The main legal point established in the judgment is that claims for higher rent and penal rent must be supported by evidence and the terms of the lease agreement. Additionally, the court clarified the applicability of the Indian Contract Act and the Delhi Rent Control Act to such claims.

VALMIKI J. MEHTA, J.

1. This Regular First Appeal under Section 96 of Code of Civil Procedure, 1908(CPC) is filed by the plaintiffs in the suit impugning the judgment of the Trial Court dated 12.7.2005 by which trial court has only partly decreed the suit for mesne profits filed by the appellants/plaintiffs by not decreeing the suit for penal rent claimed as per legal notice served and by decreeing the suit only by granting increase of rent by 15% from the last admitted rate of rent paid of Rs.22,600/-per month. Appellants/plaintiffs claimed mesne profits at Rs. 48,000/-p.m.

2. The facts of the case are that the suit premises bearing no.A1/166, Pankha Road, Janakpuri, New Delhi was let out by the appellants/plaintiffs to the respondent/Union of India in terms of the lease agreement dated 15.6.1985 for a period of three years w.e.f 22.6.1985. The agreed rate of rent was Rs.22,600/-per month. Though Union of India desired after expiry of the lease period to vacate the suit premises, however, it failed to vacate the suit premises and the suit premises were vacated only on 31.8.1990. The appellants/plaintiffs claim that for the period from the expiry of the lease on 21.6.1988 and till the respondents/defendants vacated the suit premises on 31.8.1990 the appellants/plaintiffs be granted rent at Rs.48,000/-per month and which is the rate which the appellants/plaintiffs claim by serving their legal notice dated 14.3.1989.

3. Trial court has held in para 35 of the impugned judgment that rate of Rs.48,000/-is claimed on the basis of the lease agreement, however this observation is against the record because when we refer to the lease agreement dated 15.6.1985, it is found that there is no clause that the appellants/plaintiffs after expiry of the lease period will be entitled to rent at Rs.48,000/-per month. The amount of Rs. 48,000/-is as per legal notice dated 14.3.1989. Trial court has also held that taking that such a clause as per the lease deed would be in the nature of penalty i.e the aspect would fall under Section 74 of the Indian Contract Act, 1872 and therefore damages cannot be awarded. Trial court has also held that since no evidence whatsoever was led by the appellants/plaintiffs to show what was the actual rate prevailing, no mesne profits can be granted at Rs.48,000/-per month as claimed by the appellants/plaintiffs. Trial court has however granted increase of rent at 15% on Rs.22,600/-i.e the agreed rate of Rs.22,600/-per month plus Rs.3,390/-from 22.6.1988 upto 31.8.1990 and which also in the opinion of this Court was illegal exercise of power in favour of the appellants/plaintiffs because till 1.12.1988 the suit premises would be covered under Delhi Rent Control Act, 1958 i.e. respondents/defendants had statutory protection against eviction and hence no liability towards mesne profits. Once suit premises are covered under the Delhi Rent Control Act neither there arises an issue of vacating the suit premises nor any issue of enhancement of rent except as provided under the Delhi Rent Control Act. Delhi Rent Control Act was amended by Act 57 of 1988 w.e.f 1.12.1988 whereby premises whose rent was above Rs.3,500/-per month, were made to fall outside the protection of the Delhi Rent Control Act. By the same amendment, Section 6A was added entitling the landlord to increase the rate of rent by 10% after every three years subject to serving of a notice demanding increase in the rent. Therefore in this case the appellants/plaintiffs are lucky that they have received enhanced rent from 22.6.1988 whereas they could only have received enhancement of rent post 1.12.1988 and that too after having served a notice under Section 6A of the Delhi Rent Control Act and which admittedly was not served.

4. In view of the aforesaid discussion, it is seen that the appellants/plaintiffs led no evidence of what was actual rate of prevailing rent for grant of mesne profits at a rate higher than the agreed rate of Rs.22,600/-per month. Wh