New Jatinga Valley Tea Ltd. Regd. Office at 17 R. N. Mukherjee Road, Calcutta-1 Subrata Chatterjee, Director, M/S New Jatinga Valley Tea Ltd. v. Hindustan Tea Co. 205, Rabindra Sarani, Calcutta -7
1993-03-24
MANISANA, U.L.BHAT
body1993
DigiLaw.ai
Manisana. J.:- This is an appeal from a decree passed by the District Judge at Cachar in Money Suit No 1 of 1979. The facts of the case, in brief, are thus. The dispute is in respect of Subong and Haticherra Tea Estates. Sometime in the month of March, 1972,4th defendant, M/s Hindustan Tea Company, made an application under section 41 of the Arbitration Act to the District Judge, Cachar, being Misc. Case No 61 of 1972, for appointment of a Receiver of the two tea estates in a dispute between the 4th and 5th defendants. The 5th defendant, M/s K. Sashikant & Co. also made an application, Award Matter No. 136 of 1972, to the High Court of Calcutta for appointment of a Receiver of the two tea estates. The Calcutta High Court, under its order dated 20.6.72, appointed the official Receiver as a Receiver of the two estates. Against that order, the 4th defendant appealed to the Supreme Court. In Civil Appeal No 1846(M) of 1972, the Supreme Court, under order dated 1.12.72, directed the District Judge to appoint a Receiver of the two estates. On 6.7.73, the District judge, in Misc. Case No 61 of 1972, appointed the Board of Trustees of the Assam Tea Plantation Provident Fund Scheme as a Receiver of the two estates. The said Board of Trustees was removed from the office of the Receiver and the District Judge appointed Sri P.K. Aditya, Advocate, as the Receiver of the two tea estates under order dated 8.3.75 and 12.3.75. The District Judge directed the Receiver, so appointed, to lease out the two tea estates by inviting tenders. The 2nd defendant, M/s New Jatinga Valley Tea Ltd, was granted lease of the said two tea estates by the Receiver for the period from 1.1.75 to 31.12.77 at a yearly rent of Rs. 1,65,000/- (which we shall refer to as the "First lease") and the delivery of possession of the two tea estates was made on 16.3.75. The 2nd defendant paid the rent for the three years. The Supreme Court made an order on 6.12.77 in CMP No 11969/77 directing the Receiver to lease out the two tea estates for two years, namely, 1978 and 1979, by auction.
The 2nd defendant paid the rent for the three years. The Supreme Court made an order on 6.12.77 in CMP No 11969/77 directing the Receiver to lease out the two tea estates for two years, namely, 1978 and 1979, by auction. The bid offered by the 2nd defendant, which was the highest bid, was accepted by the Receiver with the approval of the District Judge and, therefore, the Receiver granted lease of the said two tea estates to the 2nd defendant for the period from 1.1.78 to 31.12.79 at an annual rent of Rs. 13,00,000/- payable in three installments on or before 30.4.78 and 15.12.78 (which we shall refer to as the "second lease"). By way of security for the payment of rent for the year 1978, on 19.1.78, a bank guarantee was executed by the 1st defendant, M/s United Industrial Bank, in favour of the Receiver. The 2nd defendant paid Rs. 60,000/- as security deposit and also Rs. 4,32,400/- as the first instalment. The second and third instalments had not been paid. Therefore, the Receiver demanded the defendant-bank payment of Rs. 8,67,600/- in terms of the bank guarantee, by registered letters dated 23.12.78, 29.12.78 and 4.1.79, but the defendant-bank failed to discharge their obligation under bank guarantee. The Receiver has, therefore, filed the suit claiming Rs. 9,76,050/- of which Rs. 8,67,600/- as arrears of rent and Rs. 1,08,450/-as compensation. The 2nd and 3rd defendants filed a joint written statement and set up counterclaim against the claim of the plaintiff. Their case in respect of the first lease is that, when the 2nd defendant took possession of the two tea estates, they were found in damaged and neglected condition. The place of plantation had become a vast grazing ground. Factories, machinery, etc of both the estates were in a bad condition, as no investment was made by the previous management for a long time. Bungalows, staff quarters and workers houses were also in dilapidated condition. There was no payment of wages and salaries to workers and/or employees. The 2nd defendant initially made a capital investment of Rs. 1,50,000/-for cultivation and manufacturing of tea under the terms of lease deed. Out of Rs. 1,50,000/-, the 2nd defendant was given reimbursement of a sum of Rs. 63,000/- by the Receiver. The 2nd defendant applied for licence for manufacturing tea in Subong and Haticherra factories.
The 2nd defendant initially made a capital investment of Rs. 1,50,000/-for cultivation and manufacturing of tea under the terms of lease deed. Out of Rs. 1,50,000/-, the 2nd defendant was given reimbursement of a sum of Rs. 63,000/- by the Receiver. The 2nd defendant applied for licence for manufacturing tea in Subong and Haticherra factories. But the manufacturing licence in Subong factory was withheld by the Central Excise Department for non-payment of Central Excise Duty and penalties accrued in 1969. The 2nd defendant was, therefore, deprived of the possession of Subong factory during the period of the first lease despite demands made for delivery of the factory. For want of manufacturing facilities, the 2nd defendant sustained additional expenditure and loss of Rs. 12,85,978.63 during the term of the first lease. With regard to the second lease, due to non-delivery of Subong factory and non-functioning of Haticherra factory, the 2nd defendant suffered a loss of Rs. 15,69,733.15 in running the two tea estates from 1.1.78 to 31.12.78. The 2nd defendant did not pay the second and third instalments for the rent had abated due to non-delivery of Subong factory and non-functioning of Haticherra factory. Therefore, the sum of Rs. 4,32,400/- which was paid as the first instalment was refundable. The 2nd defendant wanted to surrender the lease with effect from 1.1.79 but the Receiver refused to accept the surrender. However, the Supreme; Court directed to surrender possession of the two estates to the Receiver but that would be without prejudice to the rights and obligations of the parties concerned with the dispute. The 2nd defendant, by a notice dated 20.2.91, informed all concerned that the Receiver would be deemed to be in possession of the two estates with effect from 1.1.79. The Receiver, in fact, took possession of the two estates on 24.2.79. During 1.1.79 to 20.2.79, the 2nd defendant spent a sum of Rs. 6,08,487.99 for running the two estates. The 2nd defendant has made the following claims - Rs. 12,85,987.63 as loss sustained during first lease, and, in respect of the second lease, refund of the security deposit of Rs. 60,000/- and Rs. 4,32,400/- paid as 1st instalment, Rs. 15,69,733.15 as loss sustained for running the estates from 1.1.78 to 31.12.78, and Rs. 6,08,478.99 as expenditure incurred in running the estates from 1.1.79 to 20.2.79. The plaintiff examined one witness; the 2nd defendant, one.
60,000/- and Rs. 4,32,400/- paid as 1st instalment, Rs. 15,69,733.15 as loss sustained for running the estates from 1.1.78 to 31.12.78, and Rs. 6,08,478.99 as expenditure incurred in running the estates from 1.1.79 to 20.2.79. The plaintiff examined one witness; the 2nd defendant, one. 34 documents were exhibited on admission. The trial Court decreed the suit allowing the claim of the plaintiff with interest at 12½ % per annum on the decretal amount from the date of institution of the suit and till its realisation and dismissed the counter claim. Hence this appeal by the 2nd and 3rd defendants. 2. It may be stated here that the plaintiff did not file written statement in answer to the counter-claim. The Receiver was removed sometime in June 83. Thereafter, the 4th defendant made an application on 15.7.83 for transposition of the 4th defendant as the plaintiff in place of the Receiver. On 5.11.86, the Court allowed the application and the 4th defendant was transposed as the plaintiff in place of the Receiver. 3. After hearing the learned counsel for the parties the following points are formulated for determination - (1) Whether the counter claim set up by the 2nd and 3rd defendants is not maintainable for want of sanction of the Court which appointed the receiver ? (2) Whether the suit is for enforcement of the bank guarantee ? If so is the counter-claim of the 2nd and 3rd defendants not maintainable? (3) Whether the judgment should have been pronounced against the plaintiff in relation to counterclaim for failure of plaintiff to file written statement in answer to the counter-claim ? (4) Whether the documents exhibited are inadmissible for want of proof ? (5) Whether the 2nd defendant would be entitled to suspend the payment of the rent, or, whether it should be held liable to pay proportionate part of the rent ? (6) To what relief the plaintiff or the 2nd defendant is entitled ? 4. Ill re point (1), - Mr. B.K. Das, learned counsel for the plaintiff-respondent, has submitted that the 2nd and 3rd defendants have set up counter-claim against the claim of the Receiver, the plaintiff in the suit. Under O.8, r. 6A, the counterclaim is to be treated as a plaint and governed by the rules applicable to plaints, and the counter-claim shall have the same effect as a cross-suit.
Under O.8, r. 6A, the counterclaim is to be treated as a plaint and governed by the rules applicable to plaints, and the counter-claim shall have the same effect as a cross-suit. Therefore, no such counter-claim can be set up without leave of the Court which appointed the Receiver. 4A. In Everest Coal vs. State of Bihar, AIR 1977 SC 2304 , the Supreme Court has held that, when a Court puts a Receiver in possession of property, the property comes under court custody, the Receiver being merely an officer or agent of the Court. Any legal action in respect of that property, either before starting the action or during its continuance, requires permission of the Court which appointed the Receiver. If, before the suit terminates the permission to sue or to prosecute further is granted by the Court, the requirement of law is fulfilled. But, failure to secure such leave till the end of the is would prove fatal. 5. It has already been stated that the suit was originally filed by the Receiver and that the Receiver was removed sometime in June 83. Thereafter, the 4th defendant, M/s K. Sashikanta & Co. made an application on 15.1.83 for transposition of the 4th defendant as plaintiff in the suit. On 5.11.86, the trial Court allowed the petition. Accordingly, the 4th defendant was transposed as plaintiff in place of the Receiver. The counter-claim was filed by 19.11.79 before the Receiver was removed. It is not disputed that no leave or permission was taken to set up counter-claim. As already stated, permission can be obtained either before starting of the action or during its continuance, that is to say, if the permission is taken before the termination of the suit, the requirement of law is fulfilled. In that view of the matter, in a suit against a Receiver, prior permission of the Court appointing the Receiver is not a condition precedent, and leave or permission can be taken before the suit terminates. In the present case, the 4th defendant continued the suit as the plaintiff in place of the Receiver and, as such, the requirement of law to obtain leave or permission has lost its importance. Therefore, the contention of the learned counsel is rejected. 6.
In the present case, the 4th defendant continued the suit as the plaintiff in place of the Receiver and, as such, the requirement of law to obtain leave or permission has lost its importance. Therefore, the contention of the learned counsel is rejected. 6. In re point (2) - The learned counsel for the plaintiff-respondent has argued that the present suit is one for enforcement of the bank guarantee and, therefore, no counter-claim can be set up by the 2nd and 3rd defendants against the claim of the plaintiff. 7. It is disputed that the defendant bank (1st defendant) executed a bank guarantee. The bank guarantee provides, inter alia, that the bank "undertake to guarantee the said Receiver to the extent of Rs. 11,00,000/- (Rupees eleven lacs) on behalf of New Jatinga Valley Tea Company (2nd defendant) against their failure of payment of lease hold". (words within second set of brackets have been supplied). The plaintiff claims a decree "against all or any of the principal defendants as the Court may find liable for the claim of the plaintiff." 8. Section 126 of the Indian Contract Act defines a "contract of guarantee" as "a contract to perform the promise, or discharge the liability, of a third person in case of his default", In so far as bank guarantee is concerned, it is now well settled that the bank guarantee is an autonomous contract and imposes and absolute obligation on the bank to fulfil the terms and payment in bank guarantee becomes due on the happening of a contingency on the occurrence of which the guarantee becomes enforceable. The enforceability of the same depends upon the terms under which the guarantor has bound himself. Bank guarantee must be allowed to be honoured free from interference by the Court and a bank which gives a guarantee must honour it according to its terms and it is only in exceptional cases that the Court would interfere with the machinery of irrevocable obligations assumed by banks. The Court should refrain from probing into the nature of transactions between the bank and the customer which led to the furnishing of the bank guarantee. If any authority is required, we may refer to Syndicate Bank vs. Vijay Kumar, AIR 1992 SC 1066 , in which the earlier decisions of the Court have been discussed.
The Court should refrain from probing into the nature of transactions between the bank and the customer which led to the furnishing of the bank guarantee. If any authority is required, we may refer to Syndicate Bank vs. Vijay Kumar, AIR 1992 SC 1066 , in which the earlier decisions of the Court have been discussed. But the present is not a suit simplicitor for enforcement of the bank guarantee. The 2nd defendant is one of the principal defendants. The plaintiff claims against the 2nd defendant also. Therefore, the counter-claim is maintainable. 9. In re point (3), - Mr. B.K. Goswami, learned counsel for the defendant-appellants, has submitted that the plaintiff did not file written statement in answer to the counter -claim made by the 2nd and 3rd defendants and, therefore, the trial Court should have pronounced judgment against the plaintiff in relation to the counter -claim. 10. Order 8, rule 6E, CPC, provides that if the plaintiff makes default in putting in a reply to the counter- claim made by the defendant, the Court may pronounce judgment against the plaintiff in relation to counter claim made against him, or may make such order in relation to the counter claim it thinks fit. Order 8, r 5 (1), provides that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability : provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission. This sub-rule has application only in a case where pleading is filed but does not contain specific or explicit denial of facts or the averments contained in the plaint. 0 8, r 5 (2), empowers the Court to pronounce the judgment on the basis of facts contained in the plaint, where the defendant has not filed a pleading, except against a person under disability, but the Court may in its discretion, require any such facts to be proved. 11. The basic principle is that, where the plaintiff comes to the Court, he must prove his case even in a case where defendant does not appear, that is to say, ex-parte evidence is necessary to prove plaintiff's case.
11. The basic principle is that, where the plaintiff comes to the Court, he must prove his case even in a case where defendant does not appear, that is to say, ex-parte evidence is necessary to prove plaintiff's case. The quantum of evidence or proof in such a case depends upon the nature of the case. However, this position has been altered by reason of sub-rule (2) of rule 5 of Order 8 which was introduced by Amending Act 104 of 1976. In this regard, we may refer to Modula India vs. Kamakshya Singh Deo, AIR 1989 SC 162 . In that case, the Supreme Court has, while considering rules 1, 5 and 10 of Order 8, stated in the following terms :- "Rule 1 merely requires that the defendant should present a written statement of his defence within the time permitted by the Court. Under Rule 5 (2), where the defendant has not filed a pleading it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint except against a person under disability but the Court may in its discretion require any such fact to be proved. Again under Rule 10 when any party from whom a written statement is required fails to present the same within the time permitted or fixed by the Court, the Court "shall pronounce judgment against him or make such order in relation to the suit as it thinks fit". It will be seen that these rules are only permissive in nature. They enable the Court in an appropriate case to pronounce a decree straightway on the basis of the plaint and the averments contained therein. Though the present language of Rule 10 says that the Court "shall pronounce judgment against him, it is obvious from the language of the rule that there is still an option with the Court either to pronounce judgment on the basis of the plaint against the defendant or to make such other appropriate order as the Court may think fit. Therefore, there is nothing in these rules, which makes it mandatory for the Court to pass a decree in favour of the plaintiff straightway because a written statement has not been filed." 12. In view of the above discussion, O 8, rr 5 (2) and 10, are permissive in nature.
Therefore, there is nothing in these rules, which makes it mandatory for the Court to pass a decree in favour of the plaintiff straightway because a written statement has not been filed." 12. In view of the above discussion, O 8, rr 5 (2) and 10, are permissive in nature. The provisions under O 8, r 6E, are similar to those under O 8, rr 5 (2) and 10. Therefore, O 8, r 6E, is also permissive in nature. This being the situation, one of the courses open to the Court under O 8, rr 6E and 10, namely, to pronounce judgment straightway or to make such other appropriate order as the Court may think it, may be adopted. Which one of the courses is to be adopted is at the discretion of the Court provided always that justice is done to both parties. The discretion must be exercised judicially; it must not be arbitrary and fanciful; it must be just and proper in the circumstances. However, it will depend on particular cases and no hard and fast rule can be laid down. Various factors have to be taken into consideration and carefully weighed. The nature of the suit is one of the factors - summary suits upon bills of exchange, hands, promissory notes, etc, for example. The Court has also to consider facts stated in the plaint, documents filed along with the plaint, if any, and law applicable to the parties. It must also include some acts done by the defendant, as in absence of such acts no cause of action can possibly accrue. In the above view of the matter, it was at the discretion of the trial Judge to adopt one of the courses under O.8, r 6E. We are of the opinion that the trial Court exercised its jurisdiction in a just and proper manner in the circumstances of the case. Accordingly, the contention of the learned counsel cannot be accepted. 13. In re point (4), - Mr. B.K. Das, learned counsel for the plaintiff-respondent, has contended that the documents which have been exhibited and relied on by the defendant - appellants cannot be considered as they have not been proved in accordance with law. The contention of the learned counsel cannot be accepted. We approach the matter as follows. 14.
13. In re point (4), - Mr. B.K. Das, learned counsel for the plaintiff-respondent, has contended that the documents which have been exhibited and relied on by the defendant - appellants cannot be considered as they have not been proved in accordance with law. The contention of the learned counsel cannot be accepted. We approach the matter as follows. 14. The plaintiff and the 2nd defendant made a joint application on 5.11.86 to the trial Court praying for dispensing with the formal proof of the documents, which were enumerated in the petition, stating that the documents had been admitted by the parties-to the suit and it was necessary to dispense with the formal proof of the documents. The Court made an order on 5.11.86 for marking those documents on the list as exhibits on admission. Accordingly, those documents were marked exhibits with necessary endorsements which were signed by the trial judge. 15. In That it Chiru vs. Ningampan Kabul, AIR 1990 Gau 7 (to which one of us (MS, J) was a party, it has been observed that there are two stages relating to documents. One stage is when all the documents on which the parties rely are examined at the first hearing of the suit or the settlement of the issues. It is at this stage that the documents which are not required to be proved by calling witness are to be admitted and marked the numbers of the suit, etc, as provided under O 13, r 4. The next stage is when those documents (other than the documents not required to be proved) are proved and formally tendered in evidence. At this later stage, those documents, which are required to be proved are admitted in evidence. 16. In Gopal Das vs Sri Thakurji, AIR 1943 PC 83, the Privy Council has, at page 47, observed thus : "The endorsement 'admitted against the plaintiffs' is in the form generally employed by the trial Judge under O.I3, R 4 for documents tendered by the defendants just as the plaintiffs' documents are marked 'admitted against the defendant'. The endorsement means that the document is admitted in evidence as proved.
The endorsement means that the document is admitted in evidence as proved. Where the objection to be taken is not that the document is in itself inadmissible but that the mode of proof put forward is irregular or insufficient, it is essential that the objection should be taken at the trial before the document is marked as an exhibit and admitted to the record. A party can not lie by until the case comes before a Court of appeal and then complain for the first time of the mode of proof. A strictly formal proof might or might not have been forthcoming had it been insisted on at the trial" (emphasis supplied). 17. In (he above view of the matter, where endorsement on documents has been made in terms of O.13, r 4, CPC, the documents are admitted in evidence as proved, and those documents can be considered unless they are inadmissible, irrelevant or the Court thinks otherwise under the relevant laws. 18. In re point (5), - The question which arises for consideration is whether the 2nd defendant would be entitled to suspend the payment of rent or whether the 2nd defendant should be held liable to pay proportionate part of the rent, in so far as the second lease is concerned. In para -2 of the written statement, it is stated,- "... on account of the failure of the plaintiff Receiver to deliver possession of Subong factory and also on his failure to give adequate facilities in Haticherra factory by installation of additional machineries for manufacturing teas in the said factory, the entire rent was suspended and the plaintiff is not entitled to claim anything on account of rent..." In Surendra Nath vs. Stephen Court Ltd, AIR J966SC1361, the Supreme Court has observed that it will depend on the circumstances of each case whether a tenant would be entitled to suspend payment of the rent or whether he should be held liable to pay proportionate part of the rent. 19. Let us now examine the case on hand. In the instant case, it is not disputed that the factory at Subong Tea Estate was not made available for use by the 2nd defendant, as the excise duty and penalties were not paid, and that the machinery at Haticherra Tea Estate was not functioning.
19. Let us now examine the case on hand. In the instant case, it is not disputed that the factory at Subong Tea Estate was not made available for use by the 2nd defendant, as the excise duty and penalties were not paid, and that the machinery at Haticherra Tea Estate was not functioning. The case of the 2nd defendant is that, due to non-delivery of Subong factory and non-functioning of Haticherra factory, it suffered heavy losses. Under section 108 (e), TP Act, in the absence of a contract to the contrary, if by fire, tempest or flood, or violence of any army or of a mob or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void. In other words, a lease can be avoided under section 108 (e) in the absence of a contract to the contrary. The present is not a case where material part of the property has been destroyed or rendered substantially and permanently unfit for the purpose for which it was let out. In the lease deed, there is nothing to show that the lease can be avoided, if the factories were not made available for use by the 2nd defendant. Therefore, section 108 (3) is not attracted. 20. Proceeding further, clause 7 of the lease deed provides: "The lessee will be free to use the factory at the gardens for manufacture of tea and generation of electricity if considered necessary, and will also be free to dispose of the plucked green leaves or manufacture of the same in any other factory, as they think fit and proper." On a reading of clause 7, it appears that green leaves could be disposed of without making them tea, or tea could be manufactured from those green leaves in any other factory; and that the use of factory at the gardens was optional even if the factory could be operated. The written statement of 2nd defendant and letter dated 27.11.78 (Ext-N) of the 2nd defendant show that the 2nd defendant enjoyed the two estates by producing green leaves and using the same for making tea although tea was manufactured in another factory at Urrunaband.
The written statement of 2nd defendant and letter dated 27.11.78 (Ext-N) of the 2nd defendant show that the 2nd defendant enjoyed the two estates by producing green leaves and using the same for making tea although tea was manufactured in another factory at Urrunaband. Under these circumstances, the 2nd defendant cannot claim suspension of rent or payment of proportionate part of it. 20A. For the reasons stated above, the 2nd defendant has no right to suspend the rent nor can claim to pay proportionate part of it. Therefore, the point (5) is decided against the defendant -appellants. 21. In re point (6), - In view of the above conclusion that the 2nd defendant has no right to suspend the rent nor can claim to pay proportionate part of it, the 2nd defendant is liable to pay arrears of rent, namely, Rs. 8,67,000/-, the 2nd and 3rd instalments. With regard to the claim for Rs, 1,08,450.00 as compensation for failure to pay the 2nd and 3rd instalments of rent, there is no evidence to show how the plaintiff suffered loss. There is also no evidence for the actual amount of loss claimed. That apart, under clause 4 of the deed of lease there is a penal provision of forfeiture of security deposit of Rs. 60,000/- in default of the 2nd defendant to pay rent. For the reasons stated, the claim of the plaintiff for Rs. 1,08,450/- as compensation cannot be allowed. 22. Turning to the counter claim of the 2nd defendant, as already stated, the 2nd defendant has claimed Rs. 12,85,987.63 as loss sustained during first lease, and, in respect of the second lease, refund of the security deposit of Rs. 60,000/- and Rs. 4,32,400/- paid as 1st instalment, Rs. 15,69,733.15 as loss sustained from 1.1.78 to 31.12.78, and Rs. 6,08,478.99 as expenditure incurred in running the estates from 1.1.79 to 20.2.79. In respect of Rs, 12,85,987.63, Rs. 15,69,733.15 and Rs. 6,08,478.99, assuming that the 2nd defendant is entitled to claim losses, about which we do not express our opinion, we are unable to award compensation claimed by the 2nd defendant for the following reasons. In the written statement, it is stated that the 2nd defendant made a claim for reimbursement of Rs. 27, 80,312.65 for loss sustained in the year 1978 though the actual loss came to Rs. 15, 69,733.15.
In the written statement, it is stated that the 2nd defendant made a claim for reimbursement of Rs. 27, 80,312.65 for loss sustained in the year 1978 though the actual loss came to Rs. 15, 69,733.15. Letter dated 3.5.78 (Ext-E) addressed to the District Judge who appointed Receiver (for short 'Judge') indicates that the 2nd defendant made the claim for Rs. 12,85,987/-. Letter dated 27.11.78 (Ext-N) of the 2nd defendant to the Receiver shows that the 2nd defendant made claim for Rs. 27,80,312.65 as well as Rs. 12,85,987/-. In the letters dated 15.5.78 (Ext-N), dated 12.12.78 (Ext-O) and letter (Ext-AA) of the Receiver to the Judge, claims made by the 2nd defendant are mentioned, but the letters do not indicate admission by the Receiver of the claim or amount of loss sustained. PW 1 denies the claims. All the claims were pending before the judge at the relevant time. It is settled that admission are substantive evidence by themselves in view of Ss 17 and 21 of the Indian Evidence Act, though they are not conclusive proof of the matter admitted (see Bharat Singh vs Bhagirathi, AIR 1966 SC 405 , and UOI vs. Moksh Builders, AIR 1977 SC 409 ). But, in the letters referred to above and other documents on record no admission has been made by the Receiver, and the Judge also has not made any award. The documents exhibited on behalf of the 2nd defendant can only show, in the context, that claims for loss and expenditure were made by the 2nd defendant. A mere mentioning of amount of claims in the letters would not amount to proof. The 2nd defendant has to prove the actual loss or expenditure. There is no material or evidence on record to prove the actual loss sustained by the 2nd defendant. For these reasons, the 2nd defendant has failed to establish the claim. 23. With regard to refund of security deposit of Rs. 60,000/- under clause 4 of the lease deed, the 2nd defendant is entitled to a refund of the amount with interest after expiry of the lease period provided the amount does not become liable to be forfeited for violation of any express condition of the lease. The trial Judge has held that the security deposit has been forfeited for non-payment of rent. We decline to interfere with the finding.
The trial Judge has held that the security deposit has been forfeited for non-payment of rent. We decline to interfere with the finding. In respect of refund of first instalment of rent of Rs. 4,32, 400/-, we have held that the 2nd defendant is liable to pay rent and, therefore, the question of refund does not arise. 24. The next question which arises for consideration is whether we should award pendente lite interest. Interest under section 34, CPC, after the date of suit is entirely at the discretion of the Court (see State of MP vs. Nathabhai, AIR 1972 SC 1545 ). We have rejected the counter-claim regarding alleged losses suffered by the 2nd defendant on technical ground. Claims made by the 2nd defendant were pending before the judge at the time of institution of the suit. On the facts and in the circumstances of the case, we are not inclined to award pendente lite interest. However, we are inclined to award interest from the date of decree to the date of payment at 4% per annum on the decretal amount. 25. In the result, the decree of the trial Judge is set aside. The suit is decreed for Rs. 8,67,600/- with interest at 4% per annum from the date of decree to the date of payment and costs, and the counter-claim of the 2nd defendant is dismissed. The appeal is partly allowed to the extent indicated above. No costs of appeal.