JUDGMENT
S.K. Mahajan, J.
1. The defendant was a tenant of the plaintiffs in the premises measuring 2175 sq. ft. The premises was taken on lease with effect from 1.6.1986 for a period of five years. The lease was duly registered with the Sub-Registrar on 29.5.1986. Before the expiry of the period of five years the landlords on 1.12.1994 wrote to the defendant that as the premises was required by them for their personal use they would not like to renew the same for a further period after its expiry on 31.5.1995. The original lease deed provided that after the expiry of the lease period the lease can be renewed by mutual consent for a further period of five years at an increase of 25% of the last paid rent. It appears that the defendant was interested in continuing as a tenant in the premises and the parties, therefore, entered into negotiations and by a letter dated 27.1.1995 the defendant informed the plaintiff as under :
“27th January, 1995
M/s. Gopi Nath and
Sanjay Goel
Landlord & owners,
A-18 Ram House,
Middle Circle,
Connaught Place,
New Delhi: 110 001
EXTENSION OF CURRENT LEASE BY 5 YEARS
Dear Sirs,
We have discussed the above matter from time-to-rime and finally the following points have been agreed upon :
(a) Current lease date will be extended by further 5 years period effective 1st June, 1995 to 31st May, 2001. (b) The per square foot rent of the total area of 2175 sq. feet would be @ Rs. 85/- per sq. foot per month for the entire period of extended lease of 5 years. (c) As provided in the current agreement, the advance payment would be made accordingly which would be adjusted with the monthly rent payable from 1.6.1995 to 31.5.2001. As discussions have already taken place and agreed upon, kindly give your acceptance on the duplicate copy enclosed herewith putting your signatures and date. Thank you very much for your excellent cooperation. Yours sincerely, VST INDUSTRIES LIMITED Sd/- (B. BHATTACHARJEE) MANAGER CORPORATE AFFAIRS"
The defendant having agreed to continue as a tenant for a further period of five years on a rent of Rs. 85/- per sq. ft. per month the plaintiff purchased non-judicial stamp papers of the value of Rs. 22,300/- for execution of the renewal lease deed. The lease deed duly typed on the non-judicial stamp papers was then submitted by the defendant to the plaintiff. However, before the same was executed the defendant on 1.6.1995 sent a telegram to the plaintiff that the defendant wished to renew the lease for office purposes for a further period of five years as per Clause 17 of the lease deed dated 23.5.1990. The plaintiff was accordingly called upon to execute the lease deed in favour of the defendant. Since this telegram was not in accordance with the agreement arrived at between the parties, confirmed by the defendant by its notice dated 27th January, 1995, the plaintiff on June 5, 1995 called upon the defendant to immediately execute the lease already written and approved and make the payment of advance rent as agreed between the parties. It was further stated in that notice that in case the advance rent was not paid within three days and fresh lease deed was not executed it will be presumed that the defendant was not interested in honouring the agreement dated 27th January, 1995 and the plaintiff would become entitled to recover possession of the premises from the defendant whose possession would be unauthorised w.e.f. 1st June, 1995. On July 3, 1995 the plaintiff filed the present suit for possession and for recovery of Rs, 3,81,175/- being damages for use and occupation of the premises with effect from 1st June, 1995 till 3rd July, 1995 calculated @ Rs. 85/- per sq. ft. The plaintiffs also stated in the plaint that the defendants are liable to pay mesne profits for their unauthorised use and occupation of the premises till they hand over vacant and peaceful possession of the same to the plaintiff @ Rs. 150/- per sq. ft. per month.
2. On summons being served upon the defendant, the defendant filed its written statement alongwith a counter-claim for specific performance of agreement to renew/ grant lease as contained in Clause 17 of the lease deed dated 23rd May, 1990. The plea taken in the written statement-cum-counter claim was that the letter dated 27th January, 1995 was written as a part of record of the discussions and with regard to the figure of “85”, and not as an “agreement of all the terms”. It is also stated that though certain drafts of the intended lease for renewal terms were made but nothing was finalised. It is further stated that the letter dated 27th January, 1995 was written with an understanding that the defendant was contemplating/insisting on an option for three renewals with 25% increase each time but on receipt of the letter the plaintiffs shifted their stand and were trying to trap the defendant by agreeing to the renewal of the lease only upto 31st May, 2000. It is not denied in the written statement that the market rate of rent at the relevant time was not Rs. 85/- per sq. ft.
3. In view of the fact that the possession had already been delivered to the plaintiffs on 31.3.1997, the counter-claim did not survive and the Court on 15th December, 1998 re-framed the issues which were earlier framed on 23rd January, 1996. The issues framed on 15th December, 1998 were as under :
“1. Whether the defendant was entitled to the continuance of lease in his favour, as alleged in the written statement? If so, to what effect?
2. To what amount of rent is the plaintiff entitled for the month of June, 1995?
3. Whether the plaintiff is entitled to damages/manse profits? If so, at what rate and for what period?
4. Relief.”
Since the decision of all the issues was on the basis of the documents, parties did not lead any oral evidence and this is how the Court heard arguments on the issues.
4. The main point for consideration is whether the defendant was entitled to the continuation of lease in its favour as alleged in the written statement and what is the effect of the letter dated 27fh January, 1995 by which the defendant had agreed to pay rent @ Rs. 85/- per sq. ft. in case the lease was extended for a period of five years with effect from 1st June, 1995. In case the Court decides this issue in favour of the plaintiffs, the further question which may arise is whether the plaintiffs are entitled to mesne profits. If so, at what rate and for what period. Rent for the period ending 31st March, 1997 has been paid with 25% enhancement on the last paid rent. In case issue No. 1 is decided in favour of the defendant, the plaintiffs may not be entitled to any further relief in the suit.
5. I have heard learned Counsels for the parties and have also perused the documents on record and my findings are as under :
Issue No. 1
6. This issue not only depends upon the interpretation of Clause 17 of the lease deed dated 29th May, 1986 but also on the effect of the letter dated 27th January, 1995. Clause 17 of the lease deed reads as under :
“17. After the expiry of the lease period i.e. 31st May, 1995, the lease can be renewed by mutual consent for a further period of five years at an increase of 25% of the last rent paid. If desired the subsequent renewal of the lease shall be subject to 25% increase on the last rent. On renewal a fresh lease shall be executed.”
As per Clause 17 the lease could be renewed by mutual consent and it is only after the parties had agreed to renew the lease by mutual consent that the same could be on an increase of 25% on the last paid rent. However, in spite of this clause in existence nothing prevented the parties to enter into new terms at which the lease could be extended by them. The parties, therefore, negotiated and arrived at a different agreement as is apparent from the letter dated 27th January, 1995. Parties agreed that the lease will be extended for a further period only after the defendant had agreed to increase the rent to Rs. 85/- per sq. ft. There is no averment in the written statement that this letter was written under mistake or under undue influence or coercion of the plaintiffs. In my opinion, therefore, the defendant cannot resile from the terms agreed to by it in its letter dated 27th January, 1995. It may be a different question as to what rate the defendant may be liable to pay mesne profits in case the lease was not renewed in terms of the said letter, however, the fact still remains that there was no agreement between the parties to renew the lease in terms of Clause 17 of the lease deed dated 29th May, 1986. I am, therefore, clearly of the opinion that the defendant was not entitled to the continuation of the lease in its favour and by letter dated 27th January, 1995 it had agreed to have the lease renewed for a further period of five years only on payment of Rs. 85/- per sq. ft. as the rent. Issue No. 1 is accordingly decided against the defendant.
Issue Nos. 2 and 3
7. On the expiry of the period of lease, namely, 31st May, 1995 and the lease having not been renewed, the defendant was obliged to hand over vacant possession of the premises to the plaintiffs. That having not been done the defendant became unauthorised occupant of the premises and the plaintiffs are, therefore, entitled only to damages/ mesne profits and not rent for the month of June, 1995 and for the period subsequent thereto till the premises was vacated by the defendant. As per letter dated 27th January, 1995 the defendant had agreed to pay rent @ Rs. 85/- per sq. ft. In the plaint, when it is stated that the market rent at the relevant time was Rs. 85/- per sq. ft., the same has not been denied by the defendant in its written statement. However, the question is as to whether in spite of the defendant having not denied the market rent to be Rs. 85/- per sq. ft. is it liable to pay the same till 31st March, 1997 when it vacated the premises ? A perusal of the letter shows that the defendant had agreed to pay the said rent on its having been assured that it will continue to be a tenant for a period of five years. There was a security of tenure which must have weighed in the mind of the defendant to agree to pay rent @ Rs. 85/- per sq. ft. In case there was no security of tenure for a period of five years, may be the parties had agreed on a different rent. There being no security of tenure, in my opinion, the plaintiffs are not entitled to claim rent @ Rs. 85/- per sq. ft.
8. The question, however, still remains is as to what are the damages/manse profits to which the plaintiff is entitled ? The original rent being paid to the plaintiffs was @ Rs. 25.20 per sq. ft. It my opinion, ends of justice will meet in case the defendant is directed to pay mesne profits for use and occupation of the premises at double the rate agreed to in the lease dated May 23, 1990. I, therefore, direct the defendant to pay damages/manse profits for use and occupation of the premises to the defendant @ Rs. 50.40 per sq. ft. per month with effect from 1st June, 1995 till 31st March, 1997. The plaintiffs to pay Court fee on this amount which has been directed to be paid to them under this decree. The plaintiff will also be entitled to damages at the same rate for the month of June, 1995.
9. I, therefore, while passing a decree for Rs. 1,20,582/- being mesne profits/ damages from June 1, 1995 to 3rd July, 1995 calculated at the rate of Rs. 50.40 paise per foot per month in favour of the plaintiff, also pass a decree for future mesne profits @ Rs. 50.40 paise per sq. ft. per month from 4th July, 1995 to 31st March, 1997. Plaintiffs will also be entitled to costs of the suit.