Partly allowed

Patel Industrial Corporation v. Sri C Purushotham

Karnataka HC3 Mar 2023RFA/461/2022

Case brief

AI extract

What is this about?

This judgment appeals a partial decree for ejectment where the High Court held a 35-year lease was not automatically renewable without a new deed. The appellants-tenants failed to prove renewal, so they were treated as tenants at sufferance, liable to pay refundable rents and property taxes to the landlord.

What did the court decide?

Appellant 738/2022 allowed in part to recover damages @ Rs. 1 lakh/pm, property tax refund, and vacant possession; appellant 461/2022 dismissed.

Patel Industrial Corporation Vs Sri C Purushotham — Landlord and Tenant | Karnataka HC (2023)

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RFA NO.461/2022 C/W RFA No.738/2022 1

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3^RD DAY OF MARCH 2023

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PRESENT

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THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR

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AND

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THE HON’BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA

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R.F.A NO. 461 OF 2022 C/W

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R.F.A NO.738 OF 2022 (EJE)

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IN R.F.A NO.461 OF 2022

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BETWEEN:

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PATEL INDUSTRIAL CORPORATION REP. BY ITS PARTNERS SRI. UMESH BABU PATIL NO.27, KHATA NO.537 OPP: R.V. ENGINEERNG COLLEGE BENGALURU-MYSORE HIGHWAY VALAGERAHALLI KENGERI HOBLI

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BENGALURU-560 059

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SRI. UMESH BABU PATIL S/O SRI. K. PUTTASWAMY GOWDA AGED ABOUT 72 YEARS PARTNER PATEL INDSUTRIAL CORPORATION

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SMT. REKHA W/O SRI. UMESH BABU PATIL AGED ABOUT 60 YEARS PARTNER PATEL INDSUTRIAL CORPORATION APPELLANTS NO.2 AND 3 ARE R/A NO.39/3, 13^TH CROSS 6^TH MAIN, MALLESHWARAM BENGALURU-560 003 …APPELLANTS

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(BY SHRI. R.B. SADASIVAPPA, ADVOCATE)

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RFA NO.461/2022 C/W RFA No.738/2022 2

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AND:

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SRI. C. PURUSHOTHAM S/O LATE G.K. CHIKKANARASIMAIAH AGED ABOUT 71 YEARS R/AT NO.212, BELLARY ROAD SADASHIVANAGARA

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BENGALURU-560 080 …RESPONDENT

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(BY SHRI. S.V. GIRIDHAR, ADVOCATE)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 20.01.2022 PASSED IN OS.No.8511/2018 ON THE FILE OF THE XXXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, PARTLY DECREEING THE SUIT FILED UNDER ORDER VII RULE 1 OF CPC FOR EJECTMENT.

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IN R.F.A NO.738 OF 2022

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BETWEEN:

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SRI. C. PURUSHOTHAM S/O LATE G.K. CHICKANARSIMHAIAH AGED ABOUT 70 YEARS RESIDING AT NO.212, BELLARY ROAD SADASHIVANAGARA

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BENGALURU-560 080 …APPELLANT

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(BY SHRI. S.V. GIRIDHAR, ADVOCATE)

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AND:

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PATEL INDUSTRIAL CORPORATION NO.77, KHATA NO.537, OPPOSITE R.V. ENGINEERNG COLLEGE BENGALURU-MYSORE HIGHWAY VALAGERAHALLI KENGERI HOBLI BENGALURU-560 059 REPRESENTED BY ITS PARTNERS THE RESPONDENT NO.2 AND 3

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MR. UMESH BABU PATEL AGED ABOUT 71 YEARS

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RFA NO.461/2022 C/W RFA No.738/2022

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PARTNER

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THE PATEL INDSUTRIAL CORPORATION S/O K. PUTTESWAMY GOWDA NO.39/3, 13^TH CROSS 6^TH MAIN, MALLESHWARAM BENGALURU-560 003

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MRS. REKHA AGED ABOUT 58 YEARS PARTNER THE PATEL INDSUTRIAL CORPORATION W/O K. PUTTESWAMY GOWDA NO.39/3, 13^TH CROSS 6^TH MAIN, MALLESHWARAM BENGALURU-560 003 …RESPONDENTS

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(BY SHRI. R.B. SADASIVAPPA, ADVOCATE)

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THIS RFA IS FILED UNDER SECTION 96 R/W ORDER 41 RULE 1 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 20.01.2022 PASSED IN OS.No.8511/2018 ON THE FILE OF THE XXXIV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, PARTLY DECREEING THE SUIT FOR EJECTMENT AND INJUNCTION.

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THESE RFAs, HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 01.12.2022 COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S. DINESH KUMAR J., PRONOUNCED THE FOLLOWING:-

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JUDGMENT

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These two appeals under Section 96 of CPC are filed challenging the judgment and decree dated January 20, 2022 in O.S. No.8511/2018 on the file of XXXIV Addl. City Civil and Sessions Judge,

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RFA NO.461/2022 C/W RFA No.738/2022 4

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Bengaluru. Hence, they are heard together and disposed of by this common judgment.

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For the sake of convenience, parties shall

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be referred as per their status in the Trial Court.

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Plaintiff brought the instant suit with a prayer inter alia for a decree for ejectment of defendants from the suit schedule property. The Trial Court has decreed the suit in part with costs and:

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directed the defendants to quit and deliver the vacant possession of the suit property within two months from the date of the decree;

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directed the defendants to pay property tax for the period from 06.12.2014 to 05.12.2017 with interest at the rate of 24% p.a.;

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directed the defendants to pay the property taxes from the date of filing of the suit till the date of handing over vacant possession; and

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RFA NO.461/2022 C/W RFA No.738/2022 5

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ordered enquiry into future mesne profits under

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Order XX Rule 12 of CPC.

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Feeling aggrieved, defendants have filed R.F.A. No.461/2022 and plaintiff has filed R.F.A. No.738/2022.

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Brief facts of the case pleaded in the plaint are, plaintiff is the owner of land bearing khata No.537 of Valagerahalli Village, Kasaba Hobli, Bengaluru District, measuring about 40,000 sq. ft. in Sy. No.77 and presently in Ward No.130 of Kengari Ward, BBMP¹ , Bengaluru.

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Under a lease deed dated March 12, 1981, plaintiff granted lease of the schedule property for a period of 35 years commencing from February 16, 1981 and expiring on February 15, 2016 to the first defendant, a partnership firm of which, defendants No.2 and 3 are the partners. Lease rent was fixed at

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1 Bruhat Bengaluru Mahanagara Palike

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RFA NO.461/2022 C/W RFA No.738/2022

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Rs.300/- per month for the first five years and at Rs.500/- per month for the remaining period of 30 years.

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Plaintiff issued a legal notice dated September 15, 2009 purporting to terminate the lease. Defendants replied to the said notice. Thereafter, plaintiff filed O.S. No.361/2010 inter alia seeking defendants' ejectment. Suffice to record that the said suit was dismissed upholding defendants' plea that the term of lease would expire on February 15, 2016 and therefore, the notice seeking ejectment was not valid in law.

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The term of lease ended on February 15, 2016 when O.S. No.361/2010 was pending. Plaintiff issued a fresh notice dated April 24, 2017 calling upon the defendants to quit and deliver the vacant possession of the property. The notice was served on the second defendant. Thereafter, the instant suit

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RFA NO.461/2022 C/W RFA No.738/2022 7

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has been filed on November 27, 2018. Defendants resisted the suit by filing written statement contending inter alia that:

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the lease deed provided the option of renewal to the defendants for a period of 5 years after expiry of 35 years;

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first defendant had written on March 19, 2016, exercising its option of renewal and upon such exercise, the term of lease would automatically

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get extended for a period of 5 years from 16.02.2016 to 15.02.2021. Therefore, plaintiff's claim for termination of lease was untenable and accordingly, suit was not maintainable;

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first defendant was constrained to file O.S. No.5529/2019 seeking specific performance by the plaintiff to execute a deed of renewal of lease for a period of 5 years from February 16, 2016 and hence, the instant suit for ejectment was not maintainable.

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RFA NO.461/2022 C/W RFA No.738/2022 8

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9. Based on the pleadings, the Trial Court framed following issues:

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1) Whether defendants prove that lease stood renewed for a further period of five years from 16.2.2016 and as such there is a valid and subsisting lease for the period 15.2.2021 as contended in para No.6 of the Written Statement?

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2) Whether Plaintiff proves that in accordance with the terms and conditions of the Deed of Lease dated 12.3.1981, the property tax in respect of the suit schedule property was liable to be paid by the defendants being Lessee of the suit schedule property?

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3) Whether Plaintiff proves that in spite of repeated requests and reminders, defendants have failed and neglected to pay property taxes for the financial year 2008-09 to 2017-18 and as such under threat and duress and to ensure that no distress process are initiated against the suit schedule property, plaintiff has paid a sum of Rs. 10,13,608/- towards property tax?

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4) Whether defendants prove that claim for recovery of payment of property tax by plaintiff is barred by time?

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RFA NO.461/2022 C/W RFA No.738/2022

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5) Whether Plaintiff proves that defendants are liable to pay future property tax in respect of suit schedule property post the determination of tenancy by efflux of time and upon receipt of the notice of termination of tenancy till the date of possession?

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6) Whether Plaintiff proves that defendants being tenant at sufferance are liable to pay damages for use and occupation of suit schedule property for the period commencing from 1.5.2017 a sum of Rs.4 lakhs p.m. or part thereof ?

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7) Whether Plaintiff proves that defendants are due of Rs.42,42.506/- to the plaintiff as calculated in para No. 18 of the Plaint?

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8) Whether defendants prove that they are liable to pay rent of Rs.500/- p.m only for the further lease period of five years and as such Plaintiff cannot seek for mesne profit?

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9) Whether Plaintiff is entitled for the direction as prayed in prayer (a) of the Plaint?

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10) Whether Plaintiff is entitled for the relief of direction for payment of sum as prayed in prayer (b) of the Plaint?

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RFA NO.461/2022 C/W RFA No.738/2022

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11) Whether Plaintiff is entitled for perpetual injunction as prayed in prayer (c) of the Plaint?

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12) Whether Plaintiff is entitled for mandatory injunction as prayed in prayer (d) of the Plaint?

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13) Whether Plaintiff is entitled for mesne profits as prayed in prayer (e) of the Plaint?

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14) What Order or Decree?

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On behalf of the plaintiff, P.Ws. 1 and 2 have been examined as witnesses and Exs.P1 to P80 marked. On behalf of the defendants, D.W.1 has been examined as witness and Exs.D1 to D10 marked.

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As recorded hereinabove, suit has been

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decreed and defendants have been directed to quit and deliver the vacant possession of the suit schedule property among other directions.

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RFA NO.461/2022 C/W RFA No.738/2022 11

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In the light of the pleadings and the

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evidence on record the following points arise for consideration:

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1. Whether the term of lease is deemed to have been extended based on defendant’s notice?

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2. Whether plaintiff is entitled for damages towards use and occupation of suit property after expiry of lease under lease deed dated 12.03.1981?

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3. If the answer to the Point No.2 is in affirmative, then what shall be the quantum of compensation?

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4. Whether plaintiff is entitled for reimbursement of property tax?

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Undisputed facts of the case are, plaintiff

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has executed lease deed, Ex.P1 dated March 12, 1981 granting lease for a period of 35 years. Whilst the lease was in currency, plaintiff filed a suit for ejectment in O.S. No.361/2010 and same stood dismissed. Subsequently, he has issued another notice and filed the instant suit. Suit has been decreed in part inter alia directing the defendants to

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RFA NO.461/2022 C/W RFA No.738/2022

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quit and deliver the vacant possession within two months; to make payment of property tax from 06.12.2014 to 05.12.2017 with current and future interest at rate of 24% p.a.

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Re: Point No. 1

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The clause governing the duration and renewal of lease reads as follows:

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“ IV Duration of the lease

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THE LESSOR AND LESSEE hereby convenent that the duration of the Lease shall be thirty five years certain, commencing from the 16^th day of February, One Thousand Nine Hundred and Eighty One on which date of LESSEE is put in possession of the leased area and renewable at the option of the LESSEE for further periods of five years each subject to the increased rent specified in clause 3 here to by executing a separate deed.”

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The contentions urged on behalf of

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defendants with regard to renewal of lease for a

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further period of 5 years after expiry of 35 years under the lease deed dated March 12, 1981 are:

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RFA NO.461/2022 C/W RFA No.738/2022

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that defendants had issued a notice seeking

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renewal of the period of lease;

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that defendants had filed O.S. No. 5529/2019 for specific performance and direction against the plaintiff to renew the lease.

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The clause governing the lease extracted hereinabove is unambiguous in terms thereof and renewal is not automatic. It required execution of a separate lease deed. Admittedly, defendants have filed a suit² for specific performance and the same has been dismissed. Therefore, both contentions urged on behalf of the defendants fail. Shri. Sadasivappa placed reliance on Sivayogeswara Cotton Press, Devangere and Others Vs. M. Panchaksharappa and Another³ and contended that a presumption ought to have been raised in favour of the tenant that the renewal was automatic.

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We may record that in the said case, the Apex Court

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2 O.S. No. 5529/2019

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3 AIR 1962 SC 413, Para 10 & 13

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RFA NO.461/2022 C/W RFA No.738/2022

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has recorded in para 8 of the judgment that the lessee had been granted right to continue the lease of the demised premises as long as he desired to do so. In contradiction, in the case on hand, parties have agreed that the term of lease shall be certain for a period of 35 years and renewable for a further period of 5 years by executing a separate deed.

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It is settled that in case of renewal, a new lease deed is a must. ( See: Provash Chandra Dalui and Anr Vs. Biswanath Banerjee and Anr⁴ ).

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In view of the above discussion, the Point No.1 is answered in the negative and in favour of landlord.

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Re: Point No. 2:

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Indubitably, the term of lease has expired on February 15, 2016. Defendants’ suit for specific performance and for a direction to renew the lease

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4 1989 Supp (1) SCC 487, para 14

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RFA NO.461/2022 C/W RFA No.738/2022

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for period of 5 years has been dismissed. Thus, defendants are tenants in sufferance. Hence, they are liable to pay compensation towards use and occupation of the premises after expiry of lease period till the date of delivery of possession. Accordingly, this question is answered in the affirmative .

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Re. Point No. 3:

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DW.1 in his cross-examination has admitted that he was not aware of the quantum of rent received from Kalyani Motors Private Limited⁵ and it was known to his uncle Shri.G.K.Srinivasaiah. PW.2 has produced the ledger extracts Ex. P71 to P79. The ledger extracts shows that Kalyani Motors was paying a rent of Rs.1,00,000/p.m. A suggestion has been made to DW.1 in the crossexamination that Kalyani Motors was paying a monthly rent of Rs.1,00,000/-. Though, he has

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5 ‘Kalyani Motors’ for short

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RFA NO.461/2022 C/W RFA No.738/2022

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denied the said suggestion, he has admitted that his uncle had knowledge as to how and in what capacity Kalyani Motors was in occupation of the suit property. Plaintiff has produced through PW.1 Ex.P.27, a job card issued by Kalyani Motors and photographs from Ex.P.28 to P.49. Ex.P.47 and Ex.P.48 are photographs of huge building with the board of Kalyani Motors. A careful perusal of Exhibits noted herein clearly demonstrates that Kalyani Motors were in occupation of the premises. In the absence of Certificate under Section 65B, Ex.P.71 to Ex.P79, in our view, can be considered for collateral purposes in the facts and circumstances of this case. The evidence of PW.2 and cross-examination of DW.1 coupled with Ex.P.27, Ex.P.28 to Ex.P.49 leads to an inference that Kalyani Motors were paying monthly rent of Rs.1,00,000/-. The suit has been filed on December 06, 2017. Plaintiff shall be entitled for a minimum damages of Rs.1,00,000/- which the

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RFA NO.461/2022 C/W RFA No.738/2022

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defendants were receiving from Kalyani Motors from 06.12.2014 to 5.12.2017. Accordingly, we answer this point in the affirmative .

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Re. Point No.4:

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The learned Trial Judge has directed payment of property tax from 06.12.2014 to 5.12.2017 with interest at the rate of 24% p.a., keeping in view the Law of Limitation. We find no error on this aspect. Accordingly, we answer this

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point in the affirmative .

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In view of the above discussion the

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following:

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ORDER

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a) RFA. No. 738/2022 is allowed in part . Judgment and decree is modified holding that:

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i) plaintiff shall be entitled for

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damages at the rate of Rs.1,00,000/p.m. from 06.12.2014 till the date of

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RFA NO.461/2022 C/W RFA No.738/2022

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delivery of possession by the defendants with interest at 12% p.a.; ii) plaintiff shall be entitled for recovery of property tax of Rs.3,60,262/- from 06.12.2014 to 5.12.2017 at 24% p.a and future tax till the date of delivery of possession; iii) defendants shall delivery the vacant possession of the suit schedule property within two months from today.

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b) RFA.461/2022 is dismissed with cost of Rs.1,00,000/-.

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Sd/JUDGE

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Sd/JUDGE

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SPS

Patel Industrial Corporation v. Sri C Purushotham

Case brief

What is this about?

What did the court decide?

Patel Industrial Corporation v. Sri C Purushotham

Case brief

What is this about?

What did the court decide?

What the court decided

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