Sunday, 12 August 2018

Whether court can grant mesne profits at different rates for different period?

In view of the aforesaid discussion, I do not find any
illegality whatsoever in the impugned judgment of the trial court
determining the mesne profits payable for different periods from
1.1.1999 to 30.6.2010 from Rs. 26/- per sq. ft. to Rs. 46/- per sq. ft.
whereby effectively the rate of rent is fixed for the first period
commencing from January 1999 and thereafter increased at 15% every
three years. In fact, in my opinion, appellant/defendant is lucky
because it has been held by this Court in the case of M.C. Agrawal
HUF Vs. Sahara India and Ors. 183 (2011) DLT 105 that courts are
also empowered to grant mesne profits in the absence of any evidence

to the contrary by increasing the mesne profits payable compounding
the same and increasing it by 10% every year, whereas in the present
case enhancement is only granted at 15% every three years.

 IN THE HIGH COURT OF DELHI AT NEW DELHI
 RFA No. 67/2018

Pronounced on: 25th January, 2018
THE NEW INDIA ASSURANCE CO. LTD. Vs  M/s M. GULAB SINGH & SONS P. LTD.
CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA



1. This Regular First Appeal under Section 96 of the Code
of Civil Procedure, 1908 (CPC) is filed by the defendant/tenant
impugning the judgment of the trial court dated 9.5.2017 by which the
trial court has decreed the suit for possession and mesne profits filed
by the respondent/plaintiff/landlord with respect to mesne profits. The
suit premises is an area of 11276 sq. ft. in the first floor (rear wing) of
the building known as Gulab Bhawan, 6, Bahadurshah Zafar Marg,
New Delhi. It may be noted that the appellant/defendant/tenant has

already vacated the suit premises on 30.6.2010 and the only issue
decided by the impugned judgment is the mesne profits which are
payable by the appellant/defendant to the respondent/plaintiff for the
period from 1.1.1999 to 30.6.2010.
2. With respect to the issue at hand of the mesne profits
payable by the appellant/defendant to the respondent/plaintiff, and
which is the subject matter of issue no.7, trial court has awarded
mesne profits at the following rate:-
“44. The result is that the plaintiff shall be entitled to damages/mesne
profits-at the rate of Rs.26 per square foot per month for the year 1999
(from January 1999 to December 1999); at the rate of Rs.30 per square
foot per month from January, 2000 to December, 2002; at the rate of
Rs.35 per square foot per month from January 2003 to December 2005;
at the rate of Rs.40 per square foot per month from January 2006 to
December 2008; and at the rate of Rs.46 per square foot per month from
January 2009 to June 2010 for the entire suit premises measuring 11276
square feet in area.” (emphasis added)
3. The aforesaid rate of mesne profits for different periods
have been arrived at by the trial court by placing reliance upon the
lease deeds proved and exhibited by the respondent/plaintiff as
Ex.PW1/8 and Ex.PW1/9. Ex.PW1/8 is a lease deed dated 4.11.2005
with respect to the second floor, front block, of the very same building
and the rate of rent was Rs.35 per sq. ft. per month. The rent which
was payable in terms of the lease deed Ex.PW1/8 dated 4.11.2005 was

to be increased by 15% every three years. Ex.PW1/9 is the lease deed
dated 11.1.2006 for the fourth floor, front block, again of the very
same building, at rent of Rs.38 per sq. ft. per month. Since the period
in question is from 1.1.1999 to 30.6.2010, trial court has reduced the
figure of rent of Rs. 35 per sq. ft. as contained in Ex.PW1/8 dated
4.11.2005 and also fixed the rate of rent from 1.1.1999 by taking
agreed rate of rent of Rs.15 per sq. ft. per month payable under the
original lease entered into between the parties on 1.1.1993 and
increasing the agreed rate of rent of Rs.15 per sq. ft to Rs. 26 per sq.
ft. as on 1.1.1999. It may be noted that since the period in question for
determining mesne profits is the period from 1.1.1999 to 30.6.2010,
the lease deeds proved and exhibited by the respondent/plaintiff as
Ex.PW1/8 and Ex.PW1/9 are relevant because these lease deeds are
not only with respect to the very same premises but are with respect to
around 50% of the period for calculating the mesne profits viz from
the years 2005 to 2010.
4. As held by this Court on numerous occasions, some
amount of honest calculation and guess work is always in built in the
process of determining the mesne profits and courts are entitled on the

basis of evidence on record of the suit, and more particularly
documentary evidences, to arrive at honest and fair rate of rent which
is payable as mesne profits. Obviously, there cannot be too many
identical situations in almost overwhelming number of cases, and
therefore, calculation of mesne profits on the basis of rate of rent
payable by taking the rate of rent of the premises in question or rate of
rent of the premises in the same area or nearby areas always involves
an honest assessment by a civil court inasmuch as a civil court decides
an issue in the suit on the basis of preponderance of probabilities.
5. In view of the aforesaid discussion, I do not find any
illegality whatsoever in the impugned judgment of the trial court
determining the mesne profits payable for different periods from
1.1.1999 to 30.6.2010 from Rs. 26/- per sq. ft. to Rs. 46/- per sq. ft.
whereby effectively the rate of rent is fixed for the first period
commencing from January 1999 and thereafter increased at 15% every
three years. In fact, in my opinion, appellant/defendant is lucky
because it has been held by this Court in the case of M.C. Agrawal
HUF Vs. Sahara India and Ors. 183 (2011) DLT 105 that courts are
also empowered to grant mesne profits in the absence of any evidence

to the contrary by increasing the mesne profits payable compounding
the same and increasing it by 10% every year, whereas in the present
case enhancement is only granted at 15% every three years.
6. Learned counsel for the appellant/defendant sought to
argue that the appellant/defendant is in possession of the rear portion
of the building, and therefore, the trial court has committed an error in
relying upon the lease deeds Ex.PW1/8 and Ex.PW1/9 with respect to
the front block of the very same building, however, trial court has
rightly rejected this argument by observing that the leases are for
office purposes and really therefore it would not make much
difference whether the office is situated at the front portion of the
premises or at the back of the premises. Obviously, the trial court is
correct in so observing because the issue of the front portion would
arise with respect to any showroom on the ground floor especially in
the front, but an office which is used not as a showroom but for
administrative work of the appellant/defendant/tenant company will
result in the fact that it does not make too much difference of the
office premises being situated at the front or the back of the building.

7. Learned counsel for the appellant/defendant then argued
that the trial court has illegally granted compound rate of interest,
however this argument is misconceived because reference to the
discussion and the operative para of the impugned judgment shows
that what has been granted is only simple interest at 8% per annum
and not compound interest. This becomes clear from para 51 of the
impugned judgment and which para reads as under:-
“51. The plaintiff shall also be entitled to simple interest @ 8% per
annum on the amount of damages/mesne profits payable for each month
(after adjustment of the amount already paid) from the date of expiry of
the month for which such damages/mesne profits were payable till the date
of actual payment/realization.”
8. In view of the above, I do not find any merit in the
appeal, and the same is therefore dismissed.
JANUARY 25, 2018 VALMIKI J. MEHTA, J

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