S.V.R.Ram Prasad v. N.Ismail & Ors

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:20.08.2009CORAM:THE HON'BLE MR.JUSTICE M.CHOCKALINGAMANDTHE HON'BLE MR.JUSTICE R.SUBBIAHOSA.NOS.298 OF 2004, 76 AND 77 OF 2005andCMP.NO.17968 of 2005OSA.No.298 of 2004:S.V.R.Ram PrasadCo-Trustee ...... Appellant / 2nd RespondentVs.1.N.Ismail2.The learned Official Trustee, High Court, Chennai 104. ...Respondents/Applicant and 1st RespondentOSA.No.76 OF 2005: N.Ismail ...Appellant/ApplicantVs.1.The official Trustee of Tamil Nadu City Civil Court Building, Chennai 600 104.2. S.VR.Ramprasad, "Ramapatham" No.71, 24th Street, Anna Nagar, Chennai 600 102. ...Respondents/RespondentsOSA.No.77 OF 2005: Mr.S.V.R.Ram Prasad ...Appellant/Applicant https://hcservices.ecourts.gov.in/hcservices/ Vs.1. K.Vatsala2.N.Ismail3.M/d Ismail & Sons Hotel(P) ltd.,No.17, E.V.R. Periyar High Road,Park Town, Chennai 3.4. The official Trustee of Tamil Nadu,High Court, Chennai 104 ...Respondents/RespondentsMr.R.Subramanian, Senior Counsel for M/s Hemalatha : For Appellant in OSA.No.77 of 2005 and OSA.NO.298 OF 2004 and 2nd respondent in OSA.No.76 of 2005 Mr.R.Krishnamoorthy Senior Counsel for Mr.Thankasivam :For Appellant in OSA.No.76 of 2005 and 1st Respondent in OSA.NO.298 of 2004 Mr.AR.L.Sundaresan Senior Counsel for Mr.K.Raja Shrinivas : For 2nd appellant in OSA.No.77/05Mr.K.S.Madhavan Advocate :For 2nd Respondent in OSA.No.298 OF 2004, 1st respondent in OSA.No.76 of 2005 and 4th respondent in OSA.NO.77 OF 2005 No appearance :Respondents 1 and 3 in OSA.NO.77 OF 2005 ---OSA.NOS.298 OF 2004, 76 AND 77 OF 2005: Original Side Appeals filedunder order 36 Rule 11 of OS Rules and r/w clause 15 of the letterspatent praying the against the decree and order dated 10.12.2004passed in Appln Nos.915/2003 in CS.No.90/1963 (in OSA.No.298/2004)Appln No.915/03 in CS.No.19/1963, (in OSA.No.76/05) ApplnNo.1395/2004 in CS.No.90/1963 (in OSA.No.77/05) respectively on thefile of the Original Side, High Court, Madras. https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T(Judgment of the Court was made by M.CHOCKALINGAM,J)This Judgment shall govern these three appeals namelyOSA.Nos.298 of 2004 and 77 of 2005 at the instance of the Trusteeand OSA.No.76 of 2005 at the instance of the Tenant.2. These appeals have arisen under the followingcircumstances:(a) An immovable property which is situated in the Cityof Madras in R.S.NO.43/2, Block No.7, Vepery Division, PoonamalleeHigh Road, Chennai, having an area of 5644 sq.ft. and the otherpiece of land to an extent of 4141 sq.ft. belonged to the TrustEstate of Raja Sir Ramasamy Mudaliar Choultry. An application wasmade on 28.11.1973, for grant of lease in favour of one Mr.Ismail,the applicant/appellant, for a period of 25 years with an optionfor renewal for a further period of 25 years. The lease agreementwas executed on 21.12.1973 between the Official Trustee and theapplicant/appellant. Pursuant to the order dated 28.11.1973, thelease was granted in respect of the above property for a period of25 years. The rent was fixed originally at the rate of Rs.400/- permonth from 1.1.1974 to 31.12.1976 and from 01.01.1977 to 31.12.1988at Rs.1000/- per month, and thereafter at the rate of Rs.1,200/-per month from 1.1.1989 to 31.12.1998. Since the applicant waspermitted to a raise a building thereon, he submitted a buildingplan before the Corporation of Madras to enable him to construct acommercial building in the land under lease. After obtainingapproval, he commenced the construction of the commercial buildingin the year 1985 in the property which was taken on lease by theapplicant. He also made an application for extension of lease inthe year 1985. An order came to be passed by this Court inApplication No.3725 of 1985 dated 17.2.1986, directing the OfficialTrustee to extend the lease for a further period of three yearsfrom 1.1.1999, and accordingly it was extended. Further theapplicant/appellant was directed to pay Rs.1200/- per month, and hewas also given option to renew the lease for a further period of 25years after the expiry of the lease as stipulated in the leaseagreement. (b) An appeal was preferred by the Official Trustee inO.S.A.No.213 of 1987 challenging the order dared 17.2.1986 made inApplication No.3725 of 1985, and the Division Bench of this Courtconfirmed the order made in Application No.3725 of 1985 on24.6.1993. Thereafter, on 9.4.2001, the Official Trustee executed alease agreement in favour of the applicant as per the order of thisCourt dated 17.2.1986 passed in Application No.3725 of 1985 whichwas confirmed by the Division Bench by order dated 24.6.1993. While https://hcservices.ecourts.gov.in/hcservices/ the matter stood thus, the lease period was extended from 1.1.1999to 31.3.2001 on condition that the applicant should pay a monthlyrent of Rs.1,200/- with provision for further renewal. Under suchcircumstances, Application No.915 of 2003 was filed by theapplicant to extend the lease for a period of further twenty fiveyears.(c) While the matter stood thus, two other applicationsviz., Application Nos.5141 and 5142 of 2003 were filed by theOfficial Trustee. Application No.5141 of 2003 was filed seekingtermination of the lease and handing over of possession whileApplication No.5142 of 2003 was for a direction to therespondent/tenant to pay Rs.1,25,000/- per month towards damagesfor use and occupation of the premises from the date of expiry ofthe lease period i.e. 31.12.2001, till the date of delivery ofvacant possession. All the three applications were taken up by thelearned Single Judge who by order dated 10.12.2004, while extendingthe lease for 25 years, fixed the monthly rent at Rs.1 lakh permonth payable on or before the fifth day of the succeeding EnglishCalendar month, and he should execute the lease deed thereafter,and the lease agreement should also be executed on or before31.12.2004. Since the lease period came to an end on 31.12.2004,for the interregnum period, he was directed to pay a consolidatedlease amount of Rs.15 lakhs for the period from 1.1.2002 to31.12.2004. Further, in view of the orders passed in ApplicationNo.915 of 2003, the other two applications were closed as nofurther orders are required. Under such circumstances, these threeappeals have been brought forth, two at the instance of the Co-Trustee and one at the instance of the tenant challenging thequantum of Rs.1 lakh per month. 3. Advancing arguments on behalf of theappellant/tenant, learned Senior counsel would submit that fixationof rent at Rs.1 lakh per month was excessive and unreasonable. Inthe instant case, the appellant in OSA.76 of 2005 viz., N.Ismail,came as a tenant in the year 1973. Initially, the lease was grantedfor a period of 25 years, and then and there, it was extended. Inpursuance of the order dated 28.11.1973, rent was fixed at the rateof Rs.400/- per month originally and subsequently it was increasedto Rs.1200/- per month. Even an inspection was made by AG & OT anda report has been filed. Learned Single Judge has not taken intoconsideration the materials available and also the objections thatwere seriously made. What has been leased out was 6,000 sq.ft. andodd which is continued to be in the hands of the appellant/tenant.He has also raised a massive construction. Originally constructionswere made in the year 2003, and he has made the said constructionout of borrowal. Therefore, he has to pay interest also. Furtherin the instant case, he has spent considerable amount, but, theincome being yielded is very low. Under such circumstances, therent fixed by the learned Single Judge at Rs.1 lakh payable by the https://hcservices.ecourts.gov.in/hcservices/ applicant/appellant has got to be reduced, and necessary ordershave to be made in this regard.4. According to the Co-trustee, it is true that 6000sq.ft. and odd was leased out to the applicant/appellant, Ismail,and it is also true that for making construction, another piece ofland belonging to the Trust viz., 4141 sq.ft, was leased out to oneVatsala, and the applicant has also raised another constructionthereon, for which he was getting a rent of Rs.900/- per month, andso far as the present piece of land is concerned, the constructionraised is a huge one, consisting of 24 rooms and 11 shops apartfrom 1 restaurant and he is also getting enormous rents from allthe 24 rooms, and he is having lucrative business in his restaurantand earning lakhs of rupees per month, and the same should havebeen considered by the learned Single Judge. Added further thelearned counsel that in the instant case, if public auction isheld, it would fetch more than Rs.1 lakh per month, and under suchcircumstances, it is a fit case where public auction can be made,and it would be advantageous in the interest of trust, and hencethe order of the learned Single Judge fixing the rent at Rs,.1 lakhhas got to be sustained, and if the Court comes to the conclusionthat the appellant/tenant can be continued, a reasonable rent hasgot to be fixed by the Court,.5. The Court paid its anxious consideration on thesubmissions made and looked into the materials available.6. As could be seen above, the two pieces of landmeasuring 5644 sq.ft. and 4141 sq.ft. respectively belonged to theTrust. It is also not in controversy that the first piece of landwas given in lease to the appellant in OSA.76 of 2005 in the year1973, and the original lease period was extended then and theretill 1998 in the year 1998 by the learned Single Judge. The samewas further extended for a period of three years which came to anend in the year 2001. From that period, the rent payable wasRs.1200/- per month. Insofar as the other piece of land which wasleased out to one Vatsala to the extent of 4141 sq.ft., earlierthere was an order passed. From the lease agreement, it could bewell seen that after the possession was actually handed over byVatsala to the present appellant Ismail, the same has been recordedby the AG & OT, and thereafter, the rent has been directly receivedby the Official Trustee from the said Ismail in respect of 4141sq.ft. Thus, it was too late on the part of the Co-trustee tocontend that the said Ismail has got possession of the said pieceof land from Vatsala and raised constructions, and hence the saidconstruction can be termed as 'unauthorised'. The said contentioncannot be countenanced for the simple reason that lease was grantedin respect of 4141 sq.ft. which was originally given to Vatsala,and now it cannot be disputed by the learned counsel for co-trustee. Learned Single Judge has appraised the circumstances and https://hcservices.ecourts.gov.in/hcservices/ fixed the rent at Rs.1 lakh which, in the opinion of this Court, isvery low for the reason that it is brought to the notice of theCourt that it is a massive construction worth in crores and 24rooms along with 11 shops and one restaurant have been constructedin the said property. That apart, as the property in question issituated in the heart of the City of Madras, naturally it wouldfetch huge amount. At the same time, the Court should not directthe appellant to vacate the property where massive constructionshave been made, and hotel and shops were run by him. Naturally, ifit is out of his own money, it would well earn interest ifdeposited either or if it is a borrowal, he has to make payment ofinterest. Earlier, in the agreement, it was specifically stipulatedthat what are all the constructions made by him, must become theproperty of the trust. Thus, it would be quite clear that thebuilding now raised by him is whether out of his own money orborrowed money, the entire construction actually should vest withthe trust, and he cannot make any claim over that. Taking intoconsideration the cumulative facts and circumstances stated above,this Court is of the considered opinion that fixing a rental atRs.2.5 lakhs per month is reasonable. It is not a fit case in thestated circumstances to leave it for public auction as put forth bythe Official Trustee and also the Co trustee.7. In the case of trust, the Court must look into aparticular transaction, and it should be to the utmost benefit andadvantage of the trust. Keeping in mind the above said fact andafter looking into the above matter, this Court makes the followingorder: (i) The appellant tenant is directed to pay a sum ofRs.1.5 lakhs per month from the date of order of the learned SingleJudge till 31.8.2009, and from 1.9.2009, the rent is fixed atRs.2.5 lakh per month. It is made clear that the amount should bepayable by the appellant viz., Ismail to the credit of the trustfrom the date of the order of the learned Single Judge, and thebalance amount, after adjusting the amount already paid, should becalculated and payable by the tenant/appellant within a period ofthree months here from to the Official Trustee which has got to becredited in the name of the trust. (ii) Insofar as the consolidated payment of rental forthe period from 1.1.2002 to 31.12.2004, since no agreement of leasewas available, this Court is of the considered opinion that itshould be raised from Rs.15 lakhs to Rs.24 lakhs, and accordinglyit is ordered. The said amount should be paid in equal threemonthly instalments commencing from 15.9.2009. The amount if anypaid already in that regard, will be given credit to, and thebalance should be paid as per the mode stated above.(iii) Insofar as the second piece of land namely 4141sq.ft. where the construction was raised, it is admitted that the https://hcservices.ecourts.gov.in/hcservices/ lease is continued till 2012, and it is agreed that theconstruction raised by him should vest with the trust. It wouldalso be quite clear that the second piece of land leased out is nowunder the occupation of Mr.Ismail. Learned AG & OT brought to thenotice of the Court that the appellant may be directed to makeenhanced payment instead of Rs.900/- as he was doing in the past,since it is very low. Therefore, taking into consideration thefacts and circumstances, this Court is of the considered opinionthat it is just and proper to increase to Rs.15,000/- from Rs.900/-per month from the date of commencement of the order of this Court,and accordingly it is ordered. (iv) Insofar as the appeals seeking termination of lease,this Court is of the considered opinion that it is not a fit casewhere the lease in favour of the tenant /appellant could beterminated. (v) It is also made clear that with regard to the leaseperiod in respect of 4141 sq.ft. which is shown as second piece ofland, there cannot be any impediment for the Official Trustee toseek for extension of lease or for raising rent at the time ofexpiry of the lease. (vi) It is also made clear that incorporating the termsas mentioned mentioned, a new lease agreement has to be enteredinto between the parties viz., one Mr.Ismail being a tenant, andthe Official Trustee, for the remaining period out of twenty fiveyears, what is shown in the lease deed.8. In the result, all these original side appeals aredisposed of. No costs. Consequently, connected MP is closed.VJYSd/-Asst. Registrar//True Copy//Sub Asst. RegistrarToThe Sub Assistant Registrar,Original Side, High Court,Madras.104. https://hcservices.ecourts.gov.in/hcservices/ + 3 ccs to Mrs. S. Hemalatha, Advocate (CC SR Nos.40057, 40058, 40059+ 1 cc to Mr.K. Raja Shrinivas, Advocate CCSR No.40416+ 3 ccs to Mr. K.S.Madhavan, Advocate CCSR No.40467, 40468, 40469+ 2 ccs to Mr. S. Thankasivan, Advocate SR No.40654, 40655OSA.NOS.298 OF 2004,76 AND 77 OF 2005GV(CO)SR/5.10.2009