The Manager, UCO Bank, Anna Nagar v. A. E. Chelliah
2022-12-16
S.M.SUBRAMANIAM
body2022
DigiLaw.ai
JUDGMENT : S.M. SUBRAMANIAM, J. 1. The present Appeal Suit is filed against the judgment and decree dated 08.12.2021 passed in O.S. No. 1187 of 2019 on the file of the VII Additional City Civil Court, Chennai. 2. The defendants are the appellants. The respondent/plaintiff instituted a Suit in O.S. No. 1187 of 2019 for the relief to direct the defendants to pay the plaintiff a sum of Rs. 16,67,360/- (Rupees Sixteen Lakhs Sixty Seven Thousand Three Hundred and Sixty only) due as on 01.02.2019 along with interest permissible under law and for the costs of the suit. 3. The facts in brief are that the respondent/plaintiff rented out the ground floor of his premises at AB 147, New No. 3, Plot No. 5132, III Main Road, Anna Nagar, Chennai-600040 for the functioning of the appellants/UCO Bank through lease deed dated 06.03.2009. The lease became effective from 01.06.2008 for a period of 10 years. Rent at Rs. 30/- per Sq. ft. was fixed for 1535 Sq. ft. (Rs. 46,050/- per month) and Rs. 50/- per Sq. ft. for 100 Sq. ft. for the ATM area (Rs. 5000/- per month) totalling Rs. 51,050/- per month. Rent agreed to be revised by 25% for every five year term. The Appellants/Bank has paid a sum of Rs. 3,30,000/- towards advance, but in the lease deed, it has been wrongly mentioned as Rs. 3,06,300/-. Rent from 01.06.2013 till 31.05.2018 was enhanced to Rs. 63,812.50/-. The lease expired on 31.05.2018. The appellants state that the negotiations were continued regarding renewal of lease. The respondent also agreed on 02.06.2018 to renew the lease subject to payment of monthly rent of Rs. 2,90,950/-. However, the rent proposed by the respondent was not agreeable for the appellants/Bank. On 24.06.2018, the respondent/landlord has stated that reduced rent of Rs. 2,73,600/- was agreeable. However, the issue was not finalized and the parties have not settled the matter nor renewed the lease, which was expired on 31.05.2018. 4. The respondent/Landlord claimed Rs. 12,58,772/- towards usage and damages from 01.06.2018. Thereafter, the respondent filed O.S. No. 1187/2019, claiming a sum of Rs. 16,67,361/-. The rent claimed in the suit was a sum of Rs. 2,73,600/- per month on the ground that the rented premises situates in Anna Nagar area, which is a prime locality and higher rental value is prevailing.
12,58,772/- towards usage and damages from 01.06.2018. Thereafter, the respondent filed O.S. No. 1187/2019, claiming a sum of Rs. 16,67,361/-. The rent claimed in the suit was a sum of Rs. 2,73,600/- per month on the ground that the rented premises situates in Anna Nagar area, which is a prime locality and higher rental value is prevailing. The appellants filed a written statement and contested the case by stating that the respondent is claiming rent at the rate of 456% over the existing rent and at no point of time, the said enhancement was agreed by the appellants/Bank and thus, the suit claim is false and untenable. However, the suit decreed as prayed for a sum of Rs. 16,67,360/- with interest @ 12% per annum from the date of plaint on 08.12.2021. The appellants/Bank adjusted the advance amount of Rs. 3,30,000/- and paid monthly rent of Rs. 63,812.50/- without any default till 03.01.2020, on which date, the appellants/Bank vacated the premises and handed over possession to the respondent/landlord. Thus, as per the decree, a sum of Rs. 22.23 Lakh was due as on the date of filing of the present appeal suit in March 2022 and a sum of Rs. 23,00,360/- is due as of December 2022. 5. The appellants/Bank contention is that even in case of 100% enhancement of rent from 01.06.2018, the rent payable until January 2020 will be only Rs. 12,12,438/- (19 months). Thus, the appellants/Bank prays that the appeal suit is to be allowed. 6. The respondent/landlord objected the contentions raised on behalf of the appellants/Bank by stating that admittedly, the lease deed executed between the appellants/Bank and the respondent/Landlord expired on 31.05.2018 and from 01.06.2018 onwards, the appellants/Bank is overstaying in the premises without any lease or permission. Therefore, the rent payable during the subsistence of the lease agreement cannot be continued since the respondent/landlord claimed the monthly rent of Rs. 2,73,600/- per month, which was the prevailing rent in that locality during the relevant point of time. 7.
Therefore, the rent payable during the subsistence of the lease agreement cannot be continued since the respondent/landlord claimed the monthly rent of Rs. 2,73,600/- per month, which was the prevailing rent in that locality during the relevant point of time. 7. The respondent/landlord in person, contended that he was continuously pursuing the matter with the Bank and the appellants/Bank failed to respond in time as per the conditions stipulated in the lease agreement and thus, they have failed to comply with the conditions agreed between the parties in the original lease agreement and thus, they are liable to pay the enhanced rent as claimed by the respondent/landlord on expiry of the lease period on 31.05.2018. Overstayal of the appellants/Bank deprived the respondent/Landlord from earning market rent, which was prevailing during the relevant point of time at Anna Nagar area. The appellants/Bank being a Nationalized Bank, taking undue advantage of their possession, without finalizing the negotiations, continued in the premises for about 19 months and therefore, they are liable to pay the market rent, which was established by the respondent/landlord before the trial Court. The respondent in person, at the outset, contended that the rent demanded by him in the plaint is not exorbitant, but based on the documents marked by him before the trial Court and thus, the suit decreed in his favour is in accordance with law based on the documents and evidences and consequently, the appeal suit is to be rejected. 8. The respondent/Landlord in support of his contention, drew the attention of this Court with reference to the notices and letters sent by him to the appellants/Bank. Accordingly, on 05.03.2018, (Ex.A2, the respondent/plaintiff sent a notice to the first defendant), stating that if at all the appellant/Bank is ready for renewal of lease, it can be for two years only subject to increase in the payment of rent negotiable. After two years, the respondent/landlord said that himself, his wife and two sons and their families are willing to occupy the premises. In continuation of the notice, the appellants/Bank sent a reply on 25.05.2018 (Ex.A4), stating that as per the appellants/Bank policy, renewal should be 15 years only. However, the Bank made a request to come forward for negotiation with regard to the Lease period, Rent and other charges for conclusion. 9.
In continuation of the notice, the appellants/Bank sent a reply on 25.05.2018 (Ex.A4), stating that as per the appellants/Bank policy, renewal should be 15 years only. However, the Bank made a request to come forward for negotiation with regard to the Lease period, Rent and other charges for conclusion. 9. In letter dated 02.06.2018 (Ex.A5), the respondent/Landlord made it clear that it is not renewal of lease, but only continuation of occupation of the Bank. The Lease Deed dated 6th March 2009, taking effect from 1st June 2008 speaks about the lease for 10 years only and there is no option for renewal provided in the original Lease Deed dated 6th March 2009. 10. The respondent/Landlord in letter dated 24.06.2018 (Ex.A7), again sent a letter, reiterating that there is no scope for renewal, but it must be a new lease, which could be for 5 years and the present market rate per Sq. ft. in Anna Nagar area to be paid as rent. 11. The appellants/Bank sent a reply on 30.07.2018 (Ex.A10), stating that they have conveyed the details regarding the negotiation between the appellants/Bank and the respondent/landlord to the Head Office at Kolkatta and they have not received any decision for finalization of the rent. The respondent/landlord addressed the letter the appellants/Bank on 27.08.2018 (Ex.A11), stating that there cannot be any other matter under the category “Top priority” on your table. He has clarified that there are only two options either to continue or not to continue your functioning in the property belongs to the respondent/Landlord. The respondent/landlord expressed his negotiation that the appellants/Bank was torturing him since they are continuing in possession after the expiry of the lease period and without paying the enhanced rent as claimed by him. 12. Finally, in letter dated 19.11.2018 (Ex.A14), the appellants/Bank conveyed their position by stating that they have decided to surrender the vacant possession and shift their branch to the new premises within a period of six months. Accordingly, the appellants/Bank vacated the premises on 03.01.2020. 13. Thereafter, the plaintiff sent letters on 21.05.2019 (Ex.A23).
12. Finally, in letter dated 19.11.2018 (Ex.A14), the appellants/Bank conveyed their position by stating that they have decided to surrender the vacant possession and shift their branch to the new premises within a period of six months. Accordingly, the appellants/Bank vacated the premises on 03.01.2020. 13. Thereafter, the plaintiff sent letters on 21.05.2019 (Ex.A23). In the context of the market rent prevailing in the nearby area at Anna Nagar, the respondent/Landlord furnished the copy of the letter sent by him to the Indian Overseas Bank, Central Office dated 25.06.2019 (Ex.A24) and in response to the R.T.I. Application, the Indian Overseas Bank sent a reply dated 26.06.2019 (Ex.A25) through Central Public Information Officer, stating that their Branch at Anna Nagar is paying Rs. 7,08,000/- for 4909 Sq. ft. @ 144.22 per Sq. ft. The query raised by the respondent/landlord was to furnish the details regarding the rent being paid by the Indian Overseas Bank, Tower Branch, at No. AH-1, Shanthi Colony, Anna Nagar, Chennai-600040. Thus, the respondent/landlord made a submission that the rent prevailing in that locality was a sum of Rs. 144.22/- per Sq. ft. The usage and occupation charges paid by the appellants/Bank was received by the respondent/landlord with protest. 14. Relying on the above documents, which were marked, the respondent/landlord has stated that the appellants/Bank is liable to pay the market rent prevailing in Anna Nagar area during the relevant point of time for the period, they had overstayed in the premises belongs to the respondent/Landlord. The premises is in the prime locality and therefore, he claimed Rs. 150/- per Sq. ft. which should be an appropriate rent for the premises leased out. 15. The learned counsel for the appellants/Bank drew the attention of this Court with reference to the judgment impugned and stated that the suit was filed for damages from 31.05.2018 to 31.01.2019 and the respondent/plaintiff reserved his right to file separate suit for damages for use and occupation of the suit property for the subsequent period from 01.02.2019 to 03.01.2020. That apart, the suit property is in III Main Road and the Indian Overseas Bank is not in the same road and therefore, the document relied on by the plaintiff cannot be the basis for fixing the rent by the trial Court. 16.
That apart, the suit property is in III Main Road and the Indian Overseas Bank is not in the same road and therefore, the document relied on by the plaintiff cannot be the basis for fixing the rent by the trial Court. 16. The contention of the appellants/Bank are that the trial Court has not considered any of the grounds raised by the appellants/defendants and decreed the suit merely on the basis that in Anna Nagar area, rent rates have sky rocketed during the past few years and the said fact was not disputed by the appellants/Bank and therefore, the respondent/plaintiff is entitled for the relief. The trial Court further found that the respondent/plaintiff filed the document showing that another Bank situated in Anna Nagar area has been paying rent @ Rs. 115/- per Sq. ft. even five years before. The said fact was also not disputed by the appellants/defendants. 17. Considering the facts and the submissions made on behalf of the respective parties to the appeal suit, the trial Court framed the following issues: “1. Whether the plaintiff is entitled for the suit amount of Rs. 16,67,360/- together with interest as prayed for in the plaint? 2. To what other relief the plaintiff is entitled for?” 18. On the side of the respondent/plaintiff, PW-1 was examined and Ex.A1 to Ex.A29 were marked. On the side of the defendants, DW-1 was examined and Ex.B1 & Ex.B2 were marked. With reference to the entitlement of the plaintiff for the suit amount, the trial Court considered the scope of the Lease Deed more specifically, Clause 4 (d), which states that “If the Lessee is desirous of taking new lease of the demised premises after the expiration of the term hereby granted, the same shall be informed in writing to the Lessor, three months in advance of the expiration of the term hereby granted in the Lease and the receipt of the same to be acknowledged by the Lessor.” 19. As per the above agreed Clause, the appellants/Bank did not show any interest to take new lease of the premises even after the expiry of the lease period. The lease period was 10 years and the appellants/Bank was very much aware of the fact that the lease was due to expire on 31.05.2018.
As per the above agreed Clause, the appellants/Bank did not show any interest to take new lease of the premises even after the expiry of the lease period. The lease period was 10 years and the appellants/Bank was very much aware of the fact that the lease was due to expire on 31.05.2018. The respondent/Landlord sent letters cum request to the appellants/Bank, informing that the lease is about to expire and whether the first respondent was willing to continue the tenancy or not or to get it terminated. When such a letter was sent by the respondent/Landlord, the appellants/Bank ought to have responded in time. However, they requested for negotiation, which was not fruitful and finally, they vacated the premises on 03.01.2020, after overstaying in the premises for about 19 months. 20. The correspondences between the respondent/landlord and the appellants/Bank would reveal that the respondent/landlord was vigilant and given an option to the Bank to enter into a new lease on expiry of the lease period of 10 years for the enhanced rent as per the rent prevailing in that locality. However, there was a delay on the part of the appellants/Bank in responding to the demand set out by the respondent/landlord even before the expiry of the lease period of 10 years. There was a long delay in taking a decision by the appellants/Bank. Finally, the appellants/Bank took a decision and vacated the premises on 03.01.2020 after their overstayal of about 19 months in the suit premises. 21. Under those circumstances, the trial Court considered the fact that the market rent prevailing in Anna Nagar area has drastically increased and more so, it is a prime locality in Chennai City and accordingly, considered the document filed by the respondent/landlord, establishing that the other Nationalized Banks in the nearby area are paying far higher rent than that of the rent being paid by the appellants/Bank to the respondent/Landlord. Considering those documents, the suit was decreed in favour of the plaintiff. Accordingly, the trial Court decided the issue No. 1 in favour of the plaintiff and consequently, held in Issue No. 2 that the plaintiff is entitled for interest @ 12% from the date of plaint till the date of realisation. 22. This Court is of the considered opinion that the primary facts are not disputed between the parties.
Accordingly, the trial Court decided the issue No. 1 in favour of the plaintiff and consequently, held in Issue No. 2 that the plaintiff is entitled for interest @ 12% from the date of plaint till the date of realisation. 22. This Court is of the considered opinion that the primary facts are not disputed between the parties. The period of lease was for 10 years, which expired on 31.05.2018 and the appellants/Bank overstayed in the premises without any new lease or otherwise and finally, they vacated the premises and handed over the possession to the respondent/Landlord on 03.01.2020. The rent agreed between the parties during the lease period was also not in dispute. The dispute is only with reference to the damages for use and occupation and also the rent to be paid by the Appellants/Bank to the respondent/Landlord for the period of overstayal in the suit property. 23. In this context, it is not in dispute that the respondent/Landlord sent several letters to the appellants/Bank, expressing his willingness to enter into a new lease on enhanced rent as per his demand. Further, option was given to the appellants/Bank to vacate the premises and handover the possession. The letters sent by the respondent/landlord well in advance as per Clause 4 (d) of the lease deed was not responded in time by the appellants/Bank nor they had vacated the suit property on expiry of the lease period on 31.05.2018. Thus, the appellants/Bank committed an act of violation of the lease conditions agreed between the parties. That apart, the appellants/Bank being a Nationalized Bank, had not responded to the letters by taking a decision. No doubt, there may be some administrative delay in taking a decision by the Nationalized Banks as they have to consult the Head Office. Since the issue is relating to the very premises of the Bank, the appellants/Banks are expected to give top priority to the issue as rightly stated by the respondent/Landlord in his letter, which they have failed to do so. The delay in taking administrative decision by the appellants/Bank cannot result in financial loss to the respondent/Landlord.
Since the issue is relating to the very premises of the Bank, the appellants/Banks are expected to give top priority to the issue as rightly stated by the respondent/Landlord in his letter, which they have failed to do so. The delay in taking administrative decision by the appellants/Bank cannot result in financial loss to the respondent/Landlord. As rightly pointed out by the respondent, the overstayal of tenant in the suit property is a mental agony to the landlord as they may not be sure, when the premises will be vacated by the Bank or the new lease will be entered into on enhanced rent. 24. Pertinently, the respondent/Landlord marked the Right to Information reply given by the Indian Overseas Bank in vide letter dated 26.06.2019 (Ex.A25), through which, he established that in the nearby area, the Indian Overseas Bank is paying Rs. 7,08,000/- rent for 4909 Sq. ft. @ Rs. 144.22/- per Sq. ft. 25. The lease agreement was entered into between the appellants/Bank and the respondent/landlord from 01.06.2008 for a period of 10 years. Period of 10 years, no doubt long and at the end of the period of 10 years, the respondent/landlord found that the rental value in Anna Nagar, Chennai, sky rocketed and the rent paid by the Bank was not in commensuration with the market rent prevailing in that locality. However, the respondent/landlord honoured the lease agreement by allowing the appellants/Bank to continue for 10 years and taking note of the prevalent rent in that locality, he was repeatedly addressing the Bank for entering into a new lease or vacate the premises, enabling him to deal with the property. However, there was an enormous delay on the part of the appellants/Bank in taking a decision, for which, the respondent/landlord cannot made to suffer financially. Number of letters sent by the respondent/landlord would reveal that he was vigilant and consistent in approaching the appellants/Bank for their response. Unfortunately, the appellants/Bank continued to be in possession beyond the lease period without paying the enhanced rent as demanded by the respondent/landlord, but paid only meagre rent as per the lease agreement.
Number of letters sent by the respondent/landlord would reveal that he was vigilant and consistent in approaching the appellants/Bank for their response. Unfortunately, the appellants/Bank continued to be in possession beyond the lease period without paying the enhanced rent as demanded by the respondent/landlord, but paid only meagre rent as per the lease agreement. When the rent paid by the appellants/Bank was no way comparable to the prevailing market rent at the time of expiry of the lease period, the appellants/Bank is liable to pay the demanded rent by the landlord, since the overstayal was intentional and more so, there was a delay in responding to the letters sent by the respondent/landlord. Intentional overstay on the part of the appellants/Bank caused mental agony to the respondent/landlord, resulted in financial loss. Now, the Bank cannot say that even after 100% hike in the rent, it will not be in commensuration with the rent demanded by the respondent/landlord. Such a plea is not available to the appellants/Bank, since they have committed an act of intentional overstay, despite the fact an opportunity was given to them to enter into a new lease agreement. If the appellants/Bank was not willing to enter into a new lease agreement, they ought to have vacated the premises and handed over the same to the landlord. But they continued to overstay for about 19 months and therefore, this Court do not find any infirmity in respect of the findings made by the trial Court for decreeing the suit. 26. In this context, the respondent/landlord has stated that the suit property is in III Main Road. Considering the said document filed by the respondent/landlord, this Court is of the considered opinion that a sum of Rs. 144.22/- per Sq. ft. would be the just and fair rent to be paid by the appellants/Bank to the respondent/landlord during the period of overstayal by the appellants/Bank in the suit property. 27. In the event of settling the arrears of rent by the appellants/Bank till the date of handing over of possession to the respondent/landlord, then the respondent/landlord looses his right to claim any further rent or damages for use and occupation or otherwise from the appellants/Bank as per the averments made in the plaint.
27. In the event of settling the arrears of rent by the appellants/Bank till the date of handing over of possession to the respondent/landlord, then the respondent/landlord looses his right to claim any further rent or damages for use and occupation or otherwise from the appellants/Bank as per the averments made in the plaint. The suit was originally filed, claiming rent up to 01.02.2019, since the plaintiff could not form an opinion regarding the length of overstayal by the appellants/Bank at that point of time. Instead of driving the parties to file another suit for the purpose of claiming rent till the date of vacation and handing over the possession by the appellants/Bank to the respondent/landlord, this Court in exercise of the powers under Order 41 Rule 33 of the Code of Civil Procedure, is empowered to award rent till the date of handing over of the possession of the premises by the appellants/Bank to the respondent/landlord. The said relief is to be granted to avoid multiplicity of proceedings and more so, the right of the landlord for claiming rent is also established. Thus, the respondent/landlord is entitled for the enhanced rent for the period of overstayal of the appellants/Bank in the premises belongs to the respondent/landlord from 01.06.2018 to 03.01.2020. 28. The respondent/landlord has also given an oral undertaking that in the event of granting enhanced rent up to the date of handing over of the possession by the appellants/Bank, he will not claim any further rent or damages from the appellants/Bank. 29. In view of the said undertaking, this Court is of an opinion that the arrears of rent is to be paid by the Bank to the landlord upto the date of handing over of the possession. 30. Regarding the rent, this Court has taken note of the rental value as per Ex.A25 and accordingly, fix the rent at the rate of Rs. 144.22/- per Sq. ft. for the overstayal period of the appellants/Bank in the respondent's premises from 01.06.2018 to 03.01.2020 as follows: Bank Area in Sq. ft. ATM area in Sq. ft. Total Area in Sq. ft. Rent Amount Per Sq. ft. in Rupees Total Rent Amount per Month in Rupees 1535 100 1635 144.22 2,35,799.70 xxx xxx xxx Amount paid as Rent per month in Rs. Amount Paid as Rent for 19 Months in Rs. Amount paid as Rent for 3 days in Rs.
ft. ATM area in Sq. ft. Total Area in Sq. ft. Rent Amount Per Sq. ft. in Rupees Total Rent Amount per Month in Rupees 1535 100 1635 144.22 2,35,799.70 xxx xxx xxx Amount paid as Rent per month in Rs. Amount Paid as Rent for 19 Months in Rs. Amount paid as Rent for 3 days in Rs. Total Amount already paid as Rent in Rs. 63,812.50 12,12,437.5 6,381.25 12,18,818.75 xxx xxx xxx Overstayal Period Total No. of Months Total Rent Amount per Month in Rs. Amount to be paid for 19 months in Rs. Amount to be paid for 3 days in Rs. Total Amount to be paid as Rent in Rs. Date From To 19 Months and 3 days 2,35,799.70 44,80,194.30 23,579.97 45,03,774.27 01.06.2018 03.01.2020 Total Amount to be paid as Rent Rs. 45,03,774.27/- Total Amount already paid as Rent Rs. 12,18,818.75/- Actual Amount to be paid as Rent Rs. 32,84,955.52/- 31. Accordingly, the decree and judgment passed in O.S. No. 1187 of 2019 dated 08.12.2021 by the VII Additional City Civil Court, Chennai stands modified as under: (1) The appellants/defendants/Bank are directed to pay a sum of Rs. 32,84,955.52/- (Rupees Thirty Two Lakh Eighty Four Thousand Nine Hundred Fifty Five and Fifty Two Paise only) to the respondent/landlord/plaintiff towards rent along with the interest at the rate of 7% per annum from the date of plaint till the date of realisation within a period of eight (8) weeks from the date of receipt of a copy of this judgment. 32. Consequently, the decree and judgment passed in O.S. No. 1187 of 2019 dated 08.12.2021 by the VII Additional City Civil Court, Chennai is modified and appeal suit in A.S. No. 130 of 2022 stands disposed of. No costs. Consequently, connected miscellaneous petition is closed.