KAGUNANDAN PRASAD GARG v. D. SREERAMASETTY — 1974 DIGILAW 80 (KAR)

GOVINDA BHAT, J. ( 1 ) THESE appeals brought on behalf of the defendant are, directed against the judgment and decrees in OS. Nos. 6 and 7 of 1971 on the file of the Court of the Civil Judge, Civil Stn. , Bangalore, by which the suits of the plaintiffs (respondents herein) for damages for use and occupation, were decreed at Rs. 11,000 per annum. The parties to both appeals are common. In order to appreciate the grounds urged in the appeals, the facts which are not in dispute may be stated in brief. ( 2 ) THE plaintiffs are the owners of a non-residential building situated in chickpet, Bangalore City. The said building was leased to the defendant by the plaintiffs, for a term of ten years with effect from 1-10-1954, under the registered lease deed dt. 20-10-1954. The defendant took the building on lease with the object of carrying on the, business of a lodging house. Under the agreement between the parties, the rent was fixed at Rs. 580 per month after the plaintiffs put up a second floor for the building and gave possession of the same to the defendant. ( 3 ) THE term of the lease as per the registered lease deed expired on 30-9- 1964. The plaintiffs, did not assent to the lessee's continuance in possession of the building after 1-10-1964. The defendant having failed to surrender possession of the building, the plaintiffs instituted OS. No. 1648 of 1964 on the file of the Court of the First Munsiff, Bangalore, for possession; no mesne profits were claimed in the said suit. That suit was contested by the defendant mainly on the ground that he was protected from eviction under the provisions of the Mysore Rent Control Act, 1961 (hereinafter called the Act), so long as he paid the agreed rent. That contention, however, was rejected and the plaintiffs' suit for possession was decreed as prayed for. That decree was ultimately affirmed by this Court and the decree has become final. In execution of the decree, the plaintiffs took delivery of possession of their building from the defendant on 16-7-1966, the plaintiffs instituted OS. No. 119 of 1966 on the file of the Court of the Civil Judge, Bangalore City, for damages for wrongful use and occupation of the aforesaid building far the period from 1-10-1964 to 30-6-1966 at the rate of Rs. No. 119 of 1966 on the file of the Court of the Civil Judge, Bangalore City, for damages for wrongful use and occupation of the aforesaid building far the period from 1-10-1964 to 30-6-1966 at the rate of Rs. 1,250 p. m. On 31-7-1969, they instituted OS. No. 171 of 1969 on the file of the Court of tho Civil Judge, Bangalore, for recovery of damages for wrongful use and occupation, for the period from 1-7-1966 to 31-7-1969, at Rs. 2,175 a month. The said two suits were subsequently transferred to the Court of the Civil Judge, Civil Stn. , Bangalore, where they were re-numbered as OS. Nos 6 and 7 of 1971. They were clubbed and tried together and disposed of by a common judgment. ( 4 ) THE contention urged by the defendant before the Court below was that the plaintiffs are not entitled to claim damages for use and occupation at a rate in excess of the 'fair rent' chargeable under the Act and that, in any event the amounts claimed are excessive. The learned Civil Judge, rejecting the first contention, held that the plaintiffs are entitled to claim damages for use and occupation. With regard to the quantum of damages, he assessed the same at Rs. 11,000 p. a. on the basis of the net profits shown by the defendant in his income-tax returns filed for the assessment year 1965-66. Before us, Sri B. P. Holla, learned Counsel for the appellant, urged that the defendant is liable to pay only aj Rs. 580 a, month which was the agreed rent under the agreement of lease. His argument was that in view of the definition of the word 'tenant' in S. 3 (r) of the Act, the defendant who continued in possession after the termination of the tenancy in his favour, is a tenant under the Act. , and therefore, entitled to the benefits conferred by the Act; and that S. 18 (2) (a) of the Act prohibits the owner of a building to receive any sum or consideration in addition to the agreed rent. According to learned Counsel, the defendant, notwithstanding the termination of his tenancy on the expiry of the lease period, was entitled to the benefits of S. 18 (2) (a) of the Act. His next contention was that on the evidence on record, the damages awarded are excessive. According to learned Counsel, the defendant, notwithstanding the termination of his tenancy on the expiry of the lease period, was entitled to the benefits of S. 18 (2) (a) of the Act. His next contention was that on the evidence on record, the damages awarded are excessive. ( 5 ) SRI Gundappa, learned Counsel for the plaintiffs-respondents contended that the defendant is not entitled to any of the benefits conferred under the provisions of the Act after the expiry of the term of his lease since the plaintiffs did not assent to the lessee's continuance in possession; that the continuance in possession of the defendant since 1-10-1964 was wrongful; that the defendant was actually evicted in execution of the decree of the civil Court overruling his contention that he was entitled to protection under the Act; and that the possession of the defendant being wrongful, he is liable for mesne profits or damages for the suit periods. He also contended that the damages assessed are fair and what was assessed was on the admission of the defendant as to the net profits made by him from the suit building. On the arguments presented before us, the pqints that arise for determination are : (1) Whether the defendant is entitled to the benefits of S 18 (2) (a) of the Act; and (2) Whether the damages assessed by the Court below are excessive point No. 1 As stated in the preamble to this judgment, the plaintiffs who are the lessors did not assent to the lessee's continuance in possession of the building after the expiry of the term of the lease on 30-9-64. It has been finally decided between the parties in the prior suit for possession that the defendant is not entitled to any protection from eviction in view of the provisions of S. 31 of the Act which provides that nothing contained in Part V of the Act shall apply to a non-residential building the monthly rent of which exceeds five hundred rupees or the annual rent value of which excels six thousand rupees. In the instant case, the building in question is a non-residential building, the monthly rent of which exceeded rupees five hundred. Part V of the Act contains the provisions for controlling the eviction of tenants and obligatiqns of landlords. In the instant case, the building in question is a non-residential building, the monthly rent of which exceeded rupees five hundred. Part V of the Act contains the provisions for controlling the eviction of tenants and obligatiqns of landlords. ( 6 ) THE lease in favour of the defendant terminated on the expiry of the term of the lease on 30-9-1964. The defendant was legally bound to surrender possession on 1-9-1964 as the plaintiffs did not assent to his continuance in possession thereafter as a tenant. Therefore, the defendant's possession after the expiry of the term of the lease was wrongful. A party who is in wrongful possession of the property of another, is liable to pay mesne profits or damages fqr use and occupation. That this is the law, was not disputed by Sri Holla, learned Counsel for the appellant. His argument was entirely based on the definition of the word 'tenant', in S. 3 (r) and the provisions of S. 18 (2) (a) of the Act. Sec. 3 (r) defines the word 'tenant' thus * * * ss. 14 to 18 are found in Part III of the Act, under the heading "provisions regarding rent'. S. 14 provides for fixation of fair rent by the controller in respect of any building subject to the conditions specified therein. S. 15 is not relevant for qur purpose. S. 16 provides for cases where lawful increase of or reduction in fair rent is admissible. S. 17 is not relevant for our purpose. Sec. 18 prohibits landlords from claiming or receiving unlawful charges in excess of the fair rent where such rent is fixed or the agreed rent where there is an agreed rent. S. 18 (2) (a) reads: * * * * * * the Act has been enacted by the State Legislature to provide for the control of rents and evictions, for the leasing of buildings, to control rates of hotels and lodging houses and for certain other matters. Under the scheme of the Act, certain benefits are conferred on tenants. The Act also imposes certain obligations on such tenants. In order to claim benefits conferred in the Act the person claiming the benefits must be a 'tenant' and there must be the relationship of landlord and tenant between the parties. Under the scheme of the Act, certain benefits are conferred on tenants. The Act also imposes certain obligations on such tenants. In order to claim benefits conferred in the Act the person claiming the benefits must be a 'tenant' and there must be the relationship of landlord and tenant between the parties. Such relationship cannot be established without the absent of the landlord after the expiry of the term of the lease unless, in view of the provisions of the Act, his consent becomes irrelevant. After the expiry of the term of the lease if the tenant is protected from eviction under the provisions of part V of the Act, the relationship of the landlord and tenant is established even without the assent of the landlord for the continuance of the lease. ( 7 ) IN such a contingency, the tenant is entitled to the benefits of S. 18; if the fair rent of the building has been determined, he is not liable to pay any amount in excess of the fair rent; if the fair rent has not been determined, he is not liable to pay anything in excess of the agreed rent. The benefits of S. 18 would be available to a tenant if his eviction is controlled by the provisions of Part V. In such a case, until the tenant is evicted, he is liable to deposit the rent in the Court in accordance with the provisions of Section 18. In our judgment, after the termination of tenancy on the expiry of the lease the defendant cannot be regarded as a tenant under the Act. The definition of the word 'tenant' gives it an extended meaning. Where an extended meaning is given to a word by the definition section by use of the word 'include' or 'includes', the wqrd in respect of which 'includes' is used, bears both its extended statutory meaning and its ordinary popular and natural sense whenever that would be properly applicable, vide Maxwell on Interpretation of Statutes, 12th Edn. , p. 270. S. 3 opens with the words: 'unless the context otherwise requires'. In certain contexts, a person continuing in possession after the termination of the tenancy in his favour will be a 'tenant' under the Act. , p. 270. S. 3 opens with the words: 'unless the context otherwise requires'. In certain contexts, a person continuing in possession after the termination of the tenancy in his favour will be a 'tenant' under the Act. One of those situations would be where the tenants are entitled to the benefits of Part V of the Act after the expiry of the term of the lease, where the absent of the landlord for continuance in possession is immaterial. Where the provisions of Part V do not apply and the tenants are not entitled to the benefit of the prqvisions of Part V, they cannot be regarded as 'tenants' under the Act, if they remain in possession against the wishes of their landlords, after the expiry of the lease period. Therefore, the defendant is not entitled to the benefits of S. 18 (2), (a) of the Act. ( 8 ) POSSESSION of the building was decreed in favour of the plaintiffs holding that the plaintiffs were entitled to possession on the expiry of the term off the lease. The plaintiffs became entitled to possession and the defendant was liable to surrender possession on 1-10-1964. Having denied the right of the plaintiffs to obtain possession and having remained in possession against the plaintiffs' assent until he was evicted through the process of the Court, the defendant cannot deprive the plaintiffs of their right to claim mesne profits or damages for the period subsequent to 1-10-1964. Point No 2 We have held under Point No. 1 that the plaintiffs are entitled to claim damages for use and occupation of the building from 1-10- 1964. The measure of the damages is the profits which the defendant who is in wrongful possession actually received or might with ordinary diligence have received therefrom Vide, definition of 'mesne profits' in S. 2, (12) of the CPC. ( 9 ) THE defendant took the building for running a lodging house business and he actually carried on such business and made profits after 1-10-1964. His income-tax returns were produced and marked as Exts P17 to P20. Ext. P20 relates to the assessment year 1965-66. Along with the said return, he had also produced his profit and loss account for the year ending on 31-12-1964 That document showed that from the lodging section the defendant received rent amounting to Rs 23,836-75. His income-tax returns were produced and marked as Exts P17 to P20. Ext. P20 relates to the assessment year 1965-66. Along with the said return, he had also produced his profit and loss account for the year ending on 31-12-1964 That document showed that from the lodging section the defendant received rent amounting to Rs 23,836-75. He claimed deduction for (a) rent payable to the plaintiffs, (b) telephone charges, (c) salaries, (d) light and water and (e) sundry expenses. After making deductions under the above heads, he showed a net profit of Rs 10,451-17 If the item of rent is excluded, the net profits made by the defendant in one year was about Rs. 18,000 The learned Civil Judge taking into consideration that the defendant had invested about Rs 30,000 tor furnishing the rooms, made an allowance of Rs 3,000 He further allowed a sum of Rs 3,000 for the personal service of the defendant. Making all allowances, the net profits earned by the defendant exceeded Rs. 11,000 per annum. That being the undisputed evidence, it cannot be contended that the sum of Rs 11,000 awarded by the learned Civil Judge as damages, is either excessne or unreasonable ( 10 ) IN OS No. 7 of 1971, the plaintiffs had claimed damages for the period from 1-7-1966 to 31-7-1969 The learned Civil Judge decreed damages at rs 11,000 a year for the period from 1-7-1966 to 30-6-1969 for a period of three years The plaintiffs could not have claimed damages for the month of July. 1966, as that claim was clearly beyond three years. The plaintiffs' claim for the period of three years from 1-8-1966 to 31-7-1969 was within time. Instead of decreeing the mesne profits for the period from 3-7-1966 to 30-6-1969, the learned Civil Judge should have decreed the same for the perios from 1-8-1966 to 31-7-1969. This is an apparent error, and, while affirming the decree of the Court below in OS. No. 7 of 1971, it must be stated in the decree that the damages are for the period from 1-8-1966 to 31-7-1969. For the reasons stated above, both the appeals fail and are dismissed with costs. --- *** --- .