APPEAL SUIT NO. 558 OF 2011
THE HON’BLE SRI JUSTICE K.C.BHANU
APPEAL SUIT NO. 558 OF 2011
Central Bank of India & another
Kurnool Chit Funds Private Limited
THE HON’BLE SRI JUSTICE K.C.BHANU
APPEAL SUIT NO. 558 OF 2011
1. This appeal has been filed challenging the judgment and decree dated 24.06.2011 in Original Suit No.464 of 2009 on the file of the Additional Senior Civil Judge, Kurnool, whereunder and whereby suit filed by the respondent/plaintiff for -eviction of the petitioner/ defendant from the suit premises; vacant possession of the same; and damages for use and occupation, was decreed.
2. The appellant herein is the defendant, and the respondent herein is the plaintiff, in the suit. For better appreciation of facts, the parties are hereinafter referred to, as they are arrayed before the trial Court.
3. The plaintiff filed the suit stating as follows.
Plaintiff is a company registered under the Companies Act, 1956. The plaint schedule property belongs to the plaintiff.
Its ground floor was leased out to the first defendant bank under registered lease deed dated 09.08.2000.
Office of the second defendant, which is a branch office of the first defendant, is located in the plaint schedule premises.
The rent agreed was Rs.13,230/- per month from 1.4.2000 to 31.3.2004.
There was a provision in the lease deed for extension of the lease period by mutual agreement for a further period of five years on agreed rent of Rs.15,855/- per month.
Thereafter, there was no extension the lease and the second defendant has to vacate the premises by 1.4.2009 as the lease stands determined by efflux of time.
The plaint schedule premises is located in the heart of Kurnool town i.e. near old bus stand, and the present rate of rent prevailing is Rs.17/- per square foot.
The plaintiff had been asking the defendants to vacate the premises and hand over vacant possession thereof to it, and it also got issued a lawyer’s notice dated 10.6.2009,
wherein the defendants were put on notice that from 1.4.2009 onwards, plaintiff would be claiming Rs.36,000/- per month by way of damages for use and occupation.
After receipt of the notice, the first defendant kept quiet till 10.7.2009 and on 11.7.2009, the second defendant credited Rs.4,886/- into the account of plaintiff towards arrears of enhanced rent for the months of April and May, 2009, and rent for the month of at June, 2009 Rs.14,740/- after deducting T.D.S. and sent a ante-dated reply notice dated 10.7.2009 falsely stating that on 20.2.2009, the first defendant sent a letter to the plaintiff exercising option for extension of lease from 1.4.2009 to 31.3.2014 and that the plaintiff agreed for such extension.
The very fact of depositing the amount on 11.7.2009 proves that plaintiff never agreed for extension after 1.4.2009.
So, the lease stands terminated by 31.3.2009 and the defendants are liable to be evicted. As the stay of the defendants in the suit premises after 31.3.2009 is illegal and unauthorized, they are liable to pay damages for use and occupation. Hence, the suit.
4. Defendants 1 and 2 filed written statement in the suit admitting the ownership of the plaintiff over the plaint schedule premises; the execution of lease deed and the agreed rent from 1.4.2000 to 31.3.2004 and for subsequent term of 1.4.2004 to 31.3.2009 and stated as follows.
From 1.4.2009 to 31.3.2014, the defendants are entitled to continue in the premises on a monthly rent of Rs.19,005/- and the defendants have to exercise the option to continue in the premises, but consent of the plaintiff was already there in the lease deed till 2014 on the rent mentioned in the lease deed, and that the defendants need not vacate the premises after 1.4.2009 by efflux of time and that the plaintiff never asked the defendants to vacate the premises and give vacant possession of the same, after 1.4.2009. The defendants received notice got issued by the plaintiff on 10.6.2009 for which the first defendant got issued reply on 11.7.2009. Plaintiff cannot go beyond the terms of lease deed and claim Rs.36,000/- per month, and it has no right to claim the amount. The demand shows that plaintiff is greedy and wants to squeeze the defendants who are running bank for benefit and welfare of public. The schedule premises is situated in the heart of Kurnool in a busy locality near Old bus stand, but it would not fetch more rent. It is an old building i.e. more than 75 years old. The area is badly affected in October, 2009 floods. The rent being paid by the defendants is very high. The second defendant sent a letter to the plaintiff on 20.2.2009 exercising option for extension of lease from 1.4.2009 to 31.3.2014, and when once the option is exercised, the lease will continue till 31.3.2014. Though the defendants sent old rent, subsequently credited the balance to the account of the plaintiff and the same was withdrawn by the plaintiff. Once the option is exercised by the defendants, the plaintiff has no right to ask the second defendant to vacate as the lease is still subsisting. Therefore, the stay of the second defendant in the premises in question is not illegal and unauthorized and so the defendants are not liable for damages for use and occupation. The suit is premature. Hence, it is liable to be dismissed with costs.
5. Basing on the above pleadings, the following issues were settled by the trial court for trial.
1) Whether the plaintiff is entitled to evict the defendants from the schedule property ?
2) Whether the plaintiff is entitled to the damages claimed ?
3) To what relief ?
6. During trial, on behalf of the plaintiff, P.W.1 was examined and Exs.A1 to A8 were got marked, and on behalf of the defendants, D.W.1 was examined and Exs.B1 was got marked.
7. The trial Court, upon consideration of the evidence on record, decreed the suit with costs directing the defendants to vacate the schedule premises and deliver vacant possession of the same to the plaintiff within a period of three months from the date of the judgment, and to pay damages of Rs.84,975/- for the period from 1.4.2009 to 31.8.2009 i.e. for five months, and also an amount of Rs.3,69,925/- towards damages for the period from 1.9.2009 to 24.6.2011. Challenging the same, the present appeal has been preferred by the defendants.
8. Learned counsel for the appellants contended that by virtue of Ex.B1-copy of letter, it is deemed that the tenancy is continued till 31.3.2014; that the original lease deed executed in the year 2000 expired in the year 2005, but thereafter also, the appellant bank continued in the premises in question, and that the landlord is accepting rents and therefore the appellant is a tenant holding over, and therefore, he prays to set aside the impugned judgment and decree.
9. On the other hand, the learned counsel for the respondent contended that first extension of lease in the year 2004-2009 was agreed by the respondent/plaintiff and thereafter there was no agreement between the parties for continuation of the lease for another five years, and therefore the tenant is bound to vacate the premises, and that the trial Court, upon appreciation of the evidence on record, directed the tenant to vacate the premises and pay damages, and the said judgment decree needs no interference with this court.
10. The factual matrix is not in dispute.
The second defendant bank is in possession of the premises in question in pursuance of the lease deed dated 09.08.2000.
According to the plaintiff, the tenancy expired by 31.3.2009 and the defendant is in unauthorized occupation of the premises in question.
A notice under Section 106 of the Transfer of Property Act, 1882, which is marked as Ex.A4, was issued by the plaintiff.
After expiry of the lease, even though the defendant bank continued to be in the occupation of the premises in question as a tenant holding over, after expiry of the first option exercised by the bank, the bank has to vacate the premises, and if it does not vacate, it can be said to be unauthorized tenancy.
It is not the case of appellants that the notice under Ex.A4 is not in accordance with the provisions of the Section 106 of the Transfer of Property Act, 1882.
When once Ex.A4 notice is in terms of Section 106 of the Transfer of Property Act, 1882, there is no other defence available to the tenant.
He has no right to continue in the premises and vacate the premises.
11. The contention of the learned counsel for the appellants/defendants is that by virtue of Ex.B1-letter the tenant has exercised its second option to continue in the premises for another period of five years and therefore by virtue of the option exercised by the defendants, the bank continued in the premises in question as tenant holding over and therefore the claim of damages for use and occupation of the building does not arise.
Plaintiff denied receipt of original of Ex.B1.
Admittedly, no proof is filed by the defendants to show that original of Ex.B1 was served on the plaintiff.
Therefore, it can be held that original of Ex.B1 has not been served on the plaintiff/landlord.
No explanation is given by D.W.1 for not serving original of Ex.B1-letter exercising second option to renew the lease period for another five years, on the plaintiff.
So, Ex.B1 appears to have been pressed into service by the defendants so as to continue in possession. So, in the absence of any proper service of Ex.B1 on the plaintiff, the evidence of D.W.1 cannot be taken into consideration to show that the bank exercised second option to continue in the premises for the second term of five years from 31.3.2009.
Therefore, the only ground taken by the defendants to continue in the possession of the premises in question till the year 2014 cannot be accepted and it is wholly untenable and devoid of merit and consequently the second defendant bank is bound to vacate the premises in question.
Considering the material on record, the trial Court rightly directed the second defendant bank to vacate the premises and there are no grounds to interfere with the same.
12. With regard to the damages for use and occupation of the premises in question after 31.3.2009, as the second option has not been given within the time prescribed under the lease deed, the second defendant can be said to be unauthorized tenant. Therefore the landlord is entitled to damages for use and occupation.
13. It is not in dispute that it is agreed between the parties that for every five years, there is an increase of 20% in the rent. If that is taken into consideration, certainly, the landlord is entitled to a sum of Rs.24,000/- per month towards damages for use and occupation of the premises in question by the defendants bank from 1.4.2009.
Hence, the damages granted by the trial Court for use and occupation of the premises in question by the second defendant bank are modified, and the defendants are directed to pay damages @ Rs.24,000/- per month from 1.4.2009 till the date of vacating the premises.
14. The learned counsel for the appellants submitted that the appellants are doing banking operations in the premises in question and that there are many formalities and lengthy procedure for vacating the premises by the defendants bank i.e. they have to obtain permission from the Reserve Bank of India, and they have to secure suitable alternative accommodation for the bank, and hence, he prays to grant considerable time i.e. till the end of the year 2012, to vacate the premises in question. Considering the facts and circumstances of the case, reasonable time can be granted to the appellants/defendants to vacate the premises in question.
15. In the result, the Appeal Suit is dismissed, directing the appellants/defendants to vacate the suit schedule premises on or before 31.12.2012 and to pay Rs.24,000/- per month for use and occupation of the premises from 31.3.2009 till vacating the premises. It is also made clear that the appellant shall give an undertaking before the trial Court that they will vacate the premises in question on or before 31.12.2012. No costs.
12.09.2011 (K.C.Bhanu, J.)
THE HON’BLE SRI JUSTICE K.C.BHANU