(Judgment of the Court was made by M.CHOCKALINGAM,J) This Judgment shall govern these three appeals namely OSA.Nos.298 of 2004 and 77 of 2005 at the instance of the Trustee and OSA.No.76 of 2005 at the instance of the Tenant.
2. These appeals have arisen under the following circumstances:
(a) An immovable property which is situated in the City of Madras in R.S.NO.43/2, Block No.7, Vepery Division, Poonamallee High Road, Chennai, having an area of 5644 sq.ft. and the other piece of land to an extent of 4141 sq.ft. belonged to the Trust Estate of Raja Sir Ramasamy Mudaliar Choultry. An application was made 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 option for renewal for a further period of 25 years. The lease agreement was executed on 21.12.1973 between the Official Trustee and the applicant/appellant. Pursuant to the order dated 28.11.1973, the lease was granted in respect of the above property for a period of 25 years. The rent was fixed originally at the rate of Rs.400/- per month from 1.1.1974 to 31.12.1976 and from 01.01.1977 to 31.12.1988 at 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 was permitted to a raise a building thereon, he submitted a building plan before the Corporation of Madras to enable him to construct a commercial building in the land under lease. After obtaining approval, he commenced the construction of the commercial building in the year 1985 in the property which was taken on lease by the applicant. He also made an application for extension of lease in the year 1985. An order came to be passed by this Court in Application No.3725 of 1985 dated 17.2.1986, directing the Official Trustee to extend the lease for a further period of three years from 1.1.1999, and accordingly it was extended. Further the applicant/appellant was directed to pay Rs.1200/- per month, and he was also given option to renew the lease for a further period of 25 years after the expiry of the lease as stipulated in the lease agreement.
(b) An appeal was preferred by the Official Trustee in O.S.A.No.213 of 1987 challenging the order dared 17.2.1986 made in Application No.3725 of 1985, and the Division Bench of this Court confirmed the order made in Application No.3725 of 1985 on 24.6.1993. Thereafter, on 9.4.2001, the Official Trustee executed a lease agreement in favour of the applicant as per the order of this Court dated 17.2.1986 passed in Application No.3725 of 1985 which was confirmed by the Division Bench by order dated 24.6.1993. While the matter stood thus, the lease period was extended from 1.1.1999 to 31.3.2001 on condition that the applicant should pay a monthly rent of Rs.1,200/- with provision for further renewal. Under such circumstances, Application No.915 of 2003 was filed by the applicant to extend the lease for a period of further twenty five years.
(c) While the matter stood thus, two other applications viz., Application Nos.5141 and 5142 of 2003 were filed by the Official Trustee. Application No.5141 of 2003 was filed seeking termination of the lease and handing over of possession while Application No.5142 of 2003 was for a direction to the respondent/tenant to pay Rs.1,25,000/- per month towards damages for use and occupation of the premises from the date of expiry of the lease period i.e. 31.12.2001, till the date of delivery of vacant possession. All the three applications were taken up by the learned Single Judge who by order dated 10.12.2004, while extending the lease for 25 years, fixed the monthly rent at Rs.1 lakh per month payable on or before the fifth day of the succeeding English Calendar month, and he should execute the lease deed thereafter, and the lease agreement should also be executed on or before 31.12.2004. Since the lease period came to an end on 31.12.2004, for the interregnum period, he was directed to pay a consolidated lease amount of Rs.15 lakhs for the period from 1.1.2002 to 31.12.2004. Further, in view of the orders passed in Application No.915 of 2003, the other two applications were closed as no further orders are required. Under such circumstances, these three appeals have been brought forth, two at the instance of the Co-Trustee and one at the instance of the tenant challenging the quantum of Rs.1 lakh per month.
3. Advancing arguments on behalf of the appellant/tenant, learned Senior counsel would submit that fixation of rent at Rs.1 lakh per month was excessive and unreasonable. In the instant case, the appellant in OSA.76 of 2005 viz., N.Ismail, came as a tenant in the year 1973. Initially, the lease was granted for a period of 25 years, and then and there, it was extended. In pursuance of the order dated 28.11.1973, rent was fixed at the rate of Rs.400/- per month originally and subsequently it was increased to Rs.1200/- per month. Even an inspection was made by AG & OT and a report has been filed. Learned Single Judge has not taken into consideration the materials available and also the objections that were seriously made. What has been leased out was 6,000 sq.ft. and odd which is continued to be in the hands of the appellant/tenant. He has also raised a massive construction. Originally constructions were made in the year 2003, and he has made the said construction out of borrowal. Therefore, he has to pay interest also. Further in the instant case, he has spent considerable amount, but, the income being yielded is very low. Under such circumstances, the rent fixed by the learned Single Judge at Rs.1 lakh payable by the applicant/appellant has got to be reduced, and necessary orders have to be made in this regard.
4. According to the Co-trustee, it is true that 6000 sq.ft. and odd was leased out to the applicant/appellant, Ismail, and it is also true that for making construction, another piece of land belonging to the Trust viz., 4141 sq.ft, was leased out to one Vatsala, and the applicant has also raised another construction thereon, for which he was getting a rent of Rs.900/- per month, and so far as the present piece of land is concerned, the construction raised is a huge one, consisting of 24 rooms and 11 shops apart from 1 restaurant and he is also getting enormous rents from all the 24 rooms, and he is having lucrative business in his restaurant and earning lakhs of rupees per month, and the same should have been considered by the learned Single Judge. Added further the learned counsel that in the instant case, if public auction is held, it would fetch more than Rs.1 lakh per month, and under such circumstances, it is a fit case where public auction can be made, and it would be advantageous in the interest of trust, and hence the order of the learned Single Judge fixing the rent at Rs,.1 lakh has got to be sustained, and if the Court comes to the conclusion that the appellant/tenant can be continued, a reasonable rent has got to be fixed by the Court,.
5. The Court paid its anxious consideration on the submissions made and looked into the materials available.
6. As could be seen above, the two pieces of land measuring 5644 sq.ft. and 4141 sq.ft. respectively belonged to the Trust. It is also not in controversy that the first piece of land was given in lease to the appellant in OSA.76 of 2005 in the year 1973, and the original lease period was extended then and there till 1998 in the year 1998 by the learned Single Judge. The same was further extended for a period of three years which came to an end in the year 2001. From that period, the rent payable was Rs.1200/- per month. Insofar as the other piece of land which was leased out to one Vatsala to the extent of 4141 sq.ft., earlier there was an order passed. From the lease agreement, it could be well seen that after the possession was actually handed over by Vatsala to the present appellant Ismail, the same has been recorded by the AG & OT, and thereafter, the rent has been directly received by the Official Trustee from the said Ismail in respect of 4141 sq.ft. Thus, it was too late on the part of the Co-trustee to contend that the said Ismail has got possession of the said piece of land from Vatsala and raised constructions, and hence the said construction can be termed as 'unauthorised'. The said contention cannot be countenanced for the simple reason that lease was granted in 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 fixed the rent at Rs.1 lakh which, in the opinion of this Court, is very low for the reason that it is brought to the notice of the Court that it is a massive construction worth in crores and 24 rooms along with 11 shops and one restaurant have been constructed in the said property. That apart, as the property in question is situated in the heart of the City of Madras, naturally it would fetch huge amount. At the same time, the Court should not direct the appellant to vacate the property where massive constructions have been made, and hotel and shops were run by him. Naturally, if it is out of his own money, it would well earn interest if deposited either or if it is a borrowal, he has to make payment of interest. Earlier, in the agreement, it was specifically stipulated that what are all the constructions made by him, must become the property of the trust. Thus, it would be quite clear that the building now raised by him is whether out of his own money or borrowed money, the entire construction actually should vest with the trust, and he cannot make any claim over that. Taking into consideration the cumulative facts and circumstances stated above, this Court is of the considered opinion that fixing a rental at Rs.2.5 lakhs per month is reasonable. It is not a fit case in the stated circumstances to leave it for public auction as put forth by the Official Trustee and also the Co trustee.
7. In the case of trust, the Court must look into a particular transaction, and it should be to the utmost benefit and advantage of the trust. Keeping in mind the above said fact and after looking into the above matter, this Court makes the following order:
(i) The appellant tenant is directed to pay a sum of Rs.1.5 lakhs per month from the date of order of the learned Single Judge till 31.8.2009, and from 1.9.2009, the rent is fixed at Rs.2.5 lakh per month. It is made clear that the amount should be payable by the appellant viz., Ismail to the credit of the trust from the date of the order of the learned Single Judge, and the balance amount, after adjusting the amount already paid, should be calculated and payable by the tenant/appellant within a period of three months here from to the Official Trustee which has got to be credited in the name of the trust.
(ii) Insofar as the consolidated payment of rental for the period from 1.1.2002 to 31.12.2004, since no agreement of lease was available, this Court is of the considered opinion that it should be raised from Rs.15 lakhs to Rs.24 lakhs, and accordingly it is ordered. The said amount should be paid in equal three monthly instalments commencing from 15.9.2009. The amount if any paid already in that regard, will be given credit to, and the balance should be paid as per the mode stated above.
(iii) Insofar as the second piece of land namely 4141 sq.ft. where the construction was raised, it is admitted that the lease is continued till 2012, and it is agreed that the construction raised by him should vest with the trust. It would also be quite clear that the second piece of land leased out is now under the occupation of Mr.Ismail. Learned AG & OT brought to the notice of the Court that the appellant may be directed to make enhanced payment instead of Rs.900/- as he was doing in the past, since it is very low. Therefore, taking into consideration the facts and circumstances, this Court is of the considered opinion that 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 case where the lease in favour of the tenant /appellant could be terminated.
(v) It is also made clear that with regard to the lease period in respect of 4141 sq.ft. which is shown as second piece of land, there cannot be any impediment for the Official Trustee to seek for extension of lease or for raising rent at the time of expiry of the lease.
(vi) It is also made clear that incorporating the terms as mentioned mentioned, a new lease agreement has to be entered into between the parties viz., one Mr.Ismail being a tenant, and the Official Trustee, for the remaining period out of twenty five years, what is shown in the lease deed.
8. In the result, all these original side appeals are disposed of. No costs. Consequently, connected MP is closed.
(MCJ) (RPSJ) 20-08-2009 Index:Yes Internet:Yes VJY M.CHOCKALINGAM,J & R.SUBBIAH,J VJY OSA.NOS.298 OF 2004, 76 AND 77 OF 2005 20.08.2009