Delhi District Court
Dinesh Dayal vs Cottage Industries Expositions Ltd on 23 October, 2024
-1-
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-02
NEW DELHI DISTRICT, PATIALA HOUSE COURTS
NEW DELHI
CNR NO.: DLND010026882023
CS (COMM.)/167/2023
IN THE MATTER OF:-
DINESH DAYAL & ORS.
... PLAINTIFFS
VERSUS
COTTAGE INDUSTRIES EXPOSITION LTD.
... DEFENDANT
ORDER
1. Vide this order, I shall decide an application dated 29-05-2023 moved on behalf of applicants/ plaintiffs under Order XIII-A CPC, as applicable to the Commercial Courts Act, 2015, for passing the summary judgment.
2. Arguments on the aforesaid application were heard. I have gone through the materials available on record, including the written submissions filed on behalf of both the sides and the judgments/authorities cited at the Bar.
BRIEF BACKGROUNDS OF THE CASE
3. The facts relevant and necessary for the disposal of present application are that the plaintiffs have filed the present suit seeking recovery of arrears of rent along with pendente lite and future interest against the defendant on the basis of following averments and allegations, inter alia, that:-
3.1 The plaintiff no.1 is the owner of commercial property i.e. Flat No.1E, on the first floor, DCM CS (Comm.)167/2023 Page 1 of 34 -2- Building with parking 20LB, 16, Barakhamba Road, New Delhi-110001 (ad-measuring 640 sq. fts.) [hereinafter referred to as the 'tenanted premises'].
3.2 The defendant company was inducted as a tenant in respect of tenanted premises by virtue of registered Lease Agreement dated 11.02.2004 which expired on 15.02.2007; and same was extended, vide Lease Deed dated 10.07.2007 for a further period of 3 years w.e.f. 16.02.2007. Further, the defendant company, vide letter dated 11.07.2007, which was duly signed by its Authorized Representative namely Sh. V. K. Sharma, had accepted its liability with regard to the payment of Service Tax notified in the month of May 2007, effective from 1 st June, 2007. In the said letter, the defendant company had confirmed that in case the rental paid for the tenanted premises, are covered by the provisions of the Service Tax, then, the defendant company would pay the same. It was agreed that the said letter shall form part and parcel of the lease deed dated 10.07.2007. Service Tax in respect of the tenanted premises became liable to be paid in view of the amendments in the Finance Act, and the plaintiff was compelled to deposit the service tax.
3.3 The Lease Deed dated 10.07.2007 expired on 15.02.2010 and it was further extended for one year from 16.02.2010 to 15.02.2011 on the same terms and conditions, vide letter dated 31.5.2010.CS (Comm.)167/2023 Page 2 of 34 -3-
3.4 Thereafter, it was mutually agreed between the plaintiff no.1 and Sh. Rashid Mir, Chairman of the defendant to extend the lease on 29.06.2011 w.e.f. 26.02.2011 for a further period of 9 years i.e. till 15.02.2020 and a registered Lease Deed was executed between the plaintiff No.1 and defendant on 29.06.2011. In terms of Clause 3 of Section III of the said Lease Deed, the lease rent was to be increased by 20% after every three years over the last paid rent. All the lease deeds were executed between the plaintiff no. 1 on ONE PART, and by Mr. V.K. Sharma Authorized Representative of the defendant the OTHER PART.
3.5 The defendant defaulted in paying the rent and Service Tax. The plaintiff no.1 was constrained to file a suit for recovery of arrears of rent with interest and recovery of service tax being Suit No.184/2014, titled as "Dinesh Dayal v. Cottage Industries Exposition Ltd.", which was assigned to the Court of Ms. Vineeta Goyal, the then Additional District Judge-01, New Delhi District, Patiala House Court, New Delhi.
3.6 In the aforesaid matter, both the parties had arrived at settlement before Delhi Mediation Centre, PHC, New Delhi and pursuant to the settlement, Supplementary Lease Deed dated 8.07.2015 was executed between plaintiff no.1 and the defendant and a Consultancy Agreement was executed CS (Comm.)167/2023 Page 3 of 34 -4- between the defendant and plaintiff no.2. In the Supplementary Lease Deed, the exiting Lease Deed dated 29.06.2011 was amended to the extent that the rent for the period from 01.07.2015 to 30.06.2018 would be reduced to Rs.54,400/- per month together with Rs.5,600/- per month towards Car Parking Space i.e. a total monthly rent agreed and payable by the defendant to plaintiff no.1 was Rs.60,000/-
per month. It was agreed that the rent will be payable quarterly, in advance, and the monthly building maintenance charges were payable by the defendant directly. Clause 5 was introduced in the Supplementary Lease Deed to include the Service Tax in the rent payable by the defendant. It was also agreed that the Lease Deed would come to an end by efflux of time on 30.06.2018. In terms of Clause 6 of the Supplementary Lease Deed, the defendant had agreed that the Lease Deed dated 29.06.2011 shall remain binding and in force. The defendant also agreed to pay to plaintiff no.2 consultancy charges of Rs.45,000/- per month together with rent, as aforesaid, payable by it to plaintiff no.1. A separate Consultancy Agreement dated 08.07.2015 was executed between the plaintiff no.2 and the defendant on the same day. Consultancy Charges were paid by the defendant after each month.
3.7 The cheques towards the rent were being issued by the defendant in the name of plaintiff no.1, but the CS (Comm.)167/2023 Page 4 of 34 -5- TDS was being deducted against the PAN of plaintiff no.3, which is stated to be HUF being managed by the plaintiff no. 1 as its Karta. Due to the change in some bank rules, plaintiff no.1 could not deposit the cheque for rent for the period from 01.01.2017 to 31.03.2017 in the HUF account/ plaintiff no.3.By letter dated 09.01.2017, the plaintiff no.1 requested the defendant to issue the cheques in the name of plaintiff no.3. The defendant agreed to the request by letter dated 31.01.2017 and started issuing cheques for rent in the name of plaintiff no.3. It was specifically agreed that the letter dated 31.01.2017 shall form part of the Lease, Supplementary Lease and the Mediation case and that the rent paid to plaintiff no.3 would suffice for discharge of all the liabilities on account of payment of lease rent in respect of the tenanted premises and that plaintiff no.1 would be left with no right to claim any rent thereafter in his own name.
3.8 The Lease Deed dated 29.06.2011 came to an end by efflux of time on 30.06.2018. However, even after 30.06.2018, the defendant continued to remain in occupation of the tenanted premises and Car Parking Space by virtue of the principle of holding over on month to month basis since the lease was never renewed thereafter. The defendant continued in possession of the tenanted premises and continued to pay rent @Rs.60,000/- per month to CS (Comm.)167/2023 Page 5 of 34 -6- plaintiff no.1 by giving a cheque in the name of plaintiff no.3 up to 31.03.2020. The rent was paid quarterly in advance. Consultancy charges @ Rs.45,000/- per month were also paid to plaintiff no.2 up to 29.02.2020 after every month.
3.9 The dispute arose between the parties when an email dated 23.04.2020 was received by plaintiff no.1, vide which the defendant sought to invoke 'Force Majeure' and claimed waiver of rent from 1st April, 2020 until resumption of the tourism industry in India. The email dated 23.04.2020 was replied to by plaintiff no.1 vide letter dated 26.05.2020 and the defendant was informed that its demand was unacceptable being arbitrary and against principles of settled law.
3.10 Vide its letter dated 09.06.2020, the defendant informed plaintiff no.1 of its intention to vacate the tenanted premises and sought refund of security by 30.07.2020 to enable it to vacate the premises.
3.11 The defendant had taken several flats on Ground Floor and First Floor on rent from different owners and had combined them to make one unit of office- cum-show room. Therefore, by email dated 22.06.2020, the plaintiff no.1 informed the defendant that in case the defendant wished to vacate the tenanted premises, they had to restore the premises to its original condition. It was further CS (Comm.)167/2023 Page 6 of 34 -7- made clear that till such time, vacant and peaceful possession of the premises is handed over to plaintiff no.1, CIE is obliged to continue paying rent and fulfill its legal and contractual obligations.
3.12 However, vide email dated 07.08.2020, the defendant informed plaintiff no.1 that they had demarcated the tenanted premises and if the plaintiff no.1 wanted the partition to be done, he should inform accordingly. It is, therefore, clear that till 07.08.2020, the defendant had not restored the premises to its original condition and the tenanted premises was not in a condition to be taken over by the plaintiff no.1.
3.13 Thereafter, mails were exchanged between plaintiff no.1 and the defendant, more particularly mails dated 07.08.2020; 13.08.2020; 22.10.2020 and 26.10.2020. It was impressed upon the defendant to restore the tenanted premises to its original condition and also to pay upto date rent and consultancy charges. The plaintiff no.1 impressed upon the defendant that demarcation done as per mail dated 07.08.2020, is not enough and once tenanted premises is restored to its original condition, intimation thereto may be given to enable inspection of the tenanted premises to facilitate taking over its possession. The defendant was also informed that the plaintiff no.1 was eager to take CS (Comm.)167/2023 Page 7 of 34 -8- possession as he had to set up an office for his daughter.
3.14 On 25.01.2021, the D\defendant, through its Authorized Signatory Sh. Ajay Sehgal, sent through e-mail, one Notice u/section 106 (1) of the Transfer of Property Act seeking termination of the tenancy and for handing over the possession of the tenanted premises. In the said e-mail, the defendant acknowledged that they had not paid rent since March 2020 and claimed waiver of the same. The Notice was replied to by the plaintiff nos.1 and 2 through Advocate by e-mail dated 06.02.2021, thereby calling upon the defendant to restore the tenanted premises to its original condition and to pay the outstanding rent.
3.15 Thereafter, Mr. Ajay Sehgal of defendant, informed plaintiff no. 1 over the phone that the defendant had restored the premises to its original condition by creating partition from adjoining flats. The plaintiff no.1 inspected the tenanted premises on 09.02.2021 and took possession of the tenanted premises from the defendant. The Possession Letter dated 09.02.2021 was duly signed by plaintiff no.1 and Sh. Ajay Sehgal, Authorized Representative of the defendant company.
3.16 The defendant never alleged termination of the Consultancy Agreement and never informed the CS (Comm.)167/2023 Page 8 of 34 -9- plaintiff no.2 about the reason for not paying the consultancy charges. The parties always knew that the Consultancy Charges were payable till the defendant continued in possession of the tenanted premises as had been agreed, vide letter dated 22.06.2015.
3.17 The defendant did not pay rent for the quarter commencing from 01.04.2020, 01.07.2020, 01.10.2020 and 01.01.2021 @ Rs.60,000/- per month and also did not pay consultancy charges to plaintiff no.2 w.e.f. 01.03.2020 @ Rs.45,000/ per month.
3.18 The defendant had agreed to pay to the plaintiffs a total sum of Rs.1,05,000/- per month towards use and occupation of the tenanted premises both, towards rent and towards consultancy charges. As agreed on 09.02.2021, at the time of handing over possession by the defendant, the plaintiff no.1 has adjusted the security amount of Rs.1,80,000/- against the arrears of rent and after adjustment, as aforesaid, the sum of Rs.9,46,500/- is still payable to the plaintiffs till 09.02.2021 and details thereof are given in Para no.19 of the plaint.
3.19 Thus, it is claimed that a sum of Rs.9,46,500/- was due and payable to the plaintiffs by the defendant as on 09.02.2021. Further, it is also averred that the defendant is also liable to pay to the plaintiffs, pre-
CS (Comm.)167/2023 Page 9 of 34 -10-suit interest @ 12% per annum on this amount till filing of the suit.
3.20 Plaintiffs got issued to the defendant legal notice dated 19.08.2021 through speed post at their corporate office, which it refused to receive. Hence, the plaintiffs sent another notice 28.08.2021 through e-mail calling upon the defendant to pay the arrears of rent and consultancy charges, however, despite receipt of same, the defendant did not clear the outstanding amount.
3.21 It is averred that the interest on the sum of Rs.9,46,500/- @ 12% per annum till the filing of the suit, has further accrued to the plaintiffs, and which works out to Rs.3,51,040/- as per calculation thereof provided in Para no. 23 of the plaint. Thus, it is claimed that the plaintiffs are entitled to recover a total sum of Rs.12,97,540/- [Rs.9,46,500/- towards arrears of rent and consultancy charges plus Rs.3,51,040/- towards interest thereon @ 12% per annum] from the defendant. The plaintiffs have also claimed pendente lite and future interest @ 12% per annum from the date of institution of the suit till recovery of the suit amount, besides costs of the suit.
3.22 It is also averred that the consultancy agreement executed by the defendant in favour of plaintiff no.2, was ancillary to the rent agreement executed by the CS (Comm.)167/2023 Page 10 of 34 -11- defendant with plaintiff no.1. Both the lease deed and the consultancy agreement were co-terminus and the amount payable by the defendant under the two agreements, as aforesaid, was towards discharge of its liability for use and occupation of the tenanted premises. Therefore, the plaintiffs seek leave of this Court for joining the cause of action arising out of the Lease Deed and Consultancy Agreement.
3.23 Further, the plaintiff no.3 has been joined as the rent was being paid by cheques drawn in favour of plaintiff no.3 in discharge of the liability of the defendant towards plaintiff no.1 and therefore, the plaintiff no.3 is a necessary party to the suit.
WRITTEN STATEMENT
4. Summons of the suit were issued to defendant. The defendant put its appearance through counsel and filed written statement contesting the suit on various grounds, inter alia:-
4.1 The Lease deed dated 29.6.2011, supplementary lease deed and consultancy agreement, both dated 08.07.2015 have already expired by efflux of time way back on 30.06.2018, therefore, the present plaint/ suit of the plaintiff is liable to be rejected on this ground itself. Thus, the defendant has admitted the execution of aforesaid lease deed /agreements;CS (Comm.)167/2023 Page 11 of 34 -12-
4.2 However, it is stated In March, 2020, Corona Virus (Covid-19) Pandemic, spread in whole world including India and the business Houses suffered huge losses due the Lock Down and Business Houses had to shut down due to government restrictions and closing the Business Premises. The defendant company wrote various letters, email communications and also made verbal request to the plaintiff for waiver of rent for the tenanted premises due to Pandemic, Covid-19, for the period starting from 1st April, 2020 until resumption of the tourism industry in India, when foreign tourists will start visiting India once again, till such time, ever CIE location will remain closed. However, the same was reluctantly rejected by the plaintiff and the defendant, vide its communication dated 7th August, 2020, informed that it was difficult for the defendant to sustain its business due to Lock Down (Covid-19) and the plaintiff reluctantly rejected the request of the defendant company to cooperate, therefore the defendant company offered to hand over the possession of the tenanted premises to the plaintiff and intimated them to take the possession of the same and to refund the Security Deposit of the defendant company. However, the plaintiffs with their ulterior motive to extort money, gave lame excuses including the restoration of the tenanted premises though the same was readily available. The defendant, after a lot of persuasion and efforts, CS (Comm.)167/2023 Page 12 of 34 -13- handed over the tenanted premises to the plaintiff, vide possession letter dated 9th February, 2021. The plaintiff knowing fully well that the tenanted premises were closed due to lock down/ shut down, had deliberately avoided to take possession and for claiming the rent for the lock down period, which was neither due, nor was payable by the defendant as the defendant company already offered the possession of the tenanted premises to the plaintiff and thus, the present claim of the plaintiffs is liable to be rejected on this count also.
4.3 It is further submitted that the subject immovable property was being used in the trade and commerce relating to the tourism industry. It is an undisputed fact that the very purpose and intention of having taken the tenanted premises was for trade and commerce of premium products art and artefacts, having a customer base of international tourists visiting India. With the advent of Covid-19, the entire country was put under lock down and internal travel in and from India was also restricted.
Therefore, due to the lock down, the Lease Deed got frustrated under the law of contract, thereby resulting in impossibility of performance thereof for both the plaintiffs and the defendant and thus, both the plaintiffs and the defendant were discharged from their respective performances under the Contract Act. The performance of both the parties CS (Comm.)167/2023 Page 13 of 34 -14- was dependent upon continued existence of performance of both the parties. The parties never agreed for altered circumstances such as pandemic, which erupted unexpectedly. Therefore, the same cannot bind the parties insisting on reciprocal performances.
4.4 Since during the subject period after 30th June, 2018, there was no written agreement existed between the parties and after March, 2020, the defendant could not used the tenanted premises due to Lock down/Shut Down and upon the rejection of the request of the defendant by the plaintiff, and further, the plaintiff avoided to take the possession of the tenanted premises on various excuses despite Lock Down, including the excuse of restoration of the premises and now, are claiming for the rent for the said lock down period, which is neither due, nor payable by the defendant company in any manner whatsoever. Therefore, the suit is liable to be dismissed on this count also.
4.5 Further, it is claimed that since the Supplementary Lease Deed was already expired, thus, the suit is not a commercial dispute or commercial suit, and therefore, the suit is liable to be rejected on this count also.
4.6 Another Consultancy Agreement dated 8th July, 2015 was executed between the defendant company CS (Comm.)167/2023 Page 14 of 34 -15- and Smt. Kapila Dayal/ plaintiff no. 2 for a period of 3(Three) years w.e.f. 1st July, 2015 till 30th June, 2018 on the terms and conditions mentioned therein, more particularly clause 3 thereof that the consultant shall provide export marketing and financial consultancy and such other related matters as may be required by the company from time to time. The said Consultancy Agreement had also expired by efflux of time i.e. on 30th June,2018 as the same was not extended further in writing, yet, the plaintiff no.2 charged the consultancy charges and defendant company paid the same to her up to February, 2020. In March, 2020, the Corona Virus (Covid-19) spread in whole world including India and the business Houses suffered huge losses due the Lock Down and Business Houses had to shut down due to government restrictions and the defendant Company closed the Business Premises and no consultancy services were taken. Accordingly, the said consultancy charges were discontinued as not payable any further. Therefore, the alleged consultancy charges claimed by the plaintiff no.2 are liable to be rejected on this ground itself.
4.7 It is stated that without prejudice to the rights and contentions of the defendant, the defendant paid a sum of Rs.1,80,000/- to the plaintiff as an interest free refundable Security Deposit. Since the defendant has vacated the tenanted premises on CS (Comm.)167/2023 Page 15 of 34 -16- 09.02.2021 and handed over the same to the plaintiff thus, the plaintiff is liable to refund the said amount of Rs.1,80,000/- along with interest @ 12% per annum from 9th February, 2021 till the date of its realization.
4.8 Likewise, in 'Parawise Reply', the defendant controverted and denied the averments made in the plaint and has reiterated the stand/defence raised by it by way of the preliminary submissions, as already noted herein above.
5. It is relevant to mention that the plaintiffs have not filed any replication to the written statement filed by the defendant.
GROUNDS OF APPLICATION u/o XXIII A CPC
6. Now adverting back to the application under consideration.
7. After referring to the case of the plaintiffs as set out in the plaint, it is claimed that the plaintiffs are entitled to summary judgment against the defendant on the following grounds:-
7.1 It is not disputed by the defendant that the plaintiff no.1 is owner of the tenanted premises, which was let out to the defendant, initially by virtue of Lease Agreement dated 11.02.2004, which was subsequently extended from time to time and ultimately, on expiry of earlier lease deeds, fresh lease deed dated 29.06.2011 was executed between CS (Comm.)167/2023 Page 16 of 34 -17- the parties for a period of 9 years i.e. up to 15.02.2020 on a monthly rent of Rs.1,05,000/- per month which was liable to be increased by 20% after ever three years.
7.2 It is also not disputed that thereafter, dispute arose between the parties, which led to the filing of a civil suit bearing No.184/2014 and admittedly, the said suit was settled between the parties through Mediation Cell, vide settlement order dated 08.07.2015. It is stated that an agreement dated 22-
06-2015 had been executed between plaintiff no.1, plaintiff no.2 and the defendant, whereby it was agreed that the supplementary lease deed and consultancy agreement would be co-terminus. It is stated that the supplementary lease deed dated 08.07.2015 was also executed between the plaintiff no.1 and the defendant, as also a consultancy agreement dated 08.07.2015 was executed between plaintiff no.2 and the defendant as contemplated in the agreement dated 22.06.2015. It is stated that though the agreement dated 22.06.2015 and the supplementary lease deed dated 08.7.2015 have been 'denied as expired' by the defendant in its affidavit of admission-denial, however, not only does the said supplementary lease deed dated 08.7.2015 form part of the mediation settlement dated 08.07.2015 but a copy thereof has also been filed by the defendant itself along with its written CS (Comm.)167/2023 Page 17 of 34 -18- statement. Further, it is stated that the denial of the agreement dated 22.06.2015 as 'denied as expired' is no denial in the eyes of law and in fact is an admission of the execution of the document.
7.3 Further, as per para-4 of the para-wise reply to the written statement, the defendant has not disputed that the supplementary Lease Deed dated 08.07.2015 was executed for a period of 3 years on a reduced rent of Rs.54,400/- for the tenanted premises along with Rs.5,600/- for parking fees in the basement, thus, totaling to Rs.60,000/-. It is also not disputed that the said agreement came to an end by efflux of time on 30.06.2018.
7.4 Further, it is also the case of the plaintiffs that the defendant also agreed to pay to plaintiff no.2 consultancy charges of Rs.45,000/- per month in addition to the rent as aforesaid payable to plaintiff no.1 and thus, a separate Consultancy Agreement dated 08.07.2015 was executed between plaintiff no.2 and the defendant, according to which, the consultancy charges were to be paid by the defendant after each month to plaintiff no.2. It is stated that the plaintiffs have filed the copy of said consultancy agreement along with the plaint, which is not only admitted by defendant in the affidavit of admission-denial, but a copy thereof is also filed by the defendant along with the written statement.
CS (Comm.)167/2023 Page 18 of 34 -19-7.5 It is stated that the defendant, by way of notice under S. 106(1) of the Transfer of Property Act dated 25.01.2021, itself has admitted that the rent for the tenanted premises has not been paid w.e.f. March, 2020 and has claimed waiver thereof on account of 'force majeure'. The plaintiff took possession of the tenanted premises from the defendant on 09.02.2021 after duly inspecting the same.
7.6 It is stated that the Consultancy Agreement dated 08.07.2015 was valid for a period of 3 years w.e.f. 01.07.2015 i.e. up to 30.06.2018, however, admittedly even after 30.06.2018, the defendant continued to pay the consultation charges to the plaintiff no.2 herein up to 28.02.2020. The defendant was well aware that the consultancy agreement is co-terminus with the tenancy and hence, never gave any notice of termination of the consultancy agreement. Since, the consultancy agreement was agreed to be co-terminus with the lease agreement, the defendant is also liable to pay consultancy charges @ Rs.45,000/- per month w.e.f. 01.03.2020 till 09.02.2021 in addition to the rent, as claimed.
7.7 As regards allegations levelled by the defendant in its written statement that the plaintiff no.1 intentionally delayed to take possession of the premises, it is stated that vide e-mail dated CS (Comm.)167/2023 Page 19 of 34 -20- 07.08.2020 (page 59 of documents filed by defendant), the defendant had informed plaintiff no.1 that demarcation of his flat has been done and if a partition was required, they may be informed. It is the case of the plaintiffs that they did not want any delay in taking possession and immediately informed the defendant, vide email dated 13.08.2020 (page 60 documents of document), that the tenanted premises be restored to its original condition. The plaintiffs waived the notice of three months as stipulated in the lease agreement and further allowed the defendant to adjust the security amount from the arrears of rent. It is stated that the defendant has not stated anywhere as to when it had informed the plaintiffs that the tenanted premises has been separated from others by partition. The plaintiff no.1 also sent an email dated 22.10.2020 (denied for want of knowledge) reminding the defendant that his property had not been restored and that the plaintiff was eager to take possession to set up an office for his daughter in the said premises.
7.8 It is also stated that the false and frivolous pleas raised by the defendant including the plea that the present dispute is not covered within the meaning of S. 2(1)(c) of the Commercial Courts Act, 2015, must be rejected forthwith in view of the fact that admittedly the defendant was using the tenanted premises for commercial purposes and the CS (Comm.)167/2023 Page 20 of 34 -21- objections raised by the defendant, are false and frivolous even to the knowledge of the defendant.
REPLY TO APPLICATION
8. The defendant has strongly opposed the application and has filed reply thereto contesting it, on more or less same grounds/ averments as pleaded in the written statement. It is stated that there are various objections and issues, as raised and mentioned in the written statement by the defendant, which need to be tried and adjudicated by this Court by leading detailed oral and documentary evidence, examination and cross-examination of the witnesses from both the sides, therefore, the present application of the plaintiffs is sought to be dismissed. It is stated that the defendant herein had offered the possession of the tenanted premises to the plaintiffs on various occasions and on 09.06.2020, yet the plaintiffs refused to take the possession on one pretext or the other and thus, this is also an issue to be decided by this Court and the present application of the plaintiffs is liable to be dismissed.
9. It is also stated that provisions laid down in Order XIII A CPC provides that summary judgment thereunder cannot be rendered in the absence of any adversary and merely upon the inquisitions by the Court. The Court is never an adversary in a dispute between the parties, and therefore, the application of the plaintiffs is liable to be dismissed. examination and cross-examination of the witnesses. Similarly, in 'parawise reply', the averments made in the CS (Comm.)167/2023 Page 21 of 34 -22- instant application are controverted and denied by defendant.
REJOINDER TO REPLY 10 . The applicants/ plaintiffs have filed rejoinder to the reply of the defendant, thereby denying the objections as raised by the defendant.
PLAINTIFFS' ARGUMENTS 11 . While referring to the case of the plaintiffs and the defence raised by the defendant, Ld. counsel of the plaintiffs vehemently argued that relationship between the parties in respect of the tenanted premises commenced on 11.02.2004 by virtue of registered lease agreement, which was renewed from time to time and lastly by virtue of registered lease deed 26.09.2011 and the same are duly admitted by the defendant.
12 . Further, it is also argued that the defendant has also admitted that in pursuant to mediation settlement in another case preferred by the plaintiff against the defendant, supplementary lease agreement dated 08.07.2015 and consultancy agreement dated 08.07.2015 were also executed between them.
13 . Ld. Sr. Advocate appearing on behalf of plaintiffs argued on the aforesaid lines of the averments made in the application under consideration, in order to bring home his points that false plea has been raised by the defendant that rent was not payable on account of tenanted premises CS (Comm.)167/2023 Page 22 of 34 -23- being not put to use on account of Covid-19 pandemic by applying the principle for 'Force Majeure' or that the defendant was not under any contractual obligation to pay the consultancy charges to plaintiff no.2 under the pretext of not availing the consultancy services from the said plaintiff. He further submitted that the entire such defence raised on behalf of defendant is moonshine and does not raise any triable issue at all. He further submitted that all the material facts involved in this case, have been admitted by the defendant and thus, there is no need to go for any trial in this matter and also that the defendant has no real prospect of successfully defending the present suit. Hence, he urged that summary judgment may be passed against the defendant while allowing the application under consideration.
14 . In support of his submissions, Ld. Sr. Advocate appearing for the plaintiffs has also relied upon the following judgments:-
14.1 "Ramanand & Ors v. Dr. Girish Soni ", reported as 2020 SCC OnLine Del 635;
14.2 Best Choice Enterprises v. M/s J. Sons Agencies, bearing RSA No.108/2004 & CM No. 4817/2004, decided on 14.02.2011 regrading rate of interest;
and 14.3 "Su-Kam Power Systems Ltd. v. Kunwer Sachdev and Another", reported as 2019 SCC OnLine Del 10764.
CS (Comm.)167/2023 Page 23 of 34 -24-DEFENDANT'S ARGUMENTS 15 . While admitting the factum of induction of defendant in the tenanted premises by virtue of lease agreement, which was renewed from time to time, it has been argued by Ld. Counsel of defendant that as a result of spread of Corona Virus during Covid-19, a pandemic was declared throughout the world including India and there was nationwide lockdown imposed in the country w.e.f. 15.03.2020, due to which, the tenanted premises was compulsorily and mandatorily shutdown / closed due to government restrictions and as such, the defendant could not use the tenanted premises for running its business. He claimed that such compulsory closure was beyond the control of plaintiffs as well as the defendant and therefore, the doctrine of 'Force Majeure' is applicable to the fact of the present matter and thus, the claim raised by plaintiffs seeking arrears of rent and consultancy charges, is not sustainable under the law. He further argued that the defendant had requested the plaintiff for waiver of rent during lockdown, which was refused by them, on which, it requested the plaintiff to take possession of the tenanted premises on 09-6-2020 but the plaintiff started providing lame excuses on the pretext of restoring the tenanted premises to its original condition despite the fact that it was readily available, with malafide intention as it could not have been re-let by the plaintiff on account of lockdown. He further argued that since the defendant did not avail any consultancy services from the plaintiff no.2 CS (Comm.)167/2023 Page 24 of 34 -25- since after 01-3-2020, the relevant claim on account of consultancy charges for the period from 01-3-2020 onwards, is unjustified and is also contrary to the covenants nos. 2, 3 and 4 of the Consultancy Agreement. Alternatively, he also submitted that said Consultancy Agreement had already expired by efflux of time on 03-6- 2018. He further submitted that the application in hand does not conform to the essential requirements of Order XIII A CPC and thus, is not maintainable under the law. Based on all these submissions, Ld. Counsel of defendant contended that there are several triable issues involved in this matter, for which, matter requires full fledged trial and therefore, the application is liable to be dismissed.
16 . In support of his submissions, Ld. Counsel for the defendant has also relied upon the following judgments passed by our own Hon'ble High Court:-
16.1 "Rockwool Internal & Anrs. v. Thermocare Rockwool (India) Pvt. Ltd." reported as 2018 SCC OnLine Del 11911 16.2 "Elofic Industries Ltd. v. Mobis India Ltd." reported as 2023 SCC Online 396; and 16.3 "Karan Kapoor v. Madhuri Kumar" bearing Civil Appeal 4545/2022 [Arising Out of SLP (Civil) No.13800 of 2021] decided on 06-07-2022 by Hon'ble Apex Court regarding judgment on admission under Order XII Rule 6 CPC.CS (Comm.)167/2023 Page 25 of 34 -26-
ANALYSIS AND CONCLUSION 17 . At the outset, it must be noted here that the application under consideration has been moved under Order XII rule 6 read with Order XIIIA CPC by the plaintiffs. However, Ld. Sr. Advocate, on instructions from the plaintiffs, submitted during the course of the arguments on this application on 20-02-2024 that this application may be treated and accordingly disposed off while applying the parameters of Order XIIIA CPC, as applicable to The Commercial Courts Act, 2015. The application in hand stands treated accordingly and thus, is being decided within the realm of the legal position governing the said provision.
18 . It must be mentioned that Order XIII A CPC provides for summary judgment and grounds for summary judgment are contained in Rule 3, which reads as under:-
"3. Grounds for summary judgment. - The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that -
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence."
19 . In view of scope of summary judgment, let us examine the facts of the case in hand.
20 . As already noted above, the defendant has admitted the entire case of the plaintiff with respect to the execution of Lease Agreement dated 11.2.2004 initially for a period of 3 years and its subsequent renewal from time to time and CS (Comm.)167/2023 Page 26 of 34 -27- lastly, vide Lease Agreement dated 29.06.2011. Not only this, it is also an undisputed fact that some dispute arose between the parties regarding payment of rent and service tax during continuation of the said lease agreement, which led to filing of Suit No. 184/2014 (supra) by the plaintiff no.1 against the defendant. It is also a matter of record that the parties arrived at amicable settlement before Mediation Centre, Patiala House Courts, New Delhi and in pursuant thereto, Supplementary Lease Deed dated 8.07.2015 was executed between plaintiff no.1 and the defendant and a Consultancy Agreement was executed between the defendant and plaintiff no.2. In the Supplementary Lease Deed, the exiting Lease Deed dated 29.06.2011 was amended to the extent that the rent for the period from 01.07.2015 to 30.06.2018 would be reduced to Rs.54,400/- per month together with Rs.5,600/- per month towards Car Parking Space i.e. a total monthly rent agreed and payable by the defendant to plaintiff no.1 was Rs.60,000/- per month. It was agreed that the rent will be payable quarterly, in advance, and the monthly building maintenance charges were payable by the defendant directly. Clause 5 was introduced in the Supplementary Lease Deed to include the Service Tax in the rent payable by the defendant. It was also agreed that the Lease Deed would come to an end by efflux of time on 30.06.2018. In terms of Clause 6 of the Supplementary Lease Deed, the defendant had agreed that the Lease Deed dated 29.06.2011 shall remain binding and in force. The defendant also agreed to pay to plaintiff no.2 consultancy CS (Comm.)167/2023 Page 27 of 34 -28- charges of Rs.45,000/- per month together with rent, as aforesaid, payable by it to plaintiff no.1. A separate Consultancy Agreement dated 08.07.2015 was executed between the plaintiff no.2 and the defendant on the same day. Consultancy Charges were to be paid by the defendant after each month.
21 . It is also relevant to note that the defendant is shown to have written a letter dated 22.06.2015 clearly mentioning therein that the supplementary lease deed between plaintiff no.1 and defendant, and the consultancy agreement between plaintiff no.2 and defendant are in connection with the tenanted premises i.e. Flat No.1E situated on first floor, DCM Building, 16, Barakhamba Road, New Delhi along with parking space No.LB-20...' Thus, it was duly agreed between the parties that same would be co-terminus with each other. The said letter is found to have been duly signed by both the plaintiffs and the authorized signatory of the defendant.
22 . Although in Para no.6 of the reply on merits of the written statement, the defendant has denied that any such letter was issued on 22.6.2015, however, in the affidavit of admission and denial, the defendant has stated that the said document is 'denied as expired', which would clearly show that the defendant has admitted the execution of the the said letter. Needless to say that the defendant was under legal obligation to specifically deny the execution of said document under the law. Once, the defendant has simply denied the same on the ground that it had expired, CS (Comm.)167/2023 Page 28 of 34 -29- the Court is in agreement with the submission made by Ld. Sr. Advocate of the plaintiffs that the said document is deemed to be admitted by the defendant.
23 . There is no merit in the arguments advanced on behalf of defendant that it never availed any consultancy services from plaintiff no.2 and thus, it is liable to pay any amount under the said head. Pertinently, it is not the case of the defendant company that it ever sought consultancy or consultancy was ever provided even during the subsistence of the consultancy agreement or till the consultancy charges were paid. The payment under the consultancy agreement was never contingent upon any consultancy sought or rendered. The consultancy agreement was in the nature of retainership and it is shown to the satisfaction of this Court that it was a fixed amount to be paid towards use and occupation of the tenanted premises.
24 . It may be noted that the defendant continued in occupation of the tenanted premises and paid rent in terms of Supplementary Lease Deed upto 31.03.2020 along with Rs.45,000/- per month in terms of Consultancy Agreement upto 29.02.2020 i.e. much beyond the purported date of expiry of Supplementary Lease Deed and Consultancy Agreement i.e. 30.06.2018. It is not in dispute that under the lease deed, the rent was payable in advance for every quarter and hence, the rent for the 1 st quarter, 2020 to 31st March, 2020 was paid in January,2020, whereas, the consultancy charges were to be paid by the defendant after the expiry of the month and hence, consultancy charges for CS (Comm.)167/2023 Page 29 of 34 -30- February,2020 were paid in March, 2020. However, the defendant stopped paying the rent /consultancy charges from April, 2020 till 09.02.2021 i.e. the date when the tenanted premises was restored to its original condition and on which date, the possession thereof is shown to have been taken by plaintiff no.1 from the defendant.
25 . The plea of 'Force Majeure' as raised by the defendant in its written statement, is misconceived inasmuch as same applies to executory agreement and not to concluded agreement like in this case as registered lease agreement and consultancy agreement were executed between the parties. While saying so, Court is relying upon the decision of Hon'ble Delhi High Court in the case of ' Ramanand & Ors' (supra) as has been relied upon by plaintiffs.
26 . In the case of Su-Kam Power Systems Ltd. (supra), which is also relied on behalf of plaintiffs, Hon'ble Delhi High Court has succinctly laid down the legal position with respect to provision contained in Order XIII A CPC. The relevant portion of the said judgment is extracted as under:-
"xxx
49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robbert Hryniak (supra).
xxx"
CS (Comm.)167/2023 Page 30 of 34 -31-27 . The other contention raised on behalf of defendant that the application in hand does not conform to the essential requirements provided in Order XIII A CPC, is unfounded and thus, stands rejected. Apart from raising this objection, the defendant has failed to point out as to how and which of such essential requirements is lacking in the present application. Still, the Court has examined the application in hand in the light of the aforesaid provision and finds that it duly contains all the essential ingredients and conforms to the requirements of law. For all these reasons, the reliance placed by the defendant on the decision of Hon'ble Delhi High Court in the case of Elofic Industries Ltd. (supra) is misplaced and said judgment is not applicable to the facts and circumstances of the present case.
28 . The reliance placed by defendant in the case of Karan Kapoor (supra), is also misplaced for the simple reason that the present application is being dealt with and considered under Order XIII A CPC, as applicable to the Commercial Courts Act, 2015, as already mentioned hereinbefore. The above cited decision deals with the power of Court under Order XII Rule 6 CPC. Thus, said judgment is inapplicable to the facts and circumstances of the present case.
29 . There cannot be any dispute to the proposition of law laid down by Hon'ble Delhi High Court in the case of Rockwool International A/S & Anr. (supra) as is cited by Ld. Counsel of defendant. However, the said judgment CS (Comm.)167/2023 Page 31 of 34 -32- lays down that as and when the defendant is able to show that there are triable issues requiring oral evidence and the suit cannot be decided in summary manner without trial, the summary procedure provided in Order XIII A CPC should not be invoked by the Court. In this case, the Court is of the considered opinion, for the reasons already noted hereinabove, that the defendant has failed to raise any triable issue in this matter, which may require the parties to lead their respective evidence during trial.
30 . There is no substance in the last argument raised on behalf of the defendant that for want of any express agreement between the parties to pay any interest on the delayed payment, the plaintiffs are not entitled to recover any such interest from the defendant.
31 . In this regard, it would be apposite to refer to Section 34 CPC, which clearly provides that where the liability in relation to the sum so adjudged had arisen out of commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate of interest, or where, there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to the commercial transactions. In the case in hand, the defendant company illegally withheld the lawful dues of the plaintiffs without any justification. No one can be allowed to enrich itself at the cost of the other side. For this purpose, the reliance placed by plaintiffs upon the decision of Hon'ble Delhi High Court in the case of Best Choice Enterprises (supra) is also relevant. Hence, this Court is of CS (Comm.)167/2023 Page 32 of 34 -33- the considered opinion that the plaintiffs are entitled to recover interest from the defendant and same does not in any manner raise any triable issue so as to call for rejection of the application under consideration.
32 . The plaintiffs have also claimed the cost of the suit. Keeping in view the provisions contained in Sections 35 and 35A CPC, it has been established that the defendant failed to pay the outstanding dues to the plaintiffs without any rhyme or reason. Therefore, the defendant is responsible for the cost of the litigation to the extent of court fee and lawyers fee etc. as per the relevant rules. In my view, the plaintiffs are accordingly entitled for the cost of litigation against the defendant.
33 . In view of the foregoing reasons, the Court is of the considered view that there is no real prospect of defendant in successfully defending the claim of the plaintiffs in view of the admitted position as stated above. Further, the defendant has failed to raise any triable issue and thus, there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
34 . As an upshot of above discussion, the application under consideration is hereby allowed and consequently, the suit of the plaintiffs is hereby decreed by way of summary judgment, whereby it is held that plaintiffs are entitled for a decree for a sum of Rs.12,97,540/- alongwith pendente lite and future interest @ 12% per annum from the date of CS (Comm.)167/2023 Page 33 of 34 -34- filing of the present suit till realization of suit amount together with costs of the proceedings.
35 . Decree sheet be drawn up accordingly.
36 . File be consigned to record room, after due compliance.
Digitally signedAnnounced in the open court by VIDYA PRAKASH on 23rd of Day of October, 2024. VIDYA Date: PRAKASH 2024.10.23 17:50:58 +0530 (VIDYA PRAKASH) DISTRICT JUDGE (COMMERCIAL)-02 PATIALA HOUSE COURTS, NEW DELHI CS (Comm.)167/2023 Page 34 of 34