Bombay High Court
Ptb Hospitality Llp Through Its ... vs Jayanti Danabhai Patel And Ors on 30 July, 2024
2024:BHC-AS:29812
Neeta Sawant WP-14685-2022-FC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 14685 OF 2022
PTB Hospitality LLP, Through
Its Partners
1. Shri. Vijaysingh Raghuvirsingh
Parihar
2. Shri. Manoj Sureh Thawanit ....Petitioners
: Versus :
1. Jayanti Danabhai Patel
2. Mrs. Pushpaben Jayantibhai Patel
3. Mr. Rohit Jayantibhai Patel
4. Mrs. Priti Rohit Patel
5. Mr. Janak Jayantibhai Patel
6. Shri. Anish Amir Bhanwadia ....Respondents
__________________________________________________________________
Mr. R.B. Huded and Mr. M.V. Chavan, for the Petitioners.
Mr. Jaydeep Deo, for the Respondents.
CORAM : SANDEEP V. MARNE, J.
Judgment Reserved On : 24 July 2024.
Judgment Pronounced On : 30 July 2024.
Page No.1 of 24
30 July 2024
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Neeta Sawant WP-14685-2022-FC
JUDGMENT :
1) Petitioners/Defendants have filed this petition challenging the order dated 11 October 2022 passed by the 3 rd Additional Judge, Small Causes Court, Pune allowing application filed by the Plaintiffs/Respondents at Exhibit-56 and directing Defendants to deposit arrears of license fees under the provisions of Order XV-A of the Code of Civil Procedure, 1908 (Code). The Small Causes Court has directed the Defendants to deposit arrears of license fees of Rs. 1,34,37,986/- for the period from 1 March 2019 to 31 March 2022. The Court has further directed the Defendants to deposit arrears of license fees @ Rs.6,98,097.70/- per month for the period from 1 April 2022 to 31 October 2022. The Defendants are further directed to deposit license fees @ Rs.6,98,097.70/- on the 10 th day of each subsequent months after 1 November 2022 till the Defendants remain in occupation of the suit premises.
2) Restaurant admeasuring built-up area of 220 sq.mtrs. and open space of 1452 sq.mtrs at Survey No.241/1A, Wakad, Taluka-Haveli, District-Pune are the suit premises. Plaintiffs claim to be the owners of the suit premises and executed Leave & License Agreement with the Defendants on 11 November 2016, under which the license in respect of the suit premises was granted in favour of Defendants for the period from 1 January 2017 to 31 December 2021 at license fees of Rs.2,87,163.35/- payable for first year, Rs. 3,01,521.51/- for second year, Page No.2 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC Rs. 3,16,597.59/- for third year, Rs. 3,32,427.47/- for fourth year and Rs. 3,49,048.85/- for the fifth year.
3) According to Plaintiff, Defendants were irregular and reluctant in paying the license fees after June 2018 and some of the cheques towards the license fees were dishonoured. That in respect of the delay in payment of license fees, penal interest was not paid by them. After May 2019, Defendants stopped paying license fees which was Rs.3,16,597.59/- per month. According to Plaintiffs, Defendants also made changes in the constitution of the firm by inducting new persons as its partners and obtained license fees from them under the head of remuneration. The Defendants sublet the suit premises to Mr. Rushikesh Pawar, Akash Pardeshi and Manish Nair by accepting exorbitant security deposit and license fees from them. However, due to disputes between the Defendants and such subletees, Cancellation Deed was executed. That Defendants had procured grocery items and other restaurant material on credit without paying charges on account of which some criminal proceedings were initiated against them. That Plaintiffs were advanced loan by Kotak Mahindra Bank requiring payment of EMI of Rs.4,00,000/- and on account of defaults committed by defendants, financial planning of the Plaintiffs was disturbed. That Defendants failed to renew license of Restaurant and Bar after 1 April 2019 by paying license fees to the concerned Departments.
4) It is averred in the Plaint that Plaintiffs sent Notice dated 31 July 2018 to Defendants demanding payment of license fees Page No.3 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC regularly and warning them not to create third party interest. Another notice dated 27 February 2019 was sent by Plaintiffs terminating the Leave & License Agreement w.e.f. 1 March 2019 and seeking possession of the suit premises. That Defendants gave reply dated 5 April 2019 to the said notice. Plaintiffs therefore instituted Civil Suit No. 192/2019 against Defendants seeking recovery of possession of the suit property as well as recovery of damages at the rate of double the amount of license fees from 1 March 2019 and for various other related prayers.
5) Defendants appeared in the suit and filed Written Statement denying the contents of the Plaint and contended that no notice of termination of Leave & License Agreement was served on PTB Hospitality LLP and that therefore the Leave & License Agreement was valid and subsisting. Defendants also disputed the liability of partners in respect of the License Agreement executed with PTB Hospitality LLP. Defendants also disputed jurisdiction of the Court and prayed for dismissal of the suit.
6) On 17 March 2005, Plaintiffs filed application under the provisions of Order XV-A Rule 1 of the Code seeking direction for deposit of arrears of license fees of Rs. 1,34,37,986/- with further direction to pay monthly compensation as per the terms of Leave & License Agreement on tenth day of each month. The application was opposed by Defendants by filing reply. It appears that the dispute was referred to mediation, which did not fructify into settlement. In the meantime, Defendants filed application for transfer of the suit Page No.4 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC from the learned Judge alleging bias against him on 6 July 2022. The application came to be rejected by the learned Principal District Judge on 26 August 2022. The Small Causes Court thereafter decided the application filed by Plaintiffs at Exhibit-56 by order dated 11 October 2022 and directed the Defendants to deposit the arrears of license fees of Rs.1,34,37,986/- for the period from 1 March 2019 to 31 March 2022. It further directed the Defendants to deposit double the amount of license fees of Rs.6,98,097.70/- for the period from 1 April 2022 to 31 October 2022 with further direction to continue depositing double the amount of license fees @ Rs.6,98,097.70/- on tenth day of each month till occupation of the suit premises. Aggrieved by the order dated 11 October 2022, Defendants have filed the present petition.
7) It appears that during pendency of the present petition, Defendants filed application at Exhibit-80 seeking rejection of the Plaint under Order VII Rule 11 of the Code. By order dated 9 February 2023, the said application at Exhibit-80 came to be rejected by the Small Causes Court. Defendants filed Civil Revision Application No. 133 of 2023 in this Court challenging the order dated 9 February 2023. By order dated 26 October 2023, this Court rejected the Civil Revision Application holding that the suit has rightly been instituted under the provisions of Section 26 of the Provincial Small Causes Courts Act, 1887 (PSCC Act). However, as regards the payment of court-fees, the Plaintiffs were directed to amend the plaint crystallizing the amount of license fees due and payable as on the date of filing of the suit and pay court-fees on such amount. It appears that the said Civil Page No.5 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC Revision Application No. 133 of 2023 was listed alongwith the present Writ Petition on 26 October 2023. While disposing of Civil Revision Application No. 133 of 2023, this Court admitted the present petition and granted stay to order dated 11 October 2022. It appears that Defendants have challenged order dated 26 October 2023 passed in Civil Revision Application No. 133 of 2023 before the Supreme Court by filing Special Leave Petition (C) No. 24968/2023. By order dated 10 October 2023, the Supreme Court has issued notice and has stayed the order dated 26 October 2023 passed in Civil Revision Application No. 133 of 2023.
8) I have heard Mr. Huded, the learned counsel appearing for the Petitioners who would submit that the impugned order passed by the Small Causes Court suffers from jurisdictional error as provisions of Order XV-A do not apply to suit filed under Section 26 of the PSCC Act. He would submit that Section 26 of the PSCC Act uses the word 'or' between 'filing of the suit for recovery of possession' and 'filing of suit for recovery of rent/license fees'. In the present case, the suit is not filed for recovery of license fees and that therefore the Small Causes Court could not have exercised jurisdiction under Order XV-A for directing the Defendants to deposit the license fees. Mr. Huded would also submit that Plaintiffs were at liberty to file suit for recovery of possession as well as for recovery of arrears of license fees but perusal of prayers in the plaint would clearly indicate that there is no prayer for recovery of license fees. That prayer for recovery of damages would not amount to prayer for recovery of license fees as 'license fees' are contra distinct from 'damages'.
Page No.6 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC 9) Mr. Huded would further submit that in a suit which does
not seek recovery of arrears of rent/license fees, jurisdiction under Section XV-A cannot be exercised by the Court. Taking me through the prayers in the suit, he would submit that Plaintiffs has sought a declaration that occupation and possession of the premises by the Defendants is unauthorised and illegal and, in that sense, Plaintiffs have branded Defendants as trespassers. That in a suit filed for recovery of possession from trespassers, order for recovery of deposit of rent/license fees cannot be made under Order XV-A of the Code. Mr. Huded would further submit that it is well established position of law that interim relief can only be in the aid of final relief and that since the suit does not contain a prayer for recovery of license fees, interim relief cannot be granted for deposit of license fees. That the objective behind introduction/incorporation of Order XV-A in the Code by Bombay Amendment is to assist the Plaintiffs in aid of his final prayers. In support of his contention that interim relief can only be in aid of final relief, Mr. Huded would rely upon judgment of the Apex Court in The State of Orissa Vs. Madan Gopal Rungta 1 and of this Court in John Vergese Vs. Gracy Vergese 2. Mr. Huded has also relied upon Krishna Priya Ganguly & Ors. Vs. University of Lucknow and Ors. 3 in support of his contention that a party cannot be granted relief which is not claimed. He would rely upon judgment of the Apex Court in Omprakash and Others Vs. Ram Kumar and Others 4 in support of his contention that only Civil Court has jurisdiction to evict a trespasser. He would also rely 1 (1952) AIR (SC) 12 2 (2006) 5 BCR 190 3 (1984) AIR (SC) 186 4 (1991) AIR (SCW) 50 Page No.7 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC upon judgment of Full Bench of this Court Central Warehousing Corporation Vs. Fortpoint Automotive Pvt. Ltd.5
10) Mr. Huded further submits that there are reciprocal promises arising out of the License Agreement and Plaintiffs have admittedly failed to observe promises made by them. That under Clause-4A of the License Agreement, Plaintiffs were prohibited from terminating the License Agreement and were under an obligation to pay compensation of Rs. 64,13,000/- if the license was to be terminated during the year 2019. Additionally, Plaintiffs are also under obligation to refund security deposit of Rs.18,00,000/- which is also not refunded by them. That in such circumstances, the Small Causes Court could not have made an order for deposit of the license fees during pendency of the suit. Considering the position that Defendants are in fact entitled to receive amount of over Rs. 92,00,000/- from Plaintiffs, Defendants have now filed a suit for recovery of the said amount from the Plaintiffs in January 2024. In support of his contention for reciprocal of promises, he would also rely upon judgment of the Apex Court in Mohammed Vs. Pushpalatha6.
11) Lastly, Mr. Huded would submit that Defendants have been forced to stop their business from the suit premises on account of the acts attributable solely to Plaintiffs. That in addition to terminating the License Agreement, Plaintiffs have initiated various criminal complaints against Defendants thereby preventing them 5 (2010) 1 ALLMR 497 6 (2008) AIR SCW 7578 Page No.8 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC from carrying on their business in the suit premises. That Defendants are holding on to the suit premises only on account of non-payment of agreed amount of compensation, as well as non-refund of security deposit. That if the said amounts are paid by the Plaintiffs, Defendants are willing to handover possession to Plaintiffs simultaneously with receipt of the said amount. He would therefore pray that the order of the Small Causes Court be set aside. Mr. Huded would also submit that Maharashtra Rent Control Act is a beneficial and social legislation enacted for the benefit of tenants/licensee and in support, he would rely upon the judgment of the Apex Court in Malpe Vishwanath Acharya and Ors. Vs. State of Maharashtra and Anr. 7
12) Per-contra, Mr. Deo the learned counsel appearing for the Respondents/Original Plaintiffs would oppose the petition and support the order passed by the Small Causes Court. He would submit that under the provisions of Order XV-A of the Code, the Small Causes Court has correctly exercised the jurisdiction in directing deposit of license fees during pendency of the suit. That Defendants are unfortunately holding on to possession of the suit premises without paying any licensee fees from 1 March 2019. That they cannot be permitted to enjoy possession of the suit premises and cause loss to the Plaintiffs during pendency of the suit. That Plaintiffs are suffering huge financial losses on account of non-payment of license fees by the Defendants as Plaintiffs are under obligation to pay EMIs to the Bank. He would submit that Plaintiffs are not liable to pay damages to Defendants under Clause-4A of the License Agreement as 7 (1998) AIR (SCW) 202 Page No.9 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC termination of the Agreement was required to be done on account of acts of failure and delay in payment of license fees, as well as induction of third parties in the licensed premises in breach of the License Agreement. That such breach is committed by the Defendants, there is no question of Plaintiffs requiring to pay any damages to the Defendants. That in any case, in Plaintiffs' suit, Defendants did not file any counterclaim. The belated suit filed in January 2024 seeking recovery of damages cannot be a reason for disturbing the order passed by the Small Causes Court on 11 October 2022. That the alleged non-user of premises by Defendants is immaterial so far as the obligation to deposit license fees is concerned and in support Mr. Deo would rely upon the judgment of Uberoisons (Machines) Ltd. Vs. Samtel Colour Ltd.8 He would submit that the very objective behind inserting Order XV-A in the Code by Bombay Amendment is to ensure that the tenant/licensee pays the arrears of rent/license fees during pendency of proceedings. That even prior to incorporation of Order XV-A by Bombay Amendment, the Division Bench of this Court Chandrakant Shankarrao Deshmukh Vs. Haribhau Tukaramji Kathane & Ors. 9 had held that the Court has jurisdiction to make an order requiring the tenant to deposit or pay rent during pendency of the suit for recovery of possession.
13) Lastly, Mr. Deo would submit that by December 2023, when Interim Application No. 776 of 2024 was filed, the amount due from Defendants had risen to Rs.2,14,77,185/- with further liability to pay 8 2003 (69) DRJ 523 9 1983 Mh.L.J. 88 Page No.10 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC license fees @ Rs.4,04,068/- from 1 January 2024. Mr. Deo would therefore pray for dismissal of the petition.
14) Rival contentions of the parties now fall for my consideration.
15) Execution of Leave & License Agreement dated 11 November 2016 between the parties is not disputed. As per the said Agreement, license in respect of the suit premises for the period from 1 January 2017 to 31 December 2021 was granted in favour of Defendants. Under the License Agreement, Defendants were to operate a Restaurant in the premises. Plaintiff alleges breach of covenants of License Agreement, inter-alia in respect of non-payment of license fees in a timely manner and induction of third parties into the licensed premises. Plaintiff accordingly terminated the License Agreement vide notice dated 27 February 2019 and has instituted Civil Suit No. 192 of 2019 before the Small Causes Court, Pune on 2 July 2019. In their Written Statement Defendants have obviously denied Plaintiff's contentions in the plaint. Considering the limited issue that has arisen for consideration in the present petition, it is not necessary to consider the points sought to be raised by the rival parties in respect of their respective contentions. The limited controversy involved in the present petition is about the liability of the Defendants to deposit the amount of license fees during pendency of the suit under Order XV-A of the Code.
Page No.11 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC 16) Order XV-A has been inserted in the Code by way of
Bombay High Court Amendment and Order XV-A reads thus:
ORDER XV-A STRIKING OFF DEFENCE IN A SUIT BY A LESSOR (1) In any suit by a lessor or a licensor against a lessee or a licensee, as the case may be, for his eviction with or without the arrears of rent or licence fee and future mesne profits from him, the defendant shall deposit such amount as the Court may direct on account of arrears up to the date of the order (within such time as the Court may fix) and thereafter continue to deposit in each succeeding month the rent or license fee claimed in the suit as the Court may direct. The defendant shall, unless otherwise directed, continue to deposit such amount till the decision of the suit.
In the event of any default in making the deposits, as aforesaid, the Court may subject to the provisions of sub-rule (2) strike-off the defence.
(2) Before passing an order for striking off the defence, the Court shall serve notice on the defendant or his Advocate to show cause as to why the defence should not be struck off, and the Court shall consider any such cause, if shown in order to decide as to whether the defendant should be relieved from an order striking off the defence.
(3) The amount deposited under this rule shall be paid to the plaintiff lessor or licensor or his Advocate and the receipt of such amount shall not have the effect of prejudicing the claim of the plaintiff and it shall not also be treated as a waiver of notice of termination. Explanation.--The suit for eviction shall include suit for mandatory injunction seeking removal of licensee from the premises for the purpose of this rule.
17) Thus under the provisions of Rule 1 of Order XV-A, in every suit filed by a lessor or licensor against lessee or licensee for eviction with or without arrears of rent or licence fees and future mesne profits, the Court has jurisdiction to direct Defendant to deposit such amount as the Court may direct on account of arrears of rent or Page No.12 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC license fees upto the date of the order with further direction to continue to deposit the rent or license fees till decision of the suit.
18) In fact before incorporation of Order XV-A by Bombay High Court Amendment in the Code, the Division Bench of this Court in Chandrakant Shankarrao Deshmukh (supra) had ruled that in a suit filed by a landlord against a tenant for delivery of possession, Courts have jurisdiction to make an order requiring tenant to deposit or pay rent due during pendency of the suit.
19) Mr. Huded has contended that the provisions of Order XV- A do not apply to the suit instituted by Plaintiffs since Plaintiffs have not sought recovery of arrears of license fees in the suit. Mr. Huded has particularly relied upon the words 'license fees claimed in the suit' used in Rule 1 of Order XV-A in support of his contention that in a suit where licence fees are not claimed, there is no question of Court directing Defendant to deposit such unclaimed licence fees.
20) In my view, the submission of Mr. Huded about non- application of provisions of Order XV-A in the present case is required to be rejected on two counts. Firstly, the Court is invested with jurisdiction to direct deposit of arrears of rent/license fees in every suit filed for eviction which may or may not contain a prayer for recovery of arrears of rent/license fees. This is clear from use of the words 'for his eviction with or without the arrears of rent or license fees' under Rule 1 of Order XV-A. It is therefore not necessary that the suit must contain a prayer for recovery of arrears of rent/license fees for the purpose of Page No.13 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC exercise of jurisdiction by the Court under Order XV-A. The objective behind incorporation of Order XV-A in the Code is to ensure that the tenant or licensee does not continue to occupy the premises without payment of contractual rent or license fees during pendency of the suit. The objective is to ensure that the tenant or licensee deposits in the Court, the entire arrears of rent/license fees in respect of the use and occupation of the premises by him/her during pendency of the suit. I am therefore of the view that regardless of the fact whether the suit contains a prayer for recovery of rent/license fees or not, the Court can exercise jurisdiction to pass an order for deposit of rent/license fees under Rule 1 of Order XV-A. Use of the words 'the rent or license fees claimed in the suit' refers to the 'quantum of rent or license fees' payable in respect of the property and not to a prayer or relief sought in the suit. Thus, the words 'rent or license fees claimed in the suit' do not refer to prayers in the suit for recovery of arrears of rent/license fees but merely refers to a pleading in the suit relating to the exact amount of rent/license fees payable for occupation of the premises.
21) The second reason reason for rejecting the contention of Mr. Huded about non-applicability of provisions of Order XV-A to the present suit is the fact that in the present case, arrears of license fees are indeed claimed by Plaintiffs. In this regard prayers in the plaint read thus:
A) The suit of the plaintiffs may kindly be decreed with costs.
B) The occupation & possession of the suit premises in the hands of Defendants may kindly be declare as unauthorized & illegal w.e.f. 01/03/2019.Page No.14 of 24
30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC C) The Defendants may kindly be evicted & directed to vacate & to hand over the actual, physical, peaceful & vacant possession of the said Premises to Plaintiffs in clean & good condition without any damages.
D) The Defendants may be directed to renew the all business license, permissions up-to-date, to clear all the dues/outgoings of the said business & Premises like light bills, water bills, GST etc., till handing over the actual possession of the said premises to Plaintiffs & to handover those business Licenses, Permissions, bills & receipts to the plaintiffs.
E) The Defendants may be directed to pay double of the monthly License fee to Plaintiffs from 01/03/2019 till handing over the actual possession of the said Premises to Plaintiffs by Defendants.
F) The Defendants may kindly be restrained from creating third party interest in the suit premises.
G) The cost of this suit may kindly be awarded to Plaintiffs from Defendants.
H) The plaintiffs may kindly be permitted to amend, add, alter, delete, modify the averments herein & plead appropriately as & when require.
I) Any other just & equitable orders may kindly be passed in the interest of justice.
22) Thus in prayer clause (E), Plaintiffs have sought recovery of an amount equivalent to double the monthly license fees from Defendants from 1 March 2019 till delivery of possession. Mr. Huded has contended that prayer clause (E) is for recovery of damages which is distinct from prayer for recovery of license fees. I am unable to Page No.15 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC agree. Plaintiffs believe that they are entitled to recover double the amount of license fees from Defendants and have accordingly elected to opt for a higher relief. Plaintiffs may or may not succeed in grant of said prayer. However, merely because the prayer is made for recovery of higher amount, it cannot be said, by any stretch of imagination, that the Plaint does not contain any prayer for lesser relief of recovery of license fees. In my view, therefore Plaintiff has paid for recovery of license fees in the suit and therefore on this count as well, submission of Mr. Huded about non-application of provisions of Order XV-A to the suit deserves to be rejected.
23) Mr. Huded has relied upon judgments of the Apex Court in Omprakash (supra) in support of his contention that a party cannot be granted a relief which is not claimed. The said judgment would have no application to the facts of the present case where the suit specifically contains a prayer for recovery of arrears of license fees. Reliance is also placed on behalf of judgment of the Apex Court in State of Orissa V/s. Madan Gopal and Krishna Priya Ganguly as well as the judgment of this Court in John Vargese (supra) in support of his contention that interim relief can be granted only in aid and as ancillary to the main relief which may be available to the parties on final determination of his rights in a suit or proceeding. While there cannot be any dispute about this proposition, the situation here is completely different. Since this Court has already held that Plaintiffs have prayed for recovery of license fees, it cannot be contended that they cannot seek interim relief under Order XV-A for deposit of arrears of license fees. The judgments sought to be relied upon by Mr. Page No.16 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC Huded therefore would have no application to the facts of the present case. Relying on the provisions of Section 26 of the PSCC Act, it is contended on behalf of the Petitioners that use of the word 'or' between 'suits relating to recovery of possession' and 'suits relating to recovery of license fees' makes it clear that a Suit under the provisions of Section 26 will have to be filed for either of the purposes. It is therefore sought to be contended that since the suit is filed only for recovery of possession of the suit property, it cannot be construed that the suit is also for recovery of arrears of license fees. Section 26 of the PSCC Act provides thus:
26. Suits or proceedings between licensors and licensees or landlords and tenants for recovery of possession of immovable property and licence fees or rent, except those to which other Acts apply, to lie in Court of Small Causes.
(1) Notwithstanding anything contained elsewhere in this Act, but subject to the provision of sub-section (2), the Court of Small Causes shall have jurisdiction to entertain and try all suits and proceedings between in licensor and licensee, or a landlord and tenants, relating to the recovery of possession of any immovable property situated in the area within the local limits of the jurisdiction of the Court of Small Causes, or relating to the recovery of the licence fee or charges or rent therefor, irrespective of the value of the subject matter of such suits or proceedings.
(2) Nothing contained in sub-section (1) shall apply to suits or proceedings for the recovery of possession of any immovable property or of licence fee or charges or rent thereof, to which the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the Bombay Government Premises (Eviction) Act, 1955, the Bombay Provincial Municipal Corporations Act, 1919 or the Maharashtra Housing and Area Development Act, 1976, or any law for the time being in force, apply.
24) I find the contention raised on behalf of the Petitioners relying on provisions of Section 26 of the PSCC Act to be totally Page No.17 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC baseless. Section 26 of the Act does not prohibit Plaintiff from instituting a composite suit for recovery of possession as well as for recovery of arrears of license fees. As held above, in the present case, the suit is filed for both purposes, for recovery of possession of the suit premises, as well as for recovery of arrears of license fees.
Therefore, reliance of Mr. Huded on provisions of Section 26 of the PSCC Act does not make the case of the Petitioner any better.
25) It is also sought to be contended on behalf of the Petitioner that the License Agreement provides for reciprocal obligations of both parties and provisions of Order XV-A cannot be selectively applied to enforce obligations against Defendants thereby ignoring Plaintiffs' obligations. He has particularly relied upon Clause-4A of the License Agreement which reads thus:
4) Termination : It is specifically agreed between the Licensor and the Licensee that the term mentioned in clause II under this agreement shall be legally binding on Licensor as well as the Licensee and all their legal heirs/ beneficiaries/ partners (existing and future) / directors (existing and future), whether individual or company or body corporate.
A) By Licensor :- The Licensors also specifically agrees that at no time it shall revoke / cancel / terminate this agreement during the License Term (also mentioned in Clause 2 under this agreement) failing which the Licensor agrees without prejudice and dispute to pay compensation not amount to damages to the Licensee as per agreed compensation monies payable over and above the security deposit and permits/license expenses (also mentioned in clause 5 under this agreement) immediately without delay upon notice of termination (minimum 4 months in advance in writing), for which licensee shall hand over the premises on as and where operative conditions to Licensor.Page No.18 of 24
30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC The compensation payable by the Licensor to the Licensee is illustrated in the chart below :
Termination Period Compensation in Rupees
01/01/2017 to 31/12/2017 88,75,000/- (Eighty Eight Lakh seventy
five thousand only)
01/01/2018 to 31/12/2018 75,45,000/- (Seventy five lakh forty five
thousand only)
01/01/2019 to 31/12/2019 64,13,000/- (Sixty four lakh thirteen
Thousand only)
01/01/2020 to 31/12/2020 54,50,000/- (Fifty four lakh fifty
thousand only)
01/01/2021 to 31/12/2021 20,00,000/- (Twenty Lakh only)
26) Relying on the above clause, it is sought to be contended
that despite specific prohibition on Plaintiffs not to terminate the License Agreement before expiry of its term, the same was sought to be illegally terminated by the Plaintiffs in 2019 and that therefore Plaintiffs are liable to pay to the Defendants compensation of Rs.64,13,000/- in addition to refund of security deposit of Rs.18,00,000/-. In my view, this is something which the Trial Court shall determine at the time of final disposal of the suit. As of now, there is no counterclaim in the suit on behalf of the Defendants claiming any amounts from Plaintiffs and it appears that the Defendants have instituted a separate Suit for recovery of said amount from the Plaintiffs in January 2024. Whether termination of License Agreement by Plaintiffs during currency of license term is legal or otherwise is also something which the Trial Court shall determine at the end of the trial. It is not necessary to go into the said issues at this juncture.
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Therefore, Defendants cannot avoid liability to deposit arrears of license fees under Order XV-A under the pretext of some amount being due to them under Clause-4A of the License Agreement. In this connection, reliance by Mr. Deo on judgment of Delhi High Court in Uberoisons (Machines) Ltd. (supra) appears to be apposite. In para-12 of the judgment, the Delhi High Court has held as under:
12. Now the question arises whether the tenant could have retained the possession of the premises without paying the rent thereof on account of non-refund of security amount by the plaintiff. The answer is emphatic `no'. The tenant has an independent remedy to recover the security but in no way can retain the possession of the premises on the plea that until and unless security is refunded, possession will not be handed over. Such a possession by the tenant is a possession for which he has to pay the rent as the premises could not have been put in use by the landlord nor have been let out by the plaintiff. No tenant can take the defense that he is entitled to retain the possession of the premises unless security amount is refunded to him. When there is an independent remedy to recover this amount, the retention of possession cannot be justified. In order to avoid the liability of rent, the tenant has the obligation to handover the possession. It is immaterial whether premises was put into use by the defendant/tenant or not. What is material was whether possession is retained by him or not.
27) Thus, the judgment of the Delhi High Court in Uberoisons (Machines) Ltd. answers the two issues of impermissibility to occupy the premises without payment of rent on account of non-refund of security deposit, as well as the relevancy of factor of non-use of the premises by tenant/license. Therefore alleged non-use of the premises by Defendant would again not be a reason for non-deposit of license fees.
Page No.20 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC 28) Defendants are unnecessarily running the risk of deposit
of monthly license fees in respect of the suit premises when admittedly the suit premises are not being used for running of Restaurant by them from 1 March 2019. Defendants seek to blame Plaintiffs for their inability to run Restaurant in the suit premises on account of service of termination notice, lodging of police complaints and filing of suits etc. On the other hand, Plaintiffs contend that the acts of the Defendants in not clearing the dues of various agencies, as well as the non-availability of sufficient corpus for running of Restaurant are the reasons for Defendants' inability to run business in the suit premises. Without going into the correctness of either of the contentions, it must be observed here that it is in the interest of Defendants that possession of the suit premises is immediately handed over to Plaintiffs without prejudice to their rights and contentions. Defendants are admittedly holding on to the possession of the suit premises under the hope of recovery of amount of damages under Clause-4A of the Agreement as well as for refund of the amount of security deposit. However, as clarified by Mr. Huded, Defendants have already filed suit for recovery of the said amount against the Plaintiffs in January 2024. In that view of the matter, it is all the more necessary that Defendants immediately vacate the suit premises so that they do not have to continue making deposit of license fees during pendency of the suit. It is for the Defendants to consider this aspect.
Page No.21 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC 29) Considering the overall conspectus of the case, I do not
find any reason to interfere in the view taken by the Small Causes Court that Defendants are liable to deposit arrears of license fees from 1 March 2019 as well as continue to deposit the same every month during pendency of the suit. The only correction required in the order of the Small Causes Court is in respect of paras-3 and 4 of the operative portion of the order by which the Court has directed the Defendants to deposit arrears of license fees @ Rs.6,98,097.70/- for the period from 1 April 2022 till 31 October 2022 and has further directed to continue to deposit the said amount of Rs.6,98,097.70/- every month during the pendency of the suit. It appears that the amount of Rs.6,98,097.70/-is arrived at by the Small Causes Court by considering double the amount of license fees payable under the Agreement. In my view, it is impermissible under Order XV-A to direct deposit of amount of damages arising out of the License Agreement. The Court can direct deposit of only the amount of license fees and not the amount of compensation or damages suffered by Plaintiffs even if the amount of such damages or compensation is predetermined under the License Agreement. In my view, therefore Defendants shall have to deposit license fees as per the License Agreement during pendency of the suit.
30) Though the Agreement provides for increase in the amount of license fees with passage of each year, it must be observed that Order XV-A uses the word 'such amount as the Court may direct'. Use of the said words would vest a discretion in the Court to award lesser amount than the agreed rent/license fees considering the unique Page No.22 of 24 30 July 2024 ::: Uploaded on - 30/07/2024 ::: Downloaded on - 31/07/2024 12:58:11 ::: Neeta Sawant WP-14685-2022-FC facts and circumstances of each case. In my view, therefore instead of directing the exact amount of license fees payable in respect of each year as per the Agreement, it would be appropriate that uniform amount is fixed to be deposited in respect of each month after 1 March 2019. It appears that for the entire year 2019, the license fees payable under the Agreement was Rs.3,16,579.905/- and therefore it is appropriate that a round figure of Rs.3,00,000/- is determined for being deposited every month in respect of the period from 1 March 2019. To this limited extent, the order passed by the Small Causes Court requires modification.
31) The Writ Petition accordingly partly succeeds, and I proceed to pass the following order:
(i) The order dated 11 October 2022 passed by the Small Causes Court is upheld to the extent of direction for deposit of license fees by the Defendants from 1 March 2019 during pendency of the suit or till delivery of possession of the suit premises to the Plaintiff, whichever is earlier. However, the amount of license fees to be deposited by the Defendants is fixed at Rs,.3,00,000/- per month.
(ii) Accordingly, Defendants shall deposit in the Small Causes Court license fees at Rs.3,00,000/- for the period from 1 March 2019 till 31 August 2024 on or before 30 September 2024.Page No.23 of 24
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(iii) Defendants shall thereafter continue to deposit monthly license fees of Rs.3,00,000/- in the Small Causes Court on tenth day of each successive month from 1 October 2024 either till pendency of Suit or till delivery of possession of the suit premises to Plaintiffs, whichever is earlier.
32) With the above directions, the Writ Petition is disposed of.
Digitally
signed by
NEETA SANDEEP V. MARNE, J.
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2024.07.30
18:04:14
+0530
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