J.D. Kapoor, J.

1. This is a suit for possession as well as recovery of arrears of rent, mesne profits and damages. Suit for possession has become infructuous as during the pendency of the suit, possession was handed over by the defendant to the plaintiff. The suit that survives is for recovery of rent, mesne profits and damages. The relevant facts pleaded in this regard are as under:

2. On 27th November, 1989, the plaintiff and defendant entered into a lease agreement in respect of the basement floor along with a toilet on the ground floor of building No. 21, Community Centre, New Friends Colony, New Delhi (hereinafter referred to as the demised premises). The lease was created for a period of 3 years beginning from 1st September, 1989 and was duly registered with the Sub-Registrar, New Delhi. Some of the important terms as mentioned in the lease agreement are as under:

(1) That the Lessor shall give and the Lessee shall take on rent the demised premises paying a monthly rent of Rs. 36,000/- (Rupees thirty six thousand only) exclusive of water and electricity charges but inclusive of all existing taxes, rates and cesses. However, any future increase in the applicable taxes, rates or cesses will be borne by the Lessee.

(2) That the Lessee has paid to the Lessor six months rent in advance amounting to Rs. 2,16,000/- on the signing of this agreement. The Lessee will pay a further sum of Rs. 2,16,000/- equivalent to six months advance rent to the Lessor on 1st April, 1990. The said advance rent will be adjusted during the entire period of the lease as follows:-

(a) During the period 1.9.1989 to 31.3.90 at the rate of Rs. 6,000/- per month.

(b) During the period 1.4.90 to 31.8.92 at the rate of Rs. 13,450/- per month.

3. That the Lessee has deposited with the Lessor a sum of Rs. 2,16,000/- (Rupees two lakhs sixteen thousand only) as interest-free security deposit towards fittings and fixtures provided in the Demised Premises as also for due and faithful performance of the terms contained herein. The Security deposit will be refunded to the Lessee by the Lessor at the time of the vacation of the Demised Premises and handing over of the possession thereof with the fittings and fixtures in the same condition as received, normal wear and tear excepted. The Lessor will have the right to deduct any valid and lawful claim therefrom, towards loss of fittings and fixtures. The Lessee will however, not be entitled to deduct or adjust the said amount of security deposit towards dues of rent, which will be paid in the manner provided in Clause 2 of this agreement.

14. That at the expiry of the term of this Lease including renewal thereof or on earlier termination of this lease, the lessee shall handover the vacant possession of the Demised Premises in as good condition as it was in when the Lessee obtained possession, to the Lessor against the refund of the Security deposit as provided in Clause 3 of this agreement.

3. The defendant gave notice dated 27th December, 1990 to the plaintiff saying that they intended to vacate the demised premises on completion of three months. It was received by the plaintiff on 28th December, 1990. On 29th March, 1991 the authorized representative of the plaintiff went to the demised premises to take over the vacant possession and for settlement of accounts and at the time of inspection of the site. On 29.3.91 itself plaintiff alongwith Shri Sen Gupta, Company Secretary of the defendant, found that the demised premises had not been brought back to the original condition in which the same were let out, the partitions and false ceiling had not been removed, the wiring was damaged and exposed and the floor required repairs. It was further found that the electricity connection had been disconnected by DESU who had sealed the meter. The plaintiff wrote letter dated 1st April, 1991 in regard to this event emphasizing that the defendant would be liable to pay the monthly rent till vacant possession of the demised premises is duly given to the plaintiff. The defendant wrote to the plaintiff on 30th April, 1991 saying that a sum of Rs. 2,95,850/- (Two lacs ninety five thousand eight hundred and fifty only) which was inclusive of Rs. 2,16,000/- (Two lacs sixteen thousand only) on account of security deposit was due from the plaintiff. The plaintiff was called upon to pay the said amount and take vacant possession. An estimate of cost of repairs and rectification of the damage amounting to Rs. 1,09,455/- (one lac nine thousand four hundred and fifty five) was got made and letter dated 1st May, 1991 was sent mentioning the deficiencies and enclosing the estimate. The defendant informed the plaintiff by letter dated 21st June, 1991 sent under registered cover that repairs had been carried out and electricity had been restored to the demised premises and, therefore, possession of the demised premises be taken after settling their accounts. Simultaneously, the defendant served legal notice through Advocate bearing reference No. L-10 dated 24th June, 1991 intimating that possession of the demised premises be taken on or before 30th June, 1991 and the advance and the security deposit be refunded. On 7th October, 1991, the plaintiff finally informed the defendant after recapitulating the events detailed above that as per Clause 15 of the lease agreement the Security deposit made by them had been forfeited and the lease cancelled as arrears of rent for more than 2 months had not been paid. The defendant was called upon to pay arrears for the period from November, 1990 to date at Rs. 22,500/- per month after adjusting advance rent as per the terms of the lease agreement and to hand over possession within 3 days. The defendant did not comply nor made any response to the notice nor did defendant paid rent/damages/mesne profits for use and occupation since 1st November, 1990. The amount reckoned for the period upto 31st January, 1992 at the rate of Rs. 22,550/- (i.e. after making adjustment on account of payment of advance rent) worked out to Rs. 3,38,250/- (three lacs thirty eight thousand and two hundred and fifty). The amount of advance rent for the period from February, 1992 to August, 1992 (which was to be adjusted in due course) worked out to Rs. 94,150/- (ninety four thousand one hundred and fifty). After carrying out adjustment the total amount payable came to Rs. 2,44,100/-. The plaintiff claims mesne profits from the date of institution of the suit till the date of delivery of possession at the rate of Rs. 36,000/- per month with escalation at 20% per year subject to the right of the plaintiff to amend the claim upwards by moving application.

4. The stand of the defendant as projected in the written statement in short is like this:

5. The defendant discontinued payment of further rent of the premises after they had sent the letter of September 17, 1990 and allowed the plaintiff to adjust the rents of notice period towards the advance rent lying in deposit with the plaintiff. Admittedly the defendant did not dismantle the fixtures and fittings as desired by the plaintiff. At the close of the Notice period on 26th December, 1990 the defendant approached the plaintiff for delivering back the possession of the premises to the plaintiff when they showed ignorance of the receipt of the letter dated September 17, 1990 although it was sent by Regd. A.D.post and a copy thereof was delivered to the plaintiff by Peon Book entry. The defendant did not want to make an issue of the receipt of the letter dated September 17, 1990 by the plaintiff because their relation then was extremely cordial. The defendant sent another notice dated December 27, 1990 along with a copy of the earlier notice dated September 17, 1990 by Regd. A.D post and by hand. In the second notice the defendant indicated they would like to settle their accounts before they could hand over vacant possession of the premises. The plaintiff was well aware of the fact that the power supply to the premises had been disconnected and the fixtures and fittings provided by he defendant were not removed at the instance of the plaintiff since the latter wanted to rent it out with the existing fixtures and installations. The reason for not restoring power supply was on account of the frequent fire hazards especially when the premises was not in use and in the absence of anybody in the premises it would aggravate the situation. Moreover power could be misused by the Chowkidars and peons in the area. The power supply was purposely disconnected with the clear understanding of the plaintiff with a view to prevent misuse of power and fire hazards. On receipt of the letter dated 1.4.1991, the defendant took immediate steps to dismantle the fittings and fixtures and to restore electricity connection as desired by the plaintiff. After the removal of the fixtures and fittings the defendant wrote a letter dated 30th April, 1991 requesting the plaintiff to take possession of the premises with the clear understanding that the defendant would restore the power supply very soon. Along with this letter the defendant had sent a statement of accounts as on 30th April, 1991 according to which a sum of Rs. 2,95,8950/- (Rs. two lakhs ninety five thousand eight hundred and fifty only) which was to be recovered from the plaintiff before the defendant could hand over to them the vacant possession of the premises. The premises in dispute has not been used by the defendants from September, 1990, it was made available to the plaintiff right from September, 1990. The defendant had always been ready and willing to handover the vacant possession of the premises to the plaintiff. The plaintiff however had been avoiding taking delivery of the premises on one pretext or the other for reasons best known to them. Although the defendant is not liable to pay rent for the premises after 31st December, 1990 they had agreed to pay the rent of the premises at the agreed rate upto 30th June, 1991. This was only a concession made by the defendant to the plaintiff. By way of Counter Claim No. 2765/1992 defendant has claimed an amount of Rs. 2,23,850/- with interest @ 20% per annum after adjustment of two months rent @ Rs. 36,000/- for May and June, 1991 against the security amount of Rs. 2,95,850/- as according to defendant, it has been ready and willing to hand over the vacant possession of the premises to the plaintiff right from September, 1990 but the latter was not prepared to accept it.

6. The averments were reiterated by the plaintiff in the replication.

7. Vide order dated 4.1.1994 following issues were framed:

(1) Whether the plaintiff does not disclose any cause of action If so, its effect OPD

(2) What was the condition of the premises in dispute when it was let out to the defendant in 1986 Onus on parties

(3) At whose instance the improvements made in the premises by the defendant were left as they were at the time the premises were offered to be surrendered to the plaintiff Onus on parties

(4) When did the plaintiff notify to the defendant that they wanted the premises back to them in the condition in which it was let out OPP

(5) Did the representative of the plaintiff go to the premises to take over vacant possession of the premises and for settlement of accounts between the parties as mentioned in paragraph 5 of the plaint OPP

(6) Whether the defendant was ready and willing or offered to surrender the possession of the premises in question in the State it was let out, normal wear and tear excepted If so, when OPD

(7) Whether the defendant is liable to pay rent/damages of use of occupation/mesne profit upto the date of giving actual physical possession of the propertyOPP

(8) Whether the amount of security deposit has been lawfully forfeited If not what amount is payable to the defendant OPD

(9) To what amount on account of rent/damages/mesne profit is the plaintiff entitled to OPP

(10) To what amount is the plaintiff entitled to bring back the premises to the position it was originally let out OPP

(11) To what amount is the defendant entitled to in respect of the counter claimOPD

(12)Relief.

8. Since the limited relief that survives is as to the entitlement of plaintiff as to the arrears of rent, mesne profits and damages, all the issues can be taken up together for deciding the controversy as the Counsel for the plaintiff has contended that plaintiff would be satisfied if the arrears of rent are paid upto the date when the possession was retained by the defendant. On the contrary, Counsel for the defendant contends that defendant has always been ready and willing to handover possession of the premises but in view of the attitude adopted by the plaintiff in not refunding the security amount, the defendant did not handover the possession and is therefore not obliged to pay the rent.

9. In view of the respective stands of the parties, the controversy as to in which condition the premises was let out to the defendant and at whose instance improvements were made by defendant in the premises and what prompted the plaintiff to inform the defendant that plaintiff wanted the possession in the same condition in which it was let out and further what damages were caused to the premises by the defendant become irrelevant and infructuous.

10. The conspectus of the facts pleaded by both the parties in their respective pleadings makes one thing clear that both the parties were engaged in tug of war. The plaintiff was not willing to refund the security as according to him premises were damaged by the defendant and he had to incur considerable expenses in order to bring back to their original position. On the other hand, the defendant insisted that he should be paid back the security first and only then he would hand over the possession. None of them realised that by engaging in such fissiriparious stands both the parties were at loosing end.

11. The security is paid to the landlord for the purpose of guarantee that no damage is done by the tenant nor any fixtures and fittings are removed and every landlord is entitled to use the security for repairing the damages done by the tenant. Though the security cannot be adjusted towards arrears of rent but in case the tenant hands over possession of the premises without any damage, the landlord has no right to retain the security. In such an event the landlord can be liable to pay the interest as any amount retained by the landlord unauthorisedly by way of security incurs liability of interest. The stand taken by the defendant in respect of installation of A.C. units etc. and installations of additional fittings and fixtures shows that he has done this for the improvement of the premises for making the utmost use of the premises for his business purposes. Though Local Commissioners were also appointed for ascertaining damages done to the premises but the very fact that additional fittings and fixtures and A.C. units were installed with the full knowledge of the plaintiff and the plaintiff did not take any action for making such provision in the premises shows what was done in the premises was with the approval of the landlord. It appears that main concern of the plaintiff was restoration of electricity connection. According to the defendant when he stopped using the premises he also disconnected the electricity connection so as to avoid hazardous incident and also to avoid misuse of electricity by Chowkidars. Somehow or the other when the plaintiff insisted for restoration of electricity, the defendant restored the same.

12. Now the question arises whether the tenant could have retained the possession of the premises without paying the rent thereof on account of non-refund of security amount by the plaintiff. The answer is emphatic no. The tenant has an independent remedy to recover the security but in no way can retain the possession of the premises on the plea that until and unless security is refunded, possession will not be handed over. Such a possession by the tenant is a possession for which he has to pay the rent as the premises could not have been put in use by the landlord nor have been let out by the plaintiff. No tenant can take the defence that he is entitled to retain the possession of the premises unless security amount is refunded to him. When there is an independent remedy to recover this amount, the retention of possession cannot be justified. In order to avoid the liability of rent, the tenant has the obligation to handover the possession. It is immaterial whether premises was put into use by the defendant/tenant or not. What is material was whether possession is retained by him or not.

13. In view of this position of law, the suit of the plaintiff has to be decreed in respect of recovery of arrears of rent upto the period the possession was retained by the defendant. Plaintiff has not proved its case as to how much damage was done to the premises by the defendant. As I have already observed that the additional fittings, fixtures and A.C. units were installed by the defendant in the premises with the approval of the plaintiff, the question of causing damage to the premises does not arise nor the plaintiff could have insisted the defendant to handover possession of the premises in original position. The plea of the defendant that the plaintiff has been showing the premises to the prospective tenants when defendant was already in possession of the premises when fittings, fixtures and A.Cs were already there cannot be brushed aside or set aside forthwith. This operates adversely against the plaintiff.

14. Be that as it may, the fact remains that the defendant retained the possession of the premises upto 17th August, 1992 whereas plaintiff has not been successful in showing the damages to the premises done by the defendant other than installation of A.C units, additional fittings and fixtures which were to the advantage of the plaintiff and not the other way round and without any objection by the plaintiff.

15. As a result, suit is decreed for Rs. 4,79,892/- after the security amount retained by the plaintiff has been adjusted towards arrears of rent. This takes care of the counter-claim of the defendant also. If the amount is not paid within one month, the plaintiff shall be entitled to interest @ 12% per annum till realization.