Dena Bank v. Kamlesh Rani & Ors.

1. This is an appeal arising out of the impugned judgment dated 26th December, 2016 by which the suit for possession and mesne profits has been decreed in the following terms. “In the result, the suit is decreed in favour of the plaintiff and against the defendant for recovery on the following amounts:-

(i) Mesne profits for the period 1.1.2008 till the handing over of the actual possession of the suit property i.e. 25.3.2013 @ Rs. 1,75,000/- p.m.

(ii) The Defendant shall be entitled to adjust the amount already paid to the Plaintiff in terms of the order dated 02.09.2013.

(iii) The plaintiff shall also be entitled to interest from the date of the institution of the suit till the date of the decree @ 9% p.a., and thereafter, the plaintiff shall be entitled to 2018:DHC:978 future interest on the principal sum @ 6% per annum till the date of realization. Plaintiff is liable to pay ad-valorem court fees on the total amount, including the amount paid during the pendency of the suit, before the decree is prepared. No order as to costs.”

2. Admittedly, the possession has been handed over to Respondents/Plaintiffs (hereinafter, ‘Plaintiffs’) on 25th March, 2013. The only question, on which submissions have been heard, is in relation to quantum of mesne profits which has been awarded. Appellant-Bank was the Defendant in the suit (hereinafter, ‘Defendant’) filed by the Plaintiffs. Case of Plaintiff No. 1 is that she is the absolute owner of the property bearing No.GL-16A, Jail Road, Hari Nagar, New Delhi – 110064 admeasuring 320 sq. yds. (hereinafter, ‘suit property’).

3. The Defendant was inducted as lessee on 15th August, 1989 in respect of the portion of the ground floor of the property in area admeasuring 2086 sq. ft. approximately. Lease deed was duly registered and executed on 22nd February, 2003. Monthly rent was agreed for a period from 1st November 2002 to 31st October 2007 at a monthly rent of Rs.41,360/-. Lease was terminated as per the terms and conditions of the lease deed. Accordingly, the Plaintiff sought Rs.[2] Lakhs per month as damages for unlawful occupation of the suit property. Plaintiff sought possession and arrears of rent as also damages for use and occupation. On 14th September 2009, the suit was decreed for possession in favour of Plaintiff and accordingly possession was handed over on 25th March, 2013. Admittedly, rent was paid upto 31st March, 2013. Plaintiff led evidence of PW-1 Shri Ajay Kumar Gambhir who exhibited the following documents. i. Ex.PW-1/1, site plan ii. Ex.PW-1/2, lease deed dated 22nd February 2003. iii. Ex.PW-1/3, legal notice dated 7th June, 2007. iv. Ex.PW-1/11, reply to legal notice dated 10th July, 2007.

4. Plaintiff claimed damages @ Rs.[2] Lakhs per month. In support of her claim of Rs.[2] Lakhs, the Plaintiff relied upon the lease deed dated 13th March, 2003 in respect of a property in the vicinity of the suit property being Ex.PW-3/1. The said exhibit was relied upon for showing the rent of Rs.1,65,000/- for property with carpet area of 1152 sq. feet during the period from 13th March, 2008 to 12th March, 2014.

5. On the other hand, Defendant adduced evidence and placed on record the lease deed dated 9th June 1994 to submit that rent of Rs.[7] per sq. ft. was being charged.

6. Trial Court, relying on Atma Ram Properties (P) Ltd v. Federal Motors Pvt. Ltd (2005) 1 SCC 705, assessed the damages. Relevant extracts of the findings of the Trial Court are set out below.

7. Thus, the Trial Court determined that from the evidence on record, Rs.1,75,000/- per month would be equitable damages that would be payable for use and occupation of the suit property.

8. Learned counsel for Defendant submits that in compliance of order dated 31st May 2017 and thereafter on 1st September 2017 the entire decretal amount of Rs.1,40,82,351.42 stands deposited. The breakup of the said decretal amount is as under: Principal amount awarded Rs.1,75,000/- per month LESS Already paid Rs.51,700/- per month Net amount (Rs.1,75,000/- Rs.51,700/-) Rs.1,23,300/- per month w.e.f. 01.01.2008 to 25.03.2013: 63 months x Rs.1,23,300/- Rs.77,67,900/- Int. on Rs.77,67,900/w.e.f. 31.05.2008 (date of institution) to 26.12.2016 (date of order): (8 years 6 months 26 days) @ 9% pa simple on Rs.77,67,900/- 8y: Rs.55,92,888.[6] + 6m: Rs.3,49,555.[5] + 26d: Rs.49,799.68 Aggregate interest: Rs.59,92,243.18 Future interest on Rs.77,67,900/- w.e.f. 27.12.2016 till 04.09.2017: (8 months 9 days) @ 6% per annum simple on 8m: Rs.3,10,716/- + 9d: Rs.11,492.24 Aggregate future interest till deposit: Rs.3,22,208.24 Net amount required to be deposited Rs.1,40,82.351.42

9. The main ground of challenge by Defendant is that the use and occupation charges having been determined after taking into account inflation, location of the suit property and escalation in rentals, interest charged @ 9% per annum, is on the higher side. The damages having being fixed at almost 3.[5] times of the admitted rent, the interest @ 9% per annum is highly inequitable. Defendant submits that it being a financial institution and that it has to pay from the public money, the enhanced rent along with interest @ 9% per annum has resulted in double profit to the Plaintiff which ought not to be permitted. He submits that interest amount deserved to be scaled down.