1. The appellant was a tenant of the first floor of Shop-cum-Flat No. 8, Sector 24-C, Chandigarh, under the respondent at a monthly rent of Rs. 140/- exclusive of water and electricity charges. The tenancy was terminated at the end of May, 1968 by serving registered notice on April 27, 1968. As the tenant refused to vacate the premises kin spite thereof, the respondent filed a suit for his ejectment which was decreed on May 28, 1969. Another suit was filed against him for the recovery of Rs. 1,680/- as damages for wrongful use and occupation of the said premises at double the rate of the rent for the period from July 1, 1968 to the end of December, 1968. In this suit a compromise was arrived at between the parties whereby the appellant agreed to vacate the premises on or before June 30, 1968 and to pay a sum of R. 378/0 on the date of the decree and the remaining amount in two instalments of Rs. 1,000/- and Rs. 680/- by July 31 and Aug, 31, 1969 respectively. In case the defendant failed to comply with the terms of the compromise, the plaintiff was given the right t recover the damages for wrongful use and occupation from Jan. 1, 1969 rate of Rs. 280/- per month. It was further agreed that if the defendant vacated the premised before July 1, 1969, till the delivery of the possession at the rate of Rs. 280/- per month. It was further agreed that if the defendant vacated the premises before July 1, 1969, he would be entitled to deduct the rent for the month of July. The suit was disposed of in terms of the compromise and a decree was accordingly passed. As according to the respondent. The appellant failed to comply with the decree, he filed the comply with the decree, he filed the present suit for recovery of Rs. 2,000/- on account of damages and electric and water charges from Jan. k1; 1969 till July 6, 1969 when the possession of the disputed premises was delivered to him.
2. The suit was contested by the appellant, who pleaded that he vacated the premises on June 30, 1969. It was further averred that the premises having been vacated before July, j1, 1969, he was entitled to deduct Rs. 140/- out of the amount payable and as the respondent was not agreeable, it was, he, who committed the default and violated the terms of the compromise. At the trial it was found that the possession had been delivered on July 6, 1969 and that the default was committed kin the payment of the instalment of Rs. 540/- were paid and that too on Nov. 28, 1969 instead of Aug. 31, k1969. Consequently a decree in the amount of Rs. 1,857/- , Rs. 1,727/- on account of damages for use and occupation and Rupees 130/- on account of water and electricity charges was passed against defendant-appellant. The decree of the trial Court having been confirmed, on appeal, by the learned District Judge, Chandigarh, vide judgment dated April 6, 1972, the defendant has come up in this second appeal.
3. The finding of the two courts below that the premises in dispute were vacated on July 6, 1969 and not on June 30, 1969 is obviously against the record and unsustainable. No doubt, the plaintiff entered into possession on July 6, 1969 but on that scope it cannot be said that the appellant did not vacate the premises on June 30. 1969. The appellant had sent an intimation through registered letter to the plaintiff on July 1, 1969 that the had vacated the premises. As there was no person present on behalf of the plaintiff to take over possession of the premises, the defendant cannot be held responsible for not putting the plaintiff in its possession on the said date. There was consequently no default on the part of the appellant kin the compliance of the decree and the fact that the plaintiff entered into possession on July 6, 1969, is of no consequence.
4. As regards the payment of Rupees 680/- the premises having been vacate by the stipulated date, the appellant as entitled to deduct Rs. 140/- on account of rent for the month of July 1969 out of the amount payable by him the last instalment payable, therefore, was of Rs. 540/- instead of Rs. 680/- Admittedly this amount was not paid by August 31, j1969 as stipulated kin the compromise and a default too that extent was committed by the appellant. However, the question still remains as to whether because of this default on the part of the appellant. The plaintiff became entitled to recover damages for wrongful use and occupation at the rate of Rs. 280/- per month from Jan. 1, 1969 till the end of June, 1969.
5. The suit in which the compromise was effected, was filed for the realisation of damages for wrongful use and occupation at the rate of Rs. 280/- per month but by way of compromise, the plaintiff accepted the rent a the rate of Rs. 140.-per month till the end of June, 1969. The amount decreed was to be paid in three instalments. If the decree had been passed granting damages at the rate of Rs. 280/- P. M. but on payment of the instalments within the prescribed period I was deemed to have been satisfied kin full, kit could be said at the stipulation entitling the plaintiff to realise the damages at the rate of Rs. 280/- per month in case of default was not penal in nature and instead was meant to deprive the defendant of the concession allowed to him for compliance with the decree. On the contrary, according to the compromise, the decree was passed only at the rate of R. 140/- per month and the said amount was to be paid in three instalments. The condition that failure of the payment of any instalment by the stipulated date, the plaintiff would be entitled to recover damages at the rate of Rs. 280/- per month was obviously penal in nature as it authorised the plaintiff to realise damages at double the agreed rate of Rs. 140/- per month. This penal clause, therefore, could not be legally enforced.
6. The costs of the suit which were also waived in case of the payment of the instalments by the due date had already been realised by the plaintiff. As no other damage accrued to him by the late payment of the mount of Rs. 540/- which was only due to him, the suit of the plaintiff was wholly misconceived and both the Courts erred in law in granting a decree by way of damages for wrongful use and occupation for the same period for which the compromise had been entered into.
7. The learned counsel for the appellant also challenged the correctness of the view that damages for wrongful use and occupation can be received at the rate of double the rent fixed between the parties. There appears to be a common notion on the basis of some decisions of the Lahore High Court, that damages at double the rate of the rent fixed between he parties can normally be claimed. But this matter was gone into by a Division Bench of the Delhi High Court in Hindustan Steel (Pvt). Ltd. v. Smt. K. Usha Rani Gupta. AIR 1969 Delhi 59 and after through review of the case law, the following proposition were laid down:--
'Where the tenant fails to deliver up possession of the premises to the landlord on the expiry of his lease, he is not liable to pay damages at the rate of double the rent if the landlord leads no evidence to prove the actual damages suffered by him for the period during which the tenant holds over.
The rule of double the rent was based on English statutes. There is no warrant for extending it to India where in the absence of the Statute the liability of a person wilfully holding over cannot be made to exceed that of a trespasser.
In the absence of a statutory provision to the contrary, the only liability of a trespasser or a person in wrongful possession of the property is for payment of mense profits to the lawful owner or the person lawfully entitled to possession.
The problem has, therefore, to be approached from the tenant's end. What has to be seen is what profit he, who is in wrongful possession, has actually received or might with ordinary diligence have received therefrom.
In case the property is one, rent of which is controlled by Rent Control Act, the landlord can get only the fixed with such increase, as is permissible under the Act.
In case the property is one which is not controlled by the Rent Control Act he is entitled to mesne profits. The only bearing which the evidence as to what the landlord in such a case might or would have made, on the question of mesne profits is that, it is relevant for the purpose of showing what the tenant might with reasonable diligence, have received.'
In the present case, the Rent control Act was not applicable when the earlier litigation between the parties took place. Consequently as held in Hindustan Steel's case (supra) with which I respectfully agree, the plaintiff in the present case would be entitled to only such sum as he might have received with ordinary diligence on account of rent of the said property. As no evidence was led by the plaintiff to show the actual profits which he would have received in case he premises in dispute had been vacated on the termination of the tenancy, the decree at the rate of Rs. 140/- per month, the agreed rent between the parties, could only be passed in his favour. The plaintiff had already got a consent decree in his favour at the rate of Rs. 140/- per month for the whole of the period till the premises were vacated. He was, therefore, not entitled to claim any further damages for wrongful use and occupation and the impugned decree is liable to be set aside on this score also.
8. For the foregoing reasons, this appeal is allowed, the impugned judgment and decree set aside and the suit dismissed but without any order as to costs.
9. Appeal allowed.