J.R. MIDHA, J.

1. M/s. Tamil Nadu Handloom Weavers Cooperative Society was a tenant under Mr. Harbans Lal Gupta in respect of basement, ground and mezzanine floor in property No.F-6, Kalkaji, New Delhi. M/s. Tamil Nadu Handloom Weavers Cooperative Society filed a suit for mandatory injunction and recovery of Rs.4,76,149.93 against Mr. Harbans Lal Gupta who filed a counter claim for Rs.5,74,000/-.

2. Claim in the suit by the society was that it had deposited Rs.12,62,000/- with Harbans Lal Gupta as security when agreement of lease was entered into in the year 1995 and that 50% of the security deposit was appropriated towards rent by adjusting Rs.10,000/- per month. That maintenance charges which were payable by it to Harbans Lal Gupta were also adjusted till March 1997. Stating that in all Rs.7,90,996/- were adjusted and thus Rs.4,71,004/- were refundable. It was pleaded that the society had removed all its goods and belongings from the tenanted premises save and except a few racks which were not permitted to be removed by Harbans Lal Gupta on 26.3.1997. It was asserted that the society had consumed electricity in sum of Rs.20,705.89 and water charges payable by it was Rs.1,100/-. Effecting further deductions it was stated that adjusting said sums from the security deposit Rs.4,49,198.11 became due and payable. Claiming pre suit interest on said amount @24% per annum amounting to Rs.26,951.52, sum of Rs.4,76,149.63 was claimed.

3. In the written statement-cum-counter claim Harbans Lal Gupta sought a decree of Rs.5,74,000/- by alleging that possession of the tenanted premises was not returned to him and that he was entitled to rent in sum of Rs.16,68,891/-. He alleged that an estimated sum of Rs.3,40,000/- would be required to restore the tenanted property due to damage caused thereto; further seeking adjustment of Rs.20,705.89 towards outstanding electricity bill he stated that appropriating the security deposit by him he was entitled to a decree in sum of Rs.5,74,000/-.

4. Vide judgment and decree dated 17th January, 2006, the learned Trial Court has decreed the suit in sum of Rs.1,33,701/- and has dismissed the counter claim. Both the parties have challenged the impugned judgment and decree.

5. For the sake of convenience, M/s. Tamil Nadu Handloom Weavers? Cooperative Society, the appellant in RFA No.263/2006, is hereinafter referred to as “the plaintiff” and Mr. Harbans Lal Gupta, the appellant in RFA No.488/2006, is referred to as “the defendant”.

6. The defendant let out the suit property to the plaintiff vide registered Lease Deed dated 14th August, 1995 - Ex.PW-1/2 at a monthly rent of Rs.70,000/-. The period of lease was fixed for six years w.e.f. 1st June, 1995. The lease was terminable by three months notice in writing by the plaintiff (clause 11). The lease agreement empowered the plaintiff to carry out the temporary additions and alterations and install fixtures and fittings without the consent of the defendant. However, the modifications/alterations of permanent nature required written consent of the defendant (clause 6). At the expiry of the lease the plaintiff was obliged to surrender the vacant possession of the suit premises in good repairs together with final payment of receipt for electricity and water charges to the defendant and the damages to the fittings and the property have to be made good (clause 18).

7. The parties executed a Security Deposit Agreement dated 14th August, 1995 - Ex.PW-1/4 in pursuance to which, the plaintiff paid the security deposit of Rs.12,62,000/- to the defendant on 14th August, 1995, out of which Rs.10,000/- per month was adjustable towards the rent and the remaining amount was refundable at the time of surrender of the vacant possession after adjusting the dues of rent, maintenance, bills of electricity, water, sewerage and cost of repairs. The agreement provided that the delay in refund of the security deposit would carry interest at the rate of