State Bank Of Patiala v. Chandermohan

Rao, C.J.

(1) This is an appeal preferred by the State Bank of Patiala (deft.) against the Judgment of the learned Single Judge by which he directed the appellant to deposit rent at Rs. 1,02, 600.00 p.m. with effect from 1.11.1990. The respondents are the landlords. Admittedly, the building was under seal from 15.10.1990 by the New Delhi Municipal Committee ("NDMC"). Later the Ndmc desealed the premises in May, 1991 and when this appeal came up for hearing before us, the appellant Bank was having possession of the building, though the appellant Bank was not putting the building to any use and had hired another building at huge rent.

(2) The suit was filed by the respondents in 1993 for eviction of the appellant (deft. 1), and for recovery of Rs. 24,62,400.00 towards arrears of rent from 1.11.1990 to 31.10.1992 and for damages and mesne profits. The lease in favour of the appellant is dated 1 .10.1983 in respect of the second and mezzanine floors of the building known as Regal Building (East), New Delhi, admeasuring 8000 square feet on a monthly rent of Rs. 1,02.6GO.00 for 5 years. It was executed by the 2nd deft. who sold the premises to plaintiffs. It was subject to renewal for a further period of 5 years, and to increase in rent by 20%. All taxes, levies and charges imposed by the Local Bodies were payable by the tenant. The appellant Bank attorney to the plaintiffs.

(3) According to the pff. the appellant stopped paying rent from 1.11.1990 on the "pretext" of the roof having fallen down and according to the pff. the appellant tenant was responsible for the damage to the building inasmuch as the appellant was not permitting the owners to conduct repairs to the building. In spite of several requests, the appellant did not handover possession to the respondents. The appellant Bank got the building sealed by the Ndmc from 15.10.i990 u/Ss. 113, 114 of the Punjab Municipal Act, 1911. Though the plaintiffs obtained permission for conducting repairs, the appellant Bank refused to give possession to the owners for conducting repairs.

(4) In 1983, when the lease commenced, the appellant Bank, no doubt, had the protection of the of the Rent Control Act but in 1988, the Drc Act ceased to apply to buildings with rent above Rs. 3,500.00 p.m. After the expiry of the 5 year lease period on 15.9.1988, the appellant became a monthly tenant by holding over. The respondents sent a registered notice dated 12.8.1991 terminating the tenancy and asking the appellant to vacate the premises by 15.9.1991. Another notice was sent on 10.9.1992, terminating the tenancy and directing the bank to vacate by 31.i0.1992. According to the respondents. the appellant became a trespasser with effect from 1.11,1992 and arrears of rent from 1.11.1990 to 31.10.1992 came to Rs. 24.62.400.00 and interest Rs. 7386.00. damages from 1.11.1992 till date of suit at Rs 2 lakh p.m. to 6.11.1992 and future damages at Rs. 2 lakh p m. in addition to inquiry by a Local Commissioner.

(5) On 8.8.1995, when this appeal came before us, we were told that the Back had rented another premises on huge rent and shifted there, that it was not using the present premises, nor vacating the premises and by that time, according to pff., it had become liable for at least Rs. 60 lakhs or more towards profits, in other words, it was paying a huge rent for it new premises taken on rent and became subject to claim for arrears of rent/ profits from 1.11.1990 in a sum said to exceed Rs. 60 lakhs. We found that, if the pff. respondents should succeed in its claim for profits, the Bank being a public sector Bank lakhs of money would have to be shelled down for this building which the Bank has not been using for years.

(6) As we found the attitude of the Bank, highly detrimental to public interest and as public monies were involved, we passed an order on 8.8.1995 issuing notice to the Secretary (Finance), Banking Division, Govt. of India.

(7) On 9.10.1995, we were informed that the Executive Committee of the Bank decided to vacate the premises and we, therefore, directed the Registrar to take over the possession of the premises from the bank. As there were large number of pffs, representing various family trusts, we directed to the Registrar to inquire into the question as to who should, on behalf of pff, take possession- The learned Joint Registrar passed orders on 13.11.1995. On 24.11.1995 we directed possession to be handed over to the persons concerned, as per the orders of the Joint registrar.

(8) Thus, further loss of public funds in the matter of mesne profits of lakhs of rupees p.m., was avoided.

(9) The question then remained for consideration as as to whether the appellant-Bank became liable for arrears of rent from 1.11.1990 in a sum of Rs. 24,62.4004 Rs. 7J86 towards interest, Rs. 40,000 towards damages from 1.11.1992 to 6.11.1992 and for future profits at Rs. 7. lakh per month and appointment of a Local Commission to inquire into future profits as prayed in the plaint, (10) Learned counsel for the Bank submitted that inasmuch as according in him, the roof of the building had collapsed on 13.10.1990, rent was not payable and hence damages were not payable and the claim was to be dismissed. It was argued that the learned Single Judge erred in directing deposit at Rs. 1,02,600.00 p.m. from 31.10,1990 etc., even at the rate of agreed rent.

(11) On the other hand, learned counsel for the plaintiffs contended that the Bank was itself responsible for deterioration of the building, that the respondents wanted to conduct repairs but the Bank did not give possession and on the other hand the Bank got the building sealed by the NDMConl3.10.1990.that the pff. got the building decaled in May, 1991, that ever. thereafter the Bank refused to give possession so as to enable the pff. to conduct repairs, and hence the appellant was liable for arrears of rent at Rs. 1,02,600pm. from 1.11,1990 and for damages from 1.11.1992 at least at Rs. 2 lakh p.m., subject to inquiry by a Local Commissioner under Order 20 Rule 12 CPC.

(12) The following points arise for consideration ; (1) Whether, when the appellant-tenant was not using the building (rent being Rs. 1.0?,600.00) and when it had, in fact, hired another building it should have vacated and minimised loss of public money? (2) Whether the tenant was guilty of not allowing the landlords, to conduct repairs to the building and in particular to the roof, so as to make it usable by the tenant? (3) Whether, in the suit for possession, arrears of rent, past and future profits, it was not open to the learned Single Judge to direct payment of entire arrears, even at the rate of the stipulated rent, subject to inquiry under Order 20, Rule 12 CPC?

(13) Point 1: When we found that public monies were being wasted by the Bank, we issued, as already stated, notice to the Secretary, Finance (Banking Division). Govt. of India, and it was only thereafter that the appellant-Bank came round, vacated the unused building and gave up possession to the Court. Possession has since been restored to the respondents, the owners of the Regal Cinema Complex.

(14) It is indeed unfortunate that on account of the adamant attitude of the Bank the monthly damages became payable and the respondents have claimed at least at Rs. 2 lakh. In fact the Bank has rented another building and is paying huge rent there. While on this point, we are not going into the question whether the pff. should have got possession only by way of a decree in suit and not otherwise. Here we are concerned with wastage of public funds by a Public Sector Bank and its wisdom in holding on to possession of an unusable building as tenant, after securing another building on rent. It was because of the firm attitude adopted by us in referring the matter to the Govt. of India, that better sense prevailed and the Bank surrendered possession to the Court. It will, in fact, be for the Govt. of India, to inquire into the question as to whether anybody in the Bank should be held responsible for the loss of public monies of a nationalised Bank, towards rent/damages for building not under use and when the Bank had rented another building. We decide this point accordingly.

(15) Point 2: The appellant tenant has contended that the landlords had not cared to conduct repairs and the roof had almost collapsed and, therefore, the landlords are not entitled to claim any rent from the tenant. On the other hand, respondents relied upon Section 108 of the Transfer of Property Act to contend that the tenant is bound to pay the rent. Provisions of S. 108 (e), (f) and (m) were referred to by both sides. Respondents have contended that there is abundant evidence to show that the landlords were willing to conduct the repairs but tenant obstructed the same. After going through the correspondence, we found though it might look rather unusal that it was the Bank that was adamant and did not allow the landlords to conduct repairs. We shall refer to a few crucial documents.

(16) The landlords wrote to the Ndmc (received by Ndmc, on 27.3.1991) that they may be allowed to carry out repairs to the building. Thereupon, the Ndmc sent a reply dated 1.4.1991 permitting various types of repairs to be conducted. The Ndmc agreed to remove the seals to allow the landlords to conduct repairs. The Bank, then addressed a curious letter to the Ndmc that "the seal should not be allowed to be removed" without the Bank being satisfied about the landlords bona fide intention of handing over the premises back to the Bank after effecting repairs. The Ndmc was "not to open the seals" for the purpose of repairs without the Bank's written consent.

(17) Thereupon, the landlords (called the Regal Building Flat owners Association) wrote to the Bank on 2.7.1991 that the Ndmc has given necessary permission for repairs, that a period of 4 months has been prescribed for repairs, that the permission has been granted inspite of the Bank's objections, and that the landlords intended to conduct the repairs immediately. It was stated that the premises may be handed over to the landlords for the above purpose. It was also stated that the appellant's tenancy was already terminated and its possession was unlawful and was liable to be evicted. (The Bank had also put its locks). The Association i.e. vendees from the landlords, even went to the extent of assuming

"However, without prejudice to our right to claim vacant possession of the premises, we shall handover back the possession of the premises to you after carrying out the repairs."

Indeed, that was the highest that any landlord or his representative could do in the circumstances.

(18) The Bank wrote a reply dated 5.7.1991 to the landlords stating that the "RBFO Association" has no authority to correspond, that their vendors alone i.e. Hansraj Duggal and R.C. Rastogi, should ask the Bank to unlock the premises for repairs, that permission by Ndmc was given only to the said two persons.

(19) Thereupon, the said two persons, viz. Mr. Duggal and Mr. Rastogi wrote to the Chief Manager of the Bank on 7.7.1991 that they intended to carry out the repairs and that the tenancy was terminated and in fact they also gave an assurance as follows:

"Without prejudice to our right to claim vacant possession of the premises, we shall handover back the possession of the premises to you after carrying out the repairs."

(20) Thus the landlords (i.e. vendors of the flat owners, who were members of the Association) also gave an assurance to give back possession to the Bank even though S. 106, Tpa notice had been issued. But still the Bank did not relent. They by letter dated 10.7.1991 refused to recognise the said Mr. Duggal and Mr. Rastogi as land-lords and representatives of the other co-landlords. Therefore the suit had to be filed in 1993 and it was only in 1995, because of this Court's orders, that possession was given up once and for all.

(21) The above facts show clearly that the bank did not allow the landlords to conduct repairs and there was absolutely no justification for this attitude. This was its conduct when in fact, it had already rented another building at huge rent. In respect of the present building, the tenant in default had to pay damages and the landlords were claiming it at Rs. 2 lakh p.m. By the time, we passed orders in 1995, the arrears claimed were already Rs. 64 lakh. What they would be if the inquiry under Order 20, Rule 12, is completed, it is difficult to say. We. therefore. hold that the action of the Bank was most reprehensible in not giving up possession to the owners for the limited purpose of conducting repairs. Point 2 is held against the appellant.

(22) Point 3 : The appellant had paid rent up to 31.10.1990 in advance, the building was decaled in May, 1991 by the Ndmc and, the tenancy was determined by notice dated 12.8.1991 w.e.f. 15.9.1991, there was a second notice on 109.1992 asking the appellant to vacate by 31.10.1992. The appellant, at any rate, became a trespasser with effect from 1.11.1992. Arrears of rent were claimed from 1.11.1990 to 31.10.1992 (Rs. 24.62.400.00) and damages from 1.11.1992 at Rs. 2 lakh p.m. upto 6.11.1292 and future damages at Rs. 2 lakh p.m. (23) Now the learned Single Judge has directed deposit at the rate of agreed rent of Rs. 1,02,600.00 p.m. and this will naturally be subject to any inquiry under Order 21, Rule 20 CPC. Question is whether this direction is to be disturbed ?

(24) We arc of the view that in a suit for possession, for past rent/profits and future profits, it is open to the Court to pass an order for payment of such an amount, under inherent powers of this Court u/S. 151 Cpc, and to prevent abuse of process of Court. It has become quite common for tenants, whose tenancies have been terminated validly, to continue occupation as trespassers, drive the landlords to file suits for eviction and profits with a view to see how far the patience of the landlords may last or how far the landlords or their L.R.s could fight the tenants particularly if the tenant had stopped payment of admitted rents. It is rather unfortunate that even public sector bodies like the appellant are taking such postures and driving landlords from pillar to post. That is why, it has become necessary for the Court to exercise its inherent powers u/S. 151 to do justice and, pending suit or pending inquiry under Order 20, Rule 12 Civil Procedure Code and to pass interim orders rather than wait till disposal of suit for eviction or for completion of inquiry under Order 20, Rule 12 CPC. The order passed in this case was the right order to be passed. After all, the direction was to deposit arrears of rent and also damages at the same rent as the rate of rent. Point 3 is held against the appellant.

(25) The order passed against the Bank will however be subject to final orders that may be passed under Order 20, Rule 12 CPC. A direction will issue for inquiry under Order 20 Rule 12 Cpc, if not already issued.