Delhi District Court
Dr. Oetkar India Pvt. Ltd. vs . Skm Products Pvt. Ltd. on 1 June, 2023
Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
IN THE COURT OF ADDITIONAL DISTRICT
JUDGE02, SOUTH, SAKET COURTS COMPLEX,
NEW DELHI
Presiding Judge: Sh. Dinesh Kumar.
CS DJ No. 7277/2016
FILING No. 21784/2011
CNR No. DLST010003542011
In the matter of :
Dr. Oetkar India Pvt. Ltd.
A Private Limited Company
Incorporated and verified
under the Companies Act, 1956
having its corporate office at
F04, Okhla Industrial Area
PhaseI, New Delhi - 110020.
.........Plaintiff
Versus
M/s SKM Products Pvt. Ltd.
A Company Registered and Verified
under the Companies Act, 1956
having its registered office at
F66, Okhla Industrial Area,
PhaseI, New Delhi 110020.
........Defendant
CS DJ No. 7277/2016
CNR No. DLST010003542011
Page 1 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023
Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
Date of Institution : 25.08.2011
Date of reserving the judgment : 19.05.2023
Date of pronouncement : 01.06.2023
Decision : Suit Decreed.
SUIT FOR THE RECOVERY OF SUM OF
RS.5,10,750/ (RUPEES FIVE LACS TEN THOUSAND
SEVEN FIFTY ONLY) ALONGWITH PENDENTE
LITE AND FUTURE INTEREST
JUDGMENT
1. Vide this judgment, I shall disposes of the Civil Suit filed by the plaintiff for recovery of Rs.5,10,750/ alongwith interest pendentelite and future against the defendant. The amount includes the interest free security deposit of Rs. 4,50,000/ and interest amount of Rs. 60,750/. It is worth mentioning that the present suit was filed by M/s Fun Foods Pvt. Ltd. as plaintiff against the defendant for recovery. However, during the pendency of the suit, the plaintiff company namely M/s Fun Foods Pvt. Ltd. was merged with another company titled Dr. Oetkar India Pvt. Ltd. The amalgamation was sanctioned by the Hon'ble High Court of Delhi vide order dated 12.05.2014 in Company Petition No. 633/2013. The plaintiff therefore, moved an application for substitution of name of the plaintiff. The application was CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 2 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
allowed vide order dated 27.02.2016 and name of the present plaintiff was substituted in place of M/s Fun Foods Pvt. Ltd. The amended memo of parties was filed as directed by the Court.
2. It is also required to be noted that similar suit bearing CS DJ No. 7278/16 has also been filed jointly by M/s VRB Foods Pvt. Ltd. and Dr. Oetkar India Pvt. Ltd. against the same defendant for recovery of the amount of interest free security deposit in relation to mezzanine and first floor of the same property. The said suit is also pending in this Court. In the said case also, the plaintiff herein has been substituted in place of the second plaintiff M/s VRB Foods Pvt. Ltd. In both the cases separate trials have been done. However, final arguments have been heard simultaneously and both the matters are fixed for judgments.
3. The plaint in the present suit has been filed by M/s Fun Foods Pvt. Ltd. The brief facts of the case, as per the plaint filed by M/s Fun Foods Pvt. Ltd., are as under: 3.1. The plaintiff is a private limited company duly incorporated under the Companies Act 1956 and is engaged in the business of food products. The defendant is also a company and owner of premises bearing no. F CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 3 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
66, Okhla Industrial Area, PhaseI, New Delhi - 110020.
3.2. The plaintiff was inducted as a tenant by the defendant in respect of basement and ground floor of the above mentioned premises (hereinafter referred to as 'suit premises') vide unregistered rent agreement dated 16.08.2007 for initial period of 3 years at monthly rent of Rs. 1,50,000/.
3.3. The plaintiff had contributed an amount of Rs.4,50,000/ towards interest free Refundable Security Deposit vide cheque no. 977331 dated 14.08.2007 drawn on Oriental Bank of Commerce, Hauz Khas, New Delhi in favour of the defendant company. 3.4. The plaintiff vacated the suit premises on 03.12.2010 and handed over the peaceful possession of the same alongwith its installations like industrial power/light/water connection and a 62.5 KVA DG set to two employees of the defendant viz. Mr. Harish and Mr. Arvind. The plaintiff has paid the entire amount of rent with respect of the suit premises upto 30.11.2010. The said premises were duly inspected by the representatives of the defendant and it was only after CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 4 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
the satisfaction of the defendant with regard to the condition of the premises that the possession was taken by them.
3.5. At the time of handing over the possession of the suit premises, the plaintiff demanded the refund of the Security Deposit. However, the defendant refused to make the payment on the ground that the same would be refunded within a period of fifteen days. The plaintiff in good faith relied upon the representation of the defendant and handed over the peaceful and vacant possession of the said premises, in good condition to the said employees of the defendant.
3.6. Instead of paying the abovementioned amount of Security deposit, the defendant sent a malicious legal notice dated 31.01.2011 disputing the liability to pay the outstanding amount and also disputing the date on which the plaintiff vacated the suit premises. 3.7. The plaintiff replied to the said legal notice vide reply dated 07.03.2011 specifically denying the false allegations made by the defendant. The plaintiff also demanded the security amount from the defendant.
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3.8. The defendant served upon the plaintiff another legal notice dated 26.05.2011 reiterating the false and baseless allegations and blatantly and dishonestly denying to the plaintiff its rightful claim to the Security Deposit. The plaintiff, after making several failed attempts to recover the amount due to them, was compelled to serve the defendant with a legal notice dated 20.06.2011 seeking refund of Refundable Security Deposit alongwith an interest of 24% per annum. The notice was duly served upon the defendant and a reply dated 24.06.2011 was received. The defendant failed to clear the outstanding dues of the plaintiff despite the service of legal notice. Hence, the present suit has been filed by the plaintiff with a prayer of a decree of an amount of Rs. 5,10,750 in favour of the plaintiff and against the defendant along with an interest @ 24% p.a. pendentelite and future.
4. Summons were issued to the defendant. The defendant appeared and filed its Written Statement. It has contested the suit on the following grounds :
4.1. The suit has not been filed by a duly authorized person. There is no board resolution on record in favour CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 6 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
of Mr. Sanjay Kumar Sharma who has filed the present suit on behalf of the plaintiff. The suit is liable to be dismissed for non disclosure of cause of action. 4.2. As per the self admission on the part of the plaintiff, after the expiry of the unregistered rent agreement dated 16.08.2007 on 15.08.2010, the peaceful and vacant possession of the demised premises was not handed over to the defendant. The plaintiff illegally and with utmost malafide and oblique intent continued to remain in possession of the demised premises.
4.3. The lease deed was specifically for a period of three years starting from 16.08.2007 at an agreed monthly rent of Rs.1,50,000/. The suit premises was given on rent of Rs. 1,50,000/ per month excluding the consumption charges of industrial power, water charges payable as per consumption per unit along with the service tax for a period of 3 years w.e.f. 16.08.2007. The unregistered rent agreement could be extended by both the parties upon reaching a common consensus. Clause 3 of the agreement specifically provides that the agreement could be renewed with mutual consent for CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 7 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
another period of 3 years with increase rent of 20%. However, the plaintiff in complete disregard of the said clause remained in illegal possession of the premises even after expiry of the rent agreement on 15.08.2010. The plaintiff also violated the term of enhancement of rent by 20%.
4.4. The plaintiff under most suspicious and oblique manner tried to vacate the demised premises on 07.12.2010 i.e. after more than three months of the date of expiry of the subject unregistered rent agreement dated 16.08.2007 in which they had succeeded. This fact had been brought under the knowledge of the defendant by one tea stall owner namely Mr. Daya Shankar who was running his stall close to the suit premises. After getting the requisite intimation, the defendant sent its officials Mr. Harish and Mr. Arvind Kumar, to the site wherein to their utter shock and dismay the information so furnished was found to be correct.
4.5. The abovenamed officials had taken the photographs of the demised premises which had been left by the plaintiff in utmost dilapidated and CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 8 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
uninhabitable condition. The subject demised premises totally stood in a deplorable state and upon seeing such condition the official of the defendant abstained from taking possession of the demised premises and requested the plaintiff to get the demised premises restored to the original condition as it stood at the time of entering upon the unregistered rent agreement dated 16.08.2007.
4.6. By the aforesaid act of the plaintiff, the defendant suffered monetary loss of Rs. 1,13,000/ which is equivalent to the increase rent by 20% which should have been paid by the plaintiff.
4.7. As per the clause 7(vii) of the rent agreement, it was agreed that once the lessee had acquired the property it was its responsibility to take care of the day to day repairs and maintenance. The agreement also provides that at the time of vacating the premises the lessee shall hand over the genset in perfect working condition. However, the lessee has violated the terms of the agreement and left the genset in the most dilapidated condition.
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4.8. The lessee had agreed to furnish interest free refundable security deposit of Rs. 4,50,000/ as per the agreement which was furnished by the then lessee vide cheque no. 97731 dated 14.08.2007 drawn on Oriental Bank of Commerce, Safdarjung Enclave, New Delhi. The sole purpose of the taking the security deposit was that the lessor intented to secure its interest in case of unforeseen dispute or mishap which might occur in due course of time by the conduct of the lessee or any of its agent. It was the clear intention of the lessor as mentioned in the agreement in Clause 7 (x) that in case any damage happens to the suit premises, the security deposit shall be utilized for rectification of the same as they comprised in dues and the remaining shall be returned.
4.9. The plaintiff had not vacated the suit premises even after expiry of the period of lease. During that possession, the plaintiff caused damage to the physical structure of the suit premises.
4.10. The defendant had made request to the plaintiff to get the damages repaired in the suit premises or to give them authority to get the same repaired and to CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 10 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
utilize the security deposit for the said purpose. However, no satisfactory reply was received from the plaintiff. The defendant was unable to lease out the suit premises and therefore, it was suffering monetary losses. Hence, the legal notice dated 31.01.2011 was issued which was duly received by the plaintiff. It is only after that written communication sent by the defendant, any communication with respect to the security deposit came into picture. Prior to 07.03.2011 there had not been a single communication from the plaintiff raising any concerns with respect to the security deposit and the said communication was made by the plaintiff in the reply to the legal notice of the defendant.
4.11. The defendant had made several representations vide the legal notices dated 31.01.2011 and 26.05.2011. It requested the plaintiff to get the damages rectified otherwise, the defendant would get the same done on their own and shall adjust from security deposit. As the plaintiff did not come forward, the defendant was left with no choice but to go ahead with the renovation and adjust the same against the security. The defendant has CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 11 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
done the requisite renovation so that the premises could be utilized. However, the Genset is still in a dilapidated condition. The plaintiff is not entitled to recover any amount from the defendant. Hence, it is prayed that the suit may be dismissed.
5. The plaintiff filed replication to the Written Statement in which it denied the allegations made by the defendant and reiterated the facts stated in the plaint. Vide order dated 20.11.2012, following issues were settled :
1. Whether the plaintiff has no cause of action to file the present suit against the defendant?OPD
2. Whether the defendant is entitled to adjustment of the security deposit made by the plaintiff towards expenses incurred by the defendant in repair of the premises no. F66, Okhla Industrial Area, New Delhi, which was given on rent by the defendant to the plaintiff? OPD
3. Whether the plaintiff is entitled to recover a sum of Rs. 5,10,750/ from the defendant being the security deposit given by the plaintiff to the defendant at the time of taking the property on lease vide lease dated 16.08.2007?OPP
4. Whether the plaintiff is entitled to claim interest on the amount found due against the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 12 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
defendant, and if so, at what rate? If yes, at what rate? OPP
5. Relief.
6. The plaintiff examined one witness i.e. PW1 Sh. Sanjay Kumar Sharma, Manager - HR & Legal, who tendered his evidence by way of affidavit Ex. PW1/A. He has reiterated the facts stated in the plaint. He has relied upon the following documents
a) The certified copy of board resolution dated 13.07.2011 is Ex. PW1/1.
b) The copy of rent agreement is Ex. PW1/2.
c) Copy of the security cheque of Rs. 4,50,000/ dated 14.08.2007 is Ex. PW1/3.
d) The receipt of acknowledgment by the
defendant is Ex. PW1/4.
e) The letter of extension of lease dated
16.09.2010 is Mark A.
f) The copy of bank statement showing the
payment of increased rent is Ex. PW1/6.
g) The copy of legal notice dated 31.01.2011 is Ex. PW1/7.
h) The copy of reply to legal notice dated 07.03.2011 is Ex. PW1/8.
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i) The copy of legal notice dated 26.05.2011 is Ex. PW1/9.
j) The copy of legal notice dated 20.06.2011 is Ex. PW1/10.
k) Postal receipts and courier receipt are Ex. PW1/11 and Ex. PW1/12.
7. In the meantime, one application under Order VII Rule 14 CPC was moved by the plaintiff to bring on record two documents i.e. copy of board resolution and certified copy of bank statement. The application was allowed vide order dated 10.04.2017. The witness was duly cross examined by Ld. Counsel for the defendant. The plaintiff did not examine any other witness. Therefore, PE was closed vide order dated 26.02.2018. Matter was fixed for Defendant Evidence.
8. The defendant moved an application under Order XVIII Rule 4 CPC r/w Order XXVI Rule 1 CPC to examine the witnesses of the defendant through Local Commissioner. The application was allowed vide order dated 27.07.2022. Local Commissioner was appointed for examination of witness of the defendant in both the cases i.e. CS DJ No. 7277/2016 and CS DJ No. 7278/2016.
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9. The defendant has examined Ms. Nirmala Jaganathan as DW1 before the Local Commissioner appointed by the Court. She tendered her affidavit in evidence which is Ex. DW1/A. She has reiterated the facts stated in the Written Statement. She has relied upon the following documents :
a) The photographs filed in the present suit are Ex. DW1/1 to Ex. DW1/42.
b) Copy of reply to legal notice dated 24.06.2011 is Ex. DW1/55.
10. The witness during her examination also mentioned about certain documents which have not been filed in the present case but only in CS DJ No. 7278/2016. However, the witness has been cross examined in relation to those documents also and therefore, they are required to be mentioned here. The documents are as under :
a) Various photographs filed in CS DJ No. 7278/2016 are Ex. DW1/43 to Ex. DW1/54 (filed in the CS DJ No. 7278/2016).
b) Copy of quotation dated 05.06.2011 is Mark A and B (filed in the CS DJ No. 7278/2016).CS DJ No. 7277/2016
CNR No. DLST010003542011 Page 15 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
c) Copy of letter dated 10.07.2011 is Mark C and D (filed in the CS DJ No. 7278/2016).
d) Copy of payment receipt dated 30.08.2011 is Mark E (filed in the CS DJ No. 7278/2016).
e) Copy of quotation dated 12.06.2011 are Mark F and G (filed in the CS DJ No. 7278/2016).
11. The witness was duly cross examined by Ld. Counsel for the plaintiff. The defendant did not examine any other witness. It also stopped appearing and therefore, opportunity to lead further evidence was closed vide order dated 16.01.2023. Matter was thereafter adjourned for final arguments.
12. Dr. Chandra Shekhar, Ld. counsel for the plaintiff would argue that the defendant has taken a false defence. The defendant has admitted receiving of Rs. 4,50,000/ as security from the plaintiff. The plaintiff has also proved the said fact by bringing on record the statement of account. The defendant has made a false submission that it had forfeited the security amount as the premises was left by the plaintiff in deplorable condition and the genset also required repairing. However, no evidence has been led by the defendant to prove those contentions. The alleged CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 16 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
photographs as well as the quotations for repairing of the premises and the repair of genset were not submitted by the defendant at the time of filing the WS. Those documents are nothing but a mere afterthought. Those documents have not been proved as per law. They are forged and fabricated documents. The defendant has not led any evidence to prove the repairing work in the premises and the repair of the genset. No witness has been examined by the defendant to prove the quotations filed in the Court. There is also no evidence of any payment made by the defendant for repairing. The statements made in the affidavit are beyond pleadings and therefore, the Court may not consider them as evidence.
13. Ld. Counsel for the plaintiff would further argue that DW1 has stated in her cross examination that the alleged payment was made in cash. However, a company cannot make payment of such a huge amount in cash. In the absence of any documentary evidence, the said statement cannot be relied upon in evidence. The photographs filed by the defendant do not bear any date. It is not clear whether the photographs pertain to the suit premises. Those photographs were brought on record by the defendant after the cross CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 17 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
examination of PW1 was completed. There is no certificate under Section 65B Indian Evidence Act along with those photographs and therefore, those photographs are not admissible in evidence as per the settled position of law.
14. Ld. Counsel for the plaintiff would further argued that the genset provided by the defendant was old and in miserable condition. Its completely stopped working within a period of 2 years from the date of rent agreement. The plaintiff had to get the same repaired from time to time. However, ultimately, the plaintiff had to rent a second genset cost of which was incurred by the plaintiff. The defendant has failed to provide any information with respect to the date of manufacturing of the genset or the date of purchase. The defendant has not filed any evidence on record to prove that it had got the genset repaired. False statements have been made in this regard. The plaintiff had abided by the terms of the rent agreement. The plaintiff vacated the premises on 03.12.2010 in the presence of representatives of the defendant. The defendant has made false allegation that the plaintiff tried to flee from the suit premises. There is no evidence to that effect. The defendant is not entitled to forfeit the security. It is liable to refund the security to the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 18 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
plaintiff. It is also liable to pay interest. Hence, it is prayed that the suit of the plaintiff may be decreed.
15. Sh. Ajay Fatiyal, Ld. Counsel for the defendant, on the other hand, would argue that the defendant company is closed and the property in question has also been disposed of. The security deposit made by the plaintiff was interest free security which was meant to protect the defendant's interest in case of any unforseen dispute or mishap which might occur in due course of time by the conduct of the plaintiff or any of its agents or in case any damage happens to the suit premises, the security deposit was to be used for rectification of the same and the remaining was to be returned. However, the plaintiff failed to hand over the peaceful and vacant possession of the suit premises after expiry of the rent agreement dated 16.08.2007 on 15.08.2010. It remained in possession of the suit premises. The plaintiff also ignored the clause of enhancement of rent by 20% after expiry of 3 years. The plaintiff admitted the contents of 20% increase in letter dated 06.03.2009 which is Ex. PW1/4. The plaintiff was under obligation to vacate the suit premises on 15.08.2010. The defendant asked to leave the suit premises. However, it did not vacate the same. On CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 19 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
07.12.2010, after more than 3 months of expiry of the rent agreement, the plaintiff under suspicious and oblique manner, vacated the suit premises. The rent paid by the plaintiff during the post termination period was not in compliance with the rent agreement. The plaintiff was legally obligated to pay the rent at increase rate of 20% over the initial rent. However, the plaintiff paid the rent at the original rate. The defendant company suffered monetary losses of Rs. 1,13,000/ due to vacation of the premises by the plaintiff on 07.12.2010. Further, the plaintiff had vacated the premises leaving it in very deplorable condition. The employees of the defendant refused to take possession of the suit premises after discovering its appalling condition. They asked the plaintiff to have the suit premises returned to its original state at the time of taking the premises on rent. The plaintiff left the premises in dilapidated condition and damage to DG Genset. The plaintiff had violated the provisions of Clause 7 (iv) of the rent agreement by making concrete additions or alterations which is shown in the photographs. The plaintiff has caused damage to the external as well as internal outlook of the property which is evident from the photos taken by the defendant at the time when the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 20 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
plaintiff was vacating the premises. The photos show that substantial damage was caused to the suit premises and to the genset which was provided by the defendant to the plaintiff. As per clause 7 (vii) of the agreement, it was the duty of the plaintiff to take care of the day to day repairs and maintenance of the tenancy premises. As per clause 7 (viii) of the agreement, the plaintiff was liable to maintain the genset and to hand over the same in perfect working condition at the time of vacating the premises. The PW1 has admitted in his cross examination that plaintiff was under
obligation to maintain the DG genset. The defendant company approached the plaintiff several times requesting to get the repair done or to give them authority to get the same done and to utilize the security deposit for that purpose. However, no satisfactory reply was made by the plaintiff. PW1 has admitted in his cross examination that no repairing work was done by the plaintiff in the rental premises. The defendant suffered monetary losses as it was not able to lease out the said premises due to dilapidated condition. Therefore, the defendant had issued the legal notice. PW1 has admitted receiving of the legal notice dated 26.05.2011. He has also stated that after receiving the notice, the plaintiff CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 21 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
did not carry out any repair in the suit premises. The legal notice issued by the plaintiff is an afterthought. The said legal notice was duly replied by the defendant. The defendant had tried to find an amicable solution, however, in vain. The defendant had obtained the quotations from the contractor. The price was finalized. An amount of Rs. 8,10,000/ was given in cash to the contractor towards repair works carried out by them during the period from 10.07.2011 till 25.08.2011 on various dates. The defendant company also obtained the quotations from Gopal Generator Service. The repairing work was got done from the said person and payment of Rs. 1,68,500/ was made for repairing of the genset. The arrears of rent were also pending equivalent to 20% increase rent. Thus, the defendant was entitled to receive sum of Rs. 10,91,500/ from the plaintiff.
Therefore, defendant is not liable to make any payment to the plaintiff. Further, the suit has not been filed by a duly authorized person on behalf of the plaintiff. The plaintiff has failed to prove the board resolution in accordance with law. Hence, it is prayed that the suit may be dismissed.
16. I have heard the submission of Ld. Counsels for the parties and carefully perused the material available on record CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 22 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
including the written arguments filed by the parties. My issuewise findings are as recorded hereinafter.
17. Issue No. 1: This issue reads as under:
"1. Whether the plaintiff has no cause of action to file the present suit against the defendant? OPD"
18. The onus to prove this issue was on the defendant. No arguments have been made on this issue. Even otherwise, the record is sufficient to show that the plaint discloses cause of action. The plaintiff has claimed that it had deposited an interest free security deposit of Rs. 4,50,000/ with the defendant. The said fact has been admitted by the defendant. It is also an admitted fact that the security deposit has not been refunded to the plaintiff by the defendant. It is a matter of trial to decide whether the plaintiff is entitled to recovery of the security amount or the defendant can adjust the security deposit towards the expenses stated to be incurred by the defendant in the repair of the premises and the genset. Thus, the plaint discloses a cause of action and the plaintiff has a cause of action. The issue is accordingly decided against the defendant.
19. Issue No. 2 : This issue reads as under:
"2. Whether the defendant is entitled to adjustment of the security deposit made by the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 23 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
plaintiff towards expenses incurred by the defendant in repair of the premises no. F66, Okhla Industrial Area, New Delhi, which was given on rent by the defendant to the plaintiff? OPD"
20. In the present case, it is an admitted fact that the plaintiff had taken on rent the suit premises from the defendant. It has also been admitted and proved that the plaintiff had given to the defendant amount of Rs. 4,50,000/ as interest free refundable security deposit.
21. There is one rent agreement dated 16.08.2007 on record which is Ex. PW1/2. This rent agreement is admittedly an unregistered rent agreement. Therefore, this unregistered rent agreement cannot be considered in evidence for its terms mentioned in the agreement including the period of the lease and certain other conditions. It is settled position of law that any lease agreement of immovable property from year to year or for any term exceeding one year, or reserving yearly rent is compulsorily registrable as provided under Section 17 of the Registration Act, 1908. Further, Section 107 of the Transfer of Property Act 1882 also provides that a lease agreement of a immovable property from year to year, or for any term CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 24 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
exceeding one year or reserving a yearly rent can be made only by a registered instrument. Section 49 of the Registration Act, 1908 provides as under :
"49. Effect of nonregistration of documents required to be registered. No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall--
"(a) affect any immovable property comprised therein, or "(b) confer any power to adopt, or "(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument."
22. Thus, it is settled position of law that any lease agreement of immovable property for a term exceeding 1 years, if unregistered, cannot be considered in evidence for the terms mentioned therein. It can be used only for collateral purpose. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titled M/s K.B. Saha and Sons Pvt. Ltd vs M/s Development Consultant Ltd. (2008) 8 SCC 564. Hon'ble Supreme Court of India in the said matter has discussed the effect of non registration of CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 25 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
a lease deed which was required by law to be registered. It has held as under :
"32. In the case of Bajaj Auto Limited vs. Behari Lal Kohli [AIR 1989 SC 1806] , this Court observed that if a document is inadmissible for nonregistration, all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sublet. It was also held in that decision that if a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose. Again this court in Rai Chand Jain Vs. Chandra Kanta Khosla [AIR 1991 SC 747] reiterated the above and observed in paragraph 10 as under : "10........the lease deed Ex. P1 dated 19th May, 1978 executed both by the appellant and the respondent i.e. the landlady and the tenant, Rai Chand Jain, though unregistered can be considered for collateral purposes and as such the findings of the Appellate Authority to the effect that the said deed cannot be used for collateral purposes namely to show that the purpose was to lease out the demised premises for residential purposes of the tenant only is not at all legally correct. It is well settled that unregistered lease executed by both the parties can be looked into for collateral purposes. In the instant case the purpose of the lease is evident from the deed itself which is as follows: "The lessor hereby demises House No. 382, Sector 30A, Chandigarh, to lessee for residential purposes only".
This clearly evinces that the property in question was let out to the tenant for his residence only...."
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"33. In the case of Rana Vidya Bhushan Singh Vs. Ratiram [1969 (1) UJ 86 (SC)], the following has been laid down:
"A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property. As stated by Mulla in his Indian Registration Act, 7th En., at p. 189 :
"The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it."
"34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that : "1. A document required to be registered is not admissible into evidence under Section 49 of the Registration Act.
"2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to Section 49 of the Registration Act. "3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
"4. A collateral transaction must be a transaction not CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 27 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immoveable property of the value of one hundred rupees and upwards.
"5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose." (emphasis supplied).
23. In the present case, the defendant in its WS and evidence of DW1 has relied upon various clauses of the said unregistered rent agreement. However, in view of the above mentioned position of law, the Court cannot consider those terms in evidence as using the document for the purpose of proving important clauses would not be using it as a collateral purpose as held by Hon'ble Supreme Court of India. Further, the tenancy between the parties is to be considered as month to month basis in view of the legal position. Hence, the submission of the defendant that the plaintiff was under a duty to vacate the suit premises after expiry of the alleged lease period does not have any legal basis. The submission regarding increase of 20% in the rent also does not have any legal basis as the agreement is unregistered. The defendant cannot claim any enhancement of rent from the plaintiff on the basis of unregistered agreement.
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24. Be that as it may, it is the duty of a tenant to maintain the premises and to handover the possession of the premises, at the time of vacating the premises, to the landlord in the same condition in which it was at the time of taking the possession. Therefore, the plaintiff was also under a duty to maintain the premises in good condition and to hand over the possession of the suit premises at the time of vacating the premises in such good condition.
25. The defendant has averred that the plaintiff had left the premises in dilapidated condition. It has also been averred that the plaintiff had left the genset in dilapidated condition. It is the claim of the defendant that it had spent the security deposit on repair of the premises and of the genset. The plaintiff has denied all these allegations. Therefore, the burden was on the defendant to prove that the plaintiff had left the premises and the genset in dilapidated condition and that it had spent the amount on repairing of the premises and of the genset.
26. Section 101 of the Indian Evidence Act provides that whoever desires any Court to give a judgment as to any legal right or liability dependent on the existence of the facts which he asserts, he must prove that those facts exists. The CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 29 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
Section also provides that in such case the burden to prove such a fact lies on that person. Section 102 provides that the burden of proof in a suit or proceedings lies on that person who would fail if no evidence at all were given on either side. Section 103 of the Act provides that the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. Section 104 of the Act states that the burden of proof is on the person giving the evidence to prove the facts that must be shown in order for the evidence to be admissible. Hence, in the present case also, the defendant had to prove all the averments made by it in the WS i.e. that the plaintiff had left the premises in dilapidated condition, that it had left the genset in dilapidated condition and that it had spent the amount on repair / renovation of the suit premises and on repair of the genset.
27. The defendant has examined DW1 Mrs. Nirmala Jaganathan to prove its averments. The witness has denied of taking over the possession of the suit premises on 03.12.2010. However, this averment does not appear to be a valid legal averment as the defendant itself has stated in the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 30 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
WS that it had issued legal notice to the plaintiff asking it to repair the premises, otherwise to give permission to it to repair the same. It is also averred by the defendant in the WS that it had repaired the premises once the plaintiff failed to do so. If the defendant was not in possession of the suit premises how could it get the same repaired as averred by it. Therefore, this averment of the defendant does not inspire confidence and therefore, it stands proved that the premises was vacated on 03.12.2010 by the plaintiff.
28. The witness DW1 in her affidavit of evidence has stated, inter alia, that the employees of the defendant Mr. Arvind Kumar and Mr. Harish had taken the photograph of the demised premises which was left by the plaintiff in utmost dilapidated and uninhabitated condition causing severe depreciation and damage to the external as well as internal outlook of the suit property, which is evident from the photographs taken at the time when the premises was vacated by the plaintiff.
29. The witness DW1 has relied upon various photographs which are Ex. DW1/1 to DW1/42. During cross examination of the witness, she would state that she had not taken those photographs and they were taken by the CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 31 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
employee from the phone camera. Suggestion was given to the witness that the photographs were manipulated.
30. Perusal of the testimony of the DW1 would show that the plaintiff had given suggestion to the witness that the photographs were manipulated. As per the statement of the witness, the photographs were not taken by her but by her employees. Those employees have not been examined by the defendant to prove those photographs. No certificate under Section 65B Indian Evidence Act was filed along with the photographs even though they are stated to be print out of the electronic record as they are stated to be taken through a mobile phone camera. In view of the same, the photographs Ex. DW1/1 to Ex. DW1/42 cannot be read in evidence of the defendant. Hon'ble Supreme Court of India in case titled Arjun Pandit Rao Khotkar Vs. Kailash Kushanrao Gorantyal (2020) 7 SCC 1, while approving the judgment of the Hon'ble Supreme Court of India in Anvar P.V. Vs. P.K. Basheer 2014 (10) SCC 470 has held that certificate under Section 65B (4) of the Evidence Act is a condition precedent for admissibility of electronic evidence. In the present case, the defendant has not filed any such certificate to prove the photograph and to make them admissible in CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 32 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
evidence. In the absence of examination of the person who had taken these photographs and in the absence of the certificate under Section 65B Indian Evidence Act, these photographs are unable to prove that the suit premises was left by the plaintiff in dilapidated condition.
31. The DW1 has also stated in her affidavit that the defendant had received quotation from Brij Kishore Building Contractor, having office at L893, Shani Bazaar Road, Sangam Vihar, New Delhi on 05.06.2011 with respect to repair of all kind of damages, paint, polish of roof wall, floors, doors and windows, sanitary and plumber repairs, electrical damage repairs of the suit property i.e. First and Second Floor measuring 6000 sq.ft. @ Rs. 70 per sq.ft. Collectively amounting to Rs. 4,20,000/ and for basement and ground floor measuring 6000 sq.ft. for Rs. 4,50,000/. The witness has also stated that the rates for the repairs for first and second floor were fixed @ Rs. 3,90,000/ and for basement and ground floor, the rates were finalized as Rs. 4,20,000/. She has also stated that collective sum of Rs. 8,10,000/ in cash was given to M/s Brij Kishore Building Contractor towards repair work carried out by them during the period from 10.07.2010 till 25.08.2011 on various dates CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 33 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
against charges for repairs of the premises including material expenses. She has also stated that the defendant had obtained the quotation from Gopal Generator Service for repair of 62.5 KVA on 12.06.2011 for Rs. 1,68,500/. The defendant company alloted the work for repairing of the genset to M/s Gopal Generator Service on 18.06.2011 for Rs. 1,68,500/. The defendant spent total amount of Rs. 9,78,500/ on repairing of the building and the genset. She has also stated that the defendant had suffered loss of rent equivalent to 20% of increase rent which comes to Rs.1,13,000/. Thus, it is averred, the defendant had spent amount of Rs. 10,91,500/ and therefore, the security deposit stood adjusted and nothing remained to be paid to the plaintiff.
32. In her evidence, the DW1 has relied upon certain documents which are quotations dated 05.06.2011 Mark A and Mark B stated to be issued by Brij Kishore Building Contractor, the photocopy of the receipt of Rs. 8,10,000/ stated to be paid in cash to Brij Kishore Building Contractor on 30.08.2011 Mark E, the estimate stated to be issued by Gopal Generator Service dated 12.06.2011 Mark F. All these documents have not been filed by the defendant in the present case. Rather, those documents have been filed in CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 34 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
another civil suit bearing CS DJ No. 7278/2016. However, the witness had been cross examined on these documents also in the present case. Perusal of the record would show that in the said case also, all these documents have not been proved as per law and therefore, they have been marked. During cross examination of DW1, suggestion has been given to the witness that documents Mark A to D are manipulated and they were not in possession of the defendant at the time of filing of the WS. Suggestion has also been given that no amount of Rs. 8,10,000/ was paid to Brij Kishore Contractors in cash and that the receipt Mark E is manipulated by the witness. Suggestion is also given that Mark F and Mark G have been manipulated by the witness. Further suggestion has been given that no payment was made to Gopal Generator Service as stated by the witness. She has also admitted that she had never shared in writing the estimates of building repairing and DG genset repairing with the plaintiff company. No record of any payment to any contractor or service centre has been proved by the defendant on record.
33. Perusal of the record would show that in the written statement, the defendant did not mention anything about CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 35 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
getting the repairing of the premises done or the repairing of the genset done. Those averments are beyond pleadings and therefore, they cannot be considered in evidence.
34. Be that as it may, even if those averments are considered by the Court, they are unable to prove that the defendant had spent amount on repairing of the suit premises and on the DG genset. All those documents have not been proved by the defendant as per law. The defendant did not examine M/s Brij Kishore Building Contractor and M/s Gopal Generator Service to prove the above mentioned documents. The burden was on the defendant to prove those documents. However, it has failed to prove them in accordance with the law of evidence and therefore, they cannot be considered in evidence while deciding the present suit. Admittedly, no proof of payment of the amount to any of those persons has been brought on record. The witness has stated that the payment was made in cash. However, it does not appear plausible that a company would pay such a huge amount to a contractor in cash. No agreement between the defendant and the contractor has been proved on record. Hence, I hold that the defendant has failed to prove, on the preponderance of probabilities, that it had spent the said CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 36 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
amount on repairing of the suit premises and on repairing of the genset. Once, the defendant has failed to prove that the premises and the genset were left by the plaintiff in dilapidated condition and that it had spent the amount of the security deposit on repairing of the suit premises and the genset, the defendant is not entitled to adjust the security deposit made by the plaintiff. Issue No. 2 is accordingly decided against the defendant.
35. Issue No. 3 : This issue reads as under :
"3. Whether the plaintiff is entitled to recover a sum of Rs. 5,10,750/ from the defendant being the security deposit given by the plaintiff to the defendant at the time of taking the property on lease vide lease dated 16.08.2007?OPP"
36. Before discussing this issue on merits, I deem it necessary to discuss one of the argument raised by the defendant during the final arguments. It has been argued that the suit has not been filed by competent person and that the board resolution has not been proved as per law.
37. I have considered the submission. Perusal of the record would show that PW1 Mr. Sanjay Sharma during his examination had tendered in evidence the copy of board resolution dated 13.07.2011 which is Ex. PW1/1. No objection regarding the exhibition of said document has been CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 37 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
taken by the defendant when the document was tendered in evidence. Even during cross examination of witness, no suggestion was given that the board resolution was forged and fabricated document. Hence, I am of the considered opinion that the board resolution has been proved as per law. Thus, it is shown that the suit has been filed by a duly authorized person.
38. In the present case, it is an admitted case of the parties that the security deposit of Rs. 4,50,000/ was a refundable security. The defendant had averred that it had adjusted the security amount towards the expenses incurred by it in repairing of the suit premises and of the genset. However, as discussed hereinabove, the defendant has failed to prove the said averments. In view of the findings of issue no. 2, I hold that the defendant cannot forfeit or adjust the security amount and that the plaintiff is entitled to recover a sum of Rs. 4,50,000/ from the defendant being the security deposit given by the plaintiff to the defendant at the time of taking the property on lease. The plaintiff has claimed amount of Rs. 5,10,750/ which includes the interest free security deposit of Rs. 4,50,000/ and interest amount of Rs. 60,750/. The issue of interest has been decided separately.
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In these circumstances, I hold that the plaintiff is entitled to recover from the defendant an amount of Rs. 4,50,000/ being the security deposit given by it to the defendant. The issue is accordingly decided in favour of the plaintiff.
39. Issue No. 4: This issue reads as under:
"4. Whether the plaintiff is entitled to claim interest on the amount found due against the defendant, and if so, at what rate? If yes, at what rate? OPP"
40. The plaintiff has claimed interest @ 24% p.a. There is nothing on record to show that it is an agreed rate of interest. Be that as it may, it is discretion of the Court to award interest pendente lite and future interest even if there is a specific contract between the parties. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titlted Central Bank of India Vs. Ravindra & Ors. SLP (C) 2421/1993 decided on 18.10.2001.
41. In the present case, the interest claimed by the plaintiff is very high. In the facts and circumstances of the case and taking judicial notice about the rate of interest charged by nationalized banks, I hold that the plaintiff is entitled to interest @ 10% p.a. from the date of filing of the suit till preparation of decree. As the transaction in question CS DJ No. 7277/2016 CNR No. DLST010003542011 Page 39 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
is commercial in nature, the plaintiff is also entitled to interest at the same rate from the date of decree till realization of the amount.
42. Issue No. 5 : Relief. In the light of discussion hereinabove, the suit of the plaintiff is decreed. The plaintiff is entitled to a decree of recovery of Rs. 4,50,000/. The plaintiff is also entitled to interest @ 10 % p.a. from the date of filing of the suit i.e. 25.08.2011 till realization of the amount. The plaintiff is also entitled to cost of the suit.
43. The plaintiff is directed to deposit the deficient Court Fee, if any, within 15 days. The decree shall not be executable unless the entire Court fee is paid. The fact of deficiency of Court Fee if any be mentioned in the decree.
44. Decree sheet be drawn accordingly.
Digitally signed by DINESHPronounced in the open Court DINESH KUMAR Date:
KUMAR 2023.06.02
on this 01st day of June 2023. 15:49:37
+0530
(DINESH KUMAR)
ADDL. DISTRICT JUDGE02
SOUTH, SAKET COURTS, NEW DELHI.
CS DJ No. 7277/2016
CNR No. DLST010003542011
Page 40 of 40 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023