PUNJAB NATIONAL BANK v. RIVIERA APARTMENTS PVT. LTD.
2007-04-23
A.K.SIKRI, ARUNA SURESH
body2007
DigiLaw.ai
JUDGMENT A.K. Sikri, J. (Oral)- Twenty-two units in the commercial building bearing Municipal No. D-1, VSC, Alaknanda Shopping Complex, Kalkaji, New Delhi, were taken on rent by the appellant Punjab National Bank (hereinafter referred to as the Bank). The landlord/owner in respect of 19 units is M/s. Riviera Apartments Pv1. Ltd.; in respect of two units, the owner is one Mr. Inder Prakash Choudhrie; and 1 unit is in the ownership of Ms. Shafali Choudhrie, D/o. Mr. Inder Prakash Choudhrie. Mr. Inder Prakash Choudhrie is the Managing Director of M/s. Riviera Apartments Pv1. Ltd. 22 separate lease deeds were signed between the respective owners and the Bank. These owners/landlords filed suit for possession and mesne profits. All these suits were taken up by the learned Single Judge of this Court. In respect of two suits it was found that rent was less than Rs. 3,500/- p.m. These two suits were, accordingly, dismissed as the tenancy is protected under the Delhi Rent Control Act, 1958. Other 20 suits have been decreed by the learned Single Judge vide impugned judgment and decree dated 13.7.2006. Mesne profits are also awarded @ Rs. 85/- per sq. ft. per month for the ground floor units and Rs. 43/- per sq. ft. per month for the first floor and second floor units. It is also held that the Plaintiffs (respondents herein) would be entitled to interest @ 9% p.a. These 20 appeals are filed challenging the said judgment and decree whereby all 20 suits were decided. They are, therefore, taken up for hearing together. 2. The following factual position was not in dispute, as is clear from the judgment of the learned Single Judge, and the appellant could not controvert this position in these appeals as well: (a) relationship of lessor and lessee between the respondents and the Bank; (b) the premises were let out for commercial purposes; (c) rent in respect of these 20 units was more than Rs. 3,500/- p.m. and, therefore, tenancy is not protected under the provisions of the Delhi Rent Control Act, 1958; (d) leases in respect of these suits expired on 16.3.1998, except in two cases where the leases expired on 22.5.1998. There was no fresh lease deed executed between the parties; and (e) the dimensions of different units, as reflected in the site plan, were also admitted. 3.
There was no fresh lease deed executed between the parties; and (e) the dimensions of different units, as reflected in the site plan, were also admitted. 3. The plea of the Bank was that after the expiry of the lease periods, as per the lease deeds, it was a tenant holding over. Submission was that even after the expiry of the lease period, the respondents continued to accept the last agreed rent and, therefore, a contractual tenancy came into existence because of tender of rent by the Bank and its acceptance by the respondents. Before lease period expired under all leases, Mr. Inder Prakash Choudhrie had written letter on 28.11.1997 (Ex. PW-1/4) to the Assistant General Manager of the Bank informing that since the leases were going to expire and the lessors were willing to extend the lease, parties should agree on rent payable so that the leases could be extended. It was followed by another letter dated 7.1.1998 (Ex. PW -1/10) wherein Mr. Choudhrie had stated that in respect of over a month having lapsed, he had not heard anything on the issue and he specifically mentioned that with effect from the date the tenancies lapse, the landlords would be charging liquidated damages at Rs. 25,000/- per day for the first three months and, thereafter, at Rs. 35,000/- per day till the possession was ~ returned. On 19.3 .1998, another letter was written by him (Ex. PW -1/5) stating that henceforth damages at Rs. 25,000/- per day would be charged. It was followed by bill in the sum of Rs. 23,27,345/- sent on 17.6.1998 (Ex. PW-l/20) towards damages for unauthorised use and occupation by the Bank. On 6.8.1998 and 23.10.1998, further such bills were raised claiming damages. In between, the Bank wrote letter dated 9.7.1998 (Ex. P-1/6) informing that it was willing to have the leases extended, vide subsequent letter dated 23.10.1998 (Ex. P-10), the Bank offered to have the leases extended at the rates which were mentioned in that letter. Parties held negotiations at regional level and authorities at regional level agreed, on 15.1.2000, subject to approval from the Competent Authority, to pay the following lease rentals: Basement Rs. 30/- per square foot Ground Floor Rs. 80/- per square foot First Floor Rs. 70/- per square foot Second Floor Rs. 60/- per square foot Though the respondents agreed, the higher authorities in the Bank did not give consent.
30/- per square foot Ground Floor Rs. 80/- per square foot First Floor Rs. 70/- per square foot Second Floor Rs. 60/- per square foot Though the respondents agreed, the higher authorities in the Bank did not give consent. One suit, namely Suit No. 2563/2000 was thus filed for possession and the respondents awaited the reaction of the Bank. As the authorities in the Bank did not buzz, remaining 21 suits were also filed in the year 2003. 4. The aforesaid facts have been established on the basis of evidence on record placed before the learned Single Judge. There is no quarrel about the factual matrix. The argument which was advanced before the learned Single Judge was that since the plaintiffs/respondents had accepted the rent even after the expiry of lease periods, the Bank became the tenant holding over and such a tenancy could be terminated only after service of notice under Section 106 of the Transfer of Property Act, 1882. In the absence of any such notice given by the respondents, they could not file the suits for possession and dismissal of the suits was sought on this ground. This contention of the Bank has been turned down by the learned Single Judge after detailed discussion on legal principles touching this aspect, with the aid of plethora of case law cited in the impugned judgment. The learned Single Judge examined, in the facts of this case, whether it was a case of holding over under Section 106 of the Transfer of Property Act, 1882 or the Bank was tenant at sufferance. Quoting from the Supreme Court judgment in R. V. Bhupal Prasadv. State of A.P., AIR 1996 SC 140 , which explained this difference, the learned Single Judge further held that mere acceptance of rent after serving upon the tenant a notice to quit would not amount to waiver under Section 113 of the Transfer of Property Act, 1882, as was held by the Supreme Court in Sarup Singh Gupta v. S. Jagdish, III (2006) SLT 148=II (2006) CLT 16 (SC)= 2006 (4) SCC 205 . Number of other judgments in respect of this very proposition are noted and relevant portions extracted. Our purpose would be served in referring to the following quotes from two such judgments.
Number of other judgments in respect of this very proposition are noted and relevant portions extracted. Our purpose would be served in referring to the following quotes from two such judgments. In Shanti Prasad Devi v. Shankar Mahto, V (2005) SLT 198=III (2005) CLT 1 (SC)= 2005 (5) SCC 543 , it was observed as under: "18. We fully agree with the High Court and the first appellate Court below that on expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying assent to the continuance of the lessee even after expiry of lease period....." In Central Bank of India v. Lalit Kumar Bhargava, 129 (2006) DLT 338, it was observed: "12. The law is well settled that no tenant can be allowed to retain possession of the tenanted premises without payment of rent/damages for its use and occupation. The law is equally well settled through a catena of judgments, both of High Courts and of Supreme Court, that mere acceptance of rent after of (sic) notice to quit does not amount to creation of new tenancy and that notice to quit is not waived by mere acceptance of rent. 13. The learned Single Judge has noted various judgments in paragraphs 5 and 14 of the impugned judgment in support of the above legal proposition. The learned Senior Counsel for the appellant could not cite even a single judgment to support his plea that acceptance of rent by the landlord after service of notice to quit amounts to waiver of said notice." 5. The learned Single Judge, in these circumstances, summed up the position in the instant case as under: "Seeking guidance from the aforenoted decisions, facts on record do not establish a case of tenancy by holding over notwithstanding the continued possession of the defendant for nearly 2 years in one and 5 years in other coupled with acceptance of rent by the plaintiffs for the reason, before leases expired, vide Ex. PW-1/4, on 28.11.1997, plaintiffs clearly informed the defendant that the leases would be expiring in the month of March 1998 and plaintiffs were willing to renew the leases but at the rent stated in the said letter. This was reiterated on 7.1.1998 vide Ex. PW -1/10. Consent of the defendant was sought.
PW-1/4, on 28.11.1997, plaintiffs clearly informed the defendant that the leases would be expiring in the month of March 1998 and plaintiffs were willing to renew the leases but at the rent stated in the said letter. This was reiterated on 7.1.1998 vide Ex. PW -1/10. Consent of the defendant was sought. Immediately when the lease period came to an end in respect of 20 leases, on 19.3.1998, vide Ex. PW1/5 the plaintiff quoted the rate which they would be charging towards damages for use and occupation. PW-1/12 was written on 26.3.1998 reiterating that damages would be charged. Bills were sent on 17.6.1998, Ex. PW-1/20 and on 6.8.1998, Ex. PW-1/22. On 23.10.1998, vide Ex. PW-1/25 once again it was reiterated that the plaintiffs were willing to allow the defendant to continue to occupy the various units as a tenant provided increased rent stated in the letter was paid. Various letters have been addressed by the plaintiff on the issue and even bills were raised on various dates after adjusting the amount received from the defendant being the last agreed rent, clearly indicating the balance amount which J had to be paid towards damages. That the bank continued in possession for 5 years is neither here nor there in the facts and circumstances of the case. In the decision reported as (1973) 2 SCC 388 , Bari Lal v. Municipal Corporation of Indore the tenant continued in possession for nearly 5 years after expiry of the lease and yet was held to be not holding over. Status held was of a tenant by sufferance." 6. The argument that Clause (3) of lease deeds created perpetual lease in favour of the Bank was also rightly turned. This Clause reads as under: "3. That the lease shall be for a period of 10 years and during this period and its extensions, if any, the rent will be increased by 20% after every three years of the then rent applicable i.e. in March 1991 the rent will be Rs. 4725 + 20% i.e. Rs. 5670 and in March, 1994 Rs. 5670 + 20% i.e. Rs. 6804 and in March 1997 Rs. 8164.80 and so on so forth. Both Lessor and the Lessee shall have the right to vacate after the expiry of the lease by giving 3 months notice.
4725 + 20% i.e. Rs. 5670 and in March, 1994 Rs. 5670 + 20% i.e. Rs. 6804 and in March 1997 Rs. 8164.80 and so on so forth. Both Lessor and the Lessee shall have the right to vacate after the expiry of the lease by giving 3 months notice. Fresh lease deed will be executed after the expiry of 10 years." No argument worth the name could be advanced by learned Counsel for the Bank, which could show that the aforesaid findings of the learned Single Judge are erroneous. It is unequivocally stated that fresh lease deed would be executed after the expiry of 10 years. No such fresh lease deed was executed. In the absence of fresh lease deed, it cannot be said that lease deed for further period, after the expiry of initial 10 years period, came into existence. The learned Single Judge has summed up the decision in para 67 of the judgment as under: "In India, law does not prohibit a perpetual lease, but clear and unambiguous language would be required to infer such a lease. If the language is ambiguous, the Court would opt for an interpretation negativing a plea which results in a perpetual lease being created. Extension ;of this principle is that Courts always lean against a perpetual renewal and hence where there is a Clause for renewal, subject to the same terms and conditions, it would be construed as giving a right to renew as per the original lease but not a right to further renewals, unless of course the language is clear. In the instant case the original lease envisaged extension up to 10 years and stipulated increase in rent. Beyond that fresh lease deed required to be executed. The clause does not even state that the renewals would be on the same terms and conditions. Thus, unless parties agreed to the terms of renewal, that was the end of the matter." 7. We agree with this view of the learned Single Judge. The appeals are, accordingly, dismissed insofar as the decree of possession is concerned. The accompanying applications also stand dismissed. Appeal dismissed.