditioning and lift to the Suit Premises.

32. The original Agreement dated 01.01.1986 for providing AC and Lift services was entered between the parties which was renewed vide Agreement dated 01.08.1992 for an additional period of 5 years Digitally corresponding with the lease Agreement of the same date, in respect of the Suit premises.

33. On expiry of the lease Agreement dated 01.08.1992 on 31.12.1996, the Defendant was required to handover the movable property to the plaintiff, if the Service Agreement was not renewed. The defendant failed to renew the Service Agreement within the stipulated time.

34. Thereafter, a Legal Notice dated 17.02.1997 was given by the plaintiff intimating the Defendant that the facilities would be withdrawn by 28.02.1997. It was also stipulated that the Defendant shall be liable to pay damages at the rate of Rs.25,000/- per day if the plaintiff was not permitted to remove the installations in the Suit Premises.

35. The Defendant informed the Plaintiff on 13.03.1997 its desire to continue all the facilities for another period of 5 years, but the same was declined by the plaintiff citing the reason that the landlord of the Property did not agree to further extend the lease of the Defendant in the tenanted premises. Since the Defendant was not forthcoming, so the plaintiff gave a Legal Notice dated 04.08.1998 to the Defendant informing about its intention to withdraw its Services w.e.f. 15.08.1998. The operator of AC and Lift, M/s Panesar Air Conditioning, who was handling the operations in the Suit Premises locked the room of A.C. plant and handed over the keys to the plaintiff on 15.08.1998.

36. The plaintiff deputed its employees on 17.08.1998 who approached the AGM and the Defendant for removal of AC plant machinery, but instead of permitting the employees of the plaintiff to remove the AC Plant/Lift, they were intimidated and threatened. The incident was reported and conveyed to the Chairman as well as the AGM of the Defendant vide letter Digitally dated 19.08.1998 requesting them to handover peaceful possession of the movable property that was handed over in trust to the defendant Bank as per the Agreement dated 01.08.1992.

37. The Defendant was further intimated that if the AC plants and lifts were used forcibly and without the prior approval and consent of the plaintiff, the same would be illegal and requested it not to illegally misuse the property of the plaintiff.

38. However, the Defendant illegally and without prior approval, misused the AC Plant/ Lift etc. and started operating the same with the help of other operators. To undertake the operations of AC/Lift independently the locks of three rooms from which the AC/Lift were operated, were broken open and due to this illegal and unwarranted action of the Defendants, Criminal Complaint under Section 403 read with 420/425/440/442 IPC was filed on 22.01.1999 in the Court of Metropolitan Magistrate, Patiala House Courts. The Chairman as well as the AGM of the Defendant were summoned for committing the offences.

39. The Defendant thereafter, approached the plaintiff for regularization of the services. The plaintiff demanded the Service Charge at the rate of Rs.15/- per sq. ft. of the covered area of the building. After holding numerous meetings, the rate was subsequently fixed at the rate of Rs.10/per sq. ft. Thereafter, the plaintiff intimated the defendant to make necessary arrangements and Agreements for extension of the Services and to take the possession at the earliest within a week failing which the plaintiff shall remove its movables. It was also intimated that in case the defendant did not approach the plaintiff or did not permit it to remove the same, then the defendant would be liable to pay the Service Charges at the rate of Rs.10 per Digitally sq. ft. along with interest @ 24% p.a. till the use of the said services. The defendant however, did not come forth to finalise the new Service Agreement in relation to the covered area at new rates, but instead continued to pay the service charges up to 31.07.1998 at the rates as per the previous Agreement.

40. After August 1998 till October 2001, the Defendant paid the sum of Rs.34,500 per month for the use of the aforesaid Services which was less by Rs. 12,500/- per month of the total agreed amount at old rates.

41. Furthermore, after October 2001, the Defendant stopped making the payment for the use of Services and kept on using the Services without the consent and approval of the plaintiff. The plaintiff has thus, asserted that not only is it entailed to get the possession of the AC Plant and the Lift in working condition, but is also entitled to Service charges as well as damages as under: i. Service charges to be paid by the SBI @ Rs. 10/- per sq. ft. for 13,723 sq. ft. area of the premises per month to FIRM Rs. 1,37,230.00/ii. Less paid @ Rs. 42,000.00/- p.m. Rs. 42,000.00/a. Net amount payable per month Rs. 95,230.00/b. Less amount paid @34,500.00/- p.m. w.e.f. 01.08.1998 to 31.10.2001 Rs. 34,500.00/- Total Rs. 1,02,230.00/c. Not paid any amount w.e.f. 01.11.2001 to 31.05.2002 Digitally DIFFERENCE OF AMOUNT PAYABLE BY SBI

01.01.1997 to 31.07.1998 @ Rs.95,230.00 p.m. -> Interest @ 18% p.a. with quarterly rest on Rs. 18,09,370.00/- w.e.f. 31.01.1997 to 31.10.2002 Rs. 18,09,370.00/- Rs. 16,28,428.00/-

TOTAL Rs. 1,03,79.520.00/-

42. The plaintiff has thus sought recovery of Rs. 1,03,79,520/- which includes interest at the rate of 18% p.a. along with damages.

43. The Defendant in its Written Statement to the two suits filed in regard to Service Charges, essentially took the same pleas. It explained that initially the Defendants were tenants under M/S Sawhney Export House Pvt. Ltd. in respect of the Suit Property vide Lease Deed dated 23.01.1987 for a period ending on 31.12.1991. Thereafter, M/S Sawhney Export House Pvt. Ltd. relinquished its share in the Suit Property in favour of Sh. T.S. Sawhney and Sh. N.P Singh who became the landlords of the Suit Premises and a fresh Lease Agreement w.e.f. 01.01.1992 vide Lease Deed dated 01.08.1992 for a period of 10 years was entered into between the parties. The new lease period was initially agreed to be a period of 5 years which was extendable by another 5 years on the part of the Defendant Bank by giving a Notice on or before 30.06.1996. The Defendant exercised its option for renewal of the lease of the tenanted premises for a further period of 5 years vide its Letter dated 27.06.1996. The Defendant thus, continued to be a tenant in the Suit Property and the plaintiffs did not have the right to file the present Suit for possession or for enhanced charges on account of termination of the two Service Agreement.

44. The Defendant has further taken a plea that they are protected under Section 53-A of the Transfer of Property Act, 1882 in as much as they have continued in possession of the tenanted premises as tenants after the initial Digitally period of 5 years, after having exercised their option to renew the Lease Agreement for another 5 years. The Defendants are continuing in possession in part performance of the Agreement for which Notice has been duly given vide letter dated 27.06.1996. The possession of the Defendants is thus, protected under Section 53-A and that they are willing to perform their part of the Agreement.

45. The Defendants have further taken a plea that the Suit is not maintainable as the rent for the month of January 1997 @ Rs.30,400/- (rate of rent was Rs.38,400/-, out of which TDS deducted) by means of cheque dated 03.04.1997 was paid by the Defendant and the same was duly encashed by the plaintiff and the alleged termination of tenancy stands waived in terms of Section 113 of TPA, 1882.

46. It is claimed that a tenancy between the parties continues as the rent has been duly accepted for the month of January 1997. The maintenance charged for Central AC and Lift services amounting to Rs.42,000/- has also been regularly remitted to M/S Sawhney Builders.

47. Since the rent and the charges are accepted by the plaintiff for the month of January, 1997 so the defendant became a tenant by holding over, it is protected under Section 116 of the Transfer and Property Act, 1882. The tenancy stands renewed for a further period of 5 years from 01.01.1997 till December, 2001 and the plaintiff has no right to disturb their possession.

48. On merits, the Defendants have reiterated that they have exercised their option for renewal of the Lease Deed for another 5 years by sending the Letter dated 27.06.1996 which was duly received by the plaintiff on 29.06.1996, while the plaintiff falsely claims that it was received on 02.07.1997. It is claimed that the tenancy has not ended by efflux of time Digitally and the Defendant being the lawful tenant, is entitled to continue in possession of the property and also enjoy the services of the fittings and fixtures as well as the AC and the lift. Counter-Claim for Rs.5,22,253/- in regard to Service Agreement for ACs, etc:

49. The Defendants have also filed a counter claim for Specific Performance and recovery of Rs.5,22,253/- in regard to Service Agreement for ACs, etc.. It is submitted that despite the service of Notice dated 27.06.1996 by the Defendant exercising its option to renew the Lease Agreement by another 5 years, the plaintiff failed to execute a fresh Lease Deed despite repeated requests and reminders. The rent for the month of January 1997 at the rate of Rs.38,400/- was duly paid to the plaintiff which was accepted and thus, the tenancy stood renewed on the same terms and conditions as the earlier Lease deed. The Defendants vide Legal Notice dated 05.12.1996 called upon the plaintiff to execute a fresh Lease Deed for a further period of 5 years, despite which the plaintiffs failed to do so. The Defendants were then left with no option but to file the present Counter Claim with directions to be issued to the plaintiff to execute a fresh Lease Deed for a period of 5 years on the same terms and conditions.

50. It is claimed that the Defendant has always been ready and willing to handover the vacant possession of the Suit Premises along with the fittings and fixtures and Central AC plant on 30.11.2001 itself, and symbolic possession was handed over on the said date itself. The plaintiffs with the malafide intention and ulterior motive have been avoiding taking possession of the Suit Premises or to take possession of the fittings and fixtures and AC and Lift. The Legal Notice dated 27.11.2001 and 06.12.2001 were sent by Digitally the plaintiff to the Defendant to remove their belongings from the premises and further threatened them with Contempt of Court proceedings.

51. The actual vacant possession has been handed over to the Plaintiffs in the presence of the Local Commissioner appointed by the Court on 01.06.2002 pursuant to the Orders of the Court dated 14.05.2002. The plaintiff had challenged the Order by filing an appeal bearing No. FAO(OS) 194/2002 which has been dismissed vide Order dated 30.05.2002 with a cost of Rs.25,000/-.

52. The plaintiff in its replication to the Written Statement filed in all the three Suits and also in response to the Counter-Claims filed by the Defendant, has reaffirmed the assertions as taken in the plaint and denied the averments made in the Written Statement. ISSUES:

53. The issues were framed in Suit No. 2439/1997 (amended suit NO. 22/2006, renumbered as CS(COMM)510/2016 & CC(COMM) 125/2017) vide order dated 09.03.2010, and the same are as given under: a. Whether the Suit is barred by limitation? OPD b. Whether the defendant/bank was protected under the provisions of Section 53(a) of the Transfer of Property Act, if so to what effect? OPD c. Whether the tenancy of the defendant/bank had come to an end by efflux of time or alternatively was legally terminated by the plaintiff, if so to what effect? OPD d. Whether the defendants were holding over tenanted premises and had been protected under section 116 of the Transfer of Property Act? OPD Digitally e. Whether a fresh tenancy was created between the parties with effect from 01.01.1997 for a further period of five years in favour of the defendant? OPD f. Whether notice of termination dated 10.10.1996 under section 106 of the Transfer of Property Act had been waived in terms of section 113 of the Transfer of Property Act? OPD g. Whether the plaintiff is entitled to damages, if so, at what rate and for what period? OPP h. Whether the plaintiff is entitled to interest as claimed in the suit or alternatively at any other rate, if so, at what rate and for what period? OPP i. Whether the defendant/bank is entitled to counterclaim of Rs. 5,22,253/- along with interest, if so to what effect? OPD j. Relief.

54. The issues in Suit No. 390/2003 (renumbered as CS(COMM) 513/2016) and Suit No. 391/2003 (renumbered as CS(COMM) 1360/2016) were framed vide order dated 09.03.2010 The issues were identical and are as under: a. Whether the Suit is barred by limitation? OPD b. Whether the defendant/bank was protected under the provisions of Section 53(a) of the Transfer of Property Act, if so to what effect? OPD c. Whether the defendant/bank was ready and willing to perform their part of contract under the agreement of 01.08.1992, if so to what effect? OPD Digitally d. Whether the plaintiff is entitled to the damages as claimed? OPP e. Whether the plaintiff is entitled to get interest on damages, and if so, at what rate and for what period? OPD f. Whether the defendant is entitled to counterclaim/set off, if so g. If the issue No.

(vi) is decided in affirmative, whether the plaintiff is entitled to interest, if so, at what rate and for what period? OPD h. Relief.

55. The plaintiffs in support of their case have examined PW-1, Sh. T.S. Sawhney who has tendered his affidavit of evidence Ex. PW1/A which bears his signatures at point A and B. He has deposed on similar lines as his case set up in the plaints, and has placed reliance on documents Ex. PW1/1 to Ex. PW1/22.

56. The defendants have examined DW-1, Sh. Krishna Chandra Jha, Manager (Administration), State Bank Institute of Learning and Development, who has tendered his consolidated affidavit of evidence Ex. DW1/A which bears his signatures at point A and B. He has essentially his stand taken in the written statements, and has placed reliance on documents Ex. DW1/1 to Ex. DW1/7.

57. Submissions heard from the Ld. Counsel for both the parties and perused the Written Submissions. The learned counsel for the plaintiffs has also submitted a copy of a Lease Deed dated 05.05.2000, concerning a property situated at C-794, New Friends Colony, New Delhi spanning 5151.22 sq. ft. between parties to increase the monthly rent charges of the Digitally property along with furniture and fixtures from Rs. 1,50,000/- p.m. to Rs. 1,95,000/- p.m. with effect from 06.08.1998, along with their written Submissions but has not been proved in evidence.

58. The issues in the three instant suits are decided in three parts: Part-A deals with the issues arising from Suit No. 2439/1997 amended Suit No. CS(COMM)510/2016 & CC(COMM) 125/2017); and Part-B deals with the issues arising from Suit No. 390/2003 and Part-C deals with the issues arising from Suit No. 391/2003, as amended CS(COMM) 513/2016 and CS(COMM) 1360/2016 respectively. PART-A Suit No. 2439/1997 amended Suit No. CS(COMM)510/2016 & CC(COMM) 125/2017) in regard to Arrears of Rent/ Mesne Profits: ISSUE NO. (a) - Whether the Suit is barred by limitation? OPD The plaintiff has sought the possession/mesne profits w.e.f. 01.01.1997 by way of this Suit which got filed in the year 1997. The tenancy had also expired. The claim for mesne profits/damages, is well within the period of limitation. The Issue is decided in favour of the plaintiff.

ISSUE NO. (c) - Whether the tenancy of the defendant/bank had come to an end by efflux of time or alternatively was legally terminated by the plaintiff, if so to what effect?

OPD ISSUE NO. (d) - Whether the defendants were holding over tenanted premises and had been protected under Section 116 of the Transfer of Property Act? OPD Digitally ISSUE NO. (e) - Whether a fresh tenancy was created between the parties with effect from 01.1.97 for a further period of five years in favour of the defendant?

OPD ISSUE NO. (f) - Whether notice of termination dated 10.10.96 under Section 106 of the Transfer of Property Act had been waived in terms of Section 113 of the Transfer of Property Act? OPD The aforesaid issues are decided collectively.

59. It is deposed by PW-1 Sh. T.S. Sawhney and is also not in dispute that, originally the Suit premises were let out to the defendant by M/s Sawhney Exports House Pvt. Ltd. vide Lease Deed dated 23.01.1987, for a period of five years, which ended on 31.12.1991. PW-1 has explained that M/s Sawhney Exports House Pvt. Ltd. relinquished its share in the aforesaid Suit property in favour of the plaintiffs, Sh. T.S. Sawhney and Sh. N.P. Singh, the plaintiffs, who thereafter entered into the registered Lease Deed dated 01.08.1992, Ex.PW-1/1, for an initial period of five years w.e.f. 01.01.1992.

60. An option was given to the defendant Bank, to seek further extension of the Lease Deed by another five years thereafter, on such terms and conditions “as may be mutually agreed to between the lesser and the Bank.” In case the lessee decides to exercise the above option, he shall give Notice of such intention to the lessers on or before 30.06.1996, subject to fresh Lease Deed on a stamp paper.

61. From the Lease Deed dated 01.08.1992, Ex. PW-1/1, it is evident and is also not in dispute that the lease was executed for a period of five years between the parties, to be computed from 01.01.1992 and the tenancy was to expire on 31.12.1996. An option was given to the defendant Bank to seek Digitally extension by another five years, subject to giving a prior six months’ Notice i.e. on or before 30.06.1996, expressing its intention for renewal of the Lease Deed. It had an additional condition stipulated that such extension shall be on the terms and conditions as mutually agreed between the lesser and the Bank and also on execution of a fresh Lease Deed on a stamp paper.

62. It is further not in dispute that the defendant exercised its option to seek extension of lease by another five years by sending a Letter dated 27.06.1996, Ex. D[1] which was received by the representative of the plaintiff on 29.06.1996.

63. The question which thus, arises is: whether by simplicitor expression of intention to renew the lease vide Letter dated 27.06.1996, the Lease got automatically extended for five years from 01.01.1997 till 31.12.2002. As has already been mentioned above, this expression of intention by the defendant, was to be followed by mutual agreement of terms and conditions for further renewal, which was to be incorporated in a written Lease Deed duly executed on the stamp paper.

64. The defendant after writing its Letter dated 27.06.1996, Ex. D[1], has neither asserted nor proved that any further steps were taken on behalf of the Bank to finalize the mutually acceptable terms and conditions. Simplicitor writing a Letter with nothing more, cannot be inferred as a proposal to renew the lease on the same terms and conditions, as the previous Lease Deed.

65. This is evident from the fact that the plaintiff had written a prior Letter dated 14.05.1996, Ex.PW-1/2 to the defendant stating that the Officials from the Vigilance Section of DDA, have been conducting the survey in the area and have taken an objection to the misuse of the Suit Digitally property especially on account of the basement being used as a Computer room. To avoid any complications in near future, the plaintiff indicated that it would be the best remedy to utilise the building for their own residence and have even assured the Inspecting Officers that the Bank shall be vacating the premises shortly.

66. The plaintiff vide its Letter dated 14.05.1996 i.e. even prior to the option being exercised by the Bank, had conveyed that it was not inclined to renew the Lease Deed.

67. Despite the plaintiff indicating its intention to not renew the Lease, the defendant still sent the Letter dated 27.06.1996 expressing its intention to extend the Lease Deed. The plaintiff responded by giving a Legal Notice dated 10.10.1996, Ex.PW-1/3, wherein it was reiterated that though the defendant had an option to seek extension of the Lease Deed for five years, but it cannot be unilaterally exercised by the Bank without reference and without agreement on terms and conditions for such extension. It was reiterated that the premises were required by the plaintiff for the residence of its family members. It also expressed the apprehension of sealing of the property by the DDA, on account of its alleged misuse of running the Training institute in a residential property. The plaintiff was aware of this non-confirming use of the Suit properties, as this aspect finds mention in the Lease Deed dated 01.08.1992, Ex. PW-1/1, wherein it was stated that the defendant shall bear any penalty or expenses that may be imposed by the Municipal Authority or any other Agency, on account of use of the premises for the Training Institute by the defendant.

68. The plaintiff thereafter, wrote a Letter dated 05.12.1996, Ex.PW-1/4 wherein it again highlighted the visit of some officials of the DDA, to the Digitally premises on 29.11.1996, wherein he wanted to meet the landlord. The Official again made a visit on 04.11.1996 and surveyed the entire premises. He also had detailed discussion with the AGM (Training) and threatened to cancel the Lease Seed and levy damages from the first day of Lease Agreement if the misuse was not stopped. The plaintiff on his part, assured the DDA Official that the current Lease Agreement was expiring on 31.12.1996 and the defendant Bank shall be vacating the premises, after which it shall be used only for the residential purpose. The Letter further mentioned about another visit conducted by the Vigilance Team of DDA in March, 1996, whereby they were again asked to stop the misuse of the building. In these circumstances, the plaintiffs sought the building to be vacated and handed over to them to be used for their own residential purpose.

69. DW-1, Sh. Krishna Chandra Jha in his cross-examination, has also admitted that though the defendant Bank had approached the plaintiff for renewal of the Lease Deed, but the plaintiff did not come forward despite several Notices to execute another Lease Agreement for next five years. It is further admitted by DW-1, Sh. Krishna Chandra Jha that the lease could have been extended only with the mutual consent of the landlord and the tenant, after five years. He admitted that the Lease had expired on 31.12.1996.

70. It is therefore, proved from the respective evidence of the parties that the Lease Agreement stood expired w.e.f. 01.01.1997. Acceptance of Rent for January, 1997:

71. The defendant had taken a desperate plea that the rent for the month of January, 1997 @Rs.39,400/- was accepted by the plaintiff, which Digitally amounts to expression of acceptance to the extension of the Lease Agreement by the plaintiff.

72. However, in the case of Shanti Prasad Devi and Ors. Vs. Shankar Mahto and Ors., (2005) 5 SCC 543, the Supreme Court held that mere acceptance of rent does not signify consent to continue the lease after its expiry. Similarly, in Sarup Singh Gupta Vs. S. Jagdish Singh and Ors., (2006) 4 SCC 205, it was concluded that acceptance of rent post-Notice to quit, does not constitute a waiver of the Notice unless additional evidence indicates the landlord's intent to treat the Lease as ongoing. In The State of Kerala and Ors. Vs. Joseph & Company, (2021)19SCC335, the Court reiterated that acceptance of rent alone does not indicate an intention to treat the lease as subsisting, and such intent must be clearly established.

73. Recently, in K.M. Manjunath Vs. Erappa G. dead through L.Rs., MANU/SC/0940/2022, the Court reaffirmed that accepting rent after the Lease term, does not waive lease termination and emphasized that once a Lease is terminated by efflux of time, no further statutory Notice is needed. It has been further held that mere acceptance of rent after the expiry of the lease period, cannot be deemed to be a renewal of the Lease Agreement.

74. In the present case, not only is there a clear admission that the plaintiff had given a Notice of termination of tenancy and but also that the Lease Deed could have been renewed only if both the parties mutually agreed to fresh terms and conditions for renewal w.e.f. 01.01.1997. The defendant has categorically admitted that there was no renewal of the tenancy. Even though the rent for the month of January, 1997 was tendered on 03.01.1997 and was accepted, but there was no consensus ad idem that Digitally the Lease was extended; mere acceptance of rent cannot lead to an inference of renewal of tenancy.

75. It is therefore, proved from the evidence and the admissions of the defendant that the tenancy expired on 31.12.1996 and there was no renewal thereafter. The possession of the defendant after expiry of the tenancy was not protected under S.116 of TPA Act. The Notice to vacate dated 10.10.1996 was duly given by the plaintiff in accordance with S.106 TPA and also the filing of Suit itself is a Notice to quit as has been observed in the case of NOPANY Investments (P) Ltd. Vs. Santosh Singh (HUF), (2008) 2 SCC 728, wherein it was held by the Apex Court that it is well settled that filing of an eviction suit under the general law itself is a Notice to quit, on the tenant.

76. The Issues are accordingly decided in favour of the plaintiff.

ISSUE NO. (b) - Whether the defendant/bank was protected under the provisions of Section 53(a) of the Transfer of Property Act, if so to what effect? OPD

77. In the light of the aforesaid discussion, it is evident that the defendant had no right to continue in the premises, after the termination of the tenancy and it was liable to be evicted. The possession of the defendant was not protected under Section 53A of the TPA Act.

78. Thus, the issue no. (b) is decided against the defendant.

OPP ISSUE NO: (h): Whether the plaintiff is entitled to interest as claimed in the suit or alternatively at any other rate, if so, at what rate and for what period? OPP Digitally

79. The next question which arises is what are the user and occupation charges, payable by the defendant. Admittedly, the possession has been handed over on 01.06.2002, after the filing of the Suit in the Court and pursuant to the appointment of a Local Commissioner for facilitating the handing over of the possession. The question thus, arises as to what is the mesne profits are payable w.e.f. 01.01.1997 till 01.06.2002.

80. It is pertinent to refer to the defence of the defendant against payment of user and occupation charges that it was willing to hand over the possession of the Suit premises to the plaintiff on 31.10.2001, but the plaintiff refused to accept the possession of the Suit premises.

81. The plaintiff has admitted that it did not take the possession when offered by the defendant as according to them, there was damage to the Suit premises and the Bank was asked to put the premises in the same shape in which it was rented out to the defendant Bank. The plaintiff however, has led no evidence whatsoever to prove the nature and the extent of alleged damage caused by the defendant, to the Suit premises. Bald assertions that there was damage to the premises cannot be considered as a valid reason for not taking the possession, when offered by the defendant. It has to be therefore, necessarily held that even though the defendant intended to handover the possession but that itself is not sufficient to absolve it of its liability to pay the enhanced user and occupation charges because it continued to remain in possession even thereafter till 01.06.2002 despite the termination of the tenancy and the possession being sought by the plaintiff. Having unauthorisedly continued in the premises after the expiry of tenancy, makes it liable for the user and occupation charges, since 01.01.1997 till it finally vacated the premises on 01.06.2002. Digitally

82. The next question which arises is: what are the user and occupation charges, liable to be paid by the defendant w.e.f. 01.01.1997 till 01.06.2002? The plaintiff in its legal Notice dated 10.10.1996, Ex.PW-1/3, while asking the defendant to vacate the premises, had also stated that in case it failed to deliver the possession by 31.12.1996, it would be liable to pay damages @Rs.50,000/- per day. Admittedly, no such Clause for payment of damages existed in the Lease Deed dated 01.08.1992. There is also no basis disclosed either in the Plaint or in the Legal Notice, on which the damages @Rs.50,000/- per day was claimed by the plaintiff.

83. The learned counsel for the plaintiffs has also submitted a copy of a Lease Deed dated 05.05.2000, but the same cannot be relied upon owing to the same not being proved in evidence by the plaintiff and no opportunity has been given to the defendants to question it.

84. In any case, the Lease Deed dated 05.05.2000 relied upon by the plaintiff cannot be any basis for the plaintiff to justify its claim for enhanced rent. The Lease Deed relied upon by the plaintiff is in respect of the area which is less than that of the plaintiff’s premises. Also, the said Lease Deed is inclusive of fittings and fixtures charges while in the present case separate Agreements were entered into between the parties in respect of rent for the premises, service agreement for AC and separate service Agreement for fittings and fixtures. Pertinently, the location of the property also does not appear to be the same. It is a known fact that there is a difference in the rental values of the properties which are situated on the main roads as compared to the premises located inside the colony. Merely by tendering this document at the time of final arguments, cannot make this document any basis to corroborate the claim of the plaintiff about the prevailing rate of Digitally rent in the locality. This document, therefore, cannot be of any assistance to the plaintiff in claiming the enhanced mesne profit as has been done.

85. In the absence of any cogent evidence led by the plaintiff, the reference may be made to the judgements wherein this aspect of grant of mesne profits in the absence of evidence by the parties, has been considered.

86. In the case of M. C. Agrawal HUF vs Sahara India & Ors., 183 (2011) DLT 105 this Court has observed that even if there is a Lease Agreement between the parties quantifying the damages payable for unauthorized occupation of the premises after expiry of the Lease Deed, then too the plaintiff cannot claim the same by virtue of the contract. A reference has been made in Fateh Chand vs Balkishan Das, AIR 1963 SC 1405 wherein it was held that where on account of breach of contract damages can be proved, then there cannot be any validity of a Clause which gives liquidated damages. What is the rent which the premises can fetch during the period of the illegal occupation by the erstwhile tenant, is a fact which can be easily proved leading evidence with respect to rents of similar premises within the locality, in a suit for possession and mesne profits against the tenants.

87. The Supreme Court in the case of O.N.G.C. vs. Saw Pipes Ltd., 2003 (5) SCC 705 had observed that the liquidated damages as fixed by the contract, would become payable only if it is impossible to calculate the loss on account of breach of contract.

88. This Court in M. C. Agrawal HUF (supra) after making a reference to Section 74 of the Indian Contract Act, 1872 noted that the mesne profit cannot be granted at double the admitted rate of rent as provided in the rent contract between the parties. However, since there was no evidence led with Digitally respect to the rent payable for similar premises in locality during the relevant period, it would be appropriate to allow damages at original contractual rate plus additional 15% p.a.

89. During the pendency of the Suit, the defendants have been regularly paying the rent up to 31.10.2001, on which date the premises had been intended to be vacated, though the physical possession was handed over on 01.06.2002 pursuant to the Orders of the Court. Therefore, in the present case, it is held that the defendant is liable to pay the mesne profits from 01.01.1997 till 01.06.2002 at the rate of the agreed rent, which is Rs. 38,400/-, with annual increase of the rent by 10% per annum. The rent so paid during this period as well as the security amount paid by the defendant shall be adjusted towards the mesne profits, which are held to be payable by the defendant Bank. CC(COMM) 125/2017 in CS(COMM) 510/2016: ISSUE NO.

(i) Whether the defendant is entitled to counter claim of Rs.5,22,253/- along with interest, if so to what effect? OPD The defendant has made a Counter-Claim of Rs.5,22,253/- along with interest, on the following accounts:a) Refund of Security Deposit: Rs.1,92,000.00 b) Expenses incurred by the Defendant on behalf of the Plaintiffs towards whitewashing, repairs etc.: Rs.85,770.00 c) Electricity bills for December, 2001, February, 2002 and May, 2002: Rs.27,961.00 d) Water Bills from 5.11.2001 Digitally till 29.01.2002: Rs.9,444.00 e) payment made to two security guards for safety of the premises from December 2001 till May 2002@ Rs.7,500/- p.m.: Rs.45,000.00