Delhi District Court
Sunspot Cafe Private Limited vs Shri Kurmamoses on 22 January, 2026
IN THE COURT OF MS SAVITA RAO, DISTRICT JUDGE
COMMERCIAL COURT-01, SOUTH ,
SAKET COURTS, DELHI
CS DJ No. : 315/2022
DLST010044282022
In the matter of :
M/s Sunspot Cafe Pvt. Ltd.
Through its Director
Shri Sushil Kumar
Regd. Office:
Plot no. 4, Part of Khasra No. 530,
Village Burari, North Delhi, Delhi - 110084
.......... Plaintiff
Versus
Sh. Kurma Moses
S/o Sh. Kurma Beeraiah
R/o 21-11-61/A03, M.S. Tower
3rd Lane, Besides ATM MA Dhura Nagar
Vijaywada (Urban)
District Krishna, Andhra Pradesh - 520011
........ Defendant
Date of Institution : 19.05.2022
Date of Arguments: 28.10.2025, 08.12.2025, 14.01.2026
& 19.01.2026
Date of Judgment : 22.01.2026
JUDGMENT
1. This is suit for recovery of Rs. 1,77,09832/- (Rs. One Crore Seventy Seven Lacs Nine Thousand Eight Hundred and CS DJ No. : 315/2022 1/47 Thirty Two only) filed by plaintiff against the defendant on the following facts that:
(a) plaintiff company which is in the business of 'Hotel and Resorts' had taken property bearing units No. 9, 10, 11, 12, 14A, Southern Park, D-2 Mall Market, District Centre, Saket, New Delhi, situated on ground floor at monthly rent of Rs. 12,80,300/- on lease.
(b) Plaintiff agreed to grant Management of the said concern to defendant on license basis for one year with effect from 01.12.2020 to 30.11.2021 vide Management and License Agreement dated 23.01.2021. As per this document, defendant was duty bound to pay an amount of Rs. 16,80,300/- per month and also to pay electricity bill as well as monthly maintenance bill (i.e. CAM Charges) payable directly to Mall Maintenance Agency, which was managing the maintenance of the premises.
Plaintiff company allowed the defendant to use the entire premises alongwith all furniture, fixtures, fittings, bar, electricity, water, air conditioning etc. and the 'bar and lounge' was given in running condition to the defendant on 01.12.2020.
(c) Defendant paid an amount of Rs. 31,00,000/- (Rs. Thirty One Lacs only) as advance money to plaintiff in December 2020 out of promised payment of Rs. 50,00,000/- (Rs. Fifty Lacs only) . Thereafter, despite repeated requests and demands from the side of plaintiff, defendant did not make payment of the license money due to which license fee kept on accumulating. Legal notice dated 22.06.2021 was served upon defendant by plaintiff whereby plaintiff terminated the Management/License Agreement and made demand for Rs. 1,24,21,800/- with interest @ 15% per annum.
CS DJ No. : 315/2022 2/47(d) Reply to said notice was not filed by defendant and rather defendant with a view to escape from paying license money to the plaintiff and to take undue advantage, filed false and frivolous civil suit for Declaration, Permanent and Mandatory Injunction being CS (OS) No. 467 of 2021 before Hon'ble High Court of Delhi, wherein he succeeded in procuring ex-parte injunction order dated 30.09.2021, though defendant was not in use and possession of the said premises as plaintiff had taken possession from the defendant on 01.07.2021.
(e) Defendant entered in the subject premises after securing ex-parte injunction order in absence of the plaintiff as the plaintiff was in Goa at that time. Hon'ble High Court vide order dated 18.11.2021 vacated the said injunction order and finally on 09.12.2021, said suit was withdrawn by the defendant through his Attorney Sh. Muzaffar Bakyara Mahamood. As such, on 09.12.2021, plaintiff though had gained the possession of the subject premises from defendant but the same was in very critical and damaged condition. Plaintiff suffered huge losses worth several Lacs of rupees on account of causing damage to the furniture, instruments, crockery, removal of liquor bottles from the Bar Room and also for non payment of electricity, maintenance charges, necessary excise duty and GST etc.
(f) Further, defendant during the pendency of the said suit before Hon'ble High Court, with a view to persuade plaintiff to settled the dispute, had issued three post dated cheques for Rs. 10,00,000/-, Rs. 60,00,000/- and Rs. 55,00,000/- , all of which were dishonoured upon presentation and complaints under section 138 N.I. Act were filed against the defendant, which are pending adjudication. Defendant did not make the payment to CS DJ No. : 315/2022 3/47 plaintiff towards License Money, accrued interest, user charges etc. and plaintiff was constrained to file the instant suit seeking recovery of abovesaid payment.
(g) Initially suit was filed before ADJ Court, however, since the matter pertained to commercial transactions between the parties, same was transferred to Commercial Jurisdiction vide order dated 03.06.2022 of Ld. Principal District & Sessions Judge, South, Delhi.
2. In written statement filed on behalf of defendant, it was stated that :
(a) plaintiff had taken the property in question on lease from M/s Nanda Brothers Private Limited vide Lease Agreement dated 18.10.2018 and plaintiff had no right, title and interest to sublet, assign or part with the possession of whole or any of the part of demised premises as mentioned in lease deed dated 18.10.2018. Further, the said property was taken on lease by the plaintiff only for restaurant and not for other purpose but the plaintiff let out the same to defendant for 'Bar and Restaurant' in the name and style of 'Toxic Bar & Restaurant'. Hence, neither the plaintiff is entitled to get any relief from this court nor defendant has any liability towards the plaintiff.
(b) One Reena Chauhan and her friend Aryan introduced defendant to the plaintiff who represented defendant that if he invested in the suit property, he shall be able to earn heavy profits and thus they lured the defendant to enter into agreement with the plaintiff. During the relevant period i.e. from 27.11.2020 to 17.12.2020, various amounts, aggregating to approx Rs. 1,30,00,000/- had been transferred by the defendant to CS DJ No. : 315/2022 4/47 said Reena Chauhan, Aryan and plaintiff in various accounts and approximately Rs. 82,97,000/- had been transferred to plaintiff.
The said agreement could only be executed on 23.01.2021.
(c) When defendant entered into the possession of the subject premises, he found that the subject premises was in very bad condition and defendant had to spend huge amounts for the renovation of premises, for arranging the stock and supplies and for publicity of lounge and bar etc. Said Ms. Reena Chauhan and Aryan created dispute with regard to clause 8.4 of the agreement and insisted to use the account of M/s Sunspot for taking payments in the swipe machine and defendant was badly threatened and mandhandled. Defendant had to approach Hon'ble High Court for protection orders which was granted and SHO PS Saket was directed to ensure the safety of the defendant.
(d) On account of non payment of electricity and maintenance charges, mall authorities disconnected the electricity connection of the bar due to which defendant was not able to carry out his business. Fittings and fixtures in the premises also did not belong to plaintiff as well as defendant came to know that rent of the said property had not been paid by plaintiff to the owners and hence owners of the property had filed a suit for eviction and had also initiated arbitration proceedings against plaintiff, which fact had been concealed by the plaintiff at the time of execution of agreement with defendant.
(e) Defendant had to spend a heavy amount for publicity, hiring of staff and for other miscellaneous expenses. Though, as per Clause 8.4 of the Agreement between the plaintiff and defendant, defendant was supposed to pay all the taxes, MCD License GST Income Tax, Excise duty and all License Fee CS DJ No. : 315/2022 5/47 structure, however, all the licenses had already expired and defendant had to apply for new licenses as well he was forced to pay heavy amount for clearing the dues of liquor license. Defendant was also informed about heavy pending dues of plaintiff towards license fee, fitting and fixture for 'lounge and bar'. The vendors again and again visited the 'Lounge and Bar' in order to collect dues which were pending against 'M/s Sunspot Cafe Private Limited' and when defendant objected to running of the illegal activities, he was threatened by plaintiff and his associates to life.
(f) Defendant though had received termination notice dated 22.06.2021, but the said notice per-se was illegal and defendant was not bound to give any reply to the said notice being afterthought and illegal. Said Reena Chauhan forcibly took payment of Rs. 30 lacs on 24.12.2020, 21.22.2021 and 08.01.2021. Later she took possession of the four post dated cheques and original property document/said management agreement as security which are still in possession of said Reena Chauhan. Also a false FIR was got registered by said Reena Chauhan against the defendant vide FIR No. 428/2021, P.S. Vasant Kunj, U/s 376/354C/354/506 IPC. Subsequently, case of defendant vide Civil Suit no. 467/2021 was dismissed as withdrawn since the matter had been settled between the parties.
(g) cheques in question were never issued by defendant to the plaintiff on account of settling the dispute and plaintiff never met the defendant since filing of case in Hon'ble High Court of Delhi. Cheque bearing no. 000789 was manipulated cheque as well as other cheques were also not issued by defendant in his handwriting. It was denied that defendant had CS DJ No. : 315/2022 6/47 paid an amount of Rs. 31 lacs as advance money to the plaintiff in December 2020 and promised to pay Rs. 50 lacs but he failed to pay the said amount. As submitted, defendant invested approx more than Rs. 2 Crore with the plaintiff under the different heads and defendant has no liability towards the plaintiff.
3. In replication, contents of written statement were denied and those of plaint were reiterated and reaffirmed. It was submitted that plaintiff had no concern with Ms. Reena Chauhan or Mr. Aryan. These persons were friends of defendant who had introduced defendant with the plaintiff. It was denied that defendant had paid Rs. 8297000/- to plaintiff or that defendant had spent huge amount for publicity, hiring of staff etc. It was further submitted that plaintiff had no concern with the payment of Rs. 30 lacs to said Ms. Reena Chauhan by defendant or any other payment made to any of the friends or associates of defendant. There was no settlement regarding dues of the plaintiff with the defendant and the suit had been withdrawn by defendant before Hon'ble High Court only qua the term that plaintiff would get keys of the premises from the police for which defendant shall have no objection.
4. Following issues were framed vide order dated 20.01.2024:
1. Whether the plaintiff is entitled for recovery of the suit amount, as prayed for ? OPP
2. Whether the plaintiff has no locus standi to file the instant suit against the defendant? OPD
3. Whether the suit is bad for non-joinder/mis-joinder of necessary parties? OPD CS DJ No. : 315/2022 7/47
4. Whether the amount as detailed in para 3 of written statement had been transferred to plaintiff. If so, its effect? OPD
5. Whether the cheques bearing no. 000789, 000772 and 00073 were not issued by the defendant and had been misappropriated by the plaintiff? OPD
6. Whether the notice of the termination of license of the defendant dated 22.06.2021 was illegal. If so, its effect? OPD
7. Relief.
5. In plaintiff's evidence, Sh. Sushil Kumar, Director of Plaintiff Company was examined as PW1. He filed affidavit of evidence Ex. PW1/A and relied upon following documents:-
1. Copy of Resolution dated 11.05.2022 as Ex. PW1/1.
2. Copy of Management and License Agreement dated 23.01.2021 duly executed and implemented between plaintiff company and defendant as Ex. PW1/2.
3. Copy of Notice dated 22.06.2021 as Ex. PW1/3
4. Copy of Injunction order dated 30.09.2021 in CS(OS) 467/2021 from Hon'ble High Court of Delhi as Ex. PW1/4
5. Copy of vacation order dated 18.11.2021 as Ex. PW1/5
6. Copy of order dated 09.12.2021 of Hon'ble High Court of Delhi whereby CS(OS) 467/2021 was withdrawn by the defendant through his attorney as Ex. PW1/6
7. Two Legal notices dated 22.03.2022 alongwith tracking reports are Ex. PW1/7 (colly.) and Ex. PW1/8 (colly.)
8. Copy of written statement dated 08.11.2021 filed in CS (OS) No. 467/2021 by plaintiff as Ex. PW1/9/D1 .CS DJ No. : 315/2022 8/47
6. In defence, defendant Sh. Kurma Moses was examined as DW1. He filed affidavit of evidence Ex. DW1/X and relied upon following documents:
1. Application U/o 1 Rule 10 (1 and 2) CPC r/w Section 151 CPC for impleadment as the applicant necessary party to the suit filed by Nanda Brothers Exports Pvt. Ltd. before Hon'ble High Court of Delhi as Mark DW1/A
2. NOC/Undertaking by Sunspot Cafe Pvt. Ltd. as Mark DW1/B
3. Affidavit dated 05.03.2021 as Mark DW1/C
4. Copy of FIR lodged by Ms. Reena Chauhan as Ex. DW1/1
5. Copy of FIR No. 0166 U/s 420/406/34 IPC as Ex. DW1/2
6. Statement showing money transferred in the account of T Ashu on the advice of plaintiff as Mark DW1/D
7. Management and License Agreement dated 23.01.2021 already exhibited as Ex. PW1/2.
Issue-wise findings are as under :
7. Plaintiff claims execution of Management and License agreement dated 23.1.2021 Ex. PW1/2 between the parties. The subject premises belonged to three different owners and was on nine years lease with the plaintiff w.e.f. 18.10.2018 at cumulative monthly rent of Rs. 1280300/- exclusive of other charges like electricity, payment of charges to mall authorities, licenses etc. According to plaintiff, he invested more than Rs. 2 Crores in furnishing the said premises and obtained license of Bar, paid maintenance and other charges to mall authorities.
CS DJ No. : 315/2022 9/478. In October-November 2020, plaintiff was finding it difficult to pay rent and other expenses. Plaintiff was introduced with defendant by one Ms. Reena Chauhan. Defendant had shown interest in taking over the premises on Management and License basis and after lengthy discussions and explanation, defendant agreed to take the business premises on license basis. It was stated on behalf of plaintiff that the Management and License Agreement was executed for one year from 01.12.2020 to 30.11.2021 against the monthly fee/charges of Rs. 16,80,300/- per month. Defendant was permitted one month time to use the premises and amenities and only upon his satisfaction that the necessary License Deed was agreed to be executed. Subsequent thereto, Management and License agreement was executed on 23.01.2021.
9. As submitted, defendant was duly informed that the premises belonged to three different owners and was on long lease with the plaintiff. Upon necessary enquiry from the owners, owners clarified that they only wanted their rent of Rs.12,80,300/- per month and after the defendant was fully satisfied, he entered into Management and License Agreement dated 23.01.2021. Plaintiff also claimed that apart from payment of License Money of Rs.16,80,300/- and payment of other dues to different agencies, defendant also agreed to pay Rs. 50,00,000/- (Rupees Fifty Lakhs only) as Security amount to the plaintiff, out of which Rs.31,00,000/- (Rupees Thirty One Lakhs only) had been paid by defendant in different tranches, on different dates to the plaintiff and balance security amount was assured to be paid alongwith monthly license fee.
CS DJ No. : 315/2022 10/4710. Due to non payment of fee/requisite charges, plaintiff issued notice of termination of Management and License Agreement dated 22.06.2021. Defendant was also called upon to pay the amount of Rs. 1,24,21,800/- alongwith interest to the plaintiff. As claimed, notice Ex. PW1/3 was duly served upon the defendant, receipt for which has been admitted by defendant in Affidavit of Admission/Denial of documents. After receipt of the notice by defendant, CS(OS) No.467/2021 was filed by defendant before Hon'ble High court, wherein initially the injunction order dated 30.09.2021 was passed, which was lateron vacated vide order dated 18.11.2021 and suit filed by defendant was also withdrawn by AR of defendant on 09.12.2021 and thereafter plaintiff got back the possession of the subject premises.
11. As further claimed by plaintiff, defendant failed to pay user charges to the plaintiff i.e. License Money w.e.f. 01.12.2020 to 22.06.2021 @ Rs. 16,80,300/- per month besides arrears of electricity, maintenance charges. Plaintiff also claimed user charges @ Rs. 16,80,300/- for the period from 05.10.2021 to 09.12.2021 alongwith other dues. It was brought on record that possession of the subject premises had been taken back by the plaintiff on 01.07.2021 from defendant. Defendant thereafter re- entered the subject premises on 05.10.2021 subsequent to ex- parte order passed by Hon'ble High Court in CS (OS) No. 467/2021 . After the stay was vacated by Hon'ble High Court and the plaintiff through its attorney withdrew the suit, plaintiff got the possession of the subject premises on 09.12.2021.
CS DJ No. : 315/2022 11/4712. Defendant admitted execution of agreement Ex. PW1/2 but alleged concealment of the important facts. As submitted on behalf of defendant, defendant was inducted as tenant in the 'Toxic Lounge and Bar' in the month of December 2020. According to defendant, he was told that the lease deed was to be executed in his favour but later on his signatures were taken on Management and License Agreement Ex. PW1/2. According to defendant, it was concealed that the actual owners of said Toxic Louge and Bar had already issued the termination notice dated 01.10.2020 to the plaintiff. Thereby, plaintiff was not entitled to enter into any further agreement with the defendant. It was further submitted that termination of the Management and License Agreement of defendant dated 22.06.2021 was illegal as he was demanding his money back which was invested by him in the 'Toxic Lounge and Bar' and plaintiff was adamant in not returning the same and rather illegally terminated the Management and License Agreement.
Issues No. 2 & 3 :
13. It was submitted on behalf of defendant that plaintiff had no locus standi to file the present suit as he was not the owner of the subject premises and the suit was bad for non-joinder/mis-
joinder of necessary parties. As submitted, plaintiff was the lease holder by virtue of lease deed dated 18.10.2018, while the actual owners of said property were M/s Nanda Brother (Exports) Pvt. Ltd. and Ors. Plaintiff did not pay rent to actual owners and therefore actual owners issued lease termination notice dated CS DJ No. : 315/2022 12/47 01.10.2020, whereas the actual owners have not been made parties in the instant proceedings.
14. Defendant relied upon Ex. PW1/D1 i.e. the lease deed between M/s Nanda Brother (Exports) Pvt. Ltd. and plaintiff to submit that plaintiff was not authorized or permitted to enter into any agreement with defendant. Clause 39 of Ex. PW1/D1 stipulates as follows:
" That in the event that the Lessee wishes to include a new investor/shareholder to its business which in anyway entitles the new investor/shareholder/director to the use of the demised premises in the capacity of Lessee/part of lessee company, then the new shareholder/director/investor shall be bound by all the terms and conditions as prescribed in the present deed. Additionally, the Lessor, at his own accord may / may not insist upon a fresh lease deed and the Lessee shall in such case ensure that the prospective new co-owner / transferee of the premises shall execute such other documents to the satisfaction of the lessor".
15. In cross examination, PW1 stated that he had filed the present case to collect due payment of rent from defendant which he sought to correct by stating that payment was for management of property and the demand of payment from defendant is on the basis of Management of License Agreement Ex. PW1/2. In cross examination, plaintiff was put the original lease agreement dated 18.10.2018 between the plaintiff and one of the owners of subject premises. He was referred to para 1 of lease deed dated 18.10.2018 Ex. PW1/D1. PW1 conceded that in terms of said stipulation in Ex. PW1/D1, the subject premises was leased out to the plainitff only for the purpose of commercial activity of running and establishing restaurant and for no other purpose. However, he sought to clarify that he had permitted user of the property by defendant only for management and not for rent. He CS DJ No. : 315/2022 13/47 admitted that as per the agreement, he could execute only management agreement and not any other agreement.
16. According to PW1, the owners had given him authority to delegate management and license. He also stated that he had orally discussed with the owners of the said property that he could give the said property for management of license to any person and owners were aware of the fact that the said property had been given for management. He stated that he discussed orally on 21.10.2018 with the owners of the said property for management to someone else or he could himself run the business of the said propety. He conceded that there was no clause for handing over of the said property to management or license in the lease agreement dated 18.10.2018. He stated that he had discussed the same orally and the owners had agreed.
17. Ld. counsel for defendant refered to the Doctorine of Frustration as enshrined in section 56 of the Indian Contract Act, 1872, which lays down that an agreement to do an act that is impossible to perform, or becomes impossible due to unforeseen circumstances, is void.
" Section 56 of Contract Act : Agreement to do impossible act.--An agreement to do an act impossible in itself is void.Contract to do act afterwards becoming impossible or unlawful.--A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or tmlawful.Compensation for loss through non-performance of act known to be impossible or unlawful.-- Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise."CS DJ No. : 315/2022 14/47
18. On the strength of above, Ld. counsel for defendant submitted that since termination notice had already been issued by the actual owners of the subject premises to the plaintiff for termination of Lease, seeking eviction and recovery of arrears of rent, hence, plaintiff was not in capacity to perform any further agreement. Further, plaintiff had the motive to extract money from the defendant, therefore he entered in to the management and license agreement without disclosing the litigation with the actual owners of the suit premises. It was submitted that doctrine of frustration is applicable since the plaintiff had lost his right to use the premises itself and therefore the management and license agreement is null and void .
19. Ld. counsel for plaintiff, per contra, submitted that defedant has not pleaded the contract between the parties being hit by Section 56 of the Contract Act. Further, conctract between the plaintiff and defendant had worked throughout and fully relied and acted upon by the defendant as he was running the business smoothly in business premises from December, 2020 to June, 2021. As the defendant had not paid the license money, despite legal notice dated 21.06.2021, plaintiff had taken over the possession of the Licensed Premises from the defendant on 01.07.2021. It was submitted that the plaintiff was in difficulty to pay lease money to the owners and the real owners were demanding their lease money from the plaintiff, therefore, the premises was given to the defendant on license basis. In any case the owners/lessors had not taken possession of the premises from the plaintiff nor had interfered in working of the plaintiff in any manner, therefore, such conduct of the real owners could not be CS DJ No. : 315/2022 15/47 termed as an IMPOSSIBLE ACT and cannot be treated as hit by the doctrine of FRUSTRATION.
20. Ld. counsel for plaintiff further submitted that defendant has not challenged the Management and License Agreement dated 23.01.2021 before the Hon'ble High Court of Delhi. The doctorine of Frustration as per section 56 of the Contract Act can come into operation only when the performance of a contract becomes impossible or unlawful by an event that intervened subsequently, as was observed in AIR 1957 A.P. 71 (72). Further reliance was placed by Ld. counsel for plaintiff upon AIR 1952 S.C. 9 (11) , wherein it was noted that :
"Section 56 does not apply to cases of impossibility due to the default of contracting party himself."
21. Agreement Ex. PW1/2 is the admitted document. Although, defendant has pleaded that he was assured for execution of lease agreement but was made to sign the Management and License Agreement Ex. PW1/2. No notice nor any communication made to plaintiff by defendant pertaining to incorrectness of contents of Ex. PW1/2 is part of record. Once defendant admits execution of Management and License Agreement duly signed by him, without any challenge even subsequent thereto, now he is estopped from challenging the contents of the same at this stage.
22. Further, relevant clauses of Agreement Ex. PW1/2 specifically stipulate that :
" 3.1 Parties have neither created nor intend to creat any lease of the Property/land thereof or any part of the Property in favour of Second party and no physical possession of any part, structure or land of the Property in general or the Property in particular is or in any manner be deemed to be CS DJ No. : 315/2022 16/47 handed over, transferred or assigned or parted with by Sunsport to/ in fvour of Universal Events and Entertainments..... and that Sunspot has only permitted Universal Events and Entertainments.... to operate the Business from the Property on the terms and conditions contained herein".
3.2. SUNSPOT, being in sole and exclusive possession of the PROPERTY and in particular, shall retain the keys to the property.
3.6 SUNSPOT being in the sole and exclusive possession of the PROPERTY shall have right to access to the PROPERTY at any time and day for inspection on its own or by its authorized official.
3.7. For the sole purpose of the requirement as mentioned in above, Clauses herein above, and at the request of UNIVERSAL EVENTS AND ENTERTAINMENTS.........SUNSPOT has agreed to grant to UNIVERSAL EVENTS AND ENTERTAINMENTS.......the non-exclusive right to use the mark " TOXIC LOUNGE & BAR" only for the purposes of and during the term of this Agreement.
4.1. This Agreement is being executed, and the parties hereto shall at all times be deemed to be dealing with each other at an arm's length, on a Principal to Principal basis and no relationship whether a partnership, association of persons or otherwise is being/will be created nor is it intended by the parties it being clearly agreed that SUNSPOT has only permitted UNIVERSAL EVENTS AND ENTERTAINMENTS....... to operate the Business from the Property on the terms and conditions contained herein.
4.5 It is clearly understood by, and it is the express intention of the parties, chat this Agreement, or any part hereof, shall not in any manner be construed as any tenancy or sub-tenancy agreement or lease agreement or as otherwise creating any right or interest of whatsoever nature in the PROPERTY or the whole or any part of the PROPERTY in favour of UNIVERSAL EVENTS AND ENTERTAINMENTS....
4.6 The permission to UNIVERSAL EVENTS AND ENTERTAINMENTS....to use the PROPERTY is purely temporary as part of this Agreement and the same will be at best a bare permission to UNIVERSAL EVENTS AND ENTERTAINMENTS... to enable it to participate in the use of the PROPERTY for the BUSINESS, which permission is revocable at any time as provided herein.
4.7 UNIVERSAL EVENTS AND ENTERTAINMENTS....shall in no manner represent itself as the owner or tenant of the PROPERTY or the whole or any part of the PROPERTY or claim to have any other interest in the PROPERTY or the PROPERTY other than the permission to use the PROPERTY for the BUSINESS on the terms and conditions contained herein".
CS DJ No. : 315/2022 17/4723. The above stipulations clearly and in unequivocal terms indicate, subject premises having been handed over to the defendant under the Management and License Agreement and not as 'Sub-Lease' or Creation of any 'Lease' in favour of defendant, contrary to the assertion of the defendant. Clause 3.12 further contains the stipulation with regard to monthly rent subjected to landlord at Rs. 12,80,300/- as on the date of execution of agreement. After the execution of the agreement Ex. PW1/2, defendant managed the business at the subject premises. As claimed by plaintiff, defendant defaulted in paymnet of License Fee and the cheques given by the defendant had also been dishonoured , therefore, the license was terminated vide legal notice dated 22.06.2021. Defendant thereafter filed CS (OS) No. 467/2021 before Hon'ble High Court .
24. Vide order dated 30.09.2021, plaint was directed to be registered as a suit. It was noted that the suit had been filed by plaintiff ( defendant herein) for declaration, permanent and mandatory injunction against the defendants to the effect that the termination notice dated 22nd June , 2021 was per-se illegal and to restrain the defendants (plaintiff herein) from interfering in the peaceful physical possession of the plaintiff over the subject premises herein. Submission of the counsel for plaintiff was also noted that Nanda Brothers Pvt. Ltd. was the original owner of the suit property with whom the defendants (plaintiff herein) had entered into a Lease Agreement dated 18.10.2018 which effectively prevented them from subletting the premises and in order to overcome the same, defendants (plaintiff herein) using their dominant position, compelled the plaintiff (defendnat CS DJ No. : 315/2022 18/47 herein) to sign the Management and License Agreement dated 23.01.2021 in respect of the suit property. Since plaintiff (defendant herein) was noted to be in possesion , it was observered that if interim protection was not given, he shall suffer irreparable loss and injury and accordingly parties were directed to maintain status quo in respect of possession of the subject premises.
25. The application under Order 1 Rule 10 CPC was moved on behalf of one of the co-owners i.e. M/s Nanda Brothers (Export) Pvt. Ltd., which was withdrawn as noted in order dated 18.11.2021, with liberty to file a proper application. It was brought on record that the plaintiff had not complied with the directions of the court as no affidavit had been filed to reflect compliance of Order 39 Rule 3 CPC. As a consequence thereof, ex-parte order dated 30.09.2021 was vacated.
26. Second application was moved under Order 1 Rule 10 CPC on behalf of Nanda Brothers with mention that plaintiff herein had entered into three independent /separate registered lease deeds with the applicant therein and the other two owners for running and operating a restaurant under the name and style of 'TOXIC' on all five interconnected units. On account of failure of plaintiff herein, to discharge its liability qua rent of the premises, the legal notice dated 01.10.2020 was issued upon him for termination of the lease, eviction, recovery of arrears and return of peaceful possession of the premises. Appliant/one of the co-owners also referred to filing of various cases against the plaintiff herein under section 138 of N.I. Act since the advance cheques issued by plaintiff herein had been returned dishonoured.
CS DJ No. : 315/2022 19/47Reference was also made to pendency of Petition under Arbitration and Conciliation Act due to dispute between the parties. It was also mentioned in application that in terms of Para 24 of registered lease deed dated 18.10.2018, defendant no.1 (plaintiff herein) was specifically barred from subletting the premises, while acknowledging that the alleged Management and License Agreement dated 23.01.2021 relied upon by the plaintiff (defendant herein) categorically recorded that that was no lease in favour of the plaintiff (defendant herein) nor the possession had been handed over to him.
27. Ld. counsel for defendant referred to the Arbitration Petition no. 737 /2020 and submitted that on 10/12/2020, Hon'ble High Court of Delhi appointed (Shri S.M Agarwal Retd. Distt. And Session Judge) as Sole Arbitrator and the same was pending and one NOC was provided by the plaintiff to the actual owners of the suit premises which state and affirm as:
"That in case M/S SUNSPOT CAFÉ PRIVATE LIMITED fail to discharge it's liability towards rent in reference to the above mentioned premises for a continuous period of 60 days or more; THE ADDRESSEE/LANDLORD SHALL BE AT THE LIBERTY TO LOCK THE DEMISED PREMISES AS MENTIONED ABOVE AND SHALL HAVE NO OBJECTION TO THE SAME FURTHER , THE POSSESSION OF THE ABOVE MENTIONED PREMISES SHALL BE DEEMED TO HAVE BEEN RETURNED TO THE LANDLORD/ADDRESSEE ON THAT DATE THE LANDLORD/ADDRESSEE INSTALLS IT'S LOCKS UPON THE PREMISES".CS DJ No. : 315/2022 20/47
28. The sequence of events as explained on record by defendant indicates that NOC was provided by plaintiff to actual owners of the suit property after the arbitration proceedings had been initiated between the plaintiff and one of the original lessors. However, NOC as referred by Ld. counsel for defendant Mark DW1/B bears the date as 15.10.2018 which was even prior to the date of execution of the lease deed between plaintiff and original lessor (s).
29. Contention of Ld. counsel for plaintiff is found correct that in the entire pleadings before Hon'ble High Court, defendant did not challenge the validity of the agreement between the parties. Rather based upon the said agreement, he sought protection of his occupation in the suit premises. The applicant of Order 1 Rule 10 application i.e. one of the owners of subject premises, in the application under Order 1 Rule 10 CPC, also acknowledged only the Management Permission/License Permission in favour of defendant and not the sub-letting or parting with the possession of the suit premises in favour of defendant. Plaintiff although ought to have disclosed about the termination notice, having been issued by one of the co-owners upon it. The justification as furnished on record on behalf of plaintiff remains that the actual owners were demanding their lease money from plaintiff and therefore, the premises was given on licence basis to the defendant for one year only so that plaintiff was able to pay rent to the owners.
30. The agreement between the parties Ex. PW1/2 specifically stipulates with regard to monthly rent payable to the landlord(s).
CS DJ No. : 315/2022 21/47Status of plaintiff as 'Lessee' in the subject premises and handing over of Maitenance and Management of the subject premises to the defendant while retaining the possession of the subject premises only with the plaintiff, does not lead to inference of any concealment of facts, at least pertaining to the status of the plaintiff and defendant in the subject premises. Had the litigation between the plaintiff and the original lessor(s) affected the managerial rights of the defendant in the subject premises, during the subsistence of the agreement between the parties, defendant would have been within its rights to seek termination of the contract and also to invoke the doctorine of Frustration with additional claim of damages.
31. However, defendant by his own conduct decided to continue in the subject premises and at the cost of repitition it may be noted that even in the proceedings before Hon'ble High Court, he did not challenge the validity of the agreement and rather sought enforcement of the same. Therefore, at this stage, when the suit has been filed by the plaintiff against the defendant seeking recovery of arrears of license fee, defendant is estopped by its own conduct from raising any such plea. The suit before this court only pertains to the arrears of License Money, Electricity, Maintenance Charges, damages and accrued interest, claimed by the plaintiff from defendant who was put in the possession of the subject premises as 'Licensee' by the plaintiff. Therefore, it cannot be said that plaintiff has no locus standi to file the instant suit against the defendant nor it is considered that the original lessor(s) of the subject premises are necessary parties in the instant matter.
CS DJ No. : 315/2022 22/47Both these issues stand decided in favour of plaintiff and against the defendant.
Issues no. 1, 4 & 6 :
32. Payment of Rs. 50,00,000/- : In terms of admitted agreement Ex. PW1/2 between the parties, defendant was permitted/licensed to Manage and operate the operations related to running of restaurant from the subject premises w.e.f. 1.12.2020. Ex. PW1/2 also contains the mention with regard to payment of amount of Rs. 50 lacs at the time of execution of the agreement as advance payment. Despite the mention of payment of Rs. 50 lacs in the agreement itself, plaintiff alleged receipt of amount of Rs. 31 lacs against the mentioned payment of Rs. 50 lacs .
33. PW1 admitted that in agreement Ex. PW1/2, amount of Rs. 50 lacs was mentioned as paid by defendant, however, sought to clarify that only amount of Rs. 31 lacs was paid in his personal account and rest of the payment was not made. PW1 admitted receipt of Rs. 25 lacs in the account of his proprietorship concern and sought to clarify that this amount of Rs. 25 lacs was included in the amount of Rs. 31 lacs which he had stated about having received in his personal account. He admitted that the said amount of Rs. 25 lacs was deposited in different tranches. He also admitted receipt of amount of Rs. 7,90,000/- , however stated that this payment was reeived against the maintenance, electricity bills and other charges.
CS DJ No. : 315/2022 23/4734. PW1 was not aware if any amount of Rs. 4,07,000 had been paid to one Ashu who, as stated by PW1, was Caretaker and Employee of defendant. He denied that on his instructions, sum of Rs. 10 lacs was paid to his wife and daughter and that amount of Rs. 15 lacs and Rs. 6 lacs was given to him in cash on the same date against maintenance. He denied that he had received Rs. 50 lacs as per the agreement dated 23.1.2020 Ex. PW1/2. PW1 admitted that defendand had paid Rs. 1 lacs in cash.
35. Despite the mention in Ex. PW1/2 with respect to payment of Rs. 50 lacs, since it was the assertion of plaintiff that defendant had paid only sum of Rs. 31 lacs, DW1 in his cross examination was put question about payment of Rs. 50,00,000/-. DW1 stated that he was having Rs. 50,00,000/- approximately in his bank accounts in November 2020 to December 2020. This witness claimed having filed his bank statement on the record, however after checking from the records, he stated that the bank statement was not part of record and he has placed on record only the Excel sheet mark DW1/D. He stated that he had sufficient money in his bank account and he would produce the bank statement, however bank statement of defendant was not produced on record during the pendency of proceedings.
36. In further cross examination of DW1, he was asked about proof of payment of Rs. 82,97,000/- to Director of plaintiff company and was asked the mode and manner and the source of the said money. He answered that he had transferred the said money to the Director of plaintiff namely Sh. Sushil Kumar and others. i.e. Sh. Ashu, Sh. Manu Arya, Ms. Reena Chauhan, in the CS DJ No. : 315/2022 24/47 account of plaintiff company and other Directors and family members of Sh. Sushil Kumar. He conceded having not filed any receipt for payment of the said amount but again cited his ignorance .
37. DW1 was asked to produce receipt of payment to the plaintiff company, to which DW1 answered in negative and stated that plaintiff had not given him any receipt. He was asked whether he had issued any notice to plaintiff, calling upon it for issuance of receipt of alleged payment by him, to which he answered in negative and sought to clarify that the security amount had been mentioned in the agreement Ex. PW1/2 and he treated the same as valid receipt of money paid in advance. He was put suggestion that security amount as mentioned in 'Management License Agreement' Ex. PW1/2 was incorporated under bonafide belief as security amount was being received in parts only and as per promise of the defendant, the full amount of Rs. 50,00,000/- was likely to be received but complete amount had not been received by the plaintiff. DW1 disputed the same and stated that he had made complete payment of Rs. 50,00,000/- on 23.01.2021 when the license agreement Ex. PW1/2 was executed. With regard to source of collection of money of Rs. 50 lacs stated to be paid on 23.01.2021, he stated that he had brought money from his village and had also taken money from his friends in Delhi. Though he denied that he had taken amount of Rs. 30,00,000/- from Ms. Reena Chauhan which was paid to plaintiff.
CS DJ No. : 315/2022 25/4738. Ld. counsel for plaintiff reiterated that DW1 even in his cross examination has not been able to prove that he paid Rs. 50 lacs to PW1 i.e. Director of plaintiff company. With reference to the deposition of PW1 and DW1, Ld. counsel for plaintiff submitted that plaintiff in his plaint and evidence has admitted receipt of Rs. 31 Lakhs only instead of Rs. 50 lacs against the security account and no money had been received against the payment of Licence fee. It was submitted that payment of Rs.7,90,000/- against the maintenance, electricity bill and other charges was neither part of security amount nor the license fee, whereas PW1 has denied receipt of payment of Rs.4,07,000/- as paid to one Mr. Ashu as he was employee of the defendant. PW1 also denied receipt of payment of Rs.10 Lakhs allegedly paid to his wife and daughter. Counsel for plaintiff further submitted that defendant has fictitiously pleaded about payment to the daughter of PW1 but PW1 has no daughter. Ld. counsel for plaintiff submitted that it is strange that the defendant has not taken receipt or documentary evidence to prove his plea and also failed to specify from and where and which source, he got the said amount.
39. Ld. counsel for defendant submitted that in the agreement itself, it is admitted by plaintiff that defendant had made payment of Rs. 50 las in advance, therefore, there is no question of rebuttal to the vague claim of plaintiff pertaining to receipt of payment of only Rs. 31 lacs.
40. Defendant apparently did not place on record any receipt, bank statements or any other documentary evidence in support CS DJ No. : 315/2022 26/47 of contention with regard to payment of Rs. 50 lacs to the plaintiff. Plaintiff's own admission was recorded for receipt of Rs. 31 lacs from the defendant at the time of execution of agreement. Mark DW1/D which is the excel sheet filed on record by defendant refers to payment through Google Pay, payments to T Ashu, Brijesh and HDFC Sunspot for Rs. 4,07,000/- , further to wife and daugher of Sushil Kumar and cash and maintenance at Rs. 31,00,000/-, payments to Sushil Kumar and Plaintiff for Rs. 7,90,000/- and in the account of Proprietorship concern of plaintiff at Rs. 25 lacs.
41. In written statement, it was stated by defendant that during the period of 27.11.2020 and 17.12.2020 various amounts had been transferred by the defendant to said Reena Chauhan, Aryan and plaintiff Sushil Kumar in various accounts and total amount was approximately Rs.1,30,00000/- whereas approximately Rs. 82,97,000 had been transferred to defendant Sushil Kumar and an amount of major considerations had been transferred to Aryan and Reena Chauhan. In cross examination, he had stated that Rs. 50 lacs had been paid on 23.01.2021. However, no substantiating documents with regard to payments as mentioned in mark DW1/D are part of record. Screenshots of payments made by plaintiff in name of his Advocate Rajeev Ranjan Pandey through UPI were placed on record by defendant without any reference with the present dispute but substantiating documents/screen shots of payments/UPI details/bank statements of the payments allegedly made to plaintiff or to his wife, daughter etc. are not part of record. Receipts of the payments made in cash, as stated by defendant had not been issued/obtained by him .
CS DJ No. : 315/2022 27/4742. As conceded by defendant, no notice or intimation to the plaintiff had ever been issued asking for receipt of payments. Rather in terms of Ex. PW1/2, all business of the restaurant was required to be managed and operated through current account with HDFC Bank or Axis Bank in the name of Sunspot Cafe, as per the particulars detailed in Ex. PW1/2. It was also stipulated that all business of the restaurant shall be transacted through the bank account and all payments on account of business and operations of the restaurant shall only be through bank transactions. Despite the clear stipulation, defendant is asserting about the huge amounts paid in cash without any proof of the same having been filed on record. Source of payments collected by defendant and allegedly paid to plaintiff except for the vague submission of defendant, have also not been placed on record, rendering the defence of defendant untenable.
43. Although it is correct that Ex. PW1/2 contains the mention with regard to payment of Rs. 50 lacs which also draws the presumption of payment as per Section 91 of Indian Evidence Act, however, this presumption is rebuttable and can be challenged with contrary evidence. The clause in Ex. PW1/2 created the initial presumption with regard to payment of Rs. 50 lacs to plaintiff with the execution of the documents. Thereby in view of pleadings to the contrary, the burden of proof was upon the plaintiff, who is challenging the receipt of balance payment of Rs. 19 lacs contrary to mention in Ex.PW1/2. Plaintiff, therefore, was needed to provide evidence which makes the non CS DJ No. : 315/2022 28/47 payment probable using the standard of preponderance of probabilities.
44. The presumption can be rebutted while showing that the document was signed but money was not transferred or by providing evidence that the party claiming to have paid the money lacked the financial capacity at the relevant time. While the plaintiff has been able to raise a probability to cast doubt on the factum of payment of balance amount of Rs. 19 lacs by the defendant, onus shifted upon the defendant to provide independent evidence to prove the entire payment made to the plaintiff. Since the plaintiff itself admitted receipt of payment of Rs. 31 lacs in his account, in account of plaintiff company and Rs. 1 lakh in cash, onus upon the defendant remained only to establish payment of remaining amount of Rs. 19 lacs which the defendant failed to prove.
45. In Civil Appeal NO. 1491 OF 2007, titled as PLACIDO FRANCISCO PINTO (D) by LRs & ANR. Vs. JOSE FRANCISCO PINTO & ANR, while referring to Smt. Gangabai w/o Rambilas Gilda v. Smt. Chhabubaiit, it was observed that :
24. ..............
"11. ...It is clear to us that the bar imposed by sub-section (1) of Section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub-section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral CS DJ No. : 315/2022 29/47 evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties..."
25. A reading of the aforesaid judgment would show that it was open to the plaintiff to assert that the document was never intended to be acted upon and the document is a sham. Such question arises when one party asserts that there has been a different transaction altogether than what is recorded in the document. It is for that purpose oral evidence is admissible".
46. License Fee: Parties were further at dispute with regard to the quantum of license fee. Plaintiff claimed sum of Rs. 1,77,09,832/- against the payment of license money, arrears of electricity, maintenance charges, user charges and accrued interest etc. , as detailed in the plaint. In terms of Agreement Ex. PW1/2, defendant was to pay monthly fee at Rs. 12,80,300/- subjected to landlord(s) alongwith monthly maintenance bill i.e. CAM charges payable to mall maintenance agency, monthly electricity bill on actual usage alongwith monthly minimum guarantee payment at Rs. 4,00,000/- for each calendar month w.e.f. 1.12.2020 to 30.11.2021. Amount of Rs. 4,00,000/- was worded as "Rs. Three Lac only" in the agreement. However, parties are not at dispute with regard to the 'Minimum Guarantee Payment' at Rs. Four Lacs. It was also specificed that due to Covid-19, defendant was entitled to pay Rs. 6,50,000/- per month for Rent and Rs. 1,20,000/- as maintenance till 31.03.2021. After aforesaid period, defendant was responsible to pay the full amount of rent and maintenance as well.
47. PW1 admitted that in Ex. PW1/2 it was mentioned that rent will be paid @ Rs. 6,50,000/- and maintenance of Rs. 1,20,000/- till March 2021. He also admitted that Ex. PW1/2 CS DJ No. : 315/2022 30/47 contained the stipulation for 'Minimum Guarantee Payment' . According to him, since bar was already under opreation and they had spent huge amount , therefore, besides the payment of Rs. 12,80,300/-, defendant was also liable to pay sum of Rs. 4 lacs as 'Minimum Guarantee Payment' , aggregating to sum of Rs. 16,80,300/-. He also stated that 'Minimum Guarantee Payment' was payable by the defendant because they had incurred expenses for interiors and infrastructure in the subject premises and defendant was under obligation to ensure the licenses to run the business during his possession.
48. Ld. counsel for defendant stated that PW1 himself has admitted that due to Covid 19, defendant was required to pay Rs 6,50,000/- (Rs Six Lakhs and fifty thousand only) for rent till 31 st march 2021. However, there was complete lockdown in Delhi since 18th april to 31st may 2021. Therefore, defendant was liable to pay a sum of Rs. 6,50,000/- only and not 16,80,300/-, as claimed by defendant.
49. Ld. counsel for plaintiff submitted that there being admission that due to covid-19 plaintiff had agreed to receive less license money of Rs.6,50,000/- per month instead of Rs.16,80,300/- per month from 23.01.2021 to 31.03.2021, therefore, plaintiff was willing to receive Rs.89,14,549/- instead of Rs.1,24,81,800/- .
50. Ld. counsel for defendant elaborated the payments payable by defendant, as follows:
CS DJ No. : 315/2022 31/47(a) Since December 2020 to 31st march 2021 ( 6,50,000 x4) = Rs 26,00000/- (Rs twenty six lakhs ).
(b) With effect from 1st april to 17th April 2021, (1680,300 x 17/30) = 9,52,170/- (Rs Nine Lakhs fifty two thousand and one hundred and seventy only).
(c) From 18th april to 30th april 2021 (6,50,000x13/30) = 3,68,333.33.
(d) From 1st may to 31st may 2021 = Rs. 6,50,000/- (Rs Six lakhs and fifity thousand only).
(e) From 1st june 2021 to 22nd june 2021 (16,80,300 x 22/30), i.e. Rs 12,32,220 All aggregating to Rs. 58,02723.33.
51. After conclusion of arguments, defendant was directed to file on record Statement/Table/Chart pertaining to payments made by defendant (as claimed) alongwith the dates, mode of payments and indicating the supporting documents on record. Ld. counsel for defendant in pursuance of the directions, filed the consolidated payment charts, date wise money transfers in the account of plaintiff and his associates and also placed on record pen drive of video allegedly showing receipt of Rs. 30 lacs by Manu Arya and Reena Chauhan. Bank Statement of Defendant was also filed alongwith the statement and the order of discharge of defendant in FIR bearing no. 428/2021, P.S. Vasant Kunj (North), u/s 376/354C/354/506/376D IPC which was registered on the complaint of Ms. Reena Chauhan. Except for the statement, as directed by this court, other documents or the contents of pen drive are not being considered at this stage, being CS DJ No. : 315/2022 32/47 impermissible in law. Judicial order passed in abovenoted FIR, nevertheless, is taken on record.
52. Defendant stated about payments made to plantiff and its associates in sum of Rs. 82,97,000/-. As per the Chart of datewise money transfers in the account of plaintiff and his associates, payments had been made to Toxic Owner, HKEY, Manu Arya, Ananya, Sunspot Cafe, Mall Maintenance and Internet. Receipt of payment in sum of Rs. 31 lacs was admitted by plaintiff and receipt of any other payment was disputed by plaintiff. Defendant stated about Manu Arya, Ananya, Ravinder etc. as associates of plaintiff in whose favour the payments had been made by defendant.
53. No such assertion was made by defendant in the evidence affidavit of defendant nor plaintiff was subjected to any cross examination on this aspect. PW1 rather categorically denied receipt of any paymnet except Rs. 31 lacs and another amount of Rs. 7,90,000/- which according to plaintiff was received against the maintenance, electricity bill payments and other charges. Neither plaintiff was put the question or suggestion with regard to his association with regard to persons in whose favour/names , defendant had allegedly transferred/paid the amounts nor defendant itself brought on record reflecting the association of plaintiff with these persons or the instructions of plaintiff for payment/deposit of amount in their favour.
54. Ld. Counsel for defendant is right in his submission that payments to the related parties bind the plaintiff in law. However, CS DJ No. : 315/2022 33/47 prior thereto, defendant has to establish that the parties were related to plaintiff or the payments were made to them upon the instructions of plaintiff. Plaintiff in cross examination and in written submission has conceded with regard to payable amount from defendant in sum of Rs. 6,50,000/- during the covid period instead of Rs. 16,80,300/-. However plaintiff has calculated the claim at Rs. 16,80,300/- per month also during the covid period in the plaint but in written submissions, calculated for the month of December till 22nd January @ Rs.16,80,300/- and w.e.f. 23rd January till 31st March 2021 @ Rs. 6,50,000/- .
55. It is not disputed that the defendant had taken over the Management of the 'Bar and Lounge 'w.e.f. 01.12.2020. Ex. PW1/2 also acknowledges that the defendant was entitled to operate the busienss of restaurant and bar from the subject property w.e.f. 01.12.2020. Mention in Ex. PW1/2 that due to Covid-19 defendant shall been entitled to pay Rs. 6,50,000/-, therefore, cannot be interpreted as payable w.e.f. 23.1.2021 i.e. the date of execution of agreement and not w.e.f. 01.12.2020. Plaintiff thereby is entitled to receive the payment @ Rs. 6,50,000/- from 1.12.2020 till 31.03.2021.
56. It is also not disputed on record that defendant was further liable to pay monthly payment @ Rs. 16,80,300/- . However, defendant further stated about the liability of payment of license money @ 6,50,000/- w.e.f. April 2021 to May 2021, instead at Rs. 16,80,300/- due to the re-imposition of complete lockdown in Delhi since 18th april to 31st may 2021. Ld. counsel for plaintiff submitted that there was no rebate on the payment of CS DJ No. : 315/2022 34/47 license money during the said period and PW1 was also not subjected to any cross examination with regard to its entitlement of licence money only at Rs. 6,50,000/- for the period w.e.f. April to May 2021.
57. Although there is no subsequent agreement between the parties nor any such communication brought on record pertaining to the entitlement of defendant for rebate during the covid period. Nevertheless, the lockdown had been reimposed during the relevant period as submitted by Ld. counsel for defendant. There being no business during the period of lockdown , the rebate permitted vide Ex. PW1/2 ought to have been extendable for the period of lockdown. Accordingly, plaintiff shall be entitled for the payment of license money as tabulated by Ld. counsel for defendant in written submissions, till 31st May 2021.
58. Counsel for defendant thereafter acknowledged payable amount of license money by defendant from 01.06.2021 to 22.06.2021 @ Rs. 16,80,300/-. Termination notice is dated 22.06.2021. Ld. counsel for defendant submitted that defendant had spent such a huge amount on the suit premises only on the assurance of the plaintiff to run the business, therefore, at that point of time, the termination of the license by the defendant on 22.6.2021 was illegal.
59. Plaintiff has claimed about non payment of the dues/license fee, compelling the plaintiff to terminate the license. Defendant had also challenged termination of license by plaintiff in CS (OS) No. 467/2021 before Hon'ble High Court which CS DJ No. : 315/2022 35/47 matter had later been withdrawn. In such circumstances, how and why the termination notice was illegal is not explained on record by Ld. counsel for defendant . Alleged spending of huge amount on the suit premises even on the assurance of plaintiff cannot be reason sufficient to justify non payment of license money which by necessary corollary, entitled plaintiff to terminate the license.
60. After terimination of notice, possession/management of the subject premises had been taken over by plaintiff from defendant on 01.07.2021. However, plaintiff has restricted its claim for payment of license money till 22.06.2021 in the plaint and has not demanded till 01.07.2021. Counsel for plaintiff submitted that defendant was again put in possession subsequent to the ex- parte injunction granted by Hon'ble High Court on 05.10.2021 who remained in possession of subject premises till 09.12.2021. Accordingly, plaintiff is held entitled for licence money for the said period @ Rs. 16,80,300/- per month.
61. Ld. counsel for defendnat submitted that since defendant was arrested on 21/11/2021, he would not have time to take out all relevant goods and articles from the 'Bar and Lounge' and the swipe machine, furniture and liquor of lakhs of Rupees and all the documents of the defendant were taken away by the plaintiff. Thereby, plaintiff can not claim the payment of license money till December 2021 from the defendant.
62. Defendant in the complaint dated 31.1.2022 made to police, part of Ex. DW1/A, mentioned about his dispossession from the subject premises on 28.11.2021, however, also stated CS DJ No. : 315/2022 36/47 about deposit of the keys by his Advocate in P.S. Saket and alleged unauthorized settlement with the plaintiff dated 15.12.2021. If the keys were lying deposited by the Advocate of defendant in P.S. Saket which were released later in favour of plaintiff, there was no occassion for the plaintiff to remove the goods of the defendant. Nothing contrary to factual position or in support of assertion of defendant is part of record. Plaintiff claimed receipt of the possession back from defendant prior to 15.12.2021 i.e. on 09.12.2021, hence, shall be entitled for payment of license money w.e.f. 05.10.2021 till 09.12.2021.
63. Maintenance Charges: Ld. counsel for defendant also submitted that defendant paid previous maintenance charges of one year i.e. Rs 2,50,000/- per month to the mall owners and after some negotiations, paid Rs 25,00000/- (Rs twenty five lakhs only) till November 2020, although plaintiff was liable to pay all these charges to the mall owners. It was submitted that PW1 failed to prove that the mall maintenance charges were paid by him. Ld. counsel for defendant also referred to cross examination of plaintiff wherein he had stated that he was not sure if the electricity was disconnected during the lockdown period w.e.f march 2020 till September as premises was also lying closed due to lockdown. It was submitted that it is the confirmation that the premises was closed and the defendant spent huge amount on its renovation as the the said bar was inaugurated on 31st December 2020.
64. Ld. counsel for defendant also submitted that admission of plaintiff pertaining to his facing difficulty in paying rent to the CS DJ No. : 315/2022 37/47 actual owners of the said bar and lounge, again confirms that the amount was spent by the defendant in the renovation of the said bar and lounge as well as for publicity. Further, lot of hidden expenses and other payments were made by the defendant after spending such huge amount of Rs 1,30,00000/- (Rs one crore thirty lakhs only) upto june 2021 .
65. In terms of Ex. PW1/2, it was the liability of the defendant to bear expenses of running, maintenance and house keeping/utilities including monthly maintenance bill payable to Mall Maintenance Agency and monthly Maintenance Bill on actual usage. Defendant albeit pleaded that mall maintenance charges even prior to the date of execution of the agreement or 'taking over' by the defendant, had not been cleared by the plaintiff, which had to be paid by defendant.
66. PW1 was unable to answer whether maintenance amount payable to mall was Rs. 2,50,000/- per month. He stated that same was being paid by defendant only. According to him, since the date of possession of plaintiff in the suit premises, plaintiff had paid maintenance charges to the mall authorities till the date of handing over the management to the defendant. PW1 denied that he was in arrears of maintenance charges for one year and defendant had to pay Rs. 25 lacs after some waiver. Although this witness was not able to answer whether maintenance amount paid by him was in cash or through bank transfer as according to him, operation of the subject property was being looked after by another director of plaintiff company. However, he stated that if the maintenance charges were not paid, mall authorities would CS DJ No. : 315/2022 38/47 have immediately disconnected the electricity. He was not sure if electricity was disconnected during the lockdown period w.e.f. March 2020 till September 2020 and stated that premises was closed due to lockdown.
67. DW1 denied that it was his liability to bear expenses of mall maintenance and pay license money to Government authorities and other expenses as detailed in Ex. PW1/2. DW1 was put question whether he had filed any documentary evidence that he had paid any amount in the account of mall owners when he was using the premises, to which he answered in negative and while feigning ignorance, stated that he did not know whether he did pay or not and further stated that he had paid the said amount in cash. He further stated that money was taken but no receipt was issued.
68. Besides the fact that agreement between the parties specifically stipulated about liability of the defendant to pay the maintenance charges etc. to the mall authorities, defendant's version that he had paid charges to the mall authorities even prior to the commencement of his business in the subject premises is not substantiated on record in form of any documentary evidence.
69. Agreement Ex. PW1/2 is dated 23.1.2021, whereas defendant had taken over the management of premises in December 2020. Ex. PW1/2 does not contain any mention with respect to adjustment of payments made by defendant to mall authorities pertaining to period prior to occupation of defendant. Further, defendant has not placed on record any bank statement CS DJ No. : 315/2022 39/47 since he also asserted that he paid the amount in cash. Albeit, no receipt was obtained by the defendant against alleged payment of the amount in cash, thereby defendant failed to establish on record any payment to the mall authorities qua the liability of the plaintiff which could or ought to have been adjusted against the payment of license fee.
70. Ld. Counsel for defendant also stated about the payments to vendors for old dues of Toxic Bar and staff salaries which were liabilities of plaintiff and were wrongfully shifted to the defendant. Similar to other aspects, no evidence was brought on record on behalf of defendant to support the said contention and alleged payments. Receipt of payment of Rs. 7,90,000/- from 31.12.2020 till 25.2.2021 was also admitted by PW1 in cross examination besides the payment of Rs. 31 lacs. Though it was stated that this payment was received against the maintenance, electricity bill payments and other charges. Once plaintiff claims that all the liabilities towards maintenance and other dues after 01.12.2020 was the responsibility of defendant, payable directly to the authorities concerned, plaintiff also cannot seek adjustment of the said amount against the payment of maintenance, electricity bill, payment etc. Issues no. 1, 4 & 6 stand answered as above, in favour of plaintiff and against defendant.
71. Issue No. 5 : There was another dispute between the parties pertaining to issuance of three cheques bearing no. 000789 dated 16.02.2022 for Rs. 10,00,000/-, Cheque no. 000772 dated 15.02.2022 for Rs. 60,00,000/- and Cheque no. 000773 dated 18.02.2022 for Rs. 55,00,000/-. Defendant pleaded that above CS DJ No. : 315/2022 40/47 noted cheques had never been issued in favour of plaintiff but these cheques were taken by Reena Chauhan on the pretext of threat to defendant to book in false rape case who also got signed forcefully an affidavit from defendant despite having knowledge about protection granted by Hon'ble High Court of Delhi . He stated that he was forcefully compelled to sign on the affidavit on 05.03.2021 Mark DW1/C and he did not lodge any complaint against her out of fear , while she succeeded in her conspiracy by lodging an FIR no. 0428/2021 under section 376/376D/354C/506/34 IPC. At the same time, defendant also stated about registration of FIR under section 420/406/34 IPC Ex. DW1/2 on the complaint of defendant.
72. Ld. counsel for plaintiff submitted that during the pendency of the suit before Hon'ble High Court, with a view to persuade plaintiff to settle the dispute, defendant had issued these three post dated cheques. As submitted, all these cheques had been dishonoured upon presentation and proceedings U/s 138 of N.I. Act are pending against the defendant.
73. On behalf of defendant, issuance of cheques in favour of plaintiff was disputed. It was submitted that defendant never issued the said cheques to plaintiff to settle the dispute. Rather plaintiff never met with the defendant since filing of the case in High Court of Delhi. It was submitted that cheque bearing no. 000789 was issued on 16.02.2021 which was manipulated by plaintiff and other Cheques were neither issued by the defendant nor were in his hand writing.
CS DJ No. : 315/2022 41/4774. PW1 while admiting that there was no separate written agreeement pertaining to issuance of cheques by defendant stated that there could not be any separate written agreement for issuance of cheques. According to him, after the repeated demands, defendant had issued these cheques against the part payments of arrears of management charges which were post dated cheques. He admitted that the cheques had been issued for total amount of Rs. 1,25,00,000/- and also that the amount of Rs. 1,25,00,000/- could not have been payable by March-2021 based upon the amount of rent of Rs. 6,50,000/- per month. However, witness stated that defendant had been irregular in payment of charges, therefore, post dated cheques were issued by him in 2021 which were against the advance payments.
75. DW1 in cross examination denied that three cheques given by him to plaintiff company had been dishonoured or that the proceedings under section 138 N.I. Act were pending against him. He stated that 138 proceedings were pending against him for the cheques which had been issued in favour of Ms. Reena Chauhan which were blank cheques.
76. Though the cheques bear the dates of 2022, nevertheless, as conceded by PW1, same had been received by him in March 2021 which according to him were post dated cheques. The above submission is contrary to the other submission that the cheques were issued by defendant in pursuance of the settlement talks subsequent to filing of the case before Hon'ble High Court which had been filed in July 2021 and settlement talks between the parties had been initiated only in November-December 2021.
CS DJ No. : 315/2022 42/4777. Irrespective of the fact that the above noted cheques were issued by the defendant voluntarily or under the alleged threat by Ms. Reena Chauhan or in pursuance of the settlement talks or as advance payments, the cheques having been dishonoured, the alleged misappropriation of the same by plaintiff does not require any adjudication or judgment by this court though may be contentious issue in proceedings under section 138 N.I. Act. Hence, is rendered redundant.
78. Arbitration Clause: Ld. counsel for defendant referred to the arbitration clause in the agreement Ex. PW1/2 and submitted that defendant has taken objection pertaining to existence of aritration clause in the written statement, thereby the suit filed by plaintiff is barred and is in violation of the arbitration and conciliation act. Ld. counsel for defendant relied upon Madhu Sudan Sharma & Ors vs Omax Ltd 2023 RFA 823/2019 and CM 41007/2019 wherein it was noted that :
" requirement of making of an application seeking reference of the disputes between the parties to arbitration, as engrafted in Section 8(1) of the 1996 Act, is more a requirement of form than of substance. What matters is whether there is, in fact, an arbitration agreement between the parties, which is valid and subsisting. If such an agreement is in place, the jurisdiction of the Civil Court to hear and adjudicate subsists only so long as its attention is not invited to the arbitration agreement. Its jurisdiction perishes the very instant the arbitration agreement is brought to its notice, and a jurisdictional objection, on that ground, is raised - as has indisputably been done in the present case. The absence of any formal request for referring the dispute to arbitration makes no difference. An objection, predicated on Section 8 of the 1996 Act, in the light the existence of the arbitration agreement, ipso facto denudes the Court of its power to continue with the suit. It is rendered coram non judice. All future acts by the Court, in continuing to entertain the suit are, therefore, rendered ipso facto without jurisdiction".CS DJ No. : 315/2022 43/47
79. Ld. counsel for defendant reiterated that since the objection pertaining to existence of arbitration clause in the agreement was taken at the first instance and in the first submission made before the court, therefore the matter ought to be referred to the arbitration and cannot be decided by this court.
80. Ld. counsel for plaintiff submitted that plaintiff has not disputed existence of arbitration clause in the agreement. On the contrary, it is the defendant who has withdrawn from it . It is apparent from the Civil Suit CS (OS) no. 467/2021 titled as Universal Events and Management vs. Sunspot Café (P) Ltd., filed by the defendant before Hon'ble High court wherein no reference was made to the Arbitration Clause. It is submitted that defendant had relied upon the Management and License agreement dated 23.01.2021 and had challenged only legal notice dated 22.06.2021 issued by the plaintiff, regarding termination of the License. It was submitted that as per section 8 of the Arbitration & Conciliation Act, person relying upon the Arbitration Agreement, has to move before the court with necessary application submitting his first statement on the substance of the dispute. Meaning thereby, the defendant relying upon the Arbitration Agreement was duty bound to move necessary application U/s 8 of the Arbitration & Conciliation Act before moving his first statement on the substance of the dispute.
81. As submitted by counsel for plaintiff defendant had moved application seeking return of the suit wherein no plea with regard to arbitration was tajeb nor any separate application U/o 8 (1) of the Arbitration & Conciliation Act, 1996 had been moved CS DJ No. : 315/2022 44/47 by the defendant. It was submitted that reliance placed by Ld. counsel for defendant upon Madhu Sudan Sharma Vs. Omex Ltd., 2023 is no help to the case of defendant as the facts of the case are altogether different. It was submitted that even in the written statement, there was no prayer for reference of the dispute to the Arbitrator except for the vague plea. While the defendant himself did not rely upon the Arbitration Clause in the civil suit filed before Hon'ble High Court.
82. Perusal of record reveals that the application under Order 7 Rule 11 CPC had been filed on behalf of defendant prior to filing of the written statement in the matter. Prior to disposal of application under Order 7 Rule 11 CPC, written statement had been filed. Defendant had stated in the written statement that the plaint was barred under the provisions of section 12-A of Commercial Courts Act and due to existence of arbitration clause in the agreement dated 23.1.2021. Plea pertaining to provision of section 12-A had been taken in the application under Order 7 Rule 11 CPC, however, the submission with regard to existence of arbitration clause in the agreement and for reference of the dispute to the arbitration was not taken in the application under Order 7 Rule 11 CPC nor any application was moved separately under section 8 of Arbitration and Conciliation Act. Application under Order 7 Rule 11 CPC was dismissed.
83. Suit had been filed in the year 2022. During the pendency of the entire proceedings, defendant never took this objection at any point of time nor ever pressed for the decision on the fleeting plea with regard to existence of arbitration clause in the written CS DJ No. : 315/2022 45/47 statement. Now at this stage of final disposal , this objection has been taken by the defendant. Therefore, irrespective of the mention in the written statement, conduct of defendant in not pressing for the objection amounts to waiver of the said objection. Most important fact which is revealed on record is the waiver by the defendant himself in not invoking the arbitration clause earlier. After the dispute had arisen between parties pertaining to termination of the license of defendant, defendant did not resort to arbitration proceedings and chose to file civil suit before Hon'ble High Court, thereby himself gave the waiver to the arbitration clause, in which circumstances, at this stage, defendant is estopped from raising this objection for reference of dispute to arbitration, in view of own conduct in giving waiver to the arbitration clause at all the relevant stages.
84. Plaintiff is accordingly held entitled for payment of license money, as follows:
(i) W.e.f. 1st December 2020 to 31st March 2021 @ Rs. 6,50,000/- per month i.e. Rs. 26,00,000/- (Rs Twenty six lakhs ).
(ii) With effect from 1st april to 17th April 2021 @ Rs.
16,80,300 i.e. Rs. 9,52,170/- (Rs Nine Lakhs fifty two thousand and one hundred and seventy only).
(iii) With effect from 18th april to 31st may 2021 @ Rs. 6,50,000/- i.e. Rs. 9,31,666/-
(iv) With effect from 1st june 2021 to 22nd june 2021 @ Rs. 16,80,300 i.e. Rs 12,32,220
(v) With effect from 5th October 2021 to 9th December 2021 @ Rs. 16,80,300/- i.e. Rs. 35,28,630/-
All aggregating to Rs. 92,44,686/-
CS DJ No. : 315/2022 46/4785. Admitted security amount received by plaintiff in sum of Rs. 31,00,000/- and the other payment of Rs. 7,90,000/- shall be adjustable in the abovenoted amount, leaving the balance amount payable to the plaintiff at Rs. 53,54,686/- (Rs. Fifty Three Lacs Fifty Four Thousand Six Hundred Eighty Six only).
86. Plaintiff has claimed interest @ 15% per annum. There was no agreement between the parties for payment of interest at the above rate on outstanding liability, which even otherwise, in considered opinion of this court is on higher side. Hence this court is inclined to grant interest @ 9% p.a considering the prevailing market conditions and banking rate.
87. Relief : Instant suit is accordingly decreed with cost in favour of the plaintiff and against the defendant for an amount of Rs. 53,54,686/- (Rs. Fifty Three Lacs Fifty Four Thousand Six Hundred Eighty Six only) alongwith interest @ 9% p.a. w.e.f. due dates till realization.
88. Decree sheet be prepared accordingly. After completion of formalities, file be consigned to record room.
Digitally signedsavita by savita rao Date: rao 2026.01.22 15:18:16 +0530 Announced in the open (SAVITA RAO) court on 22.01.2026 DISTRICT JUDGE (COMMERCIAL COURT)-01 SOUTH, SAKET COURTS, DELHI CS DJ No. : 315/2022 47/47