State Bank of Travancore and Branch Manager, Fort Branch, Thiruvananthapuram v. M.A. Beegum

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **&** **THE HONOURABLE MRS. JUSTICE SHIRCY V. WEDNESDAY, THE 21ST DAY OF AUGUST 2019 / 30TH SRAVANA, 1941** **RFA.No.629 OF 2009** **AGAINST THE JUDGMENT IN OS 455/2002 DATED 20-03-2009 OF I ADDITIONAL SUB COURT,TRIVANDRUM** ## **APPELLANTS/DEFENDANTS 1 AND 2:** **1 STATE BANK OF TRAVANCORE, REPRESENTED BY ITS CHIEF MANAGER (PREMISES), HEAD OFFICE,, POOJAPPURA, THIRUVANANTHAPURAM. 2 THE BRANCH MANAGER, STATE BANK OF TRAVANCORE FORT BRANCH, THIRUVANANTHAPURAM.** **BY ADVS. SRI.T.SETHUMADHAVAN (SR.) SMT.ANJU P.NAIR SRI.K.JAYESH MOHANKUMAR SRI.PUSHPARAJAN KODOTH** ## **RESPONDENT/PLAINTIFF:** **M.A.BEEGUM, W/O. S.M. HANEEF SAHIB, RESIDING AT 'BISMI' MANACAUD, THIRUVANANTHAPURAM, REPRESENTED BY HER POWER OF ATTORNEY HOLDER, S.M.HANEEF SAHIB, RESIDING AT 'BISMI' MANACAUD, THIRUVANANTHAPURAM.** **R1 BY ADV. SRI. SAMEER KHARIM R1 BY ADV. SRI.A.ABDUL KHARIM R1 BY ADV. SMT.INDU SUSAN JACOB R1 BY ADV. SRI.LIJU.V.STEPHEN R1 BY ADV. SRI.SAJAD KHARIM** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON** **18-07-2019, THE COURT ON 21-08-2019 DELIVERED THE FOLLOWING:** RFA.629/2009 2 ## **JUDGMENT** ## Shircy, V. (J) Defendants in the original suit are before us being aggrieved by and dissatisfied with the Judgment and decree dated 20.3.2009 passed by the learned 1[st] Additional Sub Judge, Thiruvanathapuram, in O.S. No.455/2002 filed by the plaintiff for realization of money as arrears of rent. 2. The appellants- Bank, namely State Bank of Travancore and the Branch Manager, Fort Branch, are the defendants. The suit was decreed allowing the plaintiff to recover the entire amount of Rs.44,52,242/- claimed with interest as arrears of rent from the defendants (herein after referred to as 'the Bank'). 3. Shorn of unnecessary details ,the facts in brief are that the plaintiff is the owner of a three storeyed building RFA.629/2009 3 at Thiruvanathapuram. The building was leased out to the Bank for a total period of 10 years from 1.7.1986 initially for a monthly rent of Rs.3/- per sq.feet. Later the rent was revised by 15% of increase as agreed to between the parties for the period from 1.7.1991 to 30.6.1996. The composite rent thus fixed for the entire building from 1.7.1991 was Rs.58,391/per month. The contractual period of lease expired by 30.6.1996. Then, after a series of discussions the Bank by a letter dated 12.07.1996 informed that the Bank was not interested to continue with the lease of the entire building but they require only the ground floor. The partial and unilateral surrender of the first floor and second floor of the building was not acceptable to the plaintiff. However, the Bank unilaterally reduced the rent and started to account only Rs.19,627/-towards rent purportedly for the ground floor. Thereafter, several correspondences were made and an offer RFA.629/2009 4 to give the first floor of the building with the strong rooms in the ground floor and a portion of the –mezzanine floor for a rent of Rs.10/- per sq.feet was proposed by the plaintiff. But as there was no response from the side of the Bank for quite a long time, R.C.P. No.14/1999 was instituted for eviction under Section 11(2) ( b) and 11(3) of the Kerala Building (Lease and Rent Control) Act. But unfortunately both the R.C.P and the appeal preferred by the plaintiff were dismissed on the finding that the Bank was not liable to pay rent for the entire building in view of the partial surrender of the tenanted premises. The order of the appellate authority was challenged in C.R.P. No.1952/2002 before this Court by the plaintiff and the C.R.P. was disposed of holding that the Bank is liable to pay monthly rent of Rs.58,391/- for the entire building instead of Rs.19,627 /- for the ground floor. The said order has become final. Later the bank vacated the building on RFA.629/2009 5 31.8.2006 without paying the arrears, ie the difference in the rent at the rate of Rs.38,764/- per month from 28.11.1998 to 31.8.2006 and hence the suit to recover an amount of Rs.44,52,242/- with interest at the rate of 6% per annum from the bank was preferred . 4. The Bank resisted the plaint claim inter alia contending that the Bank had surrendered the first and the second floor of the tenanted premises on 31.1.1997, and since 1.2.1997 the Bank was in possession of only the ground floor and Mezzanine floor. As per the terms of the renewal of the rent, the revised rent was Rs.58,391/- from 1.7.1991 for a further period of 5 years and the rent payable was adjusted towards the loan availed by the plaintiff for construction of the building. As the lease in respect of the first floor and second floor stands terminated and the Bank was in possession of only the ground floor and Mezzanine floor from RFA.629/2009 6 1.2.1997, the rent to be paid was only Rs.19,627/- being the 1/3[rd] of the rent fixed. However an amount of Rs.9,01,844/- @ Rs 38,764/-from 31.1.1997 till 1998 with interest had already been deposited. But, the suit filed in the year 2002 is barred by limitation and hence liable to be dismissed. 5. On the basis of the pleadings of the parties, the learned trial court framed necessary issues and recorded the evidence. The power of attorney holder of the plaintiff was examined as PW1 and Exts.A1 to A6 were marked for the plaintiff. No oral evidence was adduced by the Bank but marked Exts.B1 and B2. The court below on appreciation of the evidence has decreed the suit directing the Bank to pay an amount of Rs.44,52,242/- as arrears rent with interest at the rate of 6%. RFA.629/2009 7 6. We heard Sri.T. Sethumadhavan, the learned Senior Counsel for the Bank as well Sri. Liju V. Stephen, the learned counsel for the respondent. 7. Question, which requires consideration is, whether the plaintiff, the landlady is entitled to realize the amount claimed by way of arrears of rent from the Bank, the tenant. The plaintiff had admittedly constructed a multi storeyed building bearing No.TC 643/1 of Vanchiyoor village and entered into an agreement for lease with the Bank initially on 1.7.1986 for a period of ten years on a monthly rent of Rs.3/- per sq.feet. Admittedly, the bank had taken the ground floor, the first floor and the second floor of the building on lease. Later the rent was revised by 15% of increase of rent from 1.7.1991 to 30.6.1996 and the composite rent thus fixed was Rs.58,391/- (as Rs.3.45/ per sq.ft.) after discussions and deliberations between the parties. RFA.629/2009 8 Thereafter, the bank purported to terminate the tenancy of a portion of the building with effect from 31.1.1997 and according to the plaintiff the bank unilaterally and arbitrarily reduced the rent to Rs.19,627/- contending that they require only the ground floor of the building. But it is revealed from the records that the proposal of partial surrender of tenancy was not accepted by the plaintiff and after several communications between the parties, lastly on 28.11.1998 as per Ext A4 the plaintiff issued a lawyer notice claiming arrears of rent and surrender of the entire tenanted premises. Thereafter, the plaintiff instituted RCP No.14/1999 before the Rent Control Court under Section 11(2)(b) and 11(3) of Kerala Building (Lease and Rent Control) Act, 1965 (for short 'the Act') for eviction but the petition was dismissed. Though the order was challenged before the appellate authority the same was also dismissed. The said judgment was challenged before RFA.629/2009 9 this court in CRP No.1952/2005 by the plaintiff. A Division Bench of this Court by Ext.A5 order dated 5.7.2005 allowed the revision petition holding that the Bank was not entitled to effect partial surrender of the tenanted premises. 8. The relevant portion in paragraph No.10 as well paragraph 11 of the said order is extracted herein for convenience : “10…....... Hence, we find that the contention of the respondent that the bank is legally entitled to surrender a portion of the premises and hence not liable to pay rent for the above portion cannot be sustained. Acceptance of the entitlement for unilateral termination of a part of the subject matter of the lease and the unilateral imposition of the choice of the tenant with respect to a portion of the premises on the landlord will upset altogether the concept of lease as a bilateral and mutual contract in between the parties. Hence, we are unable to accept the finding of the Rent Control Court and the Appellate Authority that tenancy is severable in such a manner as demonstrated by the respondent. RFA.629/2009 10 11. It was contended that Ext.A2 suit notice is not legally valid as the rent demanded as payable therein is not the contract rate. Of course, the landlord has claimed rent at the rate of Rs.10/- per sq.ft for the ground floor and mezzanine floor and at the rate of Rs.7/- per sq.ft for the first and second floor. As already noted above, there is no evidence to establish that the respondent finally agreed to pay rent at the above rates. Hence, the existing rate can only be taken as Rs.3.45/ per sq.ft. The liability of the respondent to pay rent would not cease just because the notice contained a wrong mention about the rate of rent. It is elementary that the tenant has to remit rent at the admitted rate, which can only be taken as Rs.3.45/- per sq.ft. For the alleged surrendered portions, admittedly rent has not been remitted since 31.1.1997. Hence, the landlord is entitled for an order of eviction of the respondent from the entire premises under Section 11(2)(b) of the Act. We order accordingly.” 9. In the revision, this Court found that, both the courts below have materially erred in finding that there was a RFA.629/2009 11 partial surrender. Thus, apparently partial surrender and non payment of 2/3[rd] portion of rent by the Bank for tenanted premises were found not sustainable and the existing rent was found as Rs.3.45/ per sq.ft (Rs. 58,391/-) and an order of eviction under Section 11(2)(b) of the Act was granted in favour of the plaintiff/landlady and two months time was granted to remit the rent arrears. The said order has become final. (Ext.A5) 10. It is pertinent to note that originally the suit was filed for settlement of account when CRP 1952/2005 was pending before this Court. Thereafter, an amendment petition was filed as I.A.5086/2006 to amend the suit as one for realisation of arrears of rent. The trial court had in the considered exercise of its jurisdiction allowed the amendment petition and as per the amended plaint, arrears of balance rent at the rate of Rs.38,764/- for the period from RFA.629/2009 12 28.11.1998 to 31.8.2006 was claimed with interest at the rate of 6%. 11. Though said order was also challenged before this Court by the Bank under Article 227 of the Constitution of India in WP(C) No.27917/2007 the order was not interfered with. However,while dismissing the Writ Petition the Bank was also given the liberty to take up all the defence available including the plea of bar of limitation in respect of the claim introduced by the amendment. 12. In view of the aforestated Ext.A5 order this Court had already found that the split up tenancy arrangement sought for by the bank and the partial surrender of the first floor and the second floor of the tenanted premises was per se illegal and wrong. Therefore, the bank is liable to pay the rent taking the monthly rent of the tenanted premises as Rs.58,391/- (3.45 sq.feet per sq.feet). It is revealed from the RFA.629/2009 13 records that the bank had paid only 1/3[rd] of the total rent agreed upon raising the plea of partial surrender. Therefore, the bank is liable to pay the balance amount of Rs.38,764/per month. Ext.A6 is a letter issued by the Bank to the plaintiff surrendering the vacant possession of the tenanted premises to the plaintiff. Ext.A6 is dated 31.8.2006. According to the Bank the date of surrender of the ground floor was on 31.8.2006. But by virtue of the order in CRP 1952/2005 (A5) the date of surrender of the entire tenanted premises have to be taken as 31.8.2006. Therefore, the Bank is not justified in contending that it is liable to pay only I9,627/- as rent. In fact there is no infirmity in the impugned judgment of the learned trial court that the Bank is also liable to pay the balance of Rs.38,764/- per month for the entire period of tenancy as there was a landlady -tenant relationship between the two till 31.8. 2006. The said finding cannot be disturbed. RFA.629/2009 14 13. Now the question to be looked into is whether the bank is liable to pay the balance amount claimed at the rate of Rs.38,764/- from 28.11.1998 till 31.8.2006 the date of surrender of the entire tenanted premises inspite of the contention raised that the claim is barred by limitation. The learned counsel for the Bank would submit that the plaint claim was barred by limitation as the suit was filed only on 27.9.2002. Actually, the suit was filed during the pendency of the revision petition. The revision petition (Ext.A5) was allowed on 5.7.2005. 14. Admittedly, after disposal of the revision petition the bank paid rent arrears due from 31.1.1997 to 28.11.1998 on 2.9.2005 during the pendency of the suit. No doubt the payment of arrears was without any objection and it would appear that it was in compliance of the order in Ext.A5. Thereafter the suit was amended on 14.8.2007 claiming RFA.629/2009 15 arrears of rent from 28.11.1998 till the date of surrender on 31.8.2006. It appears that the amendment was allowed to avoid multiplicity of proceedings and also on finding that the basic structure of the suit was not altered. Therefore, the finding of the court below was not interfered with by this Court though it was challenged in W.P.(C) No. 27917 of 2007. 15. As the amount claimed is arrears of rent, the relevant provision applicable is Article 52 of the Limitation Act which reads as follows: ''52. Arrears of rent Three years where the arrears become due'' As per Article 52 the plaintiff can claim arrears of rent within the period of three years where the arrears become due. Here, the arrears claimed is from 28.11.1998 till 31.8.2006, the date of surrender as per the amended plea. As referred above this court refused to interfere with the order of the trial court permitting amendment of the pleadings and the Bank RFA.629/2009 16 was permitted to take up all the defence available including the plea of bar of limitation in respect of the claim introduced by amendment. The suit was filed on 27.9.02. The learned trial court held that as the Bank paid arrears on 2.9.2005 the claim of the balance arrears of rent at the rate of 38,764/from 28.11.1998 till 31.8.2006 was not barred by limitation and on that finding the suit was decreed for amount claimed by the plaintiff. But, we do not think that said finding is absolutely correct as per Article 52 of the Limitation Act and it requires an interference. We, therefore, are of the considered opinion that, as the suit was filed only on 27.9.2002, the claim beyond the period of three years, ie before 27.9.1999 is barred by limitation. Therefore, the claim for rent due beyond the period of 27.9.1999 has to be treated as barred by limitation (from 28.11.1998 till 26.9.1999). RFA.629/2009 17 16. Now the question to be looked into is whether the plaintiff is entitled to claim interest for the said amount as claimed by her. The learned counsel for the plaintiff placed reliance on the decision of the Honourable Supreme Court in Central Bank of India v. Ravindra [2002 (1) KLT 743 (SC)] to fortify his contention that under Section 34 of CPC award of interest pendent lite and post decree, is the discretion on the court as it is essentially governed by Section 34 of CPC, dehors the contract between the parties and that the court may exercise its discretion in awarding interest pendent lite and post decree interest at a lower rate or may even decline to award interest. The relevant observation in paragraph 41 is extracted herein below for ready reference: “41. A few points are clear from a bare reading of the provision. While decreeing a suit if the decree be for payment of money, the Court would adjudge the principal sum on the date of the suit. The Court may also be called RFA.629/2009 18 upon to adjudge interest due and payable by the defendant to the plaintiff for the pre-suit period which interest would, on the findings arrived at and noted by us hereinabove, obviously be other than such interest as has already stood capitalised and having shed its character as interest, has acquired the colour of the principal and having stood amalgamated in the principal sum would be adjudged so. The principal sum adjudged would be the sum actually loaned plus the amount of interest on periodical rests which according to the contract between the parties or the established banking practice has stood capitalised. Interest pendente lite and future interest (i.e. interest post-decree not exceeding 6 per cent per annum) shall be awarded on such principal sum I. e. the principal sum adjudged on the date of the suit. It is well settled that the use of the word 'may' in Section 34 confers a discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit. Such interest, so far as future interest is concerned may commence from the date of the decree and may be made to stop running either with payment or with such earlier date as the Court thinks fit. Shortly hereinafter we propose to give an indication of the circumstances in which the Court may decline award of interest or may award RFA.629/2009 19 ## interest at a rate lesser than the permissible rate.” 17. Bank being a financial institution, safeguarding money of public by accepting deposits and lending out this money in order to earn a profit, is definitely expected to deal with the matter in a just and fair manner. Non-payment of rent to the landlady for such a long period, caused undue hardship to her and unfair advantage to the Bank, by keeping possession of the entire tenanted premises till 31.8.2006 without paying the actual rent. Therefore, the plea for interest can be entertained in favour of the plaintiff/landlady. Consequently, in view of the discussion made herein above, we find that the plaintiff is entitled to realize arrears of rent for a period of three years from the date of the suit with reasonable interest. Hence, the appeal is only to be dismissed. But the decree is modified directing the Bank to pay the arrears of rent at the rate of Rs.38,764/- from 27.9.1999 till RFA.629/2009 20 31.8.2006 with interest at the rate of 6% per annum for the said period and thereafter from the date of the suit till realization with interest at the same rate. Accordingly, the appeal is dismissed subject to the modification as stated above. The plaintiff is entitled to realize costs through out. **Sd/-** **A.HARIPRASAD JUDGE Sd/SHIRCY V. JUDGE** smm