Calcutta High Court
Abheya Realtors Private Limited vs Ssipl Retail Limited & Another on 24 December, 2009
Equivalent citations: AIRONLINE 2009 CAL 16
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
GA No. 2029 of 2009
CS No. 216 of 2009
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ABHEYA REALTORS PRIVATE LIMITED
-Versus-
SSIPL RETAIL LIMITED & ANOTHER
For the Plaintiff: Mr Abhrajit Mitra, Adv.,
Mr Jishnu Chowdhury, Adv.,
Mr S. Kakrania, Adv.
For the Defendant No. 1: Mr Ranjan Deb, Sr. Adv.,
Mr D. Dey, Adv.,
Mr R. Baliyal, Adv.
For the Defendant No. 2: Mr Debnath Ghosh, Adv.,
Mr Partha Mukherjee, Adv.
Hearing concluded on: December 21, 2009.
BEFORE
The Hon'ble Justice
SANJIB BANERJEE
Date: December 24, 2009.
SANJIB BANERJEE, J. : -
The plaintiff owns a shop-room measuring about 1077 sq.ft. on the ground
floor of one of the units at the Astral building complex on up-market Gurusaday
Road. The plaintiff purchased the shop from the proforma defendant. The
proforma defendant executed a lease on August 26, 2008 in favour of the first
defendant. The proforma defendant also entered into a second agreement to
provide certain facilities to the first defendant. The plaintiff claims to be entitled
to the proforma defendant's rights under the agreements following the plaintiff
having acquired the shop.
The lease provides for a lock-in period of three years from the date of
commencement of the lease. It stipulates that if the first defendant was desirous
of surrendering the lease during the lock-in period, it would be liable to pay the
monthly rent payable for the remaining lock-in period. The lessor was similarly
locked in for three years without being entitled to terminate the lease during
such period unless the lessee breached the covenants thereof. The following three
clauses in the agreement are of some significance:
"4.3. Lock-in: There shall be a lock-in period of the term of 3 (three) years
from the date of commencement of this lease and neither party shall be
entitled to terminate the lease during such lock in period, except in case of
breach by the other party. After expiry of two years and 6 months, the
Lessee shall have the option to terminate the lease by giving a six months
written notice in advance to the Lessor."
"4.5.4. Notwithstanding the other provisions hereof it is expressly agreed
that if the Lessor terminates the lease during the said lock-in period of this
lease mentioned in clause 4.3 above, due to non payment of any amounts
or any breach of any covenants term and conditions hereof by the Lessee
or in case the Lessee is desirous of surrendering or otherwise giving up the
lease during the Lock-in period, the Lessee will be liable to pay the monthly
rent payable by it for the entire remaining Lock-in period of this lease.
Lock-in period shall also include the notice period as mentioned in clause
4.3 above."
"4.8. Stamp Duty etc.: The Stamp Duty and Registration Charges in
respect of this Deed shall be borne by the Lessee. Subject as aforesaid,
each party shall be liable to bear its own costs for the preparation and
execution of this Deed."
The letter of atornment issued in favour of the plaintiff by the proforma
defendant was accepted without reservation by the first defendant. The plaintiff
has raised bills on the first defendant on account of the monthly lease rents and
complains that no payment in respect thereof has been made. The plaintiff refers
to a letter of July 15, 2009 issued by the first defendant seeking to terminate the
agreement with effect from July 31, 2009. The third, fourth, fifth and sixth
paragraphs of the letter have been emphasised by the plaintiff:
"3. That, as per Clause 4.3 of the Agreement, the period of 3 years was
the lock in period on the Lessee. That however in the light of the current
economic slowdown and global recession, the Lessee has been incurring
huge losses in its business from the premises. Due to the enormous
liabilities and bad future prospects the Lessee will be unable to operate its
business from the Premises and is not in any position to pay the
rent/amenities charges for the Premises.
"4. Consequently, we are unable to continue the business from the
Premises except at a loss, which is impermissible in sound business
practice. On the one hand the visitors to the Complex appear to have
reduced, and on the other hand the conversion of "customer per visitor"
ratio has drastically reduced. One main reason for our taking up a store in
your Complex was an implied assurance of business, which unfortunately
has now fizzled out. No special measures seem to have been adopted by
you to promote the Complex, and to help the business therein.
"5. That the Lessee vide this letter is exercising its right to terminate the
Agreement w.e.f from July 31, 2009 by serving upon you this notice of
termination.
"6. Though in terms of clause 4.3 the Agreement is subject to lock in
condition, the financial slowdown amounts to a Force Majeure
circumstance coupled with your failure to act in taking any measures to
promote the Complex. The lock in condition is consequently inapplicable
under the present Force Majeure circumstances."
The plaintiff says that the parties agreed to liquidated damages to the
extent of the unpaid lease rent for the balance lock-in period which was a
genuine pre-estimate of the damages suffered or likely to be suffered by the
lessor consequent upon the earlier determination of the lease by the first
defendant. The plaintiff asserts that the first defendant is impecunious and
unless the lease rent for the balance lock-in period is secured, the plaintiff may
not be able to realise such sum after obtaining the decree that is certain to be
made in its favour. The plaintiff contends that to allow the first defendant the
luxury of waiting till the trial would amount to putting a premium on dishonesty
and encouraging the breach of an express covenant.
The first defendant says that there is no case for attachment before
judgment which has been made out and it would be unjustified to secure a claim
in damages and to elevate such a claimant to the status of a secured creditor.
The first defendant suggests that whatever may have been the agreement
between the parties, it is inconceivable that the shop would remain idle for the
remainder of the lock-in period if the plaintiff were diligent. The first defendant
says that the shop is capable of fetching substantial rent, albeit at a lower rate,
and it would be unfair to keep the first defendant's money blocked without
requiring the plaintiff to mitigate the damages.
The first defendant raises a more fundamental issue. It says that the lease
deed is unstamped and unregistered and the provisions of both the Stamp Act,
1899 and the Registration Act, 1908 would preclude its terms being looked into
and the material clause relating to alleged liquidated damages being enforced.
According to the first defendant, even though it was obliged to have the
document registered upon paying due stamp duty thereon, it was incumbent on
the plaintiff to have completed the registration if the plaintiff sought to assert a
right thereunder. On merits, the first defendant claims that the averments in the
petition are woefully short of the material that need be brought by a plaintiff
seeking attachment; that there is nothing by way of evidence presented by the
plaintiff that the first defendant had any asset within jurisdiction that it
attempted to remove.
The first defendant has referred to Section 35 and the related provisions of
the Stamp Act and to Sections 17 and 49 of the Registration Act read with
Section 107 of the Transfer of Property Act. According to the first defendant, the
agreement remains inchoate and cannot be looked into for any purpose. It claims
that clauses 4.3 and 4.5.4 of the agreement are central to the document and
relate to the first defendant's right of possession thereunder; that such clauses
cannot be termed to be incidental matters that would escape the bar under the
relevant provisions of the Stamp Act and the Registration Act. Though the first
defendant also suggests that the suit is a suit for land, since there is no
application for revocation of the leave granted under clause 12 of the Letters
Patent or for dismissal of the suit such argument is not considered at this stage.
After the institution of this suit, the possession of the shop has been made
over by the first defendant and accepted, without prejudice, by the plaintiff. The
first defendant says that since the plaintiff is free to exploit the property it would
be inequitable for it to claim the entirety of the lease rent for the balance lock-in
period; that would amount to unlawful gain and render the relevant clauses to
imply a penalty rather than a pre-estimate of damages. The first defendant has
also offered to furnish a revolving or suitable bank guarantee to cover the claim,
subject to its bank accounts that remain frozen to the extent of the claim under a
subsisting order being unlocked.
The plaintiff has referred to a judgment reported at (1980) 2 All ER 502
(Allen v. Jambo Holdings Ltd.). The heirs of a man who was killed by the propeller
of a light aircraft that he was about to board brought a fatal accident claim
against the pilot and his Nigerian employers. The Nigerian company held no
assets in England and when it was discovered that the aircraft was about to leave
England the plaintiff issued a writ and sought a Mareva injunction preventing the
aircraft from being removed out of the jurisdiction. One of the questions that
arose before the Court of Appeal was whether a Mareva injunction could be
granted in a personal injury action. It was held that there was no difference in
principle between commercial actions and actions for personal injuries or other
causes of action in regard to the issue of a Mareva injunction; that the issue of
an injunction depended on the balance of justice and convenience.
In another case of Mareva injunction that the plaintiff has next brought,
which is reported at (1982) 1 All ER 556 (Z Ltd v. A & ors.), the Court of Appeal
opined that the injunction should be granted only when it appeared that it was
likely that the plaintiff would recover judgment against the defendant for a
certain or approximate sum; and, that there were reasons for believing that the
defendant had assets within the jurisdiction to meet the judgment but may take
steps designed to ensure that such assets would not be available when judgment
is given. The principle was enunciated with a rider: if the injunction sought were
merely to exert pressure on the defendant it would amount to abuse of the
jurisdiction. In the judgment reported at (1979) 2 All ER 972 (Third Chandris
Shipping Corporation v. Unimarine SA) the legal position was reiterated.
It is of some importance that the underlying principle in a Mareva
injunction and as noticed in the three cases cited by the plaintiff, is that the
claimant must have a good arguable case and must establish that the asset or
assets within jurisdiction were unlikely to remain at the time judgment would be
delivered and the claimant would have no means to satisfy the decree. The
concept of "within jurisdiction" and "outside jurisdiction" in England that is
applicable to a Mareva injunction is quite distinct from what is meant by "within
jurisdiction" qua a civil court in this country. The expression "outside
jurisdiction" in connection with a Mareva order made in England invariably
implies beyond the shores of that country. Whenever a Mareva injunction is
granted the court harbours serious doubts as to the claimant being able to
execute the decree that is likely to be passed in its favour. The legal basis for a
Mareva order is somewhat similar to the rationale for arresting ships in the
admiralty jurisdiction. But its applicability where "outside jurisdiction" means
beyond the territorial limits of a particular civil court and not beyond the
boundaries of the country, may not be as free from doubt as the plaintiff makes it
out to be. It is possible for a decree to be transferred or transmitted under the
Civil Procedure Code from one Indian court to another. The court receiving the
decree for execution thereof is expected to be governed by the same law, both in
substance and in form, and it would certainly be from the same school of
jurisprudence as the court that received the action and passed judgment
thereon. When an English court uses the expression "outside jurisdiction" to
justify its Mareva order, the phrase conjures up visions of a forlorn decree-holder
with the sacred judgment of an English court wandering aimlessly in a faraway
country - more often than not in Asia, Africa or Latin America - with strange
people, unfamiliar customs and a different system of jurisprudence. Surely, that
is not the kind of image that the plaintiff here seeks to invoke.
The plaintiff relies on a judgment reported at (2003) 5 SCC 705 (Oil and
Natural Gas Corporation Ltd. v. Saw Pipes Ltd.) in an attempt to justify that if a
reasonable amount is contemplated by the parties to be the compensation
payable upon a breach of the agreement, actual loss need not be proved.
Paragraphs 64 to 68 of the report have been placed. The plaintiff has also
brought a judgment reported at (2002) 3 Cal LT 114 (Hindusthan Paper
Corporation Ltd. v. Wellbrines Chemicals Private Ltd.) for the proposition that the
onus is on the party claiming that the liquidated damages in an agreement
amounted to penalty to demonstrate the same. Another judgment reported at
(2004) 2 SCC 712 (Food Corporation of India v. Babulal Agarwal) has been
brought by the plaintiff in support of the contention that a clause in the
agreement providing for liquidated damages should not be easily tinkered with by
court. The plaintiff says that the question as to what is reasonable for a plaintiff
to do in mitigation of his damages is not a question of law but one of fact; the
burden of proof being upon the defendant. The plaintiff has referred to a Single
Bench judgment of this Court reported at AIR 1960 Cal 214 (Prafulla Ranjan
Sarkar v. Hindusthan Building Society Ltd.). The suit in that case was for
damages upon the plaintiff employee's services being wrongfully terminated by
the employer. The judgment, rendered at the trial of the suit, recorded that the
burden of proof was on the defendant to demonstrate what the plaintiff could do
in mitigation of his damages and that the defendant in that case had adduced no
evidence at all in such regard.
The first defendant brings the old authority of Lister & Co. v. Stubbs
reported at (1890) 45 Ch D 1 for the principle that merely because the court felt
that it was highly probable that if the action were brought to hearing the plaintiff
could establish the money claim, the defendant would not be required to give
security until the claim had been accepted by a judgment or decree. The first
defendant has also carried a Division Bench judgment of this Court reported at
ILR (1955) 1 Cal 478 (Hara Gobinda Das v. Bhur and Co.) where the Court was of
the view - without expressing any final opinion - that the plaintiff had a just
claim, but opined that such view of the Court that the plaintiff had a just claim
would not entitle the plaintiff either in law or in justice to have an order of
attachment before judgment, or to convert to his unsecured debt into a secured
debt. The first defendant relies on the Single Bench judgment that almost every
defendant faced with an application for attachment before judgment cites in this
Court. The arduous benchmark set for a plaintiff to succeed in an application for
attachment before judgment in the decision reported at AIR 1951 Cal 156
(Premraj Mundra v. Md. Maneck Gazi) may appear to have been watered down in
recent times but it is still a high test that an applicant for an order in the nature
of attachment before judgment must meet to obtain such order. Even the plaintiff
here may not urge that it has met the criteria enumerated in paragraph 10 of the
Premraj Mundra judgment. But as that the decision still stands, it would not do
to say that many a plaintiff has since obtained an order of attachment before
judgment without being subjected to such exacting standards.
On the bar under Section 35 and the related provisions of the Stamp Act,
the first defendant relies on a judgment reported at (2009) 2 SCC 532 (Avinash
Kumar Chauhan v. Vijay Krishna Mishra). The Supreme Court considered a
matter where the plaintiff had paid the consideration and taken possession of a
plot of a tribal land through an unregistered and insufficiently stamped sale deed
which was sought to be registered later. The plaintiff had also not waited for the
permission of the collector that was necessary under the Madhya Pradesh Land
Revenue Code for the transfer of any tribal land. The collector denied permission
and the plaintiff instituted a suit for recovery of the money paid. The district
court impounded the document and directed the plaintiff to pay the unpaid duty
together with the penalty as provided under Section 35 of the Stamp Act. Such
order was carried by way of a revision under Article 227 of the Constitution
before the High Court. The High Court declined to interfere with the directions of
the district court. The High Court's order was upheld by the Supreme Court.
In the judgment reported at 1969 Unreported Judgments (SC) 21 at page
86 (Rana Vidya Bhushan Singh v. Ratiram) that the first defendant has next cited,
the deed of lease was unregistered. The plaintiffs sued for ejectment claiming that
the defendant was a trespasser in the land. The defendant contended that he was
a tenant for 15 years under a lease granted by the plaintiffs' mother during the
plaintiffs' minority. The defendant tendered in evidence a copy of an unregistered
agreement of lease. The trial court accepted his contention. In appeal, the district
court agreed on the factual aspect with the trial court. In second appeal to the
court of the judicial commissioner, Himachal Pradesh, the defendant was found
to be a tenant under one of the plaintiffs. Following special leave being granted
by the Supreme Court, one of the issues raised in the resultant appeal was that
since the agreement of lease was unregistered it was inadmissible in evidence.
The Supreme Court did not accept the contention on the ground that the original
lease agreement, which was in the custody of the plaintiffs, was not tendered in
evidence and the defendant had tendered only a copy thereof. On the aspect that
as an unregistered agreement it could not have been received in evidence, the
Supreme Court relied on the concurrent view of several High Courts, including
this Court, that a document which requires registration under Section 17 of the
Registration Act 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.
The next judgment that the first defendant brings to bear on the same
point is one reported at (2008) 8 SCC 564 (K.B. Saha & Sons Pvt. Ltd. v.
Development Consultant Ltd.). The two appeals before the Supreme Court were
against a common final judgment of the High Court affirming a judgment and
decree passed by the trial court in two suits filed by the appellants before the
Supreme Court. By an unregistered agreement the respondent took a flat as
tenant under the appellant for the residential accommodation of a particular officer of the respondent and members of such officer's family and for no other purpose. The agreement provided that if the premises were to be used by the respondent for any other purpose it would have to seek a written consent from the appellant before bringing about the change of purpose. The respondent informed the appellant that its named officer had vacated the premises and that it intended to make repairs and allot the same to another employee. The appellant objected. The respondent insisted on carrying out the repair work and made it known that it would not surrender the suit premises. The appellant brought the first suit for a declaration and injunction that the respondent could not allot the suit premises to any other employee after its original officer had vacated the same. The second suit was brought for ejectment. In the written statements it was claimed that the tenancy agreement was illegal and invalid as it was against the statute. The suits were dismissed by a common judgment. The resultant appeals failed before this High Court. In the Supreme Court it was contended that the agreement was not compulsorily registrable and that, even if it was found to be registrable, the condition for letting out the suit premises was a collateral purpose within the meaning of the proviso to Section 49 of the Registration Act and could be enforced. The Supreme Court relied on an old Calcutta judgment (AIR 1932 Cal 83(2)) where it was held that the terms of a compulsorily registrable instrument were nothing less than a transaction affecting the property comprised in it; and that to use such an instrument for the purpose of proving a term contained therein would not be using it for a collateral purpose if the relevant term involved the question as to who was the tenant and on what terms the tenancy had been created. The Supreme Court also relied on an Allahabad judgment where it had been held that when a party sought to extinguish the right of another by relying on a document that was compulsorily registrable, such reliance would not be deemed to be for a collateral purpose. The Supreme Court dismissed the appeals.
The first defendant has placed a Single Bench judgment reported at (2002) 3 CHN 371 (Dr. Pradip Kr. Biswas v. Sibaji Bhowmik) that under Order XXXVIII Rule 5 of the Civil Procedure Code there must be subjective satisfaction of the court that the defendant intended to obstruct to delay the execution of the decree and that with such intention the defendant was taking steps or proceeding "to dispose of the whole or any part of (the defendant's) property from within the local limits of the jurisdiction of the Court." The first defendant says that it would be extremely harsh and inconvenient to it if the amount claimed by the plaintiff is left locked in a bank account and it would amount to suffering the decree since the first defendant would be out of pocket to such extent.
In answer to the argument put forth by the first defendant under the Stamp Act and the Registration Act, the plaintiff relies on a judgment reported at AIR 2003 Bom 360 (Volition Investment Pvt. Ltd. v. Madhuri Jitendra Mashroo) where an interlocutory application for the appointment of a receiver in a suit for specific performance of an agreement relating to an immovable property was considered. At the end of paragraph 7 of the report an argument was recorded that the memorandum of understanding that had been relied upon was not admissible in evidence as it had not been properly stamped. The interlocutory application succeeded on the court observing that if the memorandum was not duly stamped, that could be fulfilled after payment of penalty at the time of the trial. It was held that the commercial, moral or mercantile ethic was not to commit the breach of an agreement to unlawfully retain a large sum of money.
The plaintiff has relied on an unreported judgment of a Division Bench of this Court in FMA No. 998 of 2006 (Re: CAN 7867 of 2006, CAN 7377 of 2006) (Sekh Nurmal Ali v. Dhanindra Kumar Sil) delivered on January 25, 2008. The appeal was at the instance of a plaintiff who had claimed specific performance of a contract relating to an immovable property. The trial court rejected an interlocutory application for injunction on the sole ground that the agreement sought to be enforced was made on insufficient stamp paper. The Division Bench held that if any agreement was made on insufficient stamp paper, the provisions of the Stamp Act would apply for the purpose of impounding the document but that would not make the suit not maintainable or deter the court from taking a prima facie view in favour of the plaintiff. In the words of the Division Bench, the appropriate consideration at the interlocutory stage is as follows:
"We, therefore, find that the learned Trial Judge erred in law in holding that there was no prima facie case in favour of the appellants when the defendant admitted execution of such agreement in a suit for specific performance of agreement. Once the execution of the agreement is admitted, in our view, in this type of case, the balance of convenience and inconvenience is in favour of granting injunction restraining the respondent from transferring, alienating and/or encumbering the property till the disposal of the suit; otherwise, the relief claimed in the suit may become inappropriate and the Court may refuse to exercise discretion in favour of the plaintiff at the time of final hearing, even if it is ultimately proved that there was valid agreement."
The plaintiff has cited a Full Bench judgment reported at AIR 1951 Mad 12 (Muruga Mudaliar v. Subha Reddiar) where the majority view was that an agreement of lease in writing was compulsorily required to be registered; but the unregistered document may be used as evidence of the agreement in a suit for damages for its breach.
The plaintiff has placed a Single Bench judgment of the Andhra Pradesh High Court reported at (2004) 2 ALD 339 (Umde Bhojram v. Wadia Gangadhar) where it was held that a mortgage could not be enforced if the deed was unregistered but the related money claim could still be pursued. Finally, the plaintiff has referred to a Single Bench judgment reported at 2002 (2) Cal LJ 449 (Biswajit Chakraborty v. Mira Sen Ray) where the view taken was that the mere production of a photocopy of a document that was compulsorily registrable along with an application for temporary injunction or otherwise would not warrant a direction for producing the original document to impound the same.
At this interlocutory stage where the plaintiff has not tendered the lease deed in evidence, the relevant provisions of the Stamp Act may not be attracted. There is support for such view in the unreported judgment of the Division Bench (Sekh Nurmal Ali v. Dhanindra Kumar Sil) and in Biswajit Chakraborty. Section 49 of the Registration Act is less severe in the sense that it provides an escape route via its proviso. Prima facie, the clause relating to payment of liquidated damages under the subject lease deed appears to be in respect of a collateral transaction within the meaning of the said proviso. In Avinash Kumar Chauhan the money that the plaintiff sought to recover was in respect of the consideration that had been tendered for transfer of the land in question. In Rana Vidya Bhushan Singh the Supreme Court permitted the unregistered document to be used as a shield by the defendant to assert the character of his coming into possession of the land. In K.B. Saha & Sons Pvt. Ltd. the condition relating to the purpose of use of the demised premises was central to the plaintiff's right to claim possession upon the breach of such condition contained in an unregistered deed.
There is no reason to suspect that the plaintiff would not comply with any directions that may be issued at the trial upon the plaintiff tendering the lease deed in evidence even if it be presumed that the plaintiff's reliance on the document is not as evidence of a collateral transaction not required to be effected by a registered instrument. Indeed, one of the reliefs claimed in the suit is for a mandatory injunction on the first defendant to execute and register the deed. In any event, since there is no denial of the execution of the agreement it may be inequitable to permit the first defendant to set up a defence under the Stamp Act and the Registration Act to wriggle out of the bargain, particularly when the first defendant does not cite such grounds to retain possession but to deny payment of outstanding lease rent and liquidated damages consequent upon premature determination of the lease.
Two aspects need to be seriously considered. At the time that the Civil Procedure Code came to be made suits would not take years or decades to be brought to trial as is usually the case these days. The strength of the principle that an apparently good claim would not justify an order for attachment to be made before final judgment is rendered, needs to be seen with reference to the time and place in which such principle was born. The second aspect is that even without a defendant attempting to defraud its creditors or the plaintiff, the vicissitudes of the commercial market may leave the defendant with little to offer as judgment-debtor upon the decree being made. The sheer passage of time between the institution of an action and the trial thereof that has now come to be accepted as par for the course may make the claim irrelevant or even the claimant disinterested. That would result in an erosion of the confidence in the system and lead suitors to undesirable quarters for more effective results. But this may not be the ideal action for such considerations to have a bearing.
As observed earlier, the plaintiff's analogy of a Mareva injunction may be inapposite in a case for attachment before judgment of the present kind. Strictly speaking, the plaintiff has not sought to stop the first defendant from taking any of its assets beyond the territorial jurisdiction of this Court. The attachment that it sought and obtained at the ad-interim stage relates to a bank account of the first defendant in New Delhi as would appear from paragraph 29 of the petition. The plaintiff is right when it asserts that Section 136 and Rule 5(1)(a) of Order XXXVIII of the Code contemplate the attachment before judgment of a property beyond the local limits of jurisdiction of a court. Order XXXIX Rule 1(b) also permits a civil court, without any limitation on the grounds of territorial jurisdiction, to issue an injunction to rein in a defendant who threatens, or intends, to remove or dispose of his property with a view to defrauding his creditors.
Since the execution of the agreement is not in dispute, the onus would be on the first defendant to demonstrate that the relevant clause providing for liquidated damages in the event of the lessee determining the lease within the lock-in period, is a penalty that would fall foul of the Contract Act. It would also be the first defendant's obligation to establish what the plaintiff could have done to mitigate its damages and the consequential reduction, if at all, of the first defendant's liability as to liquidated damages. The agreement here relates to a commercial matter and a person binding himself to pay lease rent at an agreed rate and covenanting to make payment of an ascertainable amount for a breach on his part may not be altogether let off merely by citing the non-compliance of a statutory provision that such person was liable, in the first place, to comply with. It is such conduct of the first defendant that, in the ultimate analysis, tilts the balance in the manner in which the discretion is exercised in this case. Though the first defendant's offer to secure the claim by way of a bank guarantee was undoubtedly made without prejudice, in the light of its attempt to deny its obligation in respect of the liquidated damages by taking advantage of its fault for not having registered the deed, the first defendant gives credence to the ill motive that the plaintiff imputes. It would be equitable, in the circumstances, that the first defendant be required to furnish a bank guarantee to secure the claim.
GA No. 2029 of 2009 is disposed of by directing the first defendant to furnish an unconditional bank guarantee in the sum of Rs. 85 lakh in favour of the Registrar, Original Side, within a period of four weeks after the Christmas Vacation. The subsisting order of injunction in respect of the bank account of the first defendant will stand vacated upon the written confirmation of the Registrar, Original Side, of the unconditional bank guarantee to the satisfaction of the Registrar having been furnished. The costs of the present petition assessed at 3000 GM will abide by the result of the suit.
Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.)