Delhi District Court
Dr. Oetkar India Pvt. Ltd. vs . Skm Products Pvt. Ltd. on 1 June, 2023
Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd. IN THE COURT OF ADDITIONAL DISTRICT JUDGE 02, SOUTH, SAKET COURTS COMPLEX, NEW DELHI Presiding Judge: Sh. Dinesh Kumar. CS DJ No. 7278/2016 FILING No. 21785/2011 CNR No. DLST010003552011 In the matter of : Dr. Oetkar India Pvt. Ltd. A Private Limited Company Incorporated and verified under the Companies Act, 1956 having its corporate office at F04, Okhla Industrial Area PhaseI, New Delhi - 110020. .........Plaintiff Versus M/s SKM Products Pvt. Ltd. A Company Registered and Verified under the Companies Act, 1956 having its registered office at F66, Okhla Industrial Area, PhaseI, New Delhi 110020. ........Defendant Date of Institution : 25.08.2011 Date of reserving the judgment : 19.05.2023 Date of pronouncement : 01.06.2023 Decision : Suit Decreed. CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 1 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd. SUIT FOR THE RECOVERY OF SUM OF RS.5,10,750/ (RUPEES FIVE LACS TEN THOUSAND SEVEN FIFTY ONLY) ALONGWITH PENDENTE LITE AND FUTURE INTEREST JUDGMENT
1. Vide this judgment, I shall disposes of the Civil Suit filed by the plaintiff for recovery of Rs.5,10,750/ alongwith interest pendentelite and future against the defendant. The amount includes the interest free security deposit of Rs. 4,50,000/ and interest amount of Rs. 60,750/. It is worth mentioning here that after filing of the present suit, the plaintiff also moved an application under Order VI Rule 17 CPC seeking correction of the typographical error in the prayer clause regarding the amount to be recovered. The application was allowed on 25.07.2012. It is also noteworthy that originally the present suit was filed by 2 plaintiffs i.e. M/s VRB Foods Pvt. Ltd. and the present plaintiff. However, one application under Section 151 CPC was moved by the present plaintiff for change of the name of the plaintiff after consolidation of the business of both the plaintiffs. The said application was allowed by the Court vide order dated 04.02.2015. The amended memo of parties was filed as directed by the Court.
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2. It is also required to be noted that one similar suit bearing CS DJ No. 7277/2016 has also been filed by M/s Fun Foods Pvt. Ltd. against the same defendant for recovery of the amount of interest free security deposit in relation to basement and ground floor of the same property. The said suit is also pending in this Court. In both the cases separate trials have been done. However, final arguments have been heard simultaneously and both the matters are fixed for judgments.
3. The brief facts of the case, as per the plaint are as under: 3.1. The plaintiff is a private limited company duly incorporated under the Companies Act 1956 and is engaged in the business of food products. The defendant is also a company and owner of premises bearing no. F66, Okhla Industrial Area, PhaseI, New Delhi - 110020. 3.2. Initially M/s Three Vees a partnership firm registered under the provisions of Partnership Act 1932 was inducted as a tenant of the Mezzanine and First Floor of the abovementioned premises (hereinafter referred to as the suit premises) vide an unregistered rent agreement dated 16.08.2007 with the defendant for an initial period of three years at the monthly rent of Rs.1,50,000/.
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3.3. M/s Three Vees vide the said rent agreement was permitted to sublet the premises to its group companies / sister concern after having taken due permission from the defendant in this regard., M/s Three Vees sub let the suit premises to the plaintiff(s).
3.4. M/s Threes Vees had contributed an amount of Rs.4,50,000/ towards the interest free Refundable Security Deposit vide cheque no. 558250 dated 07.08.2007 drawn on Oriental Bank of Commerce, Safdarjung Enclave, New Delhi in favour of the defendant company. Subsequent to the subletting of the suit premises by M/s Three Vees in favour of its sister concerns, cheque no. 057970 dated 27.01.2019 drawn on HDFC Bank for an amount of Rs.4,50,000/ was issued by the plaintiff (no. 1) in favour of the defendant towards the payment of the refundable security deposit. The security previously deposited by M/s Three Vees was refunded and the same was accepted by the Director of the defendant company.
3.5. The plaintiff vacated the suit premises on 03.12.2010 and handed over the peaceful possession of the same alongwith its installations like industrial power/light/water connection and a 62.5 KVA DG set to CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 4 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
two employees of the defendant viz. Mr. Harish and Mr. Arvind. The plaintiff has paid the entire amount of rent with respect of the suit premises upto 30.11.2010. The said premises were duly inspected by the representatives of the defendant and it is only after the satisfaction of the defendant with regard to the condition of the premises that the possession was taken by them.
3.6. At the time of handing over the possession of the suit premises the plaintiff demanded the refund of the Security Deposit. However, the defendant refused to make the payment on the ground that the same would be refunded within a period of fifteen days. The plaintiff in good faith relied upon the representation of the defendant and handed over the peaceful and vacant possession of the said premises, in good condition to the said employees of the defendant.
3.7. Instead of paying the abovementioned amount of Security deposit, the defendant sent a malicious legal notice dated 31.01.2011 disputing the liability to pay the outstanding amount and also disputing the date on which the plaintiff vacated the suit premises.
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3.8. The plaintiff replied to the said legal notice vide reply dated 07.03.2011 specifically denying the false allegations made by the defendant and seeking recall of the said notice. The defendant was further called upon to return the Refundable Security Deposit.
3.9. The defendant served upon the plaintiff another legal notice dated 26.05.2011 reiterating the false and baseless allegations and blatantly and dishonestly denying to the plaintiff its rightful claim to the Security Deposit. The plaintiff after making several failed attempts to recover the amount due to them were compelled to serve the defendant with a legal notice dated 20.06.2011 seeking refund of Refundable Security Deposit alongwith an interest of 24% per annum within a period of five days from the date of receipt of the said notice which was duly served upon the defendant and a reply was received vide legal notice dated 24.06.2011. The defendant has failed to clear the outstanding dues to the plaintiff despite the service of legal notice. Hence, the present suit has been filed by the plaintiff with the following prayer.
"Pass a decree for an amount of Rs.5,10,750/ in favour of the plaintiff and against the defendant;CS DJ No. 7278/2016
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"pendentelite and future interest @ 24% per annum in favour of the plaintiff and against the defendant;
"the cost of the suit in favour of the plaintiff and against the defendant;
"any other order to orders which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case.
4. Summons were issued to the defendant. The defendant appeared and filed its Written Statement. It has contested the suit on the following grounds :
4.1. The suit has not been filed by a duly authorized person. There is no board resolution on record in favour of Mr. Sanjay Kumar Sharma who has filed the present suit on behalf of the plaintiff. The suit is liable to be dismissed for non disclosure of cause of action.
4.2. As per the self admission on the part of the plaintiff, after the expiry of the unregistered rent agreement dated 16.08.2007 on 15.08.2010 the peaceful and vacant possession of the demised premises was not handed over to the defendant. The plaintiff illegally and with utmost malafide and oblique intent continued to remain in possession of the demised premises.
4.3. The lease deed was specifically for a period of three years starting from 16.08.2007 at an agreed monthly CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 7 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
rent of Rs.1,50,000/. The suit premises was given on rent of Rs. 1,50,000/ per month excluding the consumption charges of industrial power, water charges payable as consumption per unit along with the service tax for a period of 3 years w.e.f. 16.08.2007. The unregistered rent agreement could be extended by both the parties upon reaching a common consensus. Clause 3 of the agreement specifically provides that the agreement could be renewed with mutual consent for another period of 3 years with increase rent of 20%. However, the plaintiff in complete disregard of the said clause remained in illegal possession of the premises even after expiry of the rent agreement on 15.08.2010. The plaintiff also violated the term of enhancement of rent by 20%.
4.4. The plaintiff under most suspicious and oblique manner tried to vacate the demised premises on 07.12.2010 i.e. after more than three months of the date of expiry of the subject unregistered rent agreement dated 16.08.2007 in which they had succeeded. This fact had been brought under the knowledge of the defendant by one tea stall owner namely Mr. Daya Shankar who was running his stall close to the suit premises. After getting the requisite CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 8 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
intimation the defendant sent its officials Mr. Harish and Mr. Arvind Kumar, to the site wherein to their utter shock and dismay the information so furnished was found to be correct.
4.5. The abovenamed officials had taken the photographs of the demised premises which had been left by the plaintiff in utmost dilapidated and uninhabitable condition. The subject demised premises totally stood in a deplorable state and upon seeing such condition the official of the defendant abstained from taking possession of the demised premises and requested the plaintiff to get the demised premises restored to the original condition as it stood at the time of entering upon the unregistered rent agreement dated 16.08.2007.
4.6. By the aforesaid act of the plaintiff, the defendant suffered monetary loss of Rs. 1,13,000/ which is equivalent to the increase rent by 20% which should have been paid by the plaintiff.
4.7. As per the clause 7(vii) of the rent agreement, it was agreed that once the lessee had acquired the property it was its responsibility to take care of the day to day repairs and maintenance. The agreement also provides that at the CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 9 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
time of vacating the premises the lessee shall hand over the genset in perfect working condition. However, the lessee has violated the terms of the agreement and left the genset in the most dilapidated condition.
4.8. The lessee had agreed to furnish interest free refundable security deposit of Rs. 4,50,000/ as per the agreement which was furnished by the then lessee vide cheque no. 558250 dated 07.08.2007 drawn on Oriental Bank of Commerce, Safdarjung Enclave, New Delhi. The sole purpose of the taking the security deposit was that the lessor intended to secure its interest in case of unforeseen dispute or mishap which might occur in due course of time by the conduct of the lessee or any of its agent. It was the clear intention of the lessor as mentioned in the agreement in Clause 7 (x) that in case any damage happens to the suit premises, the security deposit shall be utilized for rectification of the same as they comprised in dues and the remaining shall be returned.
4.9. The plaintiff had not vacated the suit premises even after expiry of the period of lease. During that possession, the plaintiff caused damage to the physical structure of the suit premises.
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4.10. The defendant had made request to the plaintiff to get the damages repaired in the suit premises or to give them authority to get the same repaired and to utilize the security deposit for the said purpose. However, no satisfactory reply was received from the plaintiff. The defendant was unable to lease out the suit premises and therefore, it was suffering monetary losses. Hence, the legal notice dated 31.01.2011 was issued which was duly received by the plaintiff. It is only after that written communication sent by the defendant, any communication with respect to the security deposit came into picture. Prior to 07.03.2011 there had not been a single communication from the plaintiff raising any concerns with respect to the security deposit and the said communication was made by the plaintiff in the reply to the legal notice of the defendant. 4.11. The defendant had made several representations vide the legal notices dated 31.01.2011 and 26.05.2011. It requested the plaintiff to get the damages rectified otherwise, the defendant would get the same done on their own and shall adjust from security deposit. As the plaintiff did not come forward, the defendant was left with no choice but to go ahead with the renovation and adjust the CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 11 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
same against the security. The defendant has done the requisite renovation so that the premises could be utilized. However, the Genset is still in a dilapidated condition. The plaintiff is not entitled to recovery any amount from the defendant. Hence, it is prayed that the suit may be dismissed.
5. In the meantime, after filing of the WS, the defendant had stopped appearing in the Court and therefore, the defendant was proceeded exparte vide order dated 03.09.2013 and the matter was fixed for exparte evidence. However, later on, before the plaintiff could lead any evidence, the defendant started appearing through counsel.
6. One application under Section 151 CPC was filed by the plaintiff for changing the name of the plaintiff from M/s VRB Foods Pvt. Ltd. to Dr. Oetkar India Pvt. Ltd. The application was allowed vide order dated 04.02.2015.
7. The plaintiff examined one witness i.e. PW1 Sh. Sanjay Kumar Sharma, Sr. Manager - HR & Legal Affairs, who tendered his evidence by way of affidavit Ex. PW1/A. He has reiterated the facts stated in the plaint. He has relied upon the following documents CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 12 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
a) The certified copies of board resolutions dated 13.07.2011 are Mark X and Mark Y.
b) The copy of rent agreement is Mark PW1/3.
c) The permission letter dated 06.03.2009 is Ex. PW1/4.
d) The copy of the bank statement showing the encashment of the cheque of the security by the defendant is Ex. PW1/5.
e) The copy of legal notice dated 31.01.2011 is Ex.
PW1/6.
f) The copy of legal notice dated 07.03.2011 is Ex.
PW1/7.
g) The copy of legal notice dated 26.05.2011 is Ex.
PW1/8.
h) The copy of legal notice dated 20.06.2011 is Ex. PW1/9.
i) The copy of legal notice dated 24.06.2011 is Ex.
PW1/10.
j) Postal receipts and courier receipt are Ex. PW1/11 (Colly)
8. The witness was duly cross examined by Ld. Counsel for the defendant. The plaintiff did not examine any other CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 13 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
witness. Therefore, PE was closed vide order dated 08.07.2015. Matter was fixed for Defendant Evidence.
9. One application under Order VIII Rule 1A CPC was moved by the defendant to bring on record certain documents i.e. photographs, quotation from Brij Kishore Building Contractor, payment receipt, quotation from Gopal Generator Service, allotment of work letter etc. The said application was allowed vide order dated 10.04.2017.
10. The defendant failed to lead evidence despite opportunities and therefore, the opportunity to lead DE was closed on 21.01.2021. The defendant moved an application for recalling the said order and seeking opportunity to lead DE. The application was allowed vide order dated 24.01.2022.
11. The defendant also moved an application under Order XVIII Rule 4 CPC r/w Order XXVI Rule 1 CPC to examine the witnesses of the defendant through Local Commissioner. The application was allowed vide order dated 27.07.2022. Local Commissioner was appointed for examination of witness of the defendant in the present case and in the CS DJ No. 7277/2016.
12. The defendant has examined Ms. Nirmala Jaganathan as DW1 before the Local Commissioner appointed by the Court. She tendered her affidavit in evidence which is Ex.
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DW1/A. She has reiterated the facts stated in the Written Statement. She has relied upon the following documents :
a) The photographs are Ex. DW1/1 to Ex. DW1/54.
b) Copy of quotation dated 05.06.2011 is Mark A and B.
c) Copy of letter dated 10.07.2011 is Mark C and D.
d) Copy of payment receipt dated 30.08.2011 is Mark E.
e) Copy of quotation dated 12.06.2011 are Mark F and G.
13. The witness was duly cross examined by Ld. Counsel for the plaintiff. The defendant did not examine any other witness. It also stopped appearing and therefore, opportunity to lead further evidence was closed vide order dated 16.01.2023. Matter was thereafter adjourned for final arguments.
14. While the matter was fixed for final arguments on 06.04.2023, it was noticed that in the present matter, the issues were not framed before evidence. It is noteworthy that there are 2 cases pending in this Court against the same defendant having similar facts i.e. recovery of the amount of security deposit. The plaintiff in the present case was a tenant in Mezzanine and First Floor of the property bearing no. F66, Okhla Industrial Area, CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 15 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
Phase I, New Delhi - 110020 while the plaintiff in CS DJ 7277/16 was a tenant in respect of basement and ground floor of the said property. It appears that inadvertently issues were not framed in the present case. Therefore, on the basis of pleadings, followings issues have been settled on 06.04.2023 :
1. Whether the plaintiff has no cause of action to file the present suit against the defendant?OPD
2. Whether the defendant is entitled to adjustment of the security deposit made by the plaintiff towards expenses incurred by the defendant in repair of the premises which was given on rent by the defendant to the plaintiff? OPD
3. Whether the plaintiff is entitled to recover a sum of Rs. 4,50,000/ from the defendant being the security deposit given by the plaintiff to the defendant as stated in the plaint?OPP
4. Whether the plaintiff is entitled to claim interest on the amount found due against the defendants? If yes, at what rate? OPD
5. Whether the suit has been filed by duly authorized person?OPP
6. Relief.
15. The plaintiff led additional evidence in view of issue no. 5. Mr. Sanjay Kumar Sharma was examined as PW1 to tender his additional evidence by way of affidavit Ex. PW1/B and Ex. PW1/C. He has relied upon the following documents :CS DJ No. 7278/2016
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a) Copy of board resolution of Dr. Oetkar India Pvt. Ltd. dated 08.09.2014 which is Ex. PW1/12
b) The minutes of meetings of board of directors of VRB Foods Pvt. Ltd. held on 13.07.2011 are Ex. PW1/13.
c) The minutes of meetings of board of directors of Dr. Oetkar India Pvt. Ltd. held on 13.07.2011 are Ex. PW1/14.
d) The minutes of meetings of board of directors of Dr. Oetkar India Pvt. Ltd. held on 08.09.2014 are Ex. PW1/15.
e) The board resolution dated 31.03.2023 is Ex.
PW1/16.
16. The witness produced original minutes book to prove Ex. PW1/13, Ex. PW1/14 and Ex. PW1/15. The witness was cross examined by Ld. Counsel for the plaintiff. The plaintiff did not examine any other witness. Therefore, PE was closed.
17. Ld. Counsel for the defendant would submit that he did not want to examine any witness after settlement of issues. Therefore, DE was also closed and the matter was fixed for final arguments.
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18. Dr. Chandra Shekhar, Ld. counsel for the plaintiff would argue that the defendant has taken a false defence. The defendant has admitted receiving of Rs. 4,50,000/ as security from the plaintiff. The plaintiff has also proved the said fact by bringing on record the statement of account. The defendant has made a false submission that it had forfeited the security amount as the premises was left by the plaintiff in deplorable condition and the genset also required repairing. However, no evidence has been led by the defendant to prove those contentions. The alleged photographs as well as the quotations for repairing of the premises and the repair of genset were not submitted by the defendant at the time of filing the WS. Those documents are nothing but a mere afterthought. Those documents have not been proved as per law. They are forged and fabricated documents. The defendant has not led any evidence to prove the repairing work in the premises and the repair of the genset. No witness has been examined by the defendant to prove the quotations filed in the Court. There is also no evidence of any payment made by the defendant for repairing. The statements made in the affidavit are beyond pleadings and therefore, the Court may not consider them as evidence.
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19. Ld. Counsel for the plaintiff would further argue that DW1 has stated in her cross examination that the alleged payment was made in cash. However, a company cannot make payment of such a huge amount in cash. In the absence of any documentary evidence, the said statement cannot be relied upon in evidence. The photographs filed by the defendant do not bear any date. It is not clear whether the photographs pertain to the suit premises. Those photographs were brought on record by the defendant after the cross examination of PW1 was completed. There is no certificate under Section 65B Indian Evidence Act along with those photographs and therefore, those photographs are not admissible in evidence as per the settled position of law.
20. It has been further argued on behalf of the plaintiff that the genset provided by the defendant was old and in miserable condition. Its completely stopped working within a period of 2 years from the date of rent agreement. The plaintiff had to get the same repaired from time to time. However, ultimately, the plaintiff had to rent a second genset cost of which was incurred by the plaintiff. The defendant has failed to provide any information with respect to the date of manufacturing of the genset or the date of purchase. The defendant has not filed any evidence on record to prove that it had got the genset repaired.
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False statements have been made in this regard. The plaintiff had abided by the terms of the rent agreement. The plaintiff vacated the premises on 03.12.2010 in the presence of representatives of the defendant. The defendant has made false allegation that the plaintiff tried to flee from the suit premises. There is no evidence to that effect. The defendant is not entitled to forfeit the security. It is liable to refund the security to the plaintiff. It is also liable to pay interest. Hence, it is prayed that the suit of the plaintiff may be decreed.
21. Sh. Ajay Fatiyal, Ld. Counsel for the defendant, on the other hand, would argue that the defendant company is closed and the property in question has also been disposed of. The security deposit made by the plaintiff was interest free security which was meant to protect the defendant's interest in case of any unforseen dispute or mishap which might occur in due course of time by the conduct of the plaintiff or any of its agents or in case any damage happens to the suit premises, the security deposit was to be used for rectification of the same and the remaining was to be returned. However, the plaintiff failed to hand over the peaceful and vacant possession of the suit premises after expiry of the rent agreement dated 16.08.2007 on 15.08.2010. It remained in possession of the suit premises. The CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 20 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
plaintiff also ignored the clause of enhancement of rent by 20% after expiry of 3 years. The plaintiff admitted the contents of 20% increase in letter dated 06.03.2009 which is Ex. PW1/4. The plaintiff was under obligation to vacate the suit premises on 15.08.2010. The defendant asked to leave the suit premises. However, it did not vacate the same. On 07.12.2010, after more than 3 months of expiry of the rent agreement, the plaintiff under suspicious and oblique manner, vacated the suit premises. The rent paid by the plaintiff during the post termination period was not in compliance with the rent agreement. The plaintiff was legally obligated to pay the rent at increase rate of 20% over the initial rent. However, the plaintiff paid the rent at the original rate. The defendant company suffered monetary losses of Rs. 1,13,000/ due to vacation of the premises by the plaintiff on 07.12.2010. Further, the plaintiff had vacated the premises leaving it in very deplorable condition. The employees of the defendant refused to take possession of the suit premises after discovering its appalling condition. They asked the plaintiff to have the suit premises returned to its original state at the time of taking the premises on rent. The plaintiff left the premises in dilapidated condition and damage to DG Genset. The plaintiff had violated the provisions of Clause 7 (iv) of the rent CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 21 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
agreement by making concrete additions or alterations which is shown in the photographs. The plaintiff has caused damage to the external as well as internal outlook of the property which is evident from the photos taken by the defendant at the time when the plaintiff was vacating the premises. The photos show that substantial damage was caused to the suit premises and to the genset which was provided by the defendant to the plaintiff. As per clause 7 (vii) of the agreement, it was the duty of the plaintiff to take care of the day to day repairs and maintenance of the tenancy premises. As per clause 7 (viii) of the agreement, the plaintiff was liable to maintain the genset and to hand over the same in perfect working condition at the time of vacating the premises. The PW1 has admitted in his cross examination that plaintiff was under obligation to maintain the DG genset. The defendant company approached the plaintiff several times requesting to get the repair done or to give them authority to get the same done and to utilize the security deposit for that purpose. However, no satisfactory reply was made by the plaintiff. PW1 has admitted in his cross examination that no repairing work was done by the plaintiff in the rental premises. The defendant suffered monetary losses as it was not able to lease out the said premises due to dilapidated condition.
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Therefore, the defendant had issued the legal notice. PW1 has admitted receiving of the legal notice dated 26.05.2011. He has also stated that after receiving the notice, the plaintiff did not carry out any repair in the suit premises. The legal notice issued by the plaintiff is an afterthought. The said legal notice was duly replied by the defendant. The defendant had tried to find an amicable solution, however, in vain. The defendant had obtained the quotations from the contractor. The price was finalized. An amount of Rs. 8,10,000/ was given in cash to the contractor towards repair works carried out by them during the period from 10.07.2011 till 25.08.2011 on various dates. The defendant company also obtained the quotations from Gopal Generator Service. The repairing work was got done from the said person and payment of Rs. 1,68,500/ was made for repairing of the genset. The arrears of rent were also pending equivalent to 20% increase rent. Thus, the defendant was entitled to receive sum of Rs. 10,91,500/ from the plaintiff. Therefore, defendant is not liable to make any payment to the plaintiff. Further, the suit has not been filed by a duly authorized person on behalf of the plaintiff. The plaintiff has failed to prove the board resolution in accordance with law. Hence, it is prayed that the suit may be dismissed.
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22. I have heard the submission of Ld. Counsels for the parties and carefully perused the material available on record including the written arguments filed by the parties. My issue wise findings are as recorded hereinafter.
23. Issue No. 5 : This issue is taken first as it is related to the maintainability of the suit. This issue reads as under :
"5. Whether the suit has been filed by duly authorized person?OPP"
24. The onus to prove this issue was on the plaintiff. It has been argued on behalf of the defendant that the suit has not been filed by competent person and that the board resolution has not been proved as per law.
25. I have considered the submission. Perusal of the record would show that PW1 Mr. Sanjay Sharma during his examination had tendered in evidence the copies of board resolution dated 13.07.2011 which are Mark X and Mark Y. After framing of the issues, the plaintiff led additional evidence to prove the said issue. The plaintiff has brought on record the board resolution Ex. PW1/12 passed by the Board of Directors of Dr. Oetkar India Pvt. Ltd. The witness also produced the board resolution dated 31.03.2023 passed by the Board of Directors of Dr. Oetkar India Pvt. Ltd. which is Ex. PW1/16. The witness has also produced the original minutes book, copies CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 24 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
of which are Ex. PW1/13, Ex. PW1/14 and Ex. PW1/15. Perusal of Ex. PW1/13 would show that on 13.07.2011, the board of directors of M/s VRB Foods Pvt. Ltd. had passed a resolution authorizing Mr. Sanjay Kumar Sharma to initiate, file and pursue all civil and criminal proceedings filed and to be filed on behalf of the company. He is also authorized to appear as witness and to engage advocate etc. Perusal of Ex. PW1/14 would show that on 13.07.2011, board of directors of Dr. Oetkar India Pvt. Ltd. had also authorized Mr. Sanjay Kumar Sharma for the similar acts. Further, vide board resolution dated 08.09.2014, copy of which is Ex. PW1/15, Mr. Sanjay Sharma has been authorized to initiate, file and pursue all civil and criminal proceedings filed and to be filed by the company after merger of the above mentioned two companies. He has been again authorized by the resolution of the board of directors of the plaintiff company on 31.03.2023 thereby authorizing and ratifying the powers vested in Mr. Sanjay Kumar Sharma in this regard. No objection regarding the exhibition of said documents had been taken by the defendant when the documents were tendered in evidence. The documents have been proved as per law. Hence, I am of the considered opinion that the board resolutions have been proved as per law. Thus, it is shown that CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 25 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
Mr. Sanjay Kumar Sharma has been duly authorized to institute the present suit and to give evidence on behalf of the plaintiff. The issue is accordingly decided in favour of the plaintiff.
26. Issue No. 1: This issue reads as under:
"1. Whether the plaintiff has no cause of action to file the present suit against the defendant?OPD"
27. The onus to prove this issue was on the defendant. No arguments have been made on this issue. Even otherwise, the record is sufficient to show that the plaint discloses cause of action. The plaintiff has claimed that it had deposited an interest free security deposit of Rs. 4,50,000/ with the defendant. The said fact has been admitted by the defendant. In the cross examination of DW1, she has admitted receiving of the security amount from the plaintiff. It is also an admitted fact that the security deposit has not been refunded to the plaintiff by the defendant. It is a matter of trial to decide whether the plaintiff is entitled to recovery of the security amount or the defendant can adjust the security deposit towards the expenses stated to be incurred by the defendant in the repair of the premises and the genset. Thus, the plaint discloses a cause of action and the plaintiff has a cause of action. The issue is accordingly decided against the defendant.
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28. Issue No. 2 : This issue reads as under:
"2. Whether the defendant is entitled to adjustment of the security deposit made by the plaintiff towards expenses incurred by the defendant in repair of the premises which was given on rent by the defendant to the plaintiff? OPD"
29. In the present case, it is an admitted fact that the plaintiff had taken on rent the suit premises from the defendant. It has also been admitted and proved that the plaintiff had given to the defendant amount of Rs. 4,50,000/ as interest free refundable security deposit.
30. There is copy of one rent agreement dated 16.08.2007 on record which is Mark PW1/3. This rent agreement is admittedly an unregistered rent agreement. Therefore, this unregistered rent agreement cannot be considered in evidence for its terms mentioned in the agreement including the period of the lease and certain other conditions. It is settled position of law that any lease agreement of immovable property from year to year or for any term exceeding one year, or reserving yearly rent is compulsorily registrable as provided under Section 17 of the Registration Act, 1908. Further, Section 107 of the Transfer of Property Act 1882 also provides that a lease agreement of a immovable property from year to year, or for any term CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 27 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
exceeding one year or reserving a yearly rent can be made only by a registered instrument. Section 49 of the Registration Act, 1908 provides as under :
"49. Effect of nonregistration of documents required to be registered. No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall--
"(a) affect any immovable property comprised therein, or "(b) confer any power to adopt, or "(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument."
31. Thus, it is settled position of law that any lease agreement of immovable property for a term exceeding 1 years, if unregistered, cannot be considered in evidence for the terms mentioned therein. It can be used only for collateral purpose. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titled M/s K.B. Saha and Sons Pvt. Ltd vs M/s Development Consultant Ltd. (2008) 8 SCC 564. Hon'ble Supreme Court of India in the said matter has discussed the effect of non registration of a lease deed which was required by law to be registered. It has held as under :
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"32. In the case of Bajaj Auto Limited vs. Behari Lal Kohli [AIR 1989 SC 1806] , this Court observed that if a document is inadmissible for nonregistration, all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sublet. It was also held in that decision that if a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose. Again this court in Rai Chand Jain Vs. Chandra Kanta Khosla [AIR 1991 SC 747] reiterated the above and observed in paragraph 10 as under : "10........the lease deed Ex. P1 dated 19th May, 1978 executed both by the appellant and the respondent i.e. the landlady and the tenant, Rai Chand Jain, though unregistered can be considered for collateral purposes and as such the findings of the Appellate Authority to the effect that the said deed cannot be used for collateral purposes namely to show that the purpose was to lease out the demised premises for residential purposes of the tenant only is not at all legally correct. It is well settled that unregistered lease executed by both the parties can be looked into for collateral purposes. In the instant case the purpose of the lease is evident from the deed itself which is as follows: "The lessor hereby demises House No. 382, Sector 30A, Chandigarh, to lessee for residential purposes only". This clearly evinces that the property in question was let out to the tenant for his residence only...."
"33. In the case of Rana Vidya Bhushan Singh Vs. Ratiram [1969 (1) UJ 86 (SC)], the following has been laid down:
"A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 29 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
assigning, limiting or extinguishing a right to immovable property. As stated by Mulla in his Indian Registration Act, 7th En., at p. 189 :
"The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it."
"34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that : "1. A document required to be registered is not admissible into evidence under Section 49 of the Registration Act. "2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to Section 49 of the Registration Act.
"3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
"4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immoveable property of the value of one hundred rupees and upwards.
"5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose." (emphasis supplied).CS DJ No. 7278/2016
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32. In the present case, the defendant in its WS and evidence of DW1 has relied upon various clauses of the said unregistered rent agreement. However, in view of the above mentioned position of law, the Court cannot consider those terms in evidence as using the document for the purpose of proving important clauses would not be using it as a collateral purpose as held by Hon'ble Supreme Court of India. Further, the tenancy between the parties is to be considered as month to month basis in view of the legal position. Hence, the submission of the defendant that the plaintiff was under a duty to vacate the suit premises after expiry of the alleged lease period does not have any legal basis. The submission regarding increase of 20% in the rent also does not have any legal basis as the agreement is unregistered. The defendant cannot claim any enhancement of rent from the plaintiff on the basis of unregistered agreement.
33. Be that as it may, it is the duty of a tenant to maintain the premises and to handover the possession of the premises, at the time of vacating the premises, to the landlord in the same condition in which it was at the time of taking the possession. Therefore, the plaintiff was also under a duty to maintain the premises in good condition and to hand over the possession of CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 31 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
the suit premises at the time of vacating the premises in such good condition.
34. The defendant has averred that the plaintiff had left the premises in dilapidated condition. It has also been averred that the plaintiff had left the genset in dilapidated condition. It is the claim of the defendant that it had spent the security deposit on repair of the premises and of the genset. The plaintiff has denied all these allegations. Therefore, the burden was on the defendant to prove that the plaintiff had left the premises and the genset in dilapidated condition and that it had spent the amount on repairing of the premises and of the genset.
35. Section 101 of the Indian Evidence Act provides that whoever desires any Court to give a judgment as to any legal right or liability dependent on the existence of the facts which he asserts, he must prove that those facts exists. The Section also provides that in such case the burden to prove such a fact lies on that person. Section 102 provides that the burden of proof in a suit or proceedings lies on that person who would fail if no evidence at all were given on either side. Section 103 of the Act provides that the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 32 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
fact shall lie on any particular person. Section 104 of the Act states that the burden of proof is on the person giving the evidence to prove the facts that must be shown in order for the evidence to be admissible. Hence, in the present case also, the defendant had to prove all the averments made by it in the WS i.e. that the plaintiff had left the premises in dilapidated condition, that it had left the genset in dilapidated condition and that it had spent the amount on repair / renovation of the suit premises and on repair of the genset.
36. The defendant has examined DW1 Mrs. Nirmala Jaganathan to prove its averments. The witness has denied of taking over the possession of the suit premises on 03.12.2010. However, this averment does not appear to be a valid legal averment as the defendant itself has stated in the WS that it had issued legal notice to the plaintiff asking it to repair the premises, otherwise to give permission to it to repair the same. It is also averred by the defendant in the WS that it had repaired the premises once the plaintiff failed to do so. If the defendant was not in possession of the suit premises how could it get the same repaired as averred by it. Therefore, this averment of the defendant does not inspire confidence and therefore, it stands CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 33 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
proved that the premises was vacated on 03.12.2010 by the plaintiff.
37. The witness DW1 in her affidavit of evidence has stated, inter alia, that the employees of the defendant Mr. Arvind Kumar and Mr. Harish had taken the photograph of the demised premises which was left by the plaintiff in utmost dilapidated and uninhabitated condition causing severe depreciation and damage to the external as well as internal outlook of the suit property, which is evident from the photographs taken at the time when the premises was vacated by the plaintiff.
38. The witness DW1 has relied upon various photographs which are Ex. DW1/1 to DW1/54. During cross examination of the witness, she would state that she had not taken those photographs and they were taken by the employees from the phone camera. Suggestion was given to the witness that the photographs were manipulated.
39. Perusal of the testimony of the DW1 would show that the plaintiff had given suggestion to the witness that the photographs were manipulated. As per the statement of the witness, the photographs were not taken by her but by her employees. Those employees have not been examined by the CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 34 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
defendant to prove those photographs. Photos were not filed along with the WS and they were filed after the evidence of the plaintiff was closed along with certain other documents as mentioned hereinabove. No certificate under Section 65B Indian Evidence Act was filed along with the photographs even though they are stated to be print out of the electronic record as they are stated to be taken through a mobile phone camera. In view of the same, the photographs Ex. DW1/1 to Ex. DW1/54 cannot be read in evidence of the defendant. Hon'ble Supreme Court of India in case titled Arjun Pandit Rao Khotkar Vs. Kailash Kushanrao Gorantyal (2020) 7 SCC 1, while approving the judgment of the Hon'ble Supreme Court of India in Anvar P.V. Vs. P.K. Basheer 2014 (10) SCC 470 has held that certificate under Section 65B (4) of the Evidence Act is a condition precedent for admissibility of electronic evidence. In the present case, the defendant has not filed any such certificate to prove the photograph and to make them admissible in evidence. In the absence of examination of the person who had taken these photographs and in the absence of the certificate under Section 65B Indian Evidence Act, these photographs are unable to prove that the suit premises was left by the plaintiff in dilapidated condition.CS DJ No. 7278/2016
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40. The DW1 has also stated in her affidavit that the defendant had received quotation from Brij Kishore Building Contractor, having office at L893, Shani Bazaar Road, Sangam Vihar, New Delhi on 05.06.2011 with respect to repair of all kind of damages, paint, polish of roof wall, floors, doors and windows, sanitary and plumber repairs, electrical damage repairs of the suit property i.e. First and Second Floor measuring 6000 sq.ft. @ Rs. 70 per sq.ft. Collectively amounting to Rs. 4,20,000/ and for basement and ground floor measuring 6000 sq.ft. for Rs. 4,50,000/. The witness has also stated that the rates for the repairs for first and second floor were fixed @ Rs. 3,90,000/ and for basement and ground floor, the rates were finalized as Rs. 4,20,000/. She has also stated that collective sum of Rs. 8,10,000/ in cash was given to M/s Brij Kishore Building Contractor towards repair work carried out by them during the period from 10.07.2010 till 25.08.2011 on various dates against charges for repairs of the premises including material expenses. She has also stated that the defendant had obtained the quotation from Gopal Generator Service for repair of 62.5 KVA on 12.06.2011 for Rs. 1,68,500/. The defendant company alloted the work for repairing of the genset to M/s Gopal Generator Service on CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 36 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
18.06.2011 for Rs. 1,68,500/. The defendant spent total amount of Rs. 9,78,500/ on repairing of the building and the genset. She has also stated that the defendant had suffered loss of rent equivalent to 20% of increase rent which comes to Rs.1,13,000/. Thus, it is averred, the defendant had spent amount of Rs. 10,91,500/ and therefore, the security deposit stood adjusted and nothing remained to be paid to the plaintiff.
41. In her evidence, the DW1 has relied upon certain documents which are quotations dated 05.06.2011 Mark A and Mark B stated to be issued by Brij Kishore Building Contractor, the photocopy of the receipt of Rs. 8,10,000/ stated to be paid in cash to Brij Kishore Building Contractor on 30.08.2011 Mark E, the estimate stated to be issued by Gopal Generator Service dated 12.06.2011 Mark F. Perusal of the record would show that all these documents have not been proved as per law and therefore, they have been marked. She has admitted that she had never shared in writing the estimates of building repairing and DG genset repairing with the plaintiff company. No proof of the payment in cash has been filed on record. Also, there is no record of any payment made through cheques or other digital transaction system.CS DJ No. 7278/2016
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42. Perusal of the record would show that in the written statement, the defendant did not mention anything about getting the repairing of the premises done or the repairing of the genset done. Those averments are beyond pleadings and therefore, they cannot be considered in evidence.
43. Be that as it may, even if those averments are considered by the Court, they are unable to prove that the defendant had spent amount on repairing of the suit premises and on the DG genset. All those documents have not been proved by the defendant as per law. The defendant did not examine M/s Brij Kishore Building Contractor and M/s Gopal Generator Service to prove the above mentioned documents. The burden was on the defendant to prove those documents. However, it has failed to prove them in accordance with the law of evidence and therefore, they cannot be considered in evidence while deciding the present suit. Admittedly, no proof of payment of the amount to any of those persons has been brought on record. The witness has stated that the payment was made in cash. However, it does not appear plausible that a company would pay such a huge amount to a contractor in cash. No agreement between the defendant and the contractor has been proved on record. Hence, I hold that the defendant has CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 38 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
failed to prove, on the preponderance of probabilities, that it had spent the said amount on repairing of the suit premises and on repairing of the genset. Once, the defendant has failed to prove that the premises and the genset were left by the plaintiff in dilapidated condition and that it had spent the amount of the security deposit on repairing of the suit premises and the genset, the defendant is not entitled to adjust the security deposit made by the plaintiff. Issue No. 2 is accordingly decided against the defendant.
44. Issue No. 3 : This issue reads as under :
"3. Whether the plaintiff is entitled to recover a sum of Rs. 4,50,000/ from the defendant being the security deposit given by the plaintiff to the defendant as stated in the plaint?OPP"
45. In the present case, it is an admitted case of the parties that the security deposit of Rs. 4,50,000/ was a refundable security. The defendant had averred that it had adjusted the security amount towards the expenses incurred by it in repairing of the suit premises and of the genset. However, as discussed hereinabove, the defendant has failed to prove the said averments. In view of the findings of issue no. 2, I hold that the defendant cannot forfeit or adjust the security amount and that the plaintiff is entitled to recover a sum of Rs. 4,50,000/ from CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 39 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023 Dr. Oetkar India Pvt. Ltd. vs. SKM Products Pvt. Ltd.
the defendant being the security deposit given by the plaintiff to the defendant at the time of taking the property on lease. The issue is therefore, decided in favour of the plaintiff..
46. Issue No. 4: This issue reads as under:
"4. Whether the plaintiff is entitled to claim interest on the amount found due against the defendants? If yes, at what rate? OPD"
47. The plaintiff has claimed interest @ 24% p.a. There is nothing on record to show that it is an agreed rate of interest. Be that as it may, it is discretion of the Court to award interest pendente lite and future interest even if there is a specific contract between the parties. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titlted Central Bank of India Vs. Ravindra & Ors. SLP (C) 2421/1993 decided on 18.10.2001.
48. In the present case, the interest claimed by the plaintiff is very high. In the facts and circumstances of the case and taking judicial notice about the rate of interest charged by nationalized banks, I hold that the plaintiff is entitled to interest @ 10% p.a. from the date of filing of the suit till preparation of decree. As the transaction in question is commercial in nature, the plaintiff is also entitled to interest at the same rate from the date of decree till realization of the amount.
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49. Issue No. 6 : Relief. In the light of discussion hereinabove, the suit of the plaintiff is decreed. The plaintiff is entitled to a decree of recovery of Rs. 4,50,000/. The plaintiff is also entitled to interest @ 10 % p.a. from the date of filing of the suit i.e. 25.08.2011 till realization of the amount. The plaintiff is also entitled to cost of the suit.
50. The plaintiff is directed to deposit the deficient Court Fee, if any, within 15 days. The decree shall not be executable unless the entire Court fee is paid. The fact of deficiency of Court Fee if any be mentioned in the decree.
51. Decree sheet be drawn accordingly.
Digitally signed by DINESHPronounced in the open Court DINESH KUMAR Date: KUMAR on this 01st day of June 2023. 2023.06.02 15:49:55 +0530 (DINESH KUMAR) ADDL. DISTRICT JUDGE02 SOUTH, SAKET COURTS, NEW DELHI. CS DJ No. 7278/2016 CNR No. DLST010003552011 Page 41 of 41 Dinesh Kumar/ADJ02/South/Saket/ND/01.06.2023