Mr. Prashant Kumar, Mr. Amulya Dhingra, Mr. Abhineek Arvind and Mr. Chetan Rathor, Advs v. NAVEEN KHANNA AND SONS HUF & ORS

Judgment

1. The present Appeals seek to challenge an impugned judgment and decree dated 07.04.2021 passed by the Additional District Judge-04, Patiala House Courts, New Delhi in the matter titled as M/s Naveen Khanna & Sons (HUF) & Ors. v. Jet Air Pvt. Ltd. [hereinafter referred to as “Impugned Judgment”], both the Plaintiff before the learned Trial Court - Naveen Khanna & Sons (HUF) [hereinafter referred to as “NKS”] and the Defendant before the learned Trial Court - Jet Air Pvt. Ltd. [hereinafter referred to as “JAPL”] have filed their separate Appeals to challenge to the Impugned Judgment.

2. By the Impugned Judgment, the suit of NKS was partly decreed and mesne profits/damages at the rate of Rs.145/- per sq. ft. per month were awarded for the period from 01.04.2007 till 15.06.2008, subject to the adjustment of use and occupation charges already paid. NKS was also awarded interest at the rate of 9% per annum on the mesne profit from the date of accrual till the date of decree and future interest was awarded at the rate of 6% per annum. In addition, NKS was awarded litigation charges including pleader’s fees up to Rs.50,000/-.

3. In the Appeal filed by NKS, NKS has sought modification of the Impugned Judgment to a limited extent praying for: (i) Award of damages/mesne profit at the rate of Rs.250/- per sq. ft. per month or any such higher rate in accordance with the lease deeds produced and approved; and (ii) Grant of interest of 18% per annum on the use and occupation charges/damages/mesne profit from the respective due dates up to the Signature Not Verified Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected payments in full.

3.1 JAPL on the other hand has sought modification of the Impugned Judgement praying: (i) To declare there was renewal of the lease deed with 20% increase in the initial rent, after the expiry of first term; and (ii) set aside the award of damages/mesne profits.

4. Both Appeals were heard together and are being decided by this judgment.

5. By an order dated 14.03.2022, a Coordinate Bench of this Court in RFA 286/2021 directed a stay on the execution proceedings in respect of the Impugned Judgment subject to the deposit of Rs.75 lacs with the Registry of this Court. It was further directed that part of the amount deposited be released in favour of NKS.

5.1 Subsequently, the order dated 14.03.2022 was modified on

06.05.2022 by the Court directing that the entire amount of Rs.75 lacs shall remain deposited with the Registry of this Court. CM APPL. 30124/2021 in RFA 311/2021

6. This is an Application under Order XLI Rule 27, Code of Civil Procedure, 1908 [hereinafter referred to as “CPC”] filed by NKS seeking to place on record a public document reflecting the money lending rates of interest for commercial banks. Notice in this Application was issued by a Coordinate Bench on 07.09.2021. Although a Reply was filed, no arguments opposing the Application were addressed by JAPL during the final hearing of the matter.

6.1 This Court has examined the document sought to be placed on Signature Not Verified Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected record. The Application has essentially been filed to place on record the interest rates issued by the Reserve Bank of India as available on its website reflecting the money lending rates of interest for commercial banks. Since this document is a public document and is available on official website of Reserve Bank of India, the document will not require any additional proof. In addition and in view of the fact that one of the contentions raised by NKS is in relation to the interest awarded, this Court deems it apposite to allow the present Application to enable the Court to pronounce judgment.

6.2 The document being the table on interest rates is accordingly taken

on record. The Application is disposed of in the aforegoing terms. RFA 286/2021 & RFA 311/2021

7. The brief facts are that, NKS is the owner of an area admeasuring 4400 sq. ft. situated on the first floor of the multi-stored building known as “Himalaya House”, 23 Kasturba Gandhi Marg, New Delhi-110001 [hereinafter referred to as “subject premises”]. The subject premises was let out to JAPL under and by virtue of a registered lease deed dated

23.04.2004 at a monthly rent of Rs.2,82,480/- for a period of three years commencing from 01.04.2004 to 31.03.2007 [hereinafter referred to as “lease deed”].

8. The lease deed expired on 31.03.2007 and a suit for ejectment, use and occupation charges/mesne profit and interest was filed by NKS. During the pendency of the suit, the possession of the subject premises was handed over by JAPL to NKS on 15.06.2008. The suit was thus, contested on the question of entitlement and the quantum of mesne profits/damages. Signature Not Verified Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected

9. As stated above, the suit was partly decreed by the learned Trial Court awarding mesne profits/damages at the rate of Rs.145/- per sq. ft. per month for the period from 01.04.2007 till 15.06.2008, subject to the adjustment of use and occupation charges already paid.

10. It is the case of JAPL that the lease deed had a vested right of renewal with an increase of 20% in rent after the expiry of its first term and thus JAPL was only liable to pay rental, use and occupation charges at the rate of 20% increase over the previous monthly rental of Rs.64.2/- per sq. ft. totalling to Rs.77/- per sq. ft. for the period from 01.04.2007 onwards. It is not disputed that the payment at the rate of Rs.77/- per sq. ft. was made for the period of extended occupation from 01.04.2007 to 15.06.2008 [hereinafter referred to as “extended period”]. Contentions of JAPL

11. The learned Counsel for JAPL has contended that in exercise of the vested right of renewal under the lease deed, JAPL sent a communication regarding its intention to renew the lease deed on 28.12.2006 under postal certificate (UPC) to NKS. Subsequently, on 02.01.2007, a communication seeking extension of the lease was also delivered to an employee of NKS. This was followed by a communication dated 12.03.2007 as well. However, despite these communications JAPL received a legal notice on

19.03.2007 calling upon JAPL to vacate the subject premises, claiming JAPL failed to exercise the renewal option on or before 31.12.2006. The legal notice was replied to on behalf of JAPL on 26.03.2007 inter alia stating that the option for renewal of the lease deed for a term of three years commencing 01.04.2007 had been exercised by JAPL by its letter dated 28.12.2006. Despite the exercise, a suit for ejectment was filed by Signature Not Verified Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected NKS seeking eviction of JAPL from the subject premises.

11.1 It is thus contended that since the renewal option was exercised in time, JAPL would only be liable to make payment for the extended period at the renewal rate of Rs.77/- per sq. ft. and not at the rate of Rs.145/- per sq. ft. as awarded by the learned Trial Court.

11.2 It is averred that the only requirement of JAPL was to send a notice three months prior to the expiry of the lease deed which was sent by them on 28.12.2006. It was further contended that the service of this renewal notice was affected by UPC and by hand, and that UPC is a recognized mode of service.

11.3 It is further the contention of JAPL, that renewal of Lease deed will be governed by Clause I (f) of the Lease Agreement which references renewal and that there is no mode or manner prescribed in the renewal clause for how the notice of renewal ought to be served. It was argued that Clause VI of the Lease deed does not decide mode of delivery but only proof of delivery and that the Clause VI is not a bar as to the mode of sending notices for renewal by other modes of service. Reliance was also placed on a judgment by Supreme Court of New South Wales in Australia in BCFK Holdings Pty Ltd v Rork Project: Pty Ltd1 where it was held that if the party becomes aware that Notice had been issued, then the party cannot assert that Notice wasn’t served simply because it was not sent in accordance with the terms previously agreed by the parties.

11.4 The learned Counsel for JAPL contends that the Impugned Judgment to the extent it has found that NKS is entitled to mesne profits is incorrect. Signature Not Verified 1 [2022] NSWSC 1706 Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected Since JAPL exercised its option for renewal and the renewal rate of rent was Rs.77/- per sq. ft., and no mesne profits would be due and payable other than the increased rental amount.

11.5 It is further averred that Clause VI is akin to Section 27 of the General Clause Act, 1897 and it is settled law that the presumption under Section 27 is rebuttable. Therefore, the deeming provision cannot overrule the actual facts and evidence at hand which show service of the notice of renewal. As such, the learned Trial Court has erred in its finding.

11.6 The other contention raised by learned Counsel for JAPL is in support of its averment qua the mesne profits. JAPL has placed on record two lease deeds to contend that the subject premises was on the first floor and the rate of rental was at Rs.145 per sq. ft. as also found by the learned Trial Court in the Impugned Judgment was not correct. Reliance was placed upon two lease deeds of the premises in the same building on the other floors having a rate of rent @ Rs. 87/- per sq. ft. and Rs.120/- per sq. ft. to submit that the mesne profits have been calculated at a higher rate by the learned Trial Court. Learned Counsel avers that the mesne profits should have been awarded @ Rs. 85/- to Rs. 90/- per sq. Contentions of NKS

12. Learned Counsel for NKS submits that the lease deed was a registered document and its clause for renewal was clear and it stated that three months prior to expiry of the lease, a notice was required to be sent by JAPL through registered post acknowledgment [registered AD] to exercise the option for renewal. The notices sent by UPC were not received by NKS. Since the notice was to be sent by registered AD as was stated in the lease deed, the option was not validly exercised by JAPL. The legal Signature Not Verified Digitally Signed By:GEETA JOSHI Signing Date:01.07.2025 19:44:01 RFA 286/2021 & connected notice for vacation of the subject premises was sent to JAPL and once a lease deed is determined, JAPL is liable to pay mesne profits and thus, the finding of the learned Trial Court that mesne profits was payable for use of the subject premises after 31.03.2007, is correct.

12.1 Learned Counsel for NKS however does challenge the Impugned Judgment to the extent of the rate as fixed for mesne profits, use and occupation charges. It is averred that rate fixed by the Impugned Judgment is incorrect and it should be Rs.250/- per sq. ft which is the prevalent rate for like premises during that period. In this regard, learned Counsel for the NKS seeks to rely upon three lease deeds which evidence a rate of rental between Rs.150/- and Rs. 200/- per sq. ft. to submit that award of damages is on the lower side, given the prevailing market rent of about Rs. 200- 250/- per sq ft. per month.

12.2 The learned Counsel of NKS, also highlighted the fact that JAPL had not denied the rate of rent being Rs. 250/- per square feet per month at the relevant time in its Written Statement, thus, as per Section 58 of Evidence Act, 1872 it is an admitted fact that does not need to be proved. Reliance is placed on the judgments in Standard Chartered Bank v. Andhra Bank Financial Services Ltd. & Ors.2 and M. Venkataramana Hebbar (Dead) by LRs v. M. Rajagopal Hebbar & Anr.3 in this behalf.

12.3 The other issue raised by the learned Counsel for NKS was that the interest as awarded by the learned Trial Court was not commensurate to commercial transactions. Learned Counsel for NKS submitted that the subject premises were taken on rent in a commercial building near