Delve into the intricate legal analysis conducted by the court regarding tenant damages and lease agreements in this case. The court’s evaluation of the lease agreement, fair rent considerations, and the application of the Tamil Nadu (Lease and Rent) Control Act sheds light on the complexities of property law. Stay tuned for a comprehensive overview of the court’s insights and decisions on this matter.
Facts
- Defendant vacated the premises in November 2003 after filing an appeal in A.S.No.811/2009.
- Earlier suit O.S.No.95/1990 decreed eviction of defendant and compensation of Rs. 15,000 per month for three years.
- Subsequent suit O.S.No.37/2007 filed by plaintiffs seeking damages at Rs. 89,000 per month.
- Trial Court considered Tamil Nadu (Lease and Rent) Control Act for fair rent, arrived at monthly rent of Rs. 1,08,929.
- High Court dismissed defendant’s appeal in A.S.No.811/2009 against judgments dated 18.08.2008 and 14.11.2017.
- Plaintiffs owned the premises where defendant was tenant since lease agreement dated 09.07.1980.
- Appellant in current appeal challenges High Court’s judgment in A.S.No.811/2009.
- The appeal disposed of on 26.02.2003 directed payment of past damages of Rs.3,47,953/- at Rs.15,000/- per month by 13.03.2003.
- Defendant granted six months to vacate the premises and pay damages at Rs.50,000/- per month during this period.
- Agreement to vacate premises after six months with monthly compensation of Rs.50,000 to be paid to the plaintiff.
- Trial Court decree dated 08.02.1995 directed defendant to vacate premises and pay compensation of Rs.15,000/- for three years prior to filing the suit.
- Suit decreed for Rs.26,98,367/- with additional Rs.3,56,000 ordered towards future loss and cost of the suit.
- Subsequent suit filed in O.S.No.37/2007 seeking damages at the rate of Rs.89,000/- per month, decreed by Trial Court on 18.08.2008.
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Issue
- The only issue for consideration is the liability of the defendant to pay the damages sought by the plaintiffs.
- The claim as put forth by the plaintiffs and awarded by the Trial Court is being examined.
- The lease commenced on 09.07.1980 with a monthly rental of Rs.6,500.
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Arguments
- The defendant had agreed to vacate the premises within six months in the earlier round of litigation.
- The defendant vacated the premises in November 2003 as per the agreement.
- The defendant, a Consumer Cooperative Society, may not be able to bear a heavy financial burden.
- The defendant’s counsel indicated willingness to pay a reasonable amount suggested by the Court in addition to the Rs.10 lakhs already paid.
- The plaintiff’s advocate seeks to sustain the Trial Court’s judgment and decree.
- The Trial Court decreed the suit for damages only for the three years prior to the defendant vacating, considering the law of limitation.
- The defendant’s senior counsel contests the enhanced rent as damages awarded by the Trial Court.
- The defendant should not raise further grievance if the Trial Court’s decision on rent calculation is legal.
- The High Court dismissed the appeal in A.S.No.811/2009 after re-appreciating the matter.
- The factual aspects related to tenancy, previous litigation, and the defendant vacating the premises in November 2003 are not in serious dispute.
- The Trial Court had fixed compensation at Rs.15,000 per month in O.S.No.95/1990 for eviction.
- The defendant paid Rs.10 lakhs towards the decretal amount on 27.04.2010.
- The petitioner seeks allowance of the appeal based on the above points.
- The Trial Court and the High Court considered the provisions of the Rent Control Act before arriving at a conclusion regarding damages.
- Further consideration on the aspect of damages is deemed unnecessary as both the Trial Court and the High Court have already endorsed the same view.
- During the pendency of the appeal, an understanding was reached between the parties where the defendant agreed to vacate the premises within six months.
- The High Court, in this agreement, set a compensation of Rs.50,000/- per month for the six months period.
- The High Court left the option open for the plaintiff to file a separate suit if they sought a higher amount, but the plaintiff’s counsel did not pursue an amicable settlement and insisted on the full payment under the decree.
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Analysis
- The right to claim damages from the tenant for voluntarily vacating the premises is justified.
- The plaintiff was entitled to institute the suit as the right to claim damages had been reserved.
- During the eviction process, a time period of six months was granted for vacation, and rent was paid without default at Rs.50,000 per month.
- The appellant is a District Consumer Cooperative Wholesale Stores, and premises were rented for cooperative activity benefitting shareholders, not a strict business activity.
- The court suggested an amicable settlement to balance equities and avoid prejudice to either party.
- The defendant, a Consumer Co-operative Wholesale Stores, has vacated the premises after paying the enhanced amount ordered by the High Court.
- Substantial unplanned expenditure for the retrospective period would put the defendant in a financially precarious position.
- Considering all materials and special circumstances, a modification of the judgment and decree is necessary to limit the decretal amount to a reasonable quantum.
- The premises was taken in the year 1980, and a gradual enhancement in rent would be applicable in such cases.
- The application of the prevailing rent, although drastic in this case, is not justified, but the plaintiffs are entitled to reasonable compensation for the use of the premises.
Decision
- The defendant paid Rs.10 lakhs towards the decretal amount on 27.04.2010.
- Damages for the periods 14.07.2000 to 14.07.2003 calculated at Rs.50,000 per month amount to Rs.18 lakhs.
- Parties to bear their own costs in the appeal.
- High Court initially fixed damages at Rs.50,000 per month for six months before defendant vacated, justified decision.
- Damages already paid at Rs.50,000 per month for the period March to July 2003 as ordered by the High Court.
- Order modified to require defendant to pay lump sum damages of Rs.17,50,000 for the periods 14.07.2000 to 17.07.2003.
- Balance of Rs.7,50,000 to be paid by defendant within three months.
- Interest at 12% per annum applicable if Rs.7,50,000 not paid within three months.
- Payment of the ordered amount will settle all claims between the parties and end all litigations.
- Appeal allowed in part, directing payment of Rs.7,50,000 to the plaintiff for full settlement of claims.
Case Title: THE PERIYAR DISTRICT CONSUMER CO OPERATIVE WHOLESALE STORES LTD. NO. AA467 Vs. B. BALAGOPAL (DIED) THROUGH LRS (2020 INSC 243)
Case Number: C.A. No.-001893-001893 / 2020
