Shyamacharan Raghubar Prasad Tiwari Vs. Sheojee Bhai Jairam Chattri and anr. - Court Judgment

Bishambhar Dayal, C.J.

1. This first appeal filed by defendant No. 1 arises out of a suit filed by the plaintiff Sheojee Bhai for ejectment of the two defendants from a building used as a cinema house, and for mesne profits.

2. The case had a chequered career which will be shortly stated. But at present the main question for consideration in this appeal is about the rate at which the plaintiff is entitled to set mesne profits from the date when the lease came to an end up to the date of delivery of possession. There are certain other minor points also which will be dealt with at the proper place.

3. On 18th August 1951 the plaintiff Sheojee Bhai executed a registered lease of the premises, including the electric fittings and furniture, in favour of the defendants Shyamacharan and D. B. Jadav for ten years at the rate of Rupees 1,600/- per month. This lease was to start from 22nd May 1950 and was to end on 21st May 1960. On 22nd May 1960 the plaintiff demanded possession by a telegraphic notice. The defendant No. 1 replied that there had been an agreement to renew the lease for two years. On 25th June 1960 the present suit was filed.

4. Apart from reciting other facts in the plaint, the plaintiff claimed that the defendants were in arrears of Rs. 16,353/-as rent. In paragraph 5 of the plaint it was also alleged that the defendants were liable to pay damages for use and occupation at the rate of Rs. 6,000/- per month from 22nd May 1960 till the date of delivery of possession.

5. It appears that the defendant No. 2 D. B. Jadav had separated from the business and only defendant No. 1 contested the suit. He filed a written statement alleging, among others, that there was a verbal agreement for extending the lease for two years and that under the Madhya Pradesh Accommodation Control Act the defendant could not be ejected. It may be noted here that this plea regarding protection under the Madhya Pradesh Accommodation Control Act has not been pressed before us, as it is conceded that the Act as it was then in force did not apply to cinema buildings. We, therefore, need not mention this plea any more.

6. On 5th July 1961 the plaintiff filed an application for appointment of a Receiver. This application was rejected by the trial Court. Against that order the plaintiff filed an appeal in the High Court which was Miscellaneous Appeal No. 81 of 1961. That appeal was decided by a learned Single Judge of this Court on 13th October 1961 according to a compromise entered into between the parties and according to the statements made by their learned counsel. The defendant agreed to pay to the plaintiff a sum of Rs. 24,000/-and to give a solvent security for the realisation of the amount that may be ultimately decreed against him. He also agreed to deposit Rs. 1,600/- in Court every month from 1st October 1961. On account of this compromise the application for appointment of a Receiver was not pressed. It is admitted between the parties that ever-since the defendant has kept the promise and has made the payments mentioned in the compromise.

7. On 4th August 1962 the plaintiff filed an application under Order 12, R. 6, Civil Procedure Code, for a decree for delivery of possession, only, on the ground that now even the two years for which the defendant claimed an extension of the lease had expired and the plaintiff was entitled to possession on the own admission of the defendant. This application was dismissed by the trial Court. Against that order there was a revision in this Court which was allowed on 26th October 1962 and the trial Court was directed to pass a decree for ejectment forthwith. In pursuance of that order the trial Court passed a decree for ejectment on 3rd November 1962. Against that decree First Appeal No. 40 of 1962 was filed by the defendant in this Court which was dismissed on 26th February 1964. Against that decision of the High Court the defendant went to the Supreme Court. The Supreme Court also dismissed the appeal on 25th September 1964, allowing 15 days' time to the defendant to deliver possession to the plaintiff. The defendant handed over possession on 4th October 1964. Thus, after 4th October 1964 the main question that remained to be decided in the suit was the amount of mesne profits to which the plaintiff was entitled. The trial Court on the basis of evidence held that Rupees 16,353/- were due to the plaintiff on account of arrears of rent and that the plaintiff was entitled to damages for use and occupation from 22nd May 1960 to the date of delivery of possession (4th October 1964) at the rate of Rs. 4,000/- per mensem. It is against that decree that the present appeal has been filed in which, as stated above, the main question for determination is as to the rate at which the plaintiff is entitled to receive mesne profits.

8. The first contention of the learned counsel appearing for the defendant-appellant is that in Miscellaneous Appeal No. 81 of 1961 in the matter of appointment of a Receiver, there was a compromise that the defendant would continue to pay Rs. 1,600 per mensem which must be deemed to have been settled between the parties what was payable as the rate of damages to be decreed. We do not agree with this contention. The statements of parties at the time of compromise and the order of the Court do not support the contention. At that stage there was no question of the rate of mesne profits being determined between the parties. All that was relevant was whether the possession of the defendant should be disturbed by appointment of a Receiver. Admittedly, the defendant was claiming to remain in possession on account of an alleged extension of the lease and was therefore, admitting his liability to pay rent for the extension at the rate of Rs. 1,600/- per month. In this situation what was agreed was that the defendant's possession would not be disturbed if he continued to deposit that amount in future and paid the arrears also at that rate from the date of the suit. The statement of Shri J. V. Jakatdar, learned counsel appearing for the defendant, was :

'I offer to pay amount of Rs. 24,000/-as due after the date of filing of the suit till today, that is, 31st August 1961. For the amount of the decree I agree to give solvent security to the satisfaction of the lower Court within 15 days from today, to make payment of the amount of such decree as may be passed against me. I shall also pay Rs. 1,600/- per month commencing from 1st October 1961 as for the month preceding and do so for each month thereafter.'

This statement does not give an idea that the whole dispute about the rate of mesne profits was being settled by means of this offer. On the contrary, the offer to give solvent security for any decree that may ultimately be passed clearly indicates that the real dispute as to the rate of mesne profits was still to be decided by the Court. There is thus no force in the contention of the learned counsel and we reject the same.

9. We will now look into the evidence of the parties as to the rate of mesne profits.

(After discussing the plaintiffs evidence in paras 10, 11 and 12 their Lordships proceeded).

10 to 13. From this evidence of the plaintiff it is clear that the plaintiff is claiming damages not on the basis of what the defendant had earned but on the basis, of the market rental value of the premises. Although according to the plaintiff its rental value was about Rs. 6,000/- per month, according to P. W. 2 Ramadhar it was Rs. 4,000 to 5,000 per month. It is also to be noted that the other cinema house Amar Deep Talkies was let out along with the Projector Machine, but in the plaintiff's cinema house the Projector Machine had been installed by the tenant.

(After discussing defendant's evidence in paras 14 and 15 their Lordships proceeded).

14 to 16. On the basis of this evidence of the defendant it appears that there was not much difference in the rental value of the Amar Deep Talkies and the Sharda Talkies. In 1959-60 Amar Deep Talkies was let out for Rs. 3,600/- when there is a portion attached to it which fetches Rs. 400/- to 500/-, and the estimate of rent which Sharda Talkies would have fetched in 1960 is, as given by D. W. 1 Vidyakant, Rs. 3,000/-. With regard to the bad condition of the furniture mentioned by D. W. 2 it may be noted that according to the lease-deed it was the duty of the defendant to keep the furniture in good condition by repairs and replacement. It is admitted that even before 1950 when the ten years' lease was granted in favour of the defendant, the cinema house was with the defendant on rent. Thus, the statement of D. W. 2 that the condition of the furniture was not good does not appear to be correct. If that had been so, the plaintiff would certainly have claimed damages on that account also. But there is no such complaint on behalf of the plaintiff and there is no such allegation on behalf of the defendant. The defendant has not come into the witness-box to controvert the allegations of the plaintiff. The estimate of the defendant's witnesses is bound to be a little under-estimated. The seating capacity of Sharda Talkies was more than that of Amar Deep Talkies as mentioned above. Thus, the estimate of average market rental value of this cinema house for 4 years 1960 to 1964 given by the Court below at Rs. 4,000/- per month does not appear to be excessive when the other house got 3600/- in 1960 and 7321/- in 1964 and there is no reason to interfere with that finding. Some amount of guess work is always involved when mesne profits have to be estimated on current market price.

17. The next contention of learned counsel for the appellant is that under Section 6 of the M. P. Accommodation Control Act 1961, which came into force from 30th December 1961, no landlord could charge rent more than the standard rent determined according to Section 7 of the Act, and consequently from 30th December 1961 up to the date of delivery of possession, i.e., 4th October 1964, the plaintiff can only get compensation at the rate of standard rent and not at the market rental value. We think that the purpose of such a decree is to dislodge the trespasser of the illegal gain derived by him and to secure the same to the owner who was entitled to be in possession. The correct rate of mesne profits is, therefore, the market rental value, which, in an open market best represents in terms of money, the value of the right to possess. The controlled rents are for the benefit of a lawful tenant and it would be wrong to allow only that rate against unlawful possessor. The owner is not bound to let it out and he might have used the property himself and derived the full benefit of its use.

18. That question has been considered in several cases. In Bhagwandas v. Mst. Kokabai, AIR 1953 Naff 186, a learned Single Judge of this Court, reiving upon the observations in Clifton Securities Ltd. v. Huntley, 1948-2 All ER 283, came to the conclusion that the controlled rent was not always equal to the market rental value of the property and a person in unlawful possession was not entitled to the benefit of the controlled rent. He has, therefore, to pay damages for use and occupation according to the market rental value of the property. The same view was taken by a learned Single Judge of the Allahabad High Court in Chandra Shekhar v. Gopi Nath, AIR 1963 All 248. But without referring to these cases a Division Bench of the Allahabad High Court in Dwarka Prasad v. Central Talkies, AIR 1956 All 187, came to the conclusion that in a case where the landlord could not control the letting and both the person and amount of rent were to be fixed by the Rent Controller, it would be proper to allow mesne profits at the controlled rate. In that case the plaintiff wanted to prove the market value by giving evidence of the fact that he had received certain offers for the building at a much higher rate. But that evidence was wholly disbelieved and in the absence of any other evidence as to the market value, the conclusion that the controlled rate was the proper rate does not clinch the matter. If in that case it had been found that the market rate was higher and vet the controlled rate had been considered to be the proper rate, that case would have been an authority to the contrary proposition. A Division Bench of the Nagpur High Court also in Mst. Hirabai v. Jiwan-lal, AIR 1955 Nag 234, allowed compensation for use and occupation against a person, whose tenancy had come to an end, at the rate at which he was holding the tenancy. But in that case there was no dispute as to the rate at which compensation should be decreed. About the end of the judgment the learned Judges observed as follows:

'The appeal Judge saw no reason why the plaintiff should get more for the period after the suit. The compensation was accordingly fixed at the same rate as the rent. No objection is taken to the rate.'

This case also is, therefore, no authority for the proposition that where rate of rent is controlled, compensation for use and occupation against a person who is in unlawful possession can only be granted at that rate.

19 Learned counsel for the appellant also relied upon Bhagwati v. Chandramauli, AIR 1966 SC 735, but in that case the circumstances were very different. The High Court had come to the conclusion that the plaintiff had failed to prove the rate of rent at which he had let out the property as also the contract of tenancy. The suit for ejectment was decreed merely on the basis that the defendant was in permissive possession and that permission having been withdrawn, the plaintiff who was the owner was entitled to possession. The High Court had declined to pass a decree for arrears of rent and also no decree for future mesne profits was passed. But the Supreme Court held that the plaintiff was entitled at least to future mesne profits and determined the same at Rs. 300/- per month which the trial Court had found as the fair market rent of the property. This case also therefore is no authority for the contention of the learned counsel for the appellant.

20. In Fateh Chand v. Balkishan, AIR 1963 SC 1405, the circumstances with regard to the rate of compensation were very similar to those in the present case. In paragraph 17 of their judgment their Lordships observed:

'The normal measure of mesne profits is therefore the value of the user of the land to the person in wrongful possession.....It is not necessary to consider in the present case whether mesne profits at a rate exceeding the rate of the standard rent of the house may be awarded, for there is no evidence as to what the standard rent of the house was.'

In that case the trial Court had assessed compensation at Rs. 140/- per mensem and in the absence of any evidence as to the controlled rent, their Lordships did not think it necessary to go further into the matter and decreed compensation at the rate of Rs. 140/- per month.

21. In the present case also there is no evidence to find out the controlled rent and, therefore, we also have no other alternative but to accept the market rental value of the property as the proper rate for decreeing the suit. As stated above, the trial Court has correctly determined that rate at Rs. 4,000/- per month.

22. Section 7 of the Madhya Pradesh Accommodation Control Act, 1961 provides for determination of the standard rent. No reasonable annual rent having been determined under Sub-section (1) and there being no evidence of the rent which the building was fetching on 1st January 1948 and also there being no evidence about the municipal assessment of the rent in that year, there is nothing to determine the controlled rent for this property.

23. The last point raised by the learned counsel for the appellant was that the plaintiff had wrongly deposited court-fees on the amounts which the defendant had deposited in Court for payment to the plaintiff under the orders of the High Court passed on a compromise when the appeal against the order of appointment of a Receiver was decided. The contention of the learned counsel for the plaintiff was that he had to do so under the orders of the trial Court. On 15th September 1961 the trial Court pass-ed the following order:--

'I find that the plaintiff has yet to pay court-fees (ad valorem) on Rs. 24,000 deposited by defendant on last hearing. Shri Pujari has no objection. It is ordered that court-fees be realised and last hearing's order is modified accordingly.'

The trial Court seems to have thought that any amount which the plaintiff receives through the Court must be deem-ed to be paid to him under the decree that will ultimately be passed and consequently asked the plaintiff to deposit court-fee on any amount which he withdrew from the Court and in pursuance of this order the plaintiff has been paying court-fee on each amount which he withdrew. We are of opinion that this direction of the Court below was unjustified. In a suit for mesne profits court-fee is payable under Section 11 of the Court-fees Act on the amount decreed before the decree is executed. Up to this stage of the suit no decree having been passed determining the amount due to the plaintiff, there was no question of demanding court-fee from the plaintiff. If the defendant pays any amount to the plaintiff during the pendency of the suit it has to be given credit when passing the ultimate decree and court-fee will be payable only on the amount which is ultimately decreed and for which the plaintiff has to file an execution application against the defendant.

24. Since however, on the basis of our decision the decree of the Court below for damages at the rate of Rupees 4000/- per month is being confirmed, a decree will now be passed for the amount still in balance after giving credit to all the amounts which the defendant has paid during the pendency of the suit. The appellant has filed a chart showing the amounts paid but that has yet to be ascertained. The court-fee that had been paid by the plaintiff towards the amounts withdrawn by him will be adjusted towards the court-fee payable on the amount decreed and the balance, if any, will be realised when the decree is put into execution.

25. The result, therefore, is that the appeal is dismissed. The suit is decreed for arrears of rent Rs. 16,353/-and mesne profits at Rs. 4,000/- per month from 22-5-1960 to 4-10-1964 which the office will calculate after deducting payments made and show the correct amount due in the decree. The plaintiff will get future interest at 4% per annum on the amount decreed and his costs in both the Courts.