Intercraft Ltd. vs Capital Boot House and Others

V.K. Jain, J

A suit for declaration and permanent injunction was filed by M/s Inter Craft Limited against M/s Capital Boot House and three others viz. S. Indrave Singh Mann, S. Shivender Pal Singh Mann & S. Brijender Pal Singh Mann, seeking a declaration that it is a lawful tenant of the Defendants in respect of shop No. B-24 Connaught Place, New Delhi and is entitled to remain in its possession. A permanent injunction restraining the Defendants from interfering in possession of the Plaintiff qua the aforesaid shop was also sought. The Defendants in the suit filed Written Statement contesting the suit and also filed a Counter Claim against the Plaintiff. It was alleged in the Written Statement that shop in question was taken on rent by M/s Capital Boot House and Ors. Defendants were its partners. It was alleged that Plaintiff had obtained forcible unauthorized occupation of the suit premises on 3rd October, 1994. The suit became infructuous since the suit premises was vacated by the Plaintiff on 31st March, 2000 pursuant to order dated 6th September, 1999 passed by a Division Bench of this Court. The Defendants, in their Counter Claim have sought (a) a sum of Rs. 10 lac from the Plaintiff for the injury to their peace of mind, health and running of their business on account of the Plaintiff having taken forcible possession of shop, in question, from them on 3rd October, 1994, (b) restoration of articles mentioned in Annexure "A" to the Counter Claim alleged to have been stolen from shop in question on that day and (c) Rs. 5,40,984/- towards damages for use and occupation from the period 3rd October, 1994 to 7th December, 1994. They have also sought damages for use and occupation at the same rate from the date of filing of the counter claim till the date they were able to enter into the suit property along with interest on that amount @ 18% p.a.

The following issues were framed in the Counter Claim on 18th April, 2001

Whether the Defendant is entitled to mesne profits/damages? If so, for which period and at what rate? - OPD

Whether the Defendant is entitled to recovery of the items as per details given in para-9 (Annexure A) to the Written Statement or in the alternative value thereof which is claimed to be Rs. 5 lac? - OPD

Whether the Defendant is entitled to recover the amount of Rs. 10 lac as stated in para-8 of the Written Statement? - OPD

Relief.

ISSUES No. 1 and 4

The Plaintiff M/s Inter Craft Limited was proceeded ex parte in the Counter Claim on 19th July, 2007. The Defendants have filed affidavit of S.Indrave Singh Mann by way of ex parte evidence. Mr. Mann has stated that after the Agency Agreement had come to an end on 18th September, 1994, the Plaintiff illegally entered in shop in question and took its possession on 3rd October, 1994. He has further stated that the Plaintiff was in illegal occupation of the shop in question from 3rd October, 1994 to 31st March, 2000. According to him, the market rent of the premises varied from Rs. 153/- per sq. foot p.m. in the year 1996 to Rs. 200/- per sq. foot p.m. in the year 1999.

Exh. DW-1/1 is the certified copy of the lease deed dated 29th July, 1997 executed by Gopal Das Estates & Housing Private Limited in favour of Bank of Nova Scotia with respect to the ground floor of a multistory building known as Dr. Gopal Dass Bhawan at 28, Barakhambha Road, New Delhi. A perusal of document would show that vide this lease deed the rent of the premises measuring 5000 sq. feet of super area was increased to Rs. 7,68,750/- p.m. Clause 3 of the lease deed shows that initially the premises was taken on rent vide lease deed 20th May, 1994 which provided for increase in rent by 25% after three years from the date of letting out. The rent per sq. foot, in terms of these lease deed comes to Rs. 153.75 p.m. w.e.f. 29th July, 1997. Since this rent was worked out after an increase of 25%, it is obvious that the rent agreed at the time of creation of tenancy vide lease deed 20th May, 1994 would come to about Rs. 123/- per sq. foot p.m.

Exh. DW-1/2 is another lease deed dated 29th July, 1997 executed by Gopal Das Estates & Housing Private Limited in favour of Mashreq Bank in respect of commercial premises measuring about 8000 sq. feet of super area on the upper ground floor of Gopal Dass Bhawan at 28, Barakhambha Road, New Delhi. The aforesaid premises was let out at the monthly rent of Rs. 200/- per sq. foot p.m. for a period of 03 years w.e.f. 1st June, 1996. Exh. DW-1/3 is the lease deed dated 5th June, 1997 executed in respect of ground and mezzanine floor of property No. D-10 Connaught Circus, New Delhi and pertained to an area measuring 1912 sq. feet on the ground floor and 1844 sq. feet on the mezzanine floor besides space measuring about 200 sq. feet on the terrace. The agreed rent was more than Rs. 200/- per sq. foot p.m. Exh. DW-1/4 is the lease deed dated 12th August, 1999 executed in respect of some premises at the rent of about Rs. 200/- per sq. foot p.m.

Relying upon the aforesaid lease deeds, it was contended by the learned Counsel for the Defendants that the damages for use and occupation should be awarded to the Plaintiff at least @ Rs. 120/- per sq. foot p.m. w.e.f. 13th October, 1994 to 28th July, 1997 and @ Rs. 153.75 per sq. foot p.m. w.e.f. 29th July, 1997. I, however, find that for the period from 3rd October, 1994 to 7th December 1994 the Defendants have claimed damages amounting to Rs. 5,40,984/-, comes to about Rs. 90 per sq. foot p.m. since the area in shop in question is said to be 2740 sq. feet. I, also notice that in the Counter Claim, the Defendants have claimed pendent lite and future damages (mesne profits) at the same rate at which they have claimed damages for use and occupation from the period from 3rd October, 1994 to 7th December, 1994. Irrespective of the rate of rent prevailing at the relevant time the Defendants cannot be awarded damages for use and occupation at a rate higher than at which they have claimed in their counter claim.

With respect to the calculation of interest on mesne profits, Supreme Court in Sri Ramnik Vallabhdas Madhvani and Others Vs. Taraben Pravinlal Madhvani, observed as under:

A mistake has been committed by the High Court in calculation of interest on mesne profits. Interest has to be calculated on yearly basis because the amount of mesne profits on which interest is to be awarded has to be arrived at on year-to-year basis. Mesne profits for the first year would be from 5-5-1969 to 4-5-1970, for the second year it will be from 5-5-1970 to 4-5-1971 and so on. It keeps adding on from year to year. The total amount of mesne profits found due by the High Court on the basis of the Commissioner''s report comes to Rs. 38,41,920. This amount is the total of mesne profits calculated on yearly basis. Interest cannot be allowed on the whole amount from the beginning. Interest had to be worked out on amounts falling due towards mesne profits on yearly basis i.e. on the amount of mesne profits which could be taken to be due to the Plaintiff at the end of each successive year.

In Mahant Narayana Dasjee Varu and Others Vs. Board of Trustees, The Tirumalai Tirupathi, Devasthanam, , Supreme Court while dealing with computation of interest on mesne profits, inter alia, held as under:

Under Section 2(12) of the CPC which contains the definition of "mesne profits", interest is an integral part of mesne profits and has, therefore, to be allowed in the computation of mesne profits itself. That proceeds on the theory that the person in wrongful possession appropriating income from the property himself gets the benefit of the interest on such income.

The Plaintiff came in unauthorized occupation of shop in question on 3rd October, 1994. Therefore in view of decision of Supreme Court in Ramnik Vallabhdas Madhvani (supra), mesne profits have to be calculated on yearly basis i.e. for the period from 3rd October, 1994 to 2nd October, 1995, 3rd October, 1995 to 2nd October, 1996 and so on. In the facts and circumstances of the case and taking into consideration the provision contained in Section 34 of Code of Civil Procedure, I am of the view that interest should be awarded to the Defendants @ 6% p.a. The Defendants would therefore be entitled to interest on the amount of damages for use and occupation for the period from 3rd October, 1994 to 2nd October, 1995 w.e.f. 3rd October, 1995 on the amount of damages for the period from 3rd October, 1995 to 2nd October, 1996, w.e.f. 3rd October, 1996 on the amount of damages for the period from 3rd October 1996 to 2nd October, 1997, w.e.f. 3rd October, 1997 on the amount of damages from 3rd October, 1997 to 2nd October, 1998, w.e.f 3rd October, 1998 on the amount of damages from 3rd October, 1998 to 2nd October, 1999, w.e.f. 3rd October, 1999 on the amount of damages from 3rd October, 1999 to 31st March, 2000.

The issues are decided accordingly.

ISSUES No. 2 and 3

These claims were given up by the learned Counsel for the Defendants during the course of arguments. I, therefore, hold that the Defendants are not entitled to any amount either as damages for the mental agony alleged to have been caused to them or towards cost of the articles alleged to have been stolen from shop in question on 3rd October, 1994.

The issues are decided accordingly.

In view of my findings on the issues, a decree for recovery of damages @ 90/-per sq. foot p.m. for the period from 3rd October, 1994 to 31st March, 2000 with proportionate costs is hereby passed in favour of the Defendants and against the Plaintiff. The Defendants will also be entitled to interest @ 6% p.a. on the damages for use and occupation for the period from 3rd October, 1994 to 2nd October, 1995, w.e.f. 3rd October, 1995 on the amount of damages from 3rd October, 1995 to 2nd October, 1996, w.e.f. 3rd October, 1996 on the amount of damages from 3rd October, 1996 to 2nd October, 1997, w.e.f. 3rd October, 1997 on the amount of damages from 3rd October, 1997 to 2nd October, 1998, w.e.f. 3rd October, 1998 on the amount of damages from 3rd October, 1998 to 2nd October, 1999 w.e.f. 3rd October, 1999 and on the amount of damages from 3rd October, 1999 to 31st March, 2000 w.e.f. 1st April, 2000 till making of the payment to them. The Defendants are directed to deposit deficient Court fees in terms of this judgment within four weeks failing which the Counter Claim except to the extent of Rs. 5,40,984/- shall stand rejected.

Decree sheet be drawn accordingly