Delhi District Court
M/S Ozone Overseas Pvt. Ltd vs M/S Instapower Energy on 21 November, 2023
IN THE COURT OF MS. ANURADHA SHUKLA
BHARDWAJ: DISTRICT JUDGE (COMMERCIAL
COURT)-02, SOUTH DISTT., SAKET, NEW DELHI
CS (Comm.) No. 363/2019
1. Ozone Overseas Pvt. Ltd.
Regd. office at :- H.40, Bali Nagar,
New Delhi-110015.
Through it Legal Manager:-
Sh. Ashish Goswami
S/o. Sh. Omendra Giri
...PLAINTIFF
Versus
1. Insta Power Energy Efficiency (P) Ltd.
Through its Director:-
Sh. Abhijit Rai.
Having its regd. office at:-
S-19, Panchshila Park,
New Delhi-110017.
Also at:-
457, Udyog Vihar, Phase-V,
Gurugram-122002, Haryana.
....DEFENDANT
Date of filing of the suit : 20.11.2019
Date of reserving judgment : 30.10.2023
Date of judgment : 21.11.2023
JUDGMENT
1. This is a suit for recovery of Rs.22,52,300/-(Rupees Twenty Two Lakhs Fifty Two Thousand Three Hundred CS (Comm.) No. 363/2019 Page 1 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. only) along with pendente lite and future interest @ 18% per annum filed by plaintiff against defendant.
2. The plaintiff is a Private Limited Company and is engaged in the business of manufacturing and sale of Glasses, Door controls and fabrication of Steel products and various other allied products etc. Case of Plaintiff is that plaintiff company was looking for a suitable office with warehouse space in Gurugram for expansion of its business and identified the entire building No. 457, Phase-V, Udyog Vihar, Gurugram, Haryana-122002 consisting of four floors including basement as suitable for their purposes after the required changes to be made in it to make it use- worthy. Accordingly, an unregistered lease deed dt. 11.09.2018 was executed between plaintiff company and defendant company and rent for the property was fixed at Rs.2,70,000/- per month + GST. As per terms of clause 7 of lease agreement, plaintiff company paid a sum of Rs.12,00,000/- as interest free security deposit to the defendant company.
3. It was agreed between plaintiff company and defendant company that all the previous partitions and wall coverings etc. would be removed within a period of 60 days by defendant company and the said period was to be rent free. It is stated that after the partition and other wall coverings were removed by defendant company, it was noticed that walls etc. were completely damp and dirty water was CS (Comm.) No. 363/2019 Page 2 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. oozing from the floor making the premises unfit for stocking inventory or for having a proper and attractive office. It is stated that plaintiff company was deceived in signing the lease agreement since defendant company did not disclose that premises had systemic issues of serious water seepage besides other problems which were not noticeable on account of all the panelliing and other cover- ups.
4. It is stated that plaintiff company was not handed over the possession by 10.10.2018 and the problems were also not rectified by defendant company, therefore, for stocking its goods/materials plaintiff company had to search for a new premises. Plaintiff took new premises situated in the revenue estate Opp. Madhusudan, Behrampur Road, Gurgaon, Haryana-122004 on monthly rent of Rs.3 lakhs + GST and also paid Rs.9 lakhs as security to new lessor/owner and lease deed was also executed. It is stated that due to delay in providing possession of building by defendant company, plaintiff company had to suffer heavy losses. It is stated that plaintiff company sent a legal notice dt. 18.12.2018 to defendant company, however, defendant company neither replied the said notice nor paid the amount despite repeated requests and demand made by plaintiff company.
5. Plaintiff is seeking decree of Rs.22,52,300/- in prayer alongwith interest @ 18 % per annum, both pendente lite CS (Comm.) No. 363/2019 Page 3 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. and future from the date of filing of present suit till its actual realization against the defendant company.
6. The defendant put in appearance upon service of summons and filed written statement. Defendant has taken preliminary objections that the suit premises i.e 457, Phase-V, Udyog Vihar, Gurugram, Haryana-122002 is not within the territorial jurisdiction of this court as such, the plaintiff has erred in instituting the present suit before this court. It is stated that despite taking possession of the demised premises on 12.10.2018 plaintiff company resiled from its commitment and committed a breach of lease agreement dt. 11.09.2018 by not paying monthly rent. It is stated that defendant has not been able to lease out the suit premises to other person because premises has been stripped down to a bare shell thus significantly reducing its value and being unfit for use by other people and as such, defendant is suffering huge financial losses. It is stated that since the plaintiff went back from its words and breached the agreement, defendant suffered substantial losses in stripping down the entire demised premises and all the assets that were stripped out were damaged in the entire process and have been rendered useless. It is stated that parties had agreed for a lock-in period of 3 years and it was agreed that in case of premature termination of lease deed by lessee/plaintiff, it would be liable to pay defendant rent for 4 months from the date of handing over possession and now since the plaintiff has breached the understanding CS (Comm.) No. 363/2019 Page 4 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. between the parties, plaintiff company is liable to pay Rs.10,80,000/- to defendant. On merits the defendant has denied contents of the plaint.
7. Replication was filed by plaintiff, wherein he reaffirmed the facts mentioned in plaint and denied the contents of written statement.
8. On pleadings, following issues were framed on 04.12.2021.
1. Whether this Court has no territorial jurisdiction to try and entertain the suit? (OPD)
2. Whether plaintiff is entitled to the recovery of an amount of Rs.22,52,300/- from the defendant?
(OPP)
3. Whether plaintiff is entitled to interest? If so, at what rate and for which period.
4. Relief.
9. Issue no.1:- Whether this Court has no territorial jurisdiction to try and entertain the suit? (OPD)
10.Ld. Counsel for the plaintiff argued that there has been no cross-examination of any of the witnesses on this issue. The plaintiff has not sought any right in the property.
CS (Comm.) No. 363/2019 Page 5 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. Plaintiff is only seeking recovery of payment which it had paid as rent to the defendant. It was argued that plaintiff and defendant were both working in Delhi. The payment by way of cheques was made in Delhi and the cheques were presented for encashment in Delhi. This court thus has jurisdiction to try the matter. The facts have not been disputed by defendant. The address of defendant as reflected in memo of parties is Panchshila Park, New Delhi. This court thus has territorial jurisdiction as defendant's registered office is situated in Delhi and part of cause of action has arisen in Delhi. The issue is decided in favour of plaintiff and against the defendant.
11.Issue No.2:-Whether plaintiff is entitled to the recovery of an amount of Rs.22,52,300/- from the defendant? (OPP)
12.The amount of Rs.22,52,300/- is being sought by the plaintiff on three different accounts, the first being amount of Rs.52,300/- which was given by it to the defendant for registration of lease deed.
Ld. Counsel for plaintiff argued that an amount of Rs.12 lakhs was paid by the plaintiff as security and an amount of Rs.52,300/- was paid for registration of lease deed. This fact has been admitted by DW-1 in his evidence. DW-1 has tendered in his evidence e-mails exchanged between the parties. In Ex.DW1/4/P-1 it has been mentioned so. On behalf of defendant Mr. Satyajeet CS (Comm.) No. 363/2019 Page 6 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. R. Vaish has written to Anuj Vasudev asking Mr. Alok, to whom the copy of mail is marked to transfer the security deposit of Rs.12 lakhs alongwith Rs.50,000/- for stamp papers and has given his bank details in the said mail. There is no specific denial in the written statement that this amount of Rs.52,300/- was paid by plaintiff to defendant, which it has claimed was for registration of lease deed, which deed was never got registered. All that the defendant says in reply is that plaintiff is not entitled for any recovery. The payment was made vide cheque Ex PW1/6A. DW-1 was shown the cheque and was told that this cheque was given for stamp duty. The witness stated that he did not know. He was confronted with Ex.DW1/4 and admitted that amount of Rs.50,000/- was demanded for stamp duty by the defendant. The witness did not say on what account if not for the stamp duty this amount was given to the defendant. The defendant, therefore, is liable to refund the amount of Rs.52,300/- to the plaintiff.
13.The next head is amount of Rs.12,00,000/- paid by plaintiff as interest free security to the defendant.
In so far as the amount of Rs.12 lakhs-the security deposit- is concerned, the amount was paid vide two cheques Ex.PW1/5 and PW1/6 amounting to Rs.6,00,000/ each. DW-1 has accepted the receipt of these amounts towards the advance, however, both the parties have throughout referred to this amount as the security deposit. Plaintiff claims that since defendant did not hand over CS (Comm.) No. 363/2019 Page 7 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. vacant physical possession of the property in a fit to use condition to the plaintiff at any point of time therefore, it is liable to return the amount of security alongwith interest to the plaintiff; defendant on the other hand argues that the possession was handed over to the plaintiff on 12.10.2018, defendant in the meanwhile was venturing for other properties also and after it got another property which suited better to it, the plaintiff pointed out several flaws in the property of defendant with a view to evade the forfeiture of security deposit.
14.The defendant in this case is claiming that it was not his liability to carry out repairs and renovations while plaintiff is claiming otherwise. The most relevant question thus is as to whether there was any understanding between the parties qua handing over of the property by the defendant to the plaintiff. The only document which can be of any help in ascertaining the understanding between the parties is the lease deed. It was argued by Ld.Counsel for the defendant that the lease deed cannot be looked into as it was unregistered. The lease agreement signed between the parties required mandatory registration under Section 17 of registration Act. The document admittedly was not registered- though the money for stamp duty was provided by plaintiff. Its terms cannot be looked into for ascertaining as to when, how and for what purpose the tenancy was created in violation of section 49 of registration Act.
CS (Comm.) No. 363/2019 Page 8 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. In terms of judgment cited hereinabove the lease deed cannot be looked into for ascertaining rent and creation of tenancy or the period of tenancy as the court held specifically that to hold the property only for a fixed period of two years is one of the important terms of the lease itself. It is impossible to agree that proof of such a term of the tenancy will be merely evidence of a collateral transaction. The argument of Ld. Counsel for defendant that the agreement could be looked into for the purposes of lock in period if the plaintiff was relying it for rent free period of two months is thus negated in view of the judgment relied upon by defendant's counsel himself.
15.Section 49 however, says that an unregistered document requiring mandatory registration can be looked into for collateral purpose. What can be a collateral purpose has been decided by various courts in catena of judgments. In K. Panchapgesa Ayyar and Ors V K. Kalyansundaram Ayar & Ors. it was held as under :
" To sum up it is well settled in a long series of decisions which have since received statutory recognition by the Amending Act of 1929 (vide the concluding words of the new proviso to section 49 of the Registration Act) that a compulsorily registrable but an unregistered document is CS (Comm.) No. 363/2019 Page 9 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd.
admissible in evidence for a collateral purpose that is to say, for any purpose other that that of creating, declaring, limiting or extinguishing a right to immovable property".
In Subraya M.N v Vittala M.N (2016) 8 SCC 705 it was held as under:-
"even without registration a
written document of family
settlement/ family arrangement
can be used as corroborative
evidence as explaining the
arrangement made thereunder
and conduct of the parties.."
The lease agreement under such circumstances can be looked into to ascertain the status of property at the time of handing over of the possession and understanding the stands of the parties qua the repairs etc. to be carried.
16.As per clause 18 of the unregistered lease deed Ex.PW1/4, plaintiff was liable to undertake day to day repairs while the structural repairs to the building such as leakages in the roof etc. were to be attended to by the lessor within reasonable time. The responsibility taken by plaintiff was of renovation of the building as per its own requirement. CS (Comm.) No. 363/2019 Page 10 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. The structural repairs were agreed to be carried by defendant and that too within a reasonable time.
17.Plaintiff claims that issue of seepage grew to a large extent after wood paneling etc. were removed from the wall and the flooring. It was argued by Ld.Counsel for plaintiff that on 12.11.2018, plaintiff's Accounts and Finance Manager wrote to Mr. Satyajeet R. Vaish that the building had been checked and was found inhabitable. It was stated that with current status plaintiff was unable to shift in the building and that they would occupy once the building was in occupying condition. It was stated that rental would be purely dependent on taking the building in use. The major issues in the building were also mentioned in the mail. In response to this, Mr. Satyajeet R.Vaish stated that the communications be sent to H.R.Vaish and Abhijeet Vaish, who knew everything about the matter. Therefore, further communications were held between these two and the plaintiff. For later reference it is important to note here that plaintiff was asked to contact Mr. H.R.Vaish.
18.The plaintiff had offered to take part possession and pay part rental till the basement was made habitable. In this regard Ld. Counsel for plaintiff relied upon the mail dated 22.11.2018 that was sent in reply to the mail dated 18.11.2018 of the defendant wherein it was specifically written that the averments made in the mail dt. 18.11.2018 were false and that pictures along with newspaper could CS (Comm.) No. 363/2019 Page 11 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. be clicked and sent as legal proof. The mail stated that terms of discussion was that they needed a bare space and in usable condition. On stripping of furniture and coverings the seepage had become evident on all the levels. The building was not in usable condition. Selective whitewash was not acceptable to the plaintiff. The plaintiff made a proposal that since they were facing huge losses and disruption of work ground floor could be handed over to them and the building could be fixed. It was stated that once the seepages were addressed, the plaintiff would takeover all the building and the rentals would be paid according to hand overs.
19.There thus was a clear proposal given by plaintiff to the defendant, which shows that till the date of writing of email, plaintiff had all the intentions of shifting to the property. This also washes away argument of Ld counsel for defendant that the plaintiff backed out from the agreement as it had found another property in the vicinity. On the contrary it strengthens argument of plaintiff that the plaintiff had to look for an alternative property because of rigid approach of defendant in not permitting part occupancy till the needed repair work was done in the basement.
20.Ld. Counsel for the defendant argued that the plaintiff's witness Puneet Dhir has himself admitted in his cross examination dated 12.05.2022 that the possession of the CS (Comm.) No. 363/2019 Page 12 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. premises was handed over to the plaintiff as per records on 12.10.2018. It was argued that PW-1 went on to admit in his cross examination that the plaintiff had got carried some work in the premises. The witness has stated in his cross-examination that as per record possession of demise premises was handed over to plaintiff company on 12.10.2018. Admitting that some work must have been carried out by plaintiff at the demised premise he stated that he did not exactly know what work was carried on by the plaintiff. In fact, this question has reference to para 13 of internal page 8 of replication where the plaintiff has stated that it tried hard over 30 days to correct the shortcomings of said property. The plaintiff has also written in the replication para 13 : "after a lapse of only one month from the date of handing over of possession to the shock of defendant (sic), as the defendant was fully aware, being informed on day to day basis, that the property was in too bad condition and not habitable".
21.Ld. Counsel for the plaintiff on the other hand has argued that the plaintiff never took the possession of the premises. It relied upon the mail dated 27.11.2018, wherein the defendant himself stated that it was unable to agree to first make the ground floor available and offer possession of premises on piecemeal basis which shows that possession of entire premises was never handed over to the plaintiff. This mail was in response to mail of plaintiff dt. 22.11.2018 wherein while describing the inhabitable state CS (Comm.) No. 363/2019 Page 13 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. of the premises plaintiff stated that if defendant agreed it could take possession of ground floor and pay proportionate rent, while the basement was repaired. It was argued by Ld. Counsel that there was no need of this mail, if the possession of the premises had been taken over by the plaintiff finally. He argued that symbolic possession was taken for carrying renovation, however, during this period the possession was joint as defendant was also to carry out repair work.
22.He further argued that the witness of defendant DW-4 has stated in his evidence that the plaintiff was not present at the time of inspection (referring to the report of inspection which defendant got carried in December, 2018 & January, 2019). He stated that at the time of inspection both times (December, 2018 and January, 2019) he had not called plaintiff's representative. It was argued that if the plaintiff had taken the possession as claimed by the defendant the inspection of the premises was not possible in absence of the plaintiff or its representative and without taking key of the premises from the plaintiff.
23.A perusal of record would show that though the possession was handed over to the plaintiff vide Ex.DW1/A, the purpose was restricted to carrying the necessary repair and renovation as plaintiff required. The possession for the purposes of occupancy was still being negotiated on grounds of inhabitable conditions of property regarding CS (Comm.) No. 363/2019 Page 14 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. which the parties have their own stands.
24.It was argued by Ld. Counsel for plaintiff that the defendant had misrepresented to plaintiff that premises was lying unoccupied from 2017 when it was vacated by sister concern of the defendant. He argued that DW-4 in his cross-examination admitted that the premises was vacated by defendant's sister concern in 2013 and was lying vacant since then. He argued that the fact that premises was unoccupied for such a long time shows as to why the same was in such a bad shape with all seepages etc, which became evident after stripping down of paneling.
25.Per contra Ld.Counsel for defendant argued that it had got the premises inspected by Mr.Arunanshu Mullick (retd. Executive Engineer, C.P.W.D.) who submitted his report Ex.DW-1/6 and photographs Ex.DW1/8A to E. Admittedly plaintiff was not a part of inspection conducted by DW Mullick. The witness has himself admitted that he did not give notice of inspection to the plaintiff during his two visits. The inspections where the plaintiff was not even given notice to participate cannot be considered as unbiased. The inspection otherwise was conducted in December and January and defendant having carried necessary repairs by then cannot be ruled out. Thus as agreed by Ld.Counsel for plaintiff this report cannot be looked into to assess status of property in November, 2018. CS (Comm.) No. 363/2019 Page 15 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd.
26.An inspection was also carried by plaintiff in the beginning of November, 2018 and it has examined PW-1, PW-3 & PW-4 in this regard. With respect to this inspection by the plaintiff before 12.11.2018 is concerned PW-3 stated that the representative of defendant was also present at the time of inspection and that defendants had also taken photographs. No suggestion was given to the witness that the photographs were not sent to the defendant or that the defendant's representative were not present and did not take the photographs themselves. These photographs (taken by defendant) have not been placed on record by the defendant. Nor was it suggested to the witness that defendant's representative had not taken any photograph at relevant time.
27.PW-1 has placed on record the photographs taken at the spot as Ex PW1/7 (A to M). PW-3 who took the photographs at the time of inspection has also appeared and stated that he had taken these photos at the spot from his mobile. In his cross examination he stated that there was seepage on walls. Defendant asked from this witness in cross examination that two of the photos were of ground floor and not basement, which suggestion was denied by the witness, who stated that all the photographs were of basement only. However, DW1 in his cross examination admitted that Ex.PW7/B, I & J to L were of the basement of the property.
CS (Comm.) No. 363/2019 Page 16 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd.
28.PW-2 Sagar Verma in his cross-examination stated that he had received soft copies of pictures from PW-3. PW-3 stated that he had sent these photographs to PW2. The two witnesses thus have corroborated each other. He also stated that he had sent these photographs to the defendant also. No suggestion was given to the witness that photographs were never sent to the defendants or by PW-3 to PW-2.
29.Ld. Counsel for defendant stated that the dampness as per this witness (PW-3) could have been seen by anyone. Ld. Counsel for the plaintiff on the other hand argued that this person was present in the inspection of the premises after the stripping was carried and had no role except that of taking photographs. His version that dampness could be seen by anyone cannot be considered to mean that the same would have been visible even before removing of fixtures and paneling.
30.A bare perusal of photographs Ex.PW1/7 would show that property needed structural repair; even in the photographs filed by defendant seepage in the walls can be seen. The case of defendant is that his products which were to be stored were of iron and steel and thus prone to rusting because of dampness. As per lease agreement issue of seepages was to be addressed by defendant, who did not do it and did not even agree to handing over of part CS (Comm.) No. 363/2019 Page 17 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. possession till the repair was carried in the basement.
31.Ld. Counsel for defendant has argued that plaintiff is liable for rent w.e.f date of possession and cannot ask for rent free possession for first two months as it was a component of lease agreement, which cannot be relied upon being an unregistered document and has in this regard relied upon judgment in case titled as Iswar Dutt & Anr. vs. Sunder Singh & Anr. 1959SCC Online J&K 27 wherein it was held that the combined effect of proviso of Section 49 of the Registration Act and of Section 91 of the Evidence Act in the present case is that the document cannot be received in evidence nor can the terms of lease deed be proved by any other evidence.
32. In AIR 1945 NAG 69, the Hon'ble Court referred to Indian Registration Act by Mulla and quoted "where a document is inadmissible in evidence for want of registration no oral evidence can be received having regard to section 91 of Indian Evidence Act 1872, of the terms of transfer effected by the document."
33. With reference to above judgments Ld.Counsel argued that Legal notice demanding money from a later date in terms of lease deed could not be taken in evidence. What, however, is relevant is that both these documents have been relied upon by the defendant himself and are Ex DW1/4A and DW1/9. Defendant is placing reliance on CS (Comm.) No. 363/2019 Page 18 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. these documents to support its claims against defendant.
34.Even if these documents are discarded partially to the benefit of defendant; in Ex.DW1/4-A plaintiff has categorically stated that they were willing to take part possession of ground floor till the maintenance was carried in the basement and the rent was sought to be paid according to the hand overs. The defendant has replied this mail rejecting the proposal and saying that they were unable to agree to first make the ground floor available and offer possession of the premises to plaintiff on piecemeal basis. A reading of these two emails would clearly show that though the symbolic possession was handed over to the plaintiff on 12.10.2018 for starting the work of renovation, the actual physical possession of premises with all repairs etc. done was not handed over to the plaintiff and that the rent would have become due only after the premises in ready to use condition was handed over by the defendant. The defendant admittedly did not ask for the rent from the plaintiff till these objections were taken. In fact in absence of reference to lease deed the defendant cannot claim the rent w.e.f 11.11.2018 also. Since required repairs were not carried the rent did not start to accrue at any point of time.
35.It was argued by Ld. Counsel for defendant that the plaintiff was in negotiation with other parties and after executing the deed etc. with defendant, they executed yet CS (Comm.) No. 363/2019 Page 19 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. another deed with that party and took on Lease the said property. It was argued that to avoid/escape the liability under the lease deed, the plaintiff has come up with excuses. The argument was rebutted by Ld. counsel for plaintiff, who argued that the plaintiff has properties everywhere in the country and the taking on rent of stated property had got nothing to do with the dispute in this matter. As mentioned hereinabove, plaintiff was persuading defendant to give part possession till repairs were made and it was defendant who did not agree for the same. Further, Ld.Counsel for defendant has argued that plaintiff has taken several warehouses on lease and the two transactions were not related in any manner. Had the defendant agreed to condition of part possession and plaintiff had still refused to take possession of property the defendant could have validly raised this issue of plaintiff having abandoned idea of taking defendant's property on rent as it had taken some other property in the vicinity, the fact, however, is not so.
36.The defendant had issued a letter on 15.12.2018 telling the plaintiff that because of non compliance of terms of lease it was no longer bound to honour the terms of lease deed. The document is Ex DW1/9 and has not been challenged in the cross examination of DW1. The fact, however, remains that the lease deed being an unregistered document its terms are otherwise not a consideration with the court. Relevantly the defendant has not quantified its CS (Comm.) No. 363/2019 Page 20 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. losses in this letter nor is talking about any setting off. Further defendant itself having declared the lease deed as having been frustrated on 15.12.2018 and that it was bound by terms of it cannot subsequently claim rent for subsequent periods up to 2021 from the plaintiff.
37.Plaintiff also issued a legal notice dated 20.12.2018 which is Ex PW1/9 to the defendant asking it to refund the security deposit and the amount of stamp duty, however, defendant did not reply the said legal notice. DW-1 in his cross-examination stated that the legal notice was not replied as it was addressed to Instapower Ltd. when the defendant in fact is M/s. Instapower Energy Efficiency Private Ltd. It was argued by Ld. Counsel for plaintiff that the deceit of defendant is apparent since it was agreed by witness in his cross-examination that both the companies operate from same address and directors of the companies are also common. Relevantly Ex.DW1/4 the document relied upon by defendant himself has been written by Himangshu R. Vaish, who signed as Managing Director Instapower Ltd. The defendant is relying upon challan etc ExDW2/1 &3 which are issued on the letter head of M/s Instapower Ltd. The defendant thus cannot take a plea that M/s.Instapower Ltd. had no role whatsoever in the entire process. The defendant has not denied service of legal notice asking for refund of security amount etc, which was a clear announcement that tenancy stood revoked even before it came to exist. The tenancy thus CS (Comm.) No. 363/2019 Page 21 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. stood terminated on part of both the parties in the middle of December 2018.
38.It was argued by Ld. Counsel for defendant that the defendant in fact suffered significant losses on account of breach of contract by the plaintiff. As per the defendant it had offers from other prospective tenants at higher rates which it turned down because of the lease deed executed between the parties. The witness of defendant i.e DW-2 during cross examination dated 02.09.2022 in answer to the question as to when sister concern of defendant shifted from the premises stated that the sister concern had shifted from the premises in 2013. The reference to 2013 came in subsequent questions also. It was argued by Ld. Counsel for plaintiff that the property was vacated by sister concern of its in 2013 and it was lying vacant since then. The premises thus was lying vacant for five years before the plaintiff decided to take it on rent. The defendant's claim that it had several prospective tenants at relevant time thus is not believable. If the defendant had several options with it the property would not have remained vacant for five years. Subsequent non renting of property has been dealt with hereinabove. The demand of rent for entire period from December, 2018 till July, 2021 therefore, is unreasonable and illogical.
39.It was argued that the defendant tried to lease out the property after termination of lease deed but could not find CS (Comm.) No. 363/2019 Page 22 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. good tenant as the property had been completely stripped. In this regard it has already been observed hereinabove that the property was lying vacant for five years even with all fittings and furnishings and, therefore, it cannot be presumed that non renting subsequently was on account of stripping of the property as claimed by defendant.
40.It was argued that a sum of Rs.20,00,000/- was spent on stripping down and loss of fittings and fixtures as deposed by DW1 in his affidavit. Defendant in support of its contentions of expenses incurred has examined DW2, who stated that fittings, furnitures, AC wings, false ceiling, light tiles etc were stripped down. He was overseeing work of loading of scrap and furniture into the trucks and seven number of trucks were loaded. The document relied in this regard is Ex DW2/1 to 4. Nowhere in these documents the amount paid to carriage is mentioned, further no distinction is drawn on fixtures & fittings and furniture. The defendant has not been able to justify as to on what basis figure of Rs.20,00,000/ has been arrived at. Relevantly, defendant has stated in WS that it would file a counter-claim which was never filed. The defendant thus has not given any reliable evidence on this issue and thus cannot be awarded any amount as set off on this account.
41.Defendant has claimed that it had to spend Rs.1,00,000/- in making ground floor and first floor habitable. The document relied in this regard is Ex.D2/5 which is CS (Comm.) No. 363/2019 Page 23 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. computer print out of invoice of cement and dust amounting to Rs.9,775/-. He spent Rs.50,032/- on the pending work vide Ex.DW2/6. He spent Rs.20,060/- on purchase of paints etc. vide Ex. DW2/7. Rs.14,927/- on purchase of putty etc. vide Ex.DW2/8 and amount of Rs.15,387/- on purchase of different materials of repair vide Ex.DW2/10. Rs.12,000/- was spent on purchase of falas door pala repairing etc. vide Ex.DW2/9. The witness in cross-examination stated that goods under invoices DW2/6 to 10 were handed over to him by supplier and he had handed over the same to the accounts department. He admitted that he did not have record to show that his company made payments in respect of these supplies. Though Ld. Counsel gave suggestion that no material was supplied he did not specifically put to witness that documents produced were forged and fabricated. The witness has categorically deposed that the items mentioned in these documents were received in his office. The goods so received were utilized in repair of ground and first floor to make them habitable after the stripping which was to be carried as per requirement of plaintiff.
42.Ld. Counsel for defendant has relied upon judgment in case titled as M/s. Amersey Industries & Exports Vs. CRB Capital Markets Ltd. ILR (2004) II Delhi 782 to argue that it was entitled to set off the recoverable amount against the security deposit lying with it.
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43.It is otherwise settled law that the security is deposited to secure the losses if any suffered by the person taking such deposit on account of any action of the other party because of which such losses might occur. The defendant in my opinion is entitled for recovery of such amount as it had to spent on making ground floor and first floor habitable after they were stripped to basic as per requirement of plaintiff. This amount as per evidence led by DW-2 is Rs.1,22,181/-. Plaintiff has also not denied that property was stripped to make it usable by plaintiff. The plaintiff, therefore, is entitled for recovery of Rs.10,77,819/- out of security deposit of Rs.12 lakhs after deducting the expenses incurred by defendant in making the ground and first floor habitable.
44.Defendant is claiming that the cost of furnishing the premises of 9000 sq. ft. is Rs.45 lakhs. Defendant has not led any evidence as to on what basis he is seeking such amount. Ld. Counsel for defendant has argued that since the defendant's testimony in this regard has remained unrebutted, defendant would be entitled for such recovery. He relied upon the judgment of Hon'ble High Court in Jasdeep Singh Kalsi Vs. State, 2018 SCC Online 129 77 in this regard. The answer to this would be that the statement of witness in affidavit is beyond pleadings as defendant has not mentioned any such amount in the written statement. The evidence beyond pleadings cannot be considered and the set off claimed by defendant on this CS (Comm.) No. 363/2019 Page 25 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. account, therefore, is rejected.
45.PW-1 has mentioned in para 12 of its affidavit that on account of defendant's default in providing possession of building to the plaintiff, it incurred heavy losses in terms of revenue, profits and goodwill. The plaintiff has claimed damages on this account to the tune of Rs.10 lakhs. Section 73 of Contract Act lays down the provisions of loss and damage caused by breach of contract. Section 73:- Compensation of loss or damage caused by breach of contract:-
When a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or damage caused to him, thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from breach of it..... Compensation for failure to discharge obligation resembling those created by contract; when an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken its contract. A bare reading of section would show that damages on account of breach of contract is to be computed on actual loss, if any, suffered by the person claiming such damages. In cases of non-fulfillment of CS (Comm.) No. 363/2019 Page 26 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. obligation also the person seeking damages on account of breach of contract can be compensated for what he actually suffered on account of non-fulfillment of obligation in addition to return of whatever was invested by such person.
46.Plaintiff claims that it had to enter a fresh lease which it executed in February, 2019 and thus suffered losses. The computation of losses has not been mentioned anywhere in the written statement. Defendant has pleaded that plaintiff had executed another lease in the same area in November, 2018 itself, which lease deed has not been disclosed by plaintiff anywhere in the suit. The plaintiff thus had taken on lease two properties within a short span of time of three months. What it is entitled to as per law is return of the money which was deposited/paid by it to the defendant alongwith interest and such amount which it could show was spent in addition/or over and above this amount. As stated hereinabove, plaintiff has led no evidence to show that it had to spent extra money which was more than what was agreed between him and plaintiff on acquiring the second lease. The lease referred to by plaintiff in his suit had a deposit of Rs. 9 lakhs and monthly rent of Rs.3 lakhs. In any case witness of plaintiff has admitted in cross-examination that the said property was taken on rent by M/s. Ozone Secutech, which is a different entity from the plaintiff. The plaintiff has also not shown by way of evidence as to how he arrived at the computation of Rs.10 CS (Comm.) No. 363/2019 Page 27 of 28 M/s. Ozone Overseas Pvt. Ltd.
vs. M/s. Instapower Energy Efficiency Pvt. Ltd. lakhs. The relief of Rs.10 lakhs sought by plaintiff on account of damages is therefore, rejected.
47.Issue no.3:- Whether plaintiff is entitled to interest? If so, at what rate and for which period.
48.Plaintiff has claimed interest @ 18 % per annum. No document has been filed indicating an agreement between the parties for an interest to be paid @ 18% per annum. The only document on record is lease deed which cannot be looked into being unregistered. There is thus no basis with the plaintiff to ask for interest @ 18% per annum, however, it cannot be denied that plaintiff was deprived from using its money amounting Rs.11,30,119/- for a long time. In my opinion, the interest of justice will be sub- served if the plaintiff is granted interest @ 9% pendent-lite and future.
4. Issue No.4-Relief:- In view of above, a decree is hereby passed in favour of plaintiff and against defendant in the sum of Rs.11,30,119/- alongwith pendent-lite and future interest @ 9% per annum. Decree sheet be prepared accordingly. Suit stands disposed off. File be consigned to record room.
(ANURADHA SHUKLA BHARDWAJ) District Judge(Commercial Court)-02 South Distt. Saket, New Delhi.
Announced in open court on 21.11.2023.
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