VED PRAKASH AKRE v. UNION OF INDIA — 1983 DIGILAW 17 (HP)

JUDGMENT V. P. Gupta, J.—The plaintiff has filed this suit for recovery of Rs. 1,29,020/-on the allegation that the plaintiff is the owner and proprietor of a building known as Himland Hotel Simla (shortly Hotel). The President of India through the Military Estate Officer, Ambala, took on lease certain suites of the hotel for providing residence to the military officers stationed at Simla, Sixteen lease deeds were executed in the year 1971 and 1972. Ten leases were for a period of two years, while the remaining six were for a period of one year. Under clause 14 of the terms, the period of lease could be extended by one year on the same terms and conditions. Under clause 18 the disputes and differences between the parties arising under or out of or in connection with the aforesaid leases were to be referred to arbitration. The plaintiff now claims that various premises (each consisting of two rooms) were vacated by the defendants from 12-4-1973 to 17-6-1975. The premises mentioned at serial Nos. 3, 4 and 6 were vacated within the extended period of lease, while the remaining premises, at serial Nos. 1, 2, 5 and 7 to 14 were vacated by the defendants after the extended period of lease. The plaintiff claims that under clause 14 the defendants could retain the possession of the premises beyond the initial lease period, for a further period of one year, on the agreed terms and conditions. It is claimed that after an extended period of one year the defendants had no right to retain the possession, but they retained the possession of the premises. The plaintiff informed the defendants, that in case they wanted to retain the possession after the extended period then the plaintiff would be charging the tariff hotel rates from them. It is alleged that the defendants unilaterally decided to retain the possession of the premises on the terms and conditions of the leases but this decision was never accepted by the plaintiff. The plaintiff claimed tariff hotel rates after the extended period of one year but the plaintiff was paid a sum of Rs. 22857.53 only The plaintiff accepted the amount under protest. The plaintiff claimed tariff hotel rates after the extended period of one year but the plaintiff was paid a sum of Rs. 22857.53 only The plaintiff accepted the amount under protest. The plaintiff now claims Rs, 82679.47 on account of the rental charges in accordance with the hotel tariff rates after giving due rebates and adjustments of the amounts already received by him He also claims Rs, 2281,50 on account of damages, Rs. 43329 60 as interest by way of damages and Rs, 729.43 on account of notice charges etc. The suit was filed on 22-3-1978, 2. The defendants in their written statement denied the plaintiffs claim, The defendants claim that they were entitled to retain the possession of the hotel premises on the old terms and conditions and under clause 14 the period of the lease deed could be extended by them. It is alleged that the notice under Section 80 C. P. C. is not proper and valid and that the plaintiff is entitled to receive an amount of Rs, 2271/-from the defendants in accordance with the terms of the award. The plaintiff has accepted the rent from the defendants after the expiry of the initial lease period and he cannot claim any damages or interest. Other allegations are also denied, 3. The plaintiff filed a replication. The plaintiff alleges that the defendants cannot take the various defences due to the principle of res judicata. The following issues were framed on 2-11-1978 ; 1. Whether the matter in dispute is to be referred to arbitration and as such the suit is not competent ? OPD 2. Whether in terms of the agreement the defendants were entitled to renew tenancy beyond one year on the same terms and conditions on which the premises were leased out to the defendants, if so, its effect ? OPD 3. Whether the plaintiff is entitled to charge the rent in accordance with the rates as mentioned under para 11 of the plaint ? OPP 4. Whether a proper notice under Section 80 C, P. C, had been served on the defendants, if not, what is its effect ? OPP 5. Whether the plaintiff is entitled to receive only Rs. 2,271/- from the defendants ? OPD 6. Whether the plaintiff accepted the rent from the defendants after the expiry of the initial period of lease and if so, what is its effect ? OPP 5. Whether the plaintiff is entitled to receive only Rs. 2,271/- from the defendants ? OPD 6. Whether the plaintiff accepted the rent from the defendants after the expiry of the initial period of lease and if so, what is its effect ? OPD 7. Whether the plaintiff is entitled to any damages or interest, as claimed by him ? OPP 8. Whether the defence taken by the defendants that the plaintiff is not entitled to recover the suit amount, is barred by the principle of res judicata ? OPP 9. Relief. 4. It may be mentioned that issue No, 1 did not arise from the pleadings of the parties. The court appears to have framed this issue of its own. The parties lead evidence on the various issues. 5. I have heard Shri O. P. Thakur counsel for the plaintiff and Shri Prem Goel counsel for the defendants, ISSUE No. 1. 6. It is contended by the learned counsel for the defendant that the dispute between the parties is to be referred to arbitration under clause 18 of the agreement (Ex.D-1). Shri Thakur contends that this issue does not arise from the pleadings of the parties and requires no decision. He also contends that the matter cannot be referred to arbitration, 7. If there is a clause of arbitration, then under Section 34 of the Arbitration Act, any party to the arbitration agreement can claim that the legal proceedings pending in a court be stayed and the disputes be referred to the arbitration in terms of the arbitration agreement. For this purpose an application can be moved by a party before the filing of a written statement or taking any other steps in the proceedings. In this case defendants have not filed any application under Section 34 of the Arbitration Act. The defendants appeared in the suit on 8-5-1978 and prayed for an adjournment for filing a written statement. This adjournment was allowed. On 13-7-1978 the defendants again prayed for an adjournment to file a written statement. On 3-8-1978 the written statement was filed. In the written statement the defendants did not raise an objection, that the disputes between the parties should be referred to arbitration. The plaintiff filed replication and finally the issues were framed on 2-11-1978. 8. This adjournment was allowed. On 13-7-1978 the defendants again prayed for an adjournment to file a written statement. On 3-8-1978 the written statement was filed. In the written statement the defendants did not raise an objection, that the disputes between the parties should be referred to arbitration. The plaintiff filed replication and finally the issues were framed on 2-11-1978. 8. Now it is proved that the defendants did not file any application for stay of suit or raise any objection for referring of the dispute to an arbitrator, before the filing of the written statement or before taking any other steps in the suit 9. In R. D. Bhardwaj v. State of H. P. and others [1979 Simla Law Journal 87], it is held that a request by the defendant for time to file a written statement is a step to take part in the proceedings, and if the defendant after appearing in the suit prays for time to file a written statement then in that case the proceedings in the suit cannot be stayed. In State of U. P. and another v, M/s Janki Saran Kailash Chander and another, [AIR 1973 SC 2071], it was held that an application for adjournment for filing a written statement will be considered to be a step in the proceeding. The learned counsel for the defendants could not show me any law to the contrary. In these circumstances, the present suit is competent and the matter cannot be referred to arbitration. This issue is decided against the defendants. ISSUE No, 2. 10. The decision of this issue rests upon the interpretation of clause 14 of the agreement (Ex. The learned counsel for the defendants could not show me any law to the contrary. In these circumstances, the present suit is competent and the matter cannot be referred to arbitration. This issue is decided against the defendants. ISSUE No, 2. 10. The decision of this issue rests upon the interpretation of clause 14 of the agreement (Ex. D-l) which reads as follows : "If the lessee shall be desirous of taking a new lease of the said premises after the expiration of the term hereby granted and of its such desire shall deliver to the lessor or leave for him or send by registered post to him at his last known place of abode or business notice in writing not less than 30 days before the expiration of the term hereby granted them the lessor shall at or before the expiration of the term hereby granted, if there shall then be no subsisting breach of any of the lessees obligations under his present agreement, at the cost of the lessee grant to the lessee and lease of the said premises for a further term of one year to commence from and after the expiration of the term herby granted at the same covenants, agreements, and conditions as in this covenant (for renewal excepted) subject to such enhancement thereto may be permissible under the then prevailing Rent Control law of the State.” 11. Initially some leases were granted for a period of two years while others were for a period of one year. The period could be extended for another period of one year provided the lessee delivered to the lessor or left for him or send by registered post to him at his last known place of abode or business notice in writing not less than 30 days before the expiration of the term. If there was no subsisting breach of any of the lessees obligations under the agreement then at the cost of the lessee, a lease could be granted of the premises for a further period of one year to commence from and after the expiration of the term hereby granted, at the same covenants, agreements, and conditions (for renewal excepted) subject to such enhancement thereto may be permissible under the then prevailing Rent Control law of the State, 12. In view of this clause a fresh lease for one year could be granted by the lessor on the same terms and conditions. The previous lease could not be renewed. After the extended period of one year, there is no right with the lessee to get any further extension of the lease period from, the lessor on the same terms and conditions. It is a different matter that the lessor may allow the lessee to retain the possession of the building on same conditions or on fresh conditions of lease. In £x. P-l and Ex. P-3 the defendants have only stated that they are entitled to retain the possession of the premises after the expiry of the lease period but I have already stated that under clause 14, the defendants have no such right In these circumstances, issue No, 2 is decided against the defendants. ISSUE No. 4. 13. The copy of the notice is Ex. P-17 which was sent alongwith the annexures Ex. P-18 and Ex. P-19. The learned counsel for the defendants did not contest this issue. The perusal of the notice reveals that the notice under Section 80 C. P. C. is valid. This issue is decided in favour of the plaintiff, ISSUE No. 5. 14. It is admitted by the learned counsel for the parties that some disputes were referred to an arbitrator who gave and award of Rs. 2271/-in favour of the plaintiff. This award was filed in the court. Both the parties filed objections under Section 30 of the Arbitration Act. The objections of the plaintiff were accepted and the award was set aside. The matter was remitted to the arbitrator for a fresh decision. The learned counsel for the plaintiff contends that after the remittance of the award to the arbitrator, he filed a supplementary claim but did not include the amount of Rs, 2271/-for the reason that the defendants had obtained pre-stamped receipts from the plaintiff on the assurance that the amount would be paid to the plaintiff. It is alleged that the defendants did not pay the amount but tendered a cheque of a nominal amount of Rs, 10/- only to the plaintiff which the plaintiff returned. The learned counsel for the defendants states that in the written statement the defendants have accepted the payment of this amount. It is alleged that the defendants did not pay the amount but tendered a cheque of a nominal amount of Rs, 10/- only to the plaintiff which the plaintiff returned. The learned counsel for the defendants states that in the written statement the defendants have accepted the payment of this amount. Except for the award, the defendants do not accept their liability to pay this amount, 15. The amount was accepted by the defendants on the basis of the award, which is no longer in existence, therefore, the defendants now deny their liability for payment of this amount. The plaintiff also wants that the amount should be paid to him as claimed in the suit. In such circumstances this issue is not pressed by the defendants. The issue is decided against the defendants. ISSUE No. 6. 16. In para 14 of the written statement it is alleged that the payment of the rent was made to the plaintiff upto the date of the hiring of the suites and the plaintiff accepted this payment under protest as he was requesting for enhancement of the rent. Thus the rent was accepted by the plaintiff under protest. The plaintiff (PW 1) has also stated that the defendants paid a sum of Rs. 2280/- approximately, towards his bills by cheque and this payment was accepted by him under protest. Hence it is held that the plaintiff accepted the rent under protest which acceptance cannot have any effect on the merits of the case because the plaintiff never gave up his claim. Issue No, 6 is decided against the defendants. ISSUES Nos. 3, 7 and 8. 17. These three issues are interconnected, 18. Ex, P-20 is the copy of the judgment in Civil Suit No. 226/1 of 1974, decided by the Sub Judge 1st Class, Simla, on 30-3-1976. Appeal against this judgment was dismissed on 21-2-1978 vide copy of judgment Ex. P-21. It is contended by the learned counsel for the plaintiff that these judgments operate as res judicata between the parties but the learned counsel for the defendants contends that they do not operate as res judicata, 19. For res judicata the following conditions should exist: (a) The matter directly and substantially in issue in the subsequent suit must have been directly and substantially in issue in the former suit. For res judicata the following conditions should exist: (a) The matter directly and substantially in issue in the subsequent suit must have been directly and substantially in issue in the former suit. (b) The former suit must have been between the same parties or between the parties under whom they or any of them claim. (c) Such parties must have been litigating under the same title in the former suit. (d) The court trying the former suit must have been a court competent to try the subsequent suit or the suit in which such issue is subsequently raised. (e) Such matter in issue in the subsequent suit must have been heard and finally decided in the first suit. 20. Condition (d) may not be necessary in view of explanation VIII of Section 11 C. P. C. as amended by Act No, 104 of 1976. It is now sufficient, if the court in the former suit was competent to try the issue arising in the subsequent suit though it was not competent to try the subsequent suit itself. In other words, if the former court is not competent to decide the subsequent suit for want of pecuniary jurisdiction still it cannot be a ground for holding that the decision of the former court is not res judicata, 21. In the present case the parties in the former suit (in which the judgments Ex, P-20 and Ex. P-21 were given) were the same as are in the present suit. 22. The former suit was filed by the present plaintiff against the present defendants for recovery of money on the ground that the lease in favour of the defendants had expired and after the expiry of the extended period of lease the plaintiff was entitled to realise the amount from the defendants on hotel tariff rate. This stand of the plaintiff was contested. The defendants pleaded that the plaintiff was not entitled to claim hotel tariff rates and could only claim according to the rates contained in the lease deed. The plaintiff had also claimed interest which right of the plaintiff was denied by the defendants. On these pleadings issue Nos. 4 and 5 were framed : (4) Whether the plaintiff is entitled to recover the suit amount as claimed ? (5) Whether the plaintiff is entitled to interest ? 23. The plaintiff had also claimed interest which right of the plaintiff was denied by the defendants. On these pleadings issue Nos. 4 and 5 were framed : (4) Whether the plaintiff is entitled to recover the suit amount as claimed ? (5) Whether the plaintiff is entitled to interest ? 23. On issue No. 4 it was held by the Sub Judge that the defendants ceased to be the tenants of the plaintiff after the extended period of the lease and their occupation was not that of a tenant. It was also held that they were liable to pay hotel tariff rate to the plaintiff and the suit of the plaintiff for the recovery of Rs. 1400/- on the basis of hotel tariff rate ^was decreed. 24. On issue No, 5 it was held that there was no privity of contract between the parties regarding payment of interest and the interest was not claimed. The claim of interest was disallowed. 25. Before the District Judge in appeal also the tenants contested the claim of the plaintiff regarding the hotel tariff rate and the District Judge observed as follows : "The lease in the instant case was for a fixed term of two years with a provision for a renewal for a further period not exceeding one year at the option of the lessee to be exercised in the manner mentioned in the lease deed itself. The tenancy thus stood terminated by the afflux of time. In the absence of any fresh agreement between the parties, the plaintiff was justified in claiming compensation at the tariff hotel rates. It has not been shown to me if the rates charged are excessive or if the same were not in accordance with the tariff.” With these observations, the findings of the Sub-Judge were upheld and the appeal was dismissed on 21-2-1978. It is evident that the matter regarding the claim of hotel tariff rates and the interest was directly and substantially in issue in the former suit and the same was heard and finally decided by the Sub-judge and the District judge. The parties in the former suit and the present suit are litigating under the same title. The Court trying the former suit/issue was competent to try the issue. The parties in the former suit and the present suit are litigating under the same title. The Court trying the former suit/issue was competent to try the issue. Thus I find that all the essential requirements for application of Section 11 of the C. P. C. are fulfilled and the former judgments (Ex. P-20 and Ex. P-21) will operate as res judicata. 26. The learned counsel for the plaintiff referred to the letter Ex. P-2 dated 2-5-1974 in which the plaintiff had claimed enhanced rates of rent. This letter was written in response to the letter Ex. P-l. This letter is not relevant because it was never accepted by the defendants. 27. As a result of the above discussion, issue No. C is held in favour of the plaintiff. In Ex. P-20 and Ex. P-21 it was held that the plaintiff could claim the hotel tariff rate, therefore, under issue No. 3 it is held that the plaintiff can claim the hotel tariff rates as mentioned in para 11 of the plaint because these tariff rates of Rs. 49/- per day are not shown to be excessive or unfair in any manner. Similarly under issue No. 7 it is held that the plaintiff is not entitled to any damages or interest. Issue Nos. 3 and 7 are decided accordingly. RELIEF 28. The learned counsel for the defendants contends that the suit of the plaintiff is bad for mis-joinder of causes of action, as different suites were occupied by different persons during different periods. He contends that separate suits should have been filed or at least court fee should have been paid separately for each claim. This objection is not raised in the written statement. Under Order 2 Rule 7 C. P. C. all objections on the ground of misjoinder of causes of action are to be taken at the earliest possible opportunity. Hence in this case these objections shall be deemed to have been waived and as such this contention of the defendants counsel cannot be accepted. As objection of misjoinder of causes of action is not maintainable, therefore, the objection regarding court fee is also not accepted. The counsel for the defend ants could not show me any law to support his contentions. 29. The next objection of the defendants counsel is regarding the limitation. As objection of misjoinder of causes of action is not maintainable, therefore, the objection regarding court fee is also not accepted. The counsel for the defend ants could not show me any law to support his contentions. 29. The next objection of the defendants counsel is regarding the limitation. No such objection has been taken in the written statement with the result that no issue has been framed. The learned counsel contends that under Section 3 of the Limitation Act the objection can be taken at any stage. It is true that an objection regarding limitation can be allowed to be taken, if upon the allegations made in the plaint the suit is prima facie barred by limitation and is liable to be dismissed. For this purpose the allegations in the plaint and the relief claimed in the suit are to be analysed to ascertain the real nature and scope of the suit. 30. Now the plaintiff has claimed that the periods of leases as stipulated in the lease deeds have expired. It is stated that the extended period of one year which could be allowed to the defendants under clause 14 of the agreement (Ex D-l) has also expired. In view of the findings on the various issues, the possession of the defendants after the expiry of the extended period of lease is without any right and it has been held that on the principles of res judicata the defendants are liable to pay the hotel tariff rates because they are no longer the lessees of the premises, 31. In para 9 of the plaint it is stated that the plaintiff offered the defendants to accept the enhanced rates of rent. The defendants were also informed that in the alternative the premises should be vacated failing which the plaintiff would charge at the prevailing hotel tariff rates. The plaintiff has given the details of the days during which the suites were occupied by the defendants after the extended period of lease and in para 11 of the plaint the rates have also been given. Thus according to admitted position, the defendants occupied the premises after the extended period of lease. They are, therefore, liable to pay at the hotel tariff rates. 32. This suit was filed on 22-3-1978. Thus according to admitted position, the defendants occupied the premises after the extended period of lease. They are, therefore, liable to pay at the hotel tariff rates. 32. This suit was filed on 22-3-1978. A suit for recovery of arrears can be filed within a period of three years from the date of the cause of action. As the plaintiff is to charge on daily basis i. e, at the hotel tariff rates, therefore, the lodging charges become payable to the plaintiff on every day. The suit is against the Union of India and the plaintiff was required to serve a no the under Section 80 C. P. C. Hence the plaintiff is further entitled to add a period of two months in the original period of limitation, and can therefore claim the arrears fora period of three years and two months, that is, from 22-1-1975. The suit for the period from 22-1-1975 till the date of the vacation of the suites, will be within the time and the claim prior to 22-1-1975 is not within limitation. In view of Section 3 of the Limitation Act claim prior to 22-1-1975 is dismissed as time barred. The plaintiff can thus charge for the following periods as even in para 10 of the plaint :— Premises/ Rooms. Period of retention chargeable Nos. of days 1 &2 22-1-75 to 23-1-75 2 36&41 22-1-75 to 5-5-75 104 37&40 22-1-75 to 5-5-75 104 38 & 39 22-1-75 to 17-6-75 147 44 &49 22-1-75 to 23-1-75 2 45 & 48 22-1-75 to 23-1-75 2 46&47 22-1-75 to 23-1-75 2 363 33. The plaintiff has claimed at the rate of Rs, 49/- per day for one suite. The total claim comes to Rs. 17,787/-. The defendants have not produced any evidence to prove that the rate of Rs. 49/- per day was not the hotel tariff rate or that this rate is unreasonable or unfair. Plaintiff (PW 1) has stated that he sent bills to the defendant claiming the hotel tariff rates. The plaintiff has also produced Ex. P- 7 and Ex. P-8 to prove these facts. Thus I hold that the plaintiff is entitled to claim at the rate of Rs. 49/- per day for a suite. Hence the plaintiffs suit for recovery of Rs. 17,787/- is decreed with proportionate costs. The rest of the plaintiffs claim is dismissed. Order accordingly.