Sunday, 25 November 2018

When a party is not entitled to get enhanced mesne profits in case of tenanted premises?

In view of the aforesaid discussion, it is seen that the
appellants/plaintiffs led no evidence of what was actual rate of
prevailing rent for grant of mesne profits at a rate higher than the
agreed rate of Rs.22,600/- per month. When the lease period expired
the suit premises were covered under the Delhi Rent Control Act and
it is only after 1.12.1988 that the appellants/plaintiffs could have
served a notice terminating the tenancy and which was done vide
notice dated 14.3.1989, and therefore entitlement of the

appellants/plaintiffs to enhance mesne profits would only have been
thereafter, but the trial court has been more than liberal in granting
enhanced rent by 15% from 22.6.1988 itself till 31.8.1990 when the
premises were vacated. Also the lease deed in question does not
provide for a figure of Rs.48,000/- per month to be granted as
enhanced rent and which aspect at best is covered under a legal notice
but self-serving statement made in a legal notice for claiming
enhancement of rent, without showing proof of the higher rate of rent,
could not legally be a reason for the plaintiffs to be entitled to claim
rent at Rs.48,000/- per month.
 IN THE HIGH COURT OF DELHI AT NEW DELHI
 RFA No.827/2005
Dated: 4th July, 2018

ROMA SARIN  Vs  UNION OF INDIA

CORAM:
HON’BLE MR. JUSTICE VALMIKI J.MEHTA


1. This Regular First Appeal under Section 96 of Code of
Civil Procedure, 1908(CPC) is filed by the plaintiffs in the suit
impugning the judgment of the Trial Court dated 12.7.2005 by which
trial court has only partly decreed the suit for mesne profits filed by
the appellants/plaintiffs by not decreeing the suit for penal rent
claimed as per legal notice served and by decreeing the suit only by
granting increase of rent by 15% from the last admitted rate of rent
paid of Rs.22,600/- per month. Appellants/plaintiffs claimed mesne
profits at Rs. 48,000/- p.m.

2. The facts of the case are that the suit premises bearing
no.A1/166, Pankha Road, Janakpuri, New Delhi was let out by the
appellants/plaintiffs to the respondent/Union of India in terms of the
lease agreement dated 15.6.1985 for a period of three years w.e.f
22.6.1985. The agreed rate of rent was Rs.22,600/- per month.
Though Union of India desired after expiry of the lease period to
vacate the suit premises, however, it failed to vacate the suit premises
and the suit premises were vacated only on 31.8.1990. The
appellants/plaintiffs claim that for the period from the expiry of the
lease on 21.6.1988 and till the respondents/defendants vacated the suit
premises on 31.8.1990 the appellants/plaintiffs be granted rent at
Rs.48,000/- per month and which is the rate which the
appellants/plaintiffs claim by serving their legal notice dated
14.3.1989.
3. Trial court has held in para 35 of the impugned judgment
that rate of Rs.48,000/- is claimed on the basis of the lease agreement,
however this observation is against the record because when we refer
to the lease agreement dated 15.6.1985, it is found that there is no
clause that the appellants/plaintiffs after expiry of the lease period will

be entitled to rent at Rs.48,000/- per month. The amount of Rs.
48,000/- is as per legal notice dated 14.3.1989. Trial court has also
held that taking that such a clause as per the lease deed would be in
the nature of penalty i.e the aspect would fall under Section 74 of the
Indian Contract Act, 1872 and therefore damages cannot be awarded.
Trial court has also held that since no evidence whatsoever was led by
the appellants/plaintiffs to show what was the actual rate prevailing,
no mesne profits can be granted at Rs.48,000/- per month as claimed
by the appellants/plaintiffs. Trial court has however granted increase
of rent at 15% on Rs.22,600/- i.e the agreed rate of Rs.22,600/- per
month plus Rs.3,390/- from 22.6.1988 upto 31.8.1990 and which also
in the opinion of this Court was illegal exercise of power in favour of
the appellants/plaintiffs because till 1.12.1988 the suit premises would
be covered under Delhi Rent Control Act, 1958 i.e.
respondents/defendants had statutory protection against eviction and
hence no liability towards mesne profits. Once suit premises are
covered under the Delhi Rent Control Act neither there arises an issue
of vacating the suit premises nor any issue of enhancement of rent
except as provided under the Delhi Rent Control Act. Delhi Rent

Control Act was amended by Act 57 of 1988 w.e.f 1.12.1988 whereby
premises whose rent was above Rs.3,500/- per month, were made to
fall outside the protection of the Delhi Rent Control Act. By the same
amendment, Section 6A was added entitling the landlord to increase
the rate of rent by 10% after every three years subject to serving of a
notice demanding increase in the rent. Therefore in this case the
appellants/plaintiffs are lucky that they have received enhanced rent
from 22.6.1988 whereas they could only have received enhancement
of rent post 1.12.1988 and that too after having served a notice under
Section 6A of the Delhi Rent Control Act and which admittedly was
not served.
4. In view of the aforesaid discussion, it is seen that the
appellants/plaintiffs led no evidence of what was actual rate of
prevailing rent for grant of mesne profits at a rate higher than the
agreed rate of Rs.22,600/- per month. When the lease period expired
the suit premises were covered under the Delhi Rent Control Act and
it is only after 1.12.1988 that the appellants/plaintiffs could have
served a notice terminating the tenancy and which was done vide
notice dated 14.3.1989, and therefore entitlement of the

appellants/plaintiffs to enhance mesne profits would only have been
thereafter, but the trial court has been more than liberal in granting
enhanced rent by 15% from 22.6.1988 itself till 31.8.1990 when the
premises were vacated. Also the lease deed in question does not
provide for a figure of Rs.48,000/- per month to be granted as
enhanced rent and which aspect at best is covered under a legal notice
but self-serving statement made in a legal notice for claiming
enhancement of rent, without showing proof of the higher rate of rent,
could not legally be a reason for the plaintiffs to be entitled to claim
rent at Rs.48,000/- per month. In any case rent at Rs.48,000/- if this
was a figure provided in a clause of the lease agreement( and which is
not) the same would be in the nature of penalty because enhanced rate
of rent can always be proved and consequently claim of mesne profits
is covered under Section 73 of the Indian Contract Act and not Section
74 of the Indian Contract Act.
5. In view of the aforesaid discussion, I do not find any
merit in the appeal. Dismissed.
JULY 04, 2018 VALMIKI J. MEHTA, J

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