Karnataka High Court
M/S Hercules Sports International vs Mrs T Amudha on 21 July, 2023
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
R.F.A No.831/2018
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JULY 2023
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
R.F.A. NO. 831 OF 2018 (EJE)
BETWEEN :
1. M/S HERCULES SPORTS INTERNATIONAL
REGD. UNDER INDIAN COMPANIES ACT
NO.4, HSR LAYOUT, I SECTOR
BENGALURU-560 095.
REPRESENTED BY ITS PARTNERS
1(A). SRI H.V. GAJARAJ
AGED ABOUT 67 YEARS
S/O SRI. H.N. VENKATAPPA REDDY
1(B). MRS. VASANTHA GAJARAJ
W/O H.V. GAJARAJ
AGED ABOUT 57 YEARS
BOTH R/AT NO.34, MADANDEEP
BTM I PHASE, 18TH MAIN
BENGALURU-560 068. ... APPELLANTS
(BY SHRI. D.R. RAVISHANKAR, SENIOR ADVOCATE FOR
SHRI. AJIT KALYAN, ADVOCATE FOR
APPELLANT NO. 1 (A & B))
AND :
1. MRS. T. AMUDHA
D/O A.T. VELU
AGED ABOUT 50 YEARS
R.F.A No.831/2018
2
2. MRS T. LAKSHMI
D/O A.T. VELU
AGED ABOUT 36 YEARS
BOTH RESIDING AT
NO.133, KHB COLONY
KORMANGALA
BENGALURU-560 034. ... RESPONDENTS
(BY SHRI. A. RAVISHANKAR, ADVOCATE FOR C/R1 & R2)
THIS RFA IS FILED UNDER SECTION 96(1) OF THE
CPC, AGAINST THE JUDGMENT AND DECREE DATED
31.01.2018 PASSED IN O.S.NO.7642/2014 ON THE FILE OF
THE V ADDITIONAL CITY CIVIL JUDGE, BANGALORE, PARTLY
DECREEING THE SUIT FOR EJECTMENT.
THIS RFA, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 21.03.2023 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY,
POONACHA J., PRONOUNCED THE FOLLOWING:-
JUDGMENT
The above first appeal is filed by the Defendants under Section 96(1) of the Code of Civil Procedure, 1908 (hereinafter referred to as the 'CPC') challenging the judgment and decree dated 31.1.2018 passed in OS No.7642/2014, whereunder the suit of the Plaintiffs for ejectment has been decreed.
R.F.A No.831/20183
2. For the sake of convenience, the parties herein are referred as per their rank before the Trial Court.
3. It is the case of the Plaintiffs that they let out the suit premises to the Defendants under certain terms and conditions vide Lease Agreement dated 1.2.2011, whereunder the monthly rent agreed to be paid was `1,90,000/- pm., and the refundable deposit was `19.00 lakhs. The said Agreement also contemplated escalation of rent of 15% every three years. It is the further case of the Plaintiffs that the Defendants having become irregular in the matter of payment of rent and the Plaintiffs got issued a legal notice dated 25.6.2014 terminating the tenancy of the Defendants, requested them to vacate and handover vacant possession of the suit premises and to pay the outstanding rent. The Defendants received the said legal notice and responded to the same vide reply notice dated 26.7.2014. That since the Defendants did not comply with the demands made in the legal notice, the R.F.A No.831/2018 4 Plaintiffs filed a suit seeking a direction to the Defendants to vacate and handover vacant possession of the suit premises and to pay the arrears of rent from November 2013 till July 2014 in a sum of `20,49,444/- as also damages for illegal occupation from August 2014.
4. The Defendants entered appearance and filed their written statement. The relationship between the parties and the execution of the Lease Agreement dated 1.2.2011 is admitted. However, it was contended by the Defendants that the suit premises consisted of basement and ground floor, each measuring 1500 sq.ft., and the first floor measuring 1600 sq.ft., totally measuring 4600 sq.ft. That they used only the ground floor portion measuring 1500 sq.ft., and they were unable to use the basement and first floor portions, totally measuring 3100 sq.ft. It is the contention of the Defendants that during the rainy season there was no provision for removal of the rain water and there was no proper drainage and hence they were unable to use the R.F.A No.831/2018 5 basement portion. That the height of the first floor is very low and measures only 7'.5" and the Defendants were unable to store, carry and handle the equipments since the staircase was very narrow. That as per the Structural Engineer's opinion, the structural design of the building was not suitable to keep heavy equipments in the first floor and hence were unable to use the first floor portion.
4.1. That they paid the monthly rent at the rate of `1.90 lakhs pm., up to October 2013 and an assurance was given that they will be given deduction for not having used the basement and the first floor portion. That the Plaintiffs have agreed to receive rent at the rate of `96,000/- pm., since the beginning of the lease i.e., from 1.4.2011. Hence, the Defendants are liable to pay the monthly rent to Plaintiffs only at the rate of `96,000/- pm. That the Plaintiffs have also put a "To-let" board displaying that the basement and the first floor are available for rent. The Defendants have further contended that they have spent huge amounts for interiors and other fittings and fixtures and they have R.F.A No.831/2018 6 incurred huge loss in their business. The Defendants also alleged that the termination of tenancy was not proper and they are not liable to pay either the damages or the arrears of rent.
5. Based on the pleadings of the parties, the Trial Court framed six issues. The PA holder of the Plaintiffs was examined as PW.1 and Exs.P1 to P23 were marked in evidence. The Defendant No.1(a) was examined as DW.1 and Ex.D1 was marked in the evidence. The Trial Court by its judgment and decree dated 31.1.2018 partly decreed the suit of the Plaintiffs and passed the following order:
"The suit of the Plaintiffs is partly decreed.
The Plaintiffs are entitled for vacant physical possession of the suit schedule property from the Defendants.
The Plaintiffs are entitled for recovery of arrears of rental amount from November, 2013 onwards till July, 2014 at the rate of `190,000/- with service tax at the rate of `23,484/- per month from the Defendants.
It is directed to the Defendants to pay the arrears of rent from November, 2013 onwards upto July, 2014 at the rate of `1,90,000/- with service tax of `23,484/- per month.
Further Plaintiffs are entitled for damages amount of `1,90,000/- per month for R.F.A No.831/2018 7 the illegal occupation of the schedule premises by the Defendant from the month of August, 2014 till delivery of vacant physical possession of the suit schedule premises.
It is further directed to Defendants to pay damages for the illegal occupation of the schedule premises from the month of August 2014 at the rate of `1,90,000/- till the delivery of vacant physical possession of the Plaintiff.
It is the directed to Defendants to vacate the suit schedule premises within 5 months from the date of this order and handover the schedule premises to the Plaintiffs.
Draw decree accordingly."
6. Being aggrieved, the present appeal is filed.
7. Learned Senior Counsel for the Appellants - Defendants vehemently contended:
i) That the rent payable is only `96,000/-
p.m., having regard to the fact that the Defendants have not used the entire suit premises;
ii) That the Defendants are not liable to pay damages as awarded by the Trial Court.
8. Per contra, learned Counsel for the Respondents - Plaintiffs contended:
i) That the Trial Court has in detail appreciated the factual matrix and awarded arrears of rent at the R.F.A No.831/2018 8 rate of `1,90,000/- pm., as also damages and the amount awarded by the Trial Court is just and proper;
ii) That although the Defendants have contended that they have used only a portion of the premises, as rightly noticed by the Trial Court they have not proved the said aspect and hence, they are not entitled to any relief in the present appeal.
9. In support of his contentions, the learned Counsel relied on the following judgments:
i) M.V.Shankar Bhat & Ors., v.
Claude Pinto, since (deceased) by lrs., & Ors., 1 ;
ii) Smt T.Amudha & anr., v. M/s Hercules Sports International2;
iii) M/s Hercules Sports 3 International v. Smt Amudha ;
iv) M/s Hercules Sports 4 International v. Smt.Amudha .
10. Having regard to the fact that during the pendency of the above appeal, on 20.7.2018 the 1 (2003) 4 SCC 86 2 WP No.25582-83/2015, DD 29.7.2015 3 WP No.51784/2014, DD 25.1.2016 4 WP No.36824/2016, DD 2.1.2017 R.F.A No.831/2018 9 Appellants - Defendants have delivered vacant possession of the suit premises to the Respondents - Plaintiffs, the only aspect that is required to be considered is with regard to the arrears of rent and damages payable by the Defendants.
11. We have considered the submissions made by both the learned Counsel and perused the material on record. The question that arises for consideration is:
"Whether the judgment and decree of the Trial Court directing the Defendants to pay the arrears of rent from November 2013 to July 2014 at `1,90,000/-, with service tax of `23,484/- p.m., and damages of `1,90,000/- pm., from August 2014 till date of delivery of suit premises, is just and proper?"
12. Having regard to the contention of the Defendants that they are liable to pay rent at `96,000/- pm., since they did not use the basement and first floor, the Trial Court framed issue No.4 as follows:
"4. Whether the defendant proves that the basement and the first floor are not suitable for their purpose and the Plaintiff agreed to reduce the rent to `96,000/- per month?"R.F.A No.831/2018 10
13. The Trial Court considered issue Nos.1, 2 and 4 together and upon an appreciation of the oral and documentary evidence available on record has recorded the following findings:
i) The Defendants have admitted the Lease Agreement dated 1.2.2011 and date of commencement of tenancy i.e., 1.4.2011;
ii) The Defendants did not raise any objection at the time of marking of Ex.P2 - Lease Deed dated 1.2.2011;
iii) Ex.P2 - Lease Deed is not a registered document. However the tenancy between the parties is an admitted fact. Hence, Section 106 of the Transfer of Property Act would be applicable;
iv) The last sentence mentioned in Ex.D1 is that both the parties discussed to have a supplementary agreement. Hence, Ex.D1 is only an assurance for completing the contract by executing a further supplementary contract;
v) Ex.D1 is not treated as a Lease Agreement since if parties as per Ex.D1 agreed for reduction of rate R.F.A No.831/2018 11 of rent to `96,000/- pm., the Defendants would not have continued to pay rent at `1,90,000/- pm., for about two years after deducting TDS;
vi) Ex.D1 has not created any right to the Defendants to vary the terms of the Lease Deed;
vii) DW.1 has admitted in his cross-examination that he has not paid the rent from September 2013;
viii) No material is produced by the Defendants to show that they have handed over cellar and first floor to the Plaintiffs;
ix) The Defendants have not produced any material to show that basement and first floor are not suitable for their purpose and Plaintiffs had agreed to reduce the rent to `96,000/- pm.;
x) Ex.D1 is not a conclusive agreement.
14. A paper book containing the pleadings, deposition and exhibits have been filed in Court on 13.12.2022. It is forthcoming from a perusal of the oral and documentary evidence available on record that the Defendants, apart from taking a plea regarding R.F.A No.831/2018 12 reduction of rent, no material has been placed on record. Although, DW.1 in his evidence by way of examination-in-chief has stated regarding water clogging in the basement and the height of the first floor being low and the staircase to first floor being narrow, there is no independent documentary evidence produced regarding the said aspects. DW.1 in his examination in chief, although averred regarding meeting with the Plaintiffs on 09.04.2011 and offered to pay `96,000/- rent per month for the ground floor, in his cross-examination, DW.1 admits that there is no reference to the said meeting dated 09.04.2011 either in the reply notice or in the written statement.
15. DW.1 in his cross examination further admits that he has not made any correspondence with the Plaintiffs regarding entering of the rain water and drainage water. He further admits that he has not got any document regarding surrendering of the basement and first floor. With regard to Ex.D1, DW.1 admits that the signatures of the second plaintiff and her father are not forthcoming in the same. Although he has stated R.F.A No.831/2018 13 that the staff were present, he admits that there are no signatures of witnesses on Ex.D1. He also admits that in pursuance of Ex.D1, there is no supplementary agreement executed between the parties and there is no correspondence or legal notice to the Plaintiffs for execution of the supplementary agreement. He further admits that in Ex.D1 there is no reference of redelivery of possession of basement and first floor to the Plaintiffs. Ex.D1 is a letter dated 09.04.2011 addressed to the Plaintiffs.
16. As noticed above, the signatures of both the Plaintiffs are not forthcoming in Ex.D1. Admittedly, no supplementary agreement has been executed between the parties. There is a specific stipulation in Ex.D1 that "both parties discussed to have supplementary agreement ....". In the absence of Defendants producing any independent oral evidence or documentary evidence to demonstrate that rent agreed to be paid has been varied from the terms agreed at the time of inception of tenancy, the findings recorded by the Trial Court R.F.A No.831/2018 14 regarding arrears of rent is not liable to be interfered with.
17. With regard to the arrears of rent payable, the learned Counsel for the Appellants has filed a Memo of Calculation dated 10.10.2018, which reads as follows:
"2. The amount payable as per the decree passed in O.S.7642/2014 is calculated hereunder;
a. Period from November 2013 to July 2014 = 8 months b. The amount payable is 8 months x Rs.1,90,000 + Rs.23,484= 17,07,872/-.
c. Period calculated from July 2014 to June 2018 (Appellant vacated on 20th July 2018) = 47 months.
d. The amount payable for 47 months is 47 x Rs. 1,90,000= Rs.89,30,000/-
e. The total amount payable = Rs.1,06,37,872/-
f. Out of this, the amount in Court deposit is Rs.20,49,444/- and the amount being security deposit is Rs.19,00,000/-. If we subtract these two, the amount payable is Rs.66,88,428/-.
g. As per the Decree, the amount payable is Rs.66,88,428/-.
3. The amount payable as per the contentions of the Appellant:-
a. Period from November 2013 to June 2018 (Appellant vacated on 20th July 2018)= 56 months R.F.A No.831/2018 15 b. Amount payable is 56 months x Rs.96,000= Rs.53,76,000/-
c. Out of this, the amount in Court deposit is Rs.20,49,444/- and the amount being security deposit is Rs.19,00,000/-. If we subtract these two, the amount payable is Rs.14,26,556/-. d. As per the Decree, the amount payable is Rs.14,26,556/-."
18. The learned Counsel for the Respondents has also filed a Memo of Calculation dated 9.10.2018, the relevant portion of which is extracted herein below for ready reference:
"SL DESCRIPTION AS PER AMOUNT TOTAL .NO DECREE AMOUNT DUE 1 Arrears of rent from 1,90,000+23,484 19,21,356-00 Nov. 2013 to July 2014 plus = 2,13,484 x 9 service tax For 9 months 2 Damages at the rate of +1,90,000 x 47 89,30,000-00 1,90,000/- from August 2014 till June 2018 for 47 months 3 Damages for 20 days in July 6,333x20 1,26,660-00 2018 6,333 per day (Delivery of the premises given on 20.7.2018, as per order of Court).
Total (1+2+3) 1,09,78,016-00
4 Less amount deposited -20,49,444-00 89,28,572-00
before the court
5 Less refundable security -19,00,000-00 70,28,572-00
deposit 19,00,000-00
6 Cost awarded in the suit +2,62,778-00 72,91,350-00"
R.F.A No.831/2018
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19. It is forthcoming from the aforementioned that there is no dispute with regard to the dates on which the rental amount is required to be calculated and the fact that the monthly rent payable is Rs.1,90,000/-
per month and the service tax for 9 months from November 2013 to July 2014 is Rs.23,484/-.
20. The contention of the Defendants that they are liable to pay rent of Rs.96,000/- is liable to be rejected having regard to the fact that the finding regarding variation in the agreement for payment of rent from `1,90,000/- to `96,000/- has been negatived.
21. Hence, it is just and proper that the Defendants be directed to pay the arrears of rent of `1,90,000/- pm. The Appellant has failed in demonstrating that the findings recorded by the Trial Court to direct the Defendants to pay damages of Rs.1,90,000/- pm, is erroneous and liable to be interfered with.R.F.A No.831/2018 17
22. In view of the aforementioned, the amounts due and payable by the Defendant are assessed as follows:
i) Arrears of rent from November 2013 to July 2014 (9 months) + service tax= `1,90,000/- + `23,484/- = 2,13,484/-x9 = 19,21,356/-;
ii) Damages at the rate of `1,90,000/- pm.,
from August 2014 till June 2018 (47
months)=`1,90,000 x 47 = Rs.89,30,000/-;
iii) Damages for 20 days in July 2018 at Rs.6,333/- per day i.e, `6,333x20= Rs.1,26,600/- ;
iv) Thus, the total amount due by the Defendants is (`19,21,356/- + `89,30,000/-
+ `1,26,600/-) `1,09,78,016/-.
v) Out of the aforementioned total amount due, the amount deposited before this Court of `20,49,444/- as well as the refundable security deposit of `19,00,000/- is to be R.F.A No.831/2018 18 deducted. Hence, the total amount to be deducted is (`20,49,444/- + ` 19,00,000/-) `39,49,444. The balance amount payable by the Defendants is (`1,09,78,016/- -
`39,49,444/- ) ` 70,28,572/-.
23. Having regard to the subsequent development that the Defendants have handed over vacant possession of the suit property to the Plaintiffs on 20.7.2018 and the Defendants having deposited certain amounts towards the arrears of rent, the decree of the Trial Court is required to be modified only to the extent of passing appropriate orders regarding the arrears of rent and the damages payable.
24. Hence, we pass the following:
ORDER i. The above appeal is partly allowed;
ii. The judgment and decree dated 31.1.2018 passed in OS.No.7642/2014 by the V Additional City Civil Judge, Bangalore City, is modified directing the Defendants to pay the Plaintiff a sum of R.F.A No.831/2018 19 `70,28,572/- together with costs of the proceedings before the Trial Court.
iii. Parties to bear their own costs in the present appeal.
Sd/-
JUDGE Sd/-
JUDGE nd/BS