Damages for lost rent require proof of causation, mitigation, and quantum with reasonable certainty.

The Appellant-landlord had leased premises bearing No. GF-3, Plot No. B-3/4, Dr. Mukherjee Nagar Commercial Complex, Delhi, to UCO Bank under a lease deed dated 25 March 1998. Electricity was supplied through a connection used by the Bank. The connection was disconnected by NDPL on 9 March 2006 following detection of electricity theft, allegedly attributable to the Bank. The Bank subsequently vacated the premises, and the Appellant obtained possession on 25 January 2008.

The Appellant claimed that, because electricity had not been restored, the premises could neither be used nor re-let. He sought damages at Rs. 24,000 per month for three years, together with interest, totalling Rs. 9,94,000.

The premises were eventually re-let on 15 April 2013 at Rs. 27,000 per month after the Appellant arranged electricity from another premises owned by his company.

The Trial Court dismissed the suit, holding that the Appellant had failed to establish that the premises could not have been re-let earlier merely because of the electricity disconnection.

The Appellant challenged that decision under Section 96 CPC.

Whether the suit premises could not be re-let during the claimed period of 25 January 2008 to 15 April 2013 because of the electricity disconnection allegedly caused by the Respondent’s conduct, and whether the Appellant had taken reasonable steps to mitigate his loss?

Whether the Appellant proved, with reasonable certainty, the claimed rental loss at the rate of Rs. 24,000 per month?

The Court applied Section 73 of the Indian Contract Act, 1872, including its Explanation requiring the means of remedying the inconvenience caused by non-performance to be considered while assessing damages.

It relied on Murlidhar Chiranjilal v. Harishchandra Dwarkadas, AIR 1962 SC 366, and M. Lachia Setty & Sons Ltd. v. Coffee Board, Bangalore, (1980) 4 SCC 636, for the principle that a claimant must take all reasonable steps to mitigate loss and cannot recover damage attributable to his failure to do so.

The Court further relied on Fortune Infrastructure v. Trevor D’Lima, (2018) 5 SCC 442, holding that contractual damages must be proved with reasonable certainty and, ordinarily, assessed with reference to the time of breach.

The appeal itself was considered under Section 96 of the Code of Civil Procedure, 1908.

The Court accepted that the electricity connection serving the Bank’s premises had been disconnected following an electricity-theft assessment and that the Bank had subsequently paid Rs. 88,300 towards settlement of the final bill; thus, the occurrence of the disconnection and the Bank’s connection with the electricity dispute were supported by the record.

However, under Section 73 and the mitigation principle, the Appellant had to prove that no reasonable means of restoring or arranging electricity existed between 25 January 2008 and 15 April 2013. He produced no evidence regarding the date of installation, sanctioned load, permission sought from NDPL, or any technical or physical impediment to obtaining electricity from another source.

Since he ultimately arranged electricity from another premises and immediately re-let the property, he failed to explain why the same solution could not have been adopted earlier.

Independently, the claimed rent of Rs. 24,000 per month was not proved. The 2013 lease at Rs. 27,000 per month could not establish the prevailing rental value in January 2008, while the earlier proceedings had assessed the rent at approximately Rs. 9,762.50 per month as of December 2006.

No comparable leases, property-dealer evidence, advertisements, prospective tenant evidence, or other material established either the claimed rate or a causal link between the electricity disconnection and the alleged vacancy.

The claim was therefore barred by the Appellant’s failure to mitigate loss and unsupported by proof of damages with reasonable certainty.

The Regular First Appeal was dismissed, and the pending applications were disposed of accordingly.