Delhi District Court
Sh. Vinay Saigal vs M/S Telexcell Networking Solutions ... on 15 April, 2023
IN THE COURT OF ADDITIONAL DISTRICT JUDGE
02, SOUTH DISTRICT, SAKET COURTS, NEW DELHI
Presiding Judge: Sh. Dinesh Kumar.
CS DJ No. 6673/2016
Filing No. 21835/2010
CNR No. DLST010002862010
IN THE MATTER OF :
1. Sh. Vinay Saigal
2. Sh. Vijay Saigal
3. Sh. Raju Saigal
All sons of Late Sh. J.P. Saigal
All Residents of W158
Greater Kailash PartI
New Delhi - 110048
.......Plaintiffs
Versus
1. M/s Telexcell Networking Solutions Pvt. Ltd.
293, Dhanmill Road
Chattarpur Hill, New Delhi - 110074
2. Sh. Sanjeev Jain
Managing Director
M/s Telexcell Networking Solutions Pvt. Ltd.
293, Dhanmill Road
Chattarpur Hill, New Delhi - 110074
Also at:
Sh. Sanjeev Jain S/o Sh. C.L. Jain
R/o H43, Green Park Extn.
New Delhi - 110016
CS DJ No. 6673/2016
CNR No. DLST010002862010
Page 1 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023
..........Defendants/Counter Claimants
Date of Institution : 05.07.2010
Date of reserving the judgment : 16.03.2023
Date of pronouncement : 15.04.2023
Decision : Suit Decreed.
SUIT FOR RECOVERY OF DAMAGES OF RS.19,91,520/
AND COUNTERCLAIM FOR RECOVERY OF
RS.22,78,587.99
JUDGMENT
1. Vide this common judgment, I shall decided two claims, i.e. the suit filed by the plaintiff for recovery of Rs.19,91,520/ against the defendants, and a claim of setoff/counterclaim filed by the defendants against the plaintiffs. The brief facts of the case, as mentioned in the plaint, are as under: 1.1. The plaintiffs are the owner of the property bearing No. F2/9, Okhla Industrial Area, PhaseI, New Delhi 110020, comprising of Basement, Ground Floor, First Floor and Second Floor, by virtue of registered Conveyance Deed. The defendant No.1 is engaged in the business of Networking solutions. The defendant No.2 is the Managing Director of the defendant No.1 company and is responsible for day to day business CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 2 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 affairs of the defendant No.1 company. The defendant No.2 had also signed and executed the License deed on behalf of the defendant No.1 with with the plaintiffs, and therefore he is also liable jointly with defendant No.1 company.
1.2. The defendant No.2 after physically verifying the property and after being fully satisfied, took the commercial premises on license basis which comprised of Basement, Ground Floor & First Floor (hereinafter called the suit property) at monthly license fee of Rs.3,37,500/ payable to the plaintiffs in the ratio of 1/3 each, exclusive of all other charges. The license was commenced w.e.f. 10.07.2008 for a period of two years vide license deed duly registered in the office of Sub RegistrarV, Mehrauli, New Delhi, bearing document No. 14147 in Addl. Book No. 1, Volume No. 8806 on pages 81 to 90 on 12.09.2008. The license was renewable for a period of three years only for one time, subject to enhancement of the license fee by 20%. 1.3. The defendants vide letter dated 20.11.2009 served three months notice period intending to vacate and hand over the physical possession of the license premises to CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 3 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 the plaintiffs, which was duly acknowledged and replied by the plaintiffs.
1.4. In terms of the notice, the defendants, without settling the accounts of the plaintiff towards electricity consumption etc. handed over the possession of the damaged licensed premises to the plaintiffs on 20.02.2010. The defendants had caused substantial and massive damages to the suit premises, especially in basement and ground floor, at the time of their vacating the premises which were duly noticed to the defendants at the time of their vacating the premises. The plaintiffs mentioned about the same in their legal notice dated 12.03.2010 also, which was duly served upon the defendants. The photographs of damaged premises were also shown to the defendants. The defendants created chaos at the time of vacating the premises i.e. on 20.02.2010 and the plaintiffs had to call the police. 1.5. The plaintiffs got the damages assessed from M/s Saxena & Associates, Architect, Engineer, Govt. Approved Valuer and Residential Building Supervisor. As per their inspection report dated 05.03.2010, the defendants had damaged the granite slab flooring at CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 4 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 number of place in the basement and also on the ground floor, the flooring and false ceiling of the hall, sanitary fitting of four toilets and also removed the sanitary fittings, electrical fitting and also damaged number of pillars, doors, windows of toilets and windows of hall. The approximate amount of damages estimated by M/s Saxena Associates vide their inspection report is as under: S.No. Particulars of damages Estimated amount of caused to the property damages in Rupees i. Dismantling of flooring Rs.45,000/ of basement floor and Ground Floor including disposal ii. Dismantling of damages Rs.35,000/ falseceiling of Basement Floor and Ground Floor iii. Granite slab flooring of Rs. 7,05,120/ Basement Floor and Ground Floor 4972 (Basement) + 3842 (Ground Floor) = 8814 sq. ft. @ Rs.80 per sq. ft.
iv. False ceiling of Basement Rs. 8,81,400/ floor and Ground Floor 8814 sq. ft. @ Rs.100/ per sq. ft.
v. Providing Sanitary fitting Rs.1,00,000/ seats in four toilets completed @Rs.25,000/ CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 5 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 each vi. Fixing Doors in Toilets - Rs.10,000/ 4 Nos @ Rs.2500/ each vii. Providing electric fitting Rs.1,60,000/ including conduit writing.
viii. Providing fully Glazed Rs.15,000/
windows - 5 Nos. @
Rs.3000/ each
ix. White wash/colour wash Rs.40,000/
- Basement Floor and
Ground Floor
Rs.19,91,520/
Total
1.6. The defendants intentionally, deliberately with malafide intention to cause wrongful loss and damages to the plaintiffs, engaged the scrap dealers in order to gain monetary benefits in lumpsum amount. The scrap dealers extracted and removed all the fittings and fixtures of the buildings by damaging and dismantling the walls, plaster, bricks, floors and sanitary and electrical fittings of the building, thereby caused extensive and massive damages to the building which is evident from the photographs and assessment report of the Engineer. The defendants had committed mischief, breach of terms and conditions of the License Deed. 1.7. The plaintiffs requested the defendants to restore CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 6 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 the suit premises to its original condition. However, the defendants did not pay any heed to the request and reminders of the plaintiffs. The plaintiffs sent a legal notice dated 03.05.2010 to the defendants mentioning therein the details of damages caused to the suit property and called upon them to make payment of Rs.19,91,520/ towards the damages caused to the property within a period of one month from the date of receipt of the said notice. However, the defendants did not pay any heed towards the same despite service of the notice.
1.8. The plaintiffs received notice from BSES Rajdhani Power Limited under Section 156 of Electricity Act, demanding therein a Sum of Rs.25,29,055/, payable by 02.03.2010, which the defendants were legally bound to pay in terms of Clause 9 of the License Deed. The matter pertaining to electricity dues is pending before the Hon'ble High Court of Delhi in Civil Writ Petition No. 9593/2009 titled as M/s Telexcel Networking Solutions Pvt. Ltd. Vs. BSES.
1.9. The defendants No.2 namely Sh. Sanjeev Jain issued three cheques for Rs.33,715/ each in favour of CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 7 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 the plaintiffs under the signatures of defendant no. 2. However, the said cheques were dishonoured on presentation by the bankers of defendants with the remarks "payment stopped by drawer". The plaintiffs have initiated legal proceedings u/s 138 NI Act in this regard which are pending in different Courts. 1.10. As per clause 11 of the License Deed, the defendants are liable to pay the amount of damages to the plaintiffs which reads as under: "11. That the licensee shall be responsible for any damages to the premises due to fire or any other reason and the licensee shall repair and maintain the license premises and keep the premises in good sanitary condition."
1.11. The suit premises is situated within the territorial jurisdiction of this Court. Hence the present suit has been filed with the following prayers: "i) Pass a decree of recovery of Rs.19,91,520/ (Rs. Nineteen lakhs ninety one thousand five hundred twenty only) alongwith interest @12% from the date of filing of the suit till its realization in full and final, in favour of the plaintiffs and against the defendants;
"b) Cost of the suit be also passed in favour of the plaintiffs and against the defendants.
"c) Any such further relief which this Hon'ble Court may deem fit and proper in the facts and circumstances of the CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 8 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 case be also passed in favour of the plaintiffs and against the defendants in the interest of justice".
2. The defendantscumcounter claimants appeared on summons. They filed their joint Written Statement and a Counter claim/claim for set off. They have stated as under:
2.1. The suit is bad for misjoinder of the parties. The defendant no. 2 is not a necessary party. The defendant no.2 had signed the agreement on behalf of the defendant no. 1. Therefore, he is not liable in his personal capacity. Hence, the suit is liable to be dismissed.
2.2. The suit premises comprising of basement, ground floor and first floor, admeasuring over 12,000 sq. ft.
area, prior to the initial letting was used for running the business of manufacturing, distribution and marketing/sale of batteries by the plaintiffs. However, the said business was discontinued from the said premises and thereafter the plaintiffs for leasing out the same, removed all their tools, equipment, machinery and other fittings and fixtures so as to convert each of the said floor into a huge open space which could be used in any manner by the prospective tenants.
CS DJ No. 6673/2016CNR No. DLST010002862010 Page 9 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 2.3. M/s Telexcell Information Systems Ltd. which is a sister company of the defendant No.1 having common directors and engaged in the business of IT enabled services, had taken the premises on rent for carrying out its business operations/activities. The said Company was in need of a large space for opening of its office on a long term rental basis. The suit premises was unfit for being used for office purposes but it was proposed by the plaintiffs that they would carry out substantial improvements in the premises by making additions/alterations on their own, which would be suitable to the company. The said premises was to be given on rent for long term with fresh documents of renewals being executed between the parties on the same terms and condition except for the rate of rent to be negotiated at the expiry of the tenure as per then prevailing market rate of rent. The said premises was let out to the said company vide Licence Deed dated 06.07.2006, on the terms and conditions mentioned therein, on a monthly rent of Rs.2,50,000/ for a period of 3 years w.e.f. 15.07.2006.
2.4. After taking the premises on rent, the said company CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 10 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 in the month of July 2006, on its own cost, undertook the complete upgradation, renovation and interior decoration work in respect of all the floors in the said premises consistent with its business and operational needs on its own cost without contribution of any kind by the plaintiffs. The said company incurred huge expenditure in renovating the said premises which included complete relayering of cemented floor area by granite stone, repair of walls and ceiling, providing false ceiling and lights, creation of wooden partitions walls, desktops, conference rooms, cabin space, installation of window and split AC's, laying of conduit wiring, electric cables, provision for electrical points and fittings, installation of generators, complete revamp of existing toilets including the fitting of new sanitary items and toilet seats etc. The plaintiffs were appreciative of the works carried out in the said premises by the said company.
2.5. In the month of July 2007, by an internal arrangement, the tenancy rights of the said premises were transferred from M/s Telexcell Information Systems Ltd. to the defendant No.1, on the same terms CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 11 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 and conditions as mentioned in deed dated 06.07.2006 with the consent, knowledge and permission of the plaintiffs. A fresh deed was executed between the plaintiffs and defendant No.1, and accordingly, a document on similar lines labeled as License Deed dated 06.07.2007 was executed between the plaintiffs and defendant No.1 in terms of which the said premises was let out to defendant No.1 on a monthly rent of Rs.3,37,500/ for a further period of two years w.e.f. 15.07.2007 with a right of renewal for a further period of three years. A fresh license deed dated 10.07.2008 on the same terms and condition mentioned in previous license deed dated 06.07.2007 was also executed. 2.6. In the month of November 2009, due to changed circumstances, it was decided that defendant No. 1 would vacate the said premises. Therefore, defendant No.1, vide its Letter/notice dated 20.11.2009 served a three months notice to the plaintiffs thereby communicating its intention to handover the possession of the same by 20.02.2010. The notice was duly served upon the plaintiffs.
2.7. Before layering of granite flooring and false CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 12 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 ceiling, the wooden partition walls demarcating the cabin space, conference rooms and other space had been affixed to the exiting floor and ceiling When the granite flooring and false ceiling work was carried out, no granite could be laid beneath the surface of the wooden partition walls., conference rooms and other space which had been affixed to the exiting floor and ceiling. The defendant initiated process of shifting its material by removing of the wooden partition walls demarcating the cabin space etc, and as such, while removing these internal wooden partition walls there appeared certain gaps in the granite flooring. Similarly, while removing the wooden partition walls and other electrical wires, cables, equipment, there appeared certain gaps in the false ceiling. Although it was not intentional by the defendant No.1, to cause cracks/breakage either to the granite flooring or to the false ceiling but some cracks/breakage was inevitable while removing the internal wooden partition walls and other electrical equipment/fittings.
2.8. The disfigurement of the flooring and false ceiling was objected to by the plaintiffs. Though the defendant CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 13 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 was not under any obligation to accede to the objection, yet the defendant No.1 assured the plaintiff that after vacation of the premises, they would make the basement and ground floor of the said premises fit for occupation by getting the false ceiling removed and flooring repaired/redone from the excess granite stone material lying at the terrace of the said premises. However, the said offer was summarily rejected by the plaintiffs without any rhyme or reason.
2.9. On 20.02.2010, while defendant No.1 was still in process of removing their goods/material, the plaintiffs along with some hired people came to the premises and stopped the workers from removing and loading the goods/material onto the trucks called for by the defendant No.1, by threatening the workers of dire consequences in case they did not stop the removal of the goods/material belonging to the defendant No.1. Plaintiff No.1 lodged a complaint with the police in this regard. A PCR Van came to the site and officials of defendant No.1 showed the police officials the relevant records and documents of proof of ownership of goods/material which were removed. But the plaintiff in CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 14 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 connivance with the police officials managed to take forcible possession of the said premise and withheld the defendant No.1 from removing its goods/material lying in the basement and ground floor.
2.10. Immediately thereafter, on 21.02.2010 and 22.02.2010, the defendant No.1 tried to amicably resolve the issue with the plaintiffs. However, due to adamant approach of the plaintiffs, the matter could not be resolved. The defendant No.1 issued a registered letter dated 23.02.2010, calling upon the plaintiffs to either allow the defendant No.1 to remove their goods/material or else pay a sum of Rs.22,78,587.99 being the value of the goods/material lying in the basement and ground floor, within a period of three days from the date of receipt of the same. The said letter was neither complied with nor was replied.
2.11. In addition to the above mentioned material and goods of defendant no. 1. The defendant no. 1 has its goods and material lying on the first floor which is presently under the use and occupation of M/s Alok Industries Limited vide Lease Agreement dated 30.04.2008 with the knowledge, permission and CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 15 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 approval of the plaintiffs. The plaintiffs never raised any objection to the same till the time the defendant No.1 communicated to the plaintiffs about vacation of the said property by 20.02.2010. Defendant No.1 vide its letter dated 20.11.2009 terminated the tenancy of the said company w.e.f. 05.02.2010. However, despite receipt of the said letter the said company failed to comply with the same and defendant No.1 vide its legal notice dated 23.02.2010 again called upon the said company to vacate the first floor forthwith, restore all the goods and material belonging to defendant No.1, pay upto date rent/mesne profit and not to hand over the possession of the said premises or of the leased goods and material to any other person except the defendant No.1.
2.12. Instead of complying with the said notice, the said company appears to have negotiated with the plaintiffs and to the knowledge of the defendant No.1, the said company is now tenant of the plaintiffs. The defendant No.1 has objection to the use of their goods and material by the said company because the plaintiffs are enjoying the rental income without having provided CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 16 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 the same nor paid any amount to the defendant No.1. 2.13. Liability of the defendant No.1 cannot exceed the amount of actual loss suffered by the plaintiffs and as such the liability of the defendant No.1 would be best to replace/repair that part or portion which is broken due to removal of wooden partition walls and defendant No.1 is not liable to make out an entirely new flooring, false ceiling, replace the sanitary fittings etc. or to pay the value for the same. 2.14. The plaintiffs have neither got any right to seek damages on account of flooring, false ceiling or sanitary fittings, toilet seats, electric conduit wiring, glazed windows nor the defendant No.1 is under any obligation to restore the same as these goods and material were never provided by the plaintiffs. However, defendant no. 1 is ready to repair the flooring, remove false ceiling, sanitary fittings etc. from the premises in order to restore the premises to its original state. The defendant had not hired any scrap dealer as alleged. 2.15. Although the agreement between the parties is labeled as License/Lease Deed but the same has all the trappings of a lease. Possession of the said premises CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 17 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 was forcibly taken by the plaintiffs from the defendant No.1. The Inspection Report dated 12.03.2010 is manipulated and doctored document based on false facts and figures, without any actual inspection of the said premises, on the instruction of the plaintiffs. Photographs filed along with the inspection report were never taken in the presence of the defendants at the time of vacation of the said premises. Defendant No.1 was ready and willing to replace/repair that part/portion which was broken during the process of shifting, subject to plaintiffs allowing the defendant No. 1 to remove its goods and material from the basement and ground floor of the said premises but due to adamant attitude of the plaintiff in insisting for entire relaying of the granite flooring and false ceiling, the matter could not be resolved.
2.16. The plaintiffs are not entitled to any amount recoverable from the defendant No.1. If the Court comes to a finding that the plaintiffs are entitled to any amount recoverable from the defendant, in such eventuality the defendant no.1 seeks set off of the same as against its claim of recovery of Rs.22,78,587.99 but given up and CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 18 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 restricted to Rs.19,91,520/ on account of value of its goods and material lying in the basement and ground floor of the suit premises which has been illegally and unlawfully withheld by the plaintiffs. . In case the claim of the plaintiffs is dismissed then the Court may treat the claim of defendant No.1 as counter claim against plaintiffs for recovery of Rs.19,91,520/ along with pendente lite and future interest @12% p.a. and costs of counter claim.
3. The plaintiffs filed replication to the written statement of the defendants in which they denied the allegations made by the defendant and reiterated the facts stated in the plaint. They also denied the allegations made in the counter claim.
4. On the basis of the pleadings, issues were framed vide order dated 20.01.2011. One additional issue 1(a) was also framed vide order dated 17.11.2011. The issues framed in the present case are as under: "Issue No.1. Whether the plaintiff is entitled to the decree of recovery as prayed for? OPP Issue no. 1(a). Whether defendant no.2 being the director and signatory to the lease agreement between plaintiffs and defendant no.1 is jointly or CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 19 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 severally liable alongwith defendant no.1? OPP "Issue No.2: Whether the defendant is entitled to the decree of counter claim as prayed for? OPD "Issue No.3: Relief."
5. The matter was fixed for plaintiffs' evidence. The plaintiffs examined plaintiff no. 2 Vijay Saigal as PW1. He tendered his evidence by way of affidavit Ex.PW1/A. He has reiterated the facts stated in the plaint and the WS to the Counter claim. He has relied upon the following documents:
a) Copy of registered licence/lease deed: Ex.PW1/2.
b) Copy of the notice dated 20.11.2009: Ex.PW1/3.
c) Copy of invoice No. 3401 dated 20.02.2010:
Ex.PW1/4.
d) Newspaper dated 20.02.2010: Ex.PW1/5.
e) 22 photographs: Ex.PW1/6.
f) Details report of damages done by the defendant:
Ex.PW1/7.
g) Site plan of the suit property:Ex.PW1/8.
h) Copy of the legal notice: Ex.PW1/9.
i) Postal Receipts: Ex.PW1/10 to Ex.PW1/12.
j) UPC receipts:Ex.PW1/13.
k) Two signed AD Cards:Ex.PW1/14 and Ex.PW1/15.
CS DJ No. 6673/2016
CNR No. DLST010002862010
Page 20 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023
l) Electricity Consumption Bill:Ex.PW1/16.
6. The plaintiffs further examined PW2 Sh. Ajay Kumar Saxena who is stated to be assistant of S.C. Dhir, the Engineer/approved valuer. He tendered his affidavit in evidence and relied upon copy of the Certificate issued by Indian Institute of Registered Architect as Ex.PW2/1. He would depose that he is a registered draftsman. He is aware of the inspection report dated 05.03.2010, the site plan and the photographs as they were prepated in his presence by Mr. S.L. Dhir. He was accompanying Mr. S.C. Dhir and assisted him at the time of preparation of inspection report. He identifies signatures of S.L. Dhir on the inspection report which is Ex.PW1/7. He had prepared the site plan under the signature of Mr. S.L. Dhir.
7. PW1 and PW2 were duly cross examined by Ld. Counsel for the defendants. The plaintiffs also got summons issued for a photographer to prove the photographs. However, summons were received back unserved with the report 'the photographer had already expired'. The plaintiffs did not examine any other witness. The PE was closed in pursuance of the statement made by plaintiff No.2.
8. The defendants examined Sh. Sanjeev Jain, defendant No.2, as DW1. He tendered his affidavit in evidence as CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 21 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 Ex.DW1/X. He has reiterated the facts stated in WS and the Counter claim. He has relied upon following documents:
a) Board Resolution: Ex.DW1/1.
b) Photocopy of License Deed dated
06.07.2006:Ex.DW1/2.
c) Photographs:Ex.DW1/3. (Colly from Page 9 to 25)
d) Copy of Legal notice:Ex.DW1/4.
e) Photocopy of list of document:Ex.DW1/5.
9. The DW1 was cross examined by the Ld. Counsel for the plaintiffs. The defendants did not examine any other witness.
The evidence was closed in pursuance of the statement of defendant No.2 dated 16.09.2022 and the matter was fixed for final arguments.
10. Ld. Counsel for the plaintiffs would argue that the plaintiffs have proved their case against the defendants. It has been admitted by the defendants that they were inducted as tenant in the suit property by virtue of registered lease deed copy of which is Ex.PW1/2. The defendants had taken the premises with their entire satisfaction after physically examining it as per Clause 18 of the deed. Same is duly mentioned in the lease deed. Clause 5 of the lease deed provides that the licensee was under a duty to handover vacant and CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 22 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 physical possession of the premises after expiry of the period together with fixtures and fittings in substantially the same condition as it existed at the commencement of the license. If it failed to do so, it would be liable to pay damages @ Rs.27,000/ per day in addition to the other remedies available to the licensor. The defendants had vacated the premises even without settling the accounts of the plaintiffs towards electricity consumption. The defendants had intentionally and knowingly caused several substantial and massive damages to the leased premises, especially in basement and ground floor. Those damages were duly noticed to the defendants at the time of vacation. The photographs Ex.PW1/6 (colly) proves the damages caused to the premises. The inspection report Ex.PW1/7 also proves the damages of Rs.19,91,520/. The defendants also violated the terms and conditions of the lease deed by violating the Clause 10 as they were not to let out or part possession of the premises without prior permission of the plaintiffs. They were responsible for any damages to the premises during the tenancy as per clause 11. The defendants have admitted that they had caused damages to the premises. In para 4 (x), the said fact is duly admitted by the defendants. The defendants also admitted the fact of subletting the leased CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 23 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 premises. Thus, the plaintiffs have admitted the entire claim of the plaintiffs. They have made a false claim in the Counter claim. There is nothing on record to prove that the defendants had left any material in the premises. In fact they had taken the entire material and even hired a scrap dealer to remove everything from the premises which caused further damages to the premises. There are no merits in the claim presented by the defendants. Hence, it is prayed that the conter claim/set off may be dismissed and the suit mat be decreed.
11. Ld. Counsel for the defendants, on the other hand, would argue that the plaintiffs are not entitled to any relief. They have made a false and concocted story to extort money from the defendants. The suit is bad for misjoinder of the defendant no.2 as a party. The defendant no.2 is not a necessary or proper party. He is not liable in his personal capacity. He had signed the lease deed on behalf of the defendant no.1. The Company is a separate legal entity. Therefore the suit is liable to be dismissed. Even on merits, the plaintiffs are not entitled to any relief. They have failed to prove that the defendants had caused any damages to the premises. The premises was in raw condition when it was taken on rent. It was the sister concern of the defendant no. 1 which had got the granite flooring, false CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 24 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 ceiling, sanitary fittings, conduit wiring etc. and other interior decoration work done with its own funds. The company had incurred huge expenditures in renovating the suit premises. Even the plaintiffs were appreciative of the said work. The tenancy rights were transferred in favour of the defendant no.1 through an internal arrangement with the consent and knowledge of the plaintiffs. The defendant no.1 had duly notified the plaintiffs its intention to vacate the suit premises vide letter dated 20.11.2009 which was duly served. The defendant no.1 had shown its intention to vacate the suit premises by 20.02.2010. The defendant started process of vacating the suit premises by removing the wooden partition walls, window and split AC, electrical equipment fittings and other gadgets installed by it. While removing those wooden partition walls and other electrical wires cables etc., there appeared certain gaps in the granite flooring and the false ceiling. This was inevitable as the granite flooring had been done by the sister concern of the defendant company after it had got installed the wooden partition walls and therefore no granite flooring could be done under the portions of the wooden flooring. Similar was the case in relation to the false ceiling. No scrap dealer was hired by the plaintiff to remove the material CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 25 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 from the suit premises. False allegations in this regard have been made. The defendant, even though not under any obligation to do so, had assured the plaintiffs that after vacation of the premises it would make the basement and the ground floor fit for occupation by getting the false ceiling removed and the flooring redone from the excess granite stone lying at the terrace of the suit premises, however, the offer was rejected by the plaintiffs. The plaintiffs had not allowed removing its goods and material from the suit premises at the time of vacation of the suit premises. They had taken forcible possession of the suit premises in collusion with their associates and the local police. They withheld the goods and material worth Rs.22,78,587.99 belonging to the defendant no. 1. Thy did not return the material despite service of the legal notice. Rather, they have filed false suit against the defendants. The plaintiffs are not entitled to any relief. Therefore, the suit may be dismissed. As the plaintiffs have not returned the material, they are liable to pay the amount as prayed in the counter claim. Hence, it is prayed that the suit may be dismissed and the counter claim may be decreed.
12. I have heard the Ld. Counsel for the parties and gone through the relevant records including the written submissions filed by the Ld. Counsel for the parties. My issue wise findings CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 26 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 are as follows:
13. Issue No. 1(a) - This issue is taken first as it is related to the maintainability of the suit qua defendant no.2. The issue reads as under:
"Issue no. 1(a). Whether defendant no.2 being the director and signatory to the lease agreement between plaintiffs and defendant no.1 is jointly or severally liable alongwith defendant no.1? OPP"
14. Perusal of the record would show that the plaintiffs have claimed the recovery of the damages which were allegedly caused to their property while it was on lease with the defendant no.1. Admittedly, the premises were given on rent/license to the defendant no.1. The agreement had been signed by the defendant no.2 on behalf of the defendant no.1. However, there is no personal guarantee given by the defendant no. 2. It is settled position of law that a director as such is not liable for the torts or civil wrongs of his company. A director will be personally liable on a company contract when he has accepted personal liability either expressly or implicitly. Director's liability to the Company may arise where the director is guilty of negligence, or where the director committed breach of trust, or there has been misfeasance and the director has acted ultra vires and the funds of the company have been applied for such CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 27 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 an act. Hon'ble Delhi High Court in Sanuj Bathla & Anr vs Manu Maheshwari & Anr C.R.P. 166/2018 on 12 April, 2021 has discussed in detail the relating to the liability of a director and the rule of piercing the corporate veil. The suit in the said case was for recovery of money against a company. The application filed by the plaintiff to implead the directors of the company as defendants was dismissed by the trial Court. Hon'ble High Court discussed the law of lifting of corporate veil and held that the directors were not liable in their personal capacity. It has been held as under:
"13. ...The doctrine of piercing of corporate veil owes its origin to the landmark case of Salomon vs. A. Salomon and Co. Ltd. (1987) AC 22, where the House of Lords observed as under : "I am simply here dealing with the provisions of the statute, and it seems to me to be essential to the artificial creation that the law should recognise only that artificial existencequite ∙apart from the motives or conduct of individual corporators. In saying this, I do not at all mean to suggest that if it could be established that this provision of the statute to which I am adverting had not been complied with, you could not go behind the certificate of incorporation to shew that a fraud had been committed upon the officer entrusted with the duty of giving the certificate, and that by some proceeding in the nature of scire facias you could not prove the fact that the company had no real legal existence. But short of such proof it seems to me impossible to dispute that once the company is legally incorporated it must be treated like any other independent person with its rights and liabilities appropriate to itself, and that the motives of those who took part in the promotion of the company are absolutely irrelevant in discussing what those rights and liabilities are."
"14. The doctrine is an exception to the principle that a CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 28 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 Company is a legal entity, separate and distinct from its shareholders, with its own legal rights and obligations. It discards the separate entity of the Company and attributes the acts of the Company to those who are in direct control of its operations. In Ben Hashem vs Ali Shayif (2008) EWHC 2380 (Fam), six principles were crystallized for applying the said doctrine, which are as follows : "(i) ownership and control of a company were not enough to justify piercing the corporate veil;
"(ii) the Court cannot pierce the corporate veil, even in the absence of thirdparty interests in the company, merely because it is thought to be necessary in the interests of justice;
(iii) the corporate veil can be pierced only if there is some impropriety;
"(iv) the impropriety in question must be linked to the use of the company structure to avoid or conceal liability; "(v) to justify piercing the corporate veil, there must be both control of the company by the wrongdoer(s) and impropriety, that is use or misuse of the company by them as a device or facade to conceal their wrongdoing; and "(vi) the company may be a 'facade' even though it was not originally incorporated with any deceptive intent, provided that it is being used for the purpose of deception at the time of the relevant transactions."
"15. The position in India with regard to the lifting of corporate veil is found in several decisions. In Life Insurance Corporation vs. Escorts Ltd. & Ors. (1986) 1 SCC 264, a Constitution Bench of the Supreme Court held as follows : "90.... Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of the public interest, the effect on parties who may be CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 29 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 affected etc."
"16. In Balwant Rai Saluja vs Air India Ltd. (2014) 9 SCC 407, the Supreme Court held as under : "71. Thus, on relying upon the aforesaid decisions, the doctrine of piercing the veil allows the Court to disregard the separate legal personality of a company and impose liability upon the persons exercising real control over the said company. However, this principle has been and should be applied in a restrictive manner, that is, only in scenarios wherein it is evident that the company was a mere camouflage or sham deliberately created by the persons exercising control over the said company for the purpose of avoiding liability. The intent of piercing the veil must be such that would seek to remedy a wrong done by the persons controlling the company. The application would thus depend upon the peculiar facts and circumstances of each case."
"17. However, it has to be borne in mind that the doctrine is not available in every case of alleged liability against a Company. It is only available in restricted cases and limited circumstances, where it is permissible to so do under a Statute or where the corporate structure has been instituted to perpetuate a fraud or is a camouflage, facade or sham to avoid liability or in a case where effect has to be given to a beneficial Legislation. These can be broadly outlined as instances where the corporate veil can be lifted, though it cannot be said that this is an exhaustive list. I may also refer to observations of the Supreme Court in Arcelormittal India Pvt. Ltd. vs Satish Kumar Gupta & Ors. (2019) 2 SCC 1, as follows : "37. It is thus clear that, where a statute itself lifts the corporate veil, or where protection of public interest is of paramount importance, or where a company has been formed to evade obligations imposed by the law, the court will disregard the corporate veil. Further, this principle is applied even to group companies, so that one is able to look at the economic entity of the group as a whole."
"18. Therefore, in order to lift the corporate veil, the averments in the plaint are required to be examined.
"xxx "27. The judgment of the Coordinate Bench in M/s. Red Zebra CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 30 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 (supra) relied upon by the Plaintiff, in my view, would not apply in the facts of the present case. The proposition of law laid down by the Court in para 4 that although a Company is a separate legal entity from the Directors, but, its protection to the Directors is not ironclad or impenetrable, can hardly be disputed. It is, however, equally undisputed, in law, that in order to pierce the corporate veil there must be allegations of fraud or unlawful practices against the Directors in the garb of a Corporate structure. The Court as a matter of fact found in the facts of the said case that the Directors were responsible in the daytoday affairs of the Company as well as actively involved in the communications made before and after the placing of the supply orders and were therefore a necessary party. In the present case, the only averment in the plaint as mentioned above is that the Defendant Nos.2 and 3 had along with their friend requested the Plaintiff and persuaded him to advance loan to the Company. The facts of this case do not inspire piercing the corporate veil so as to continue the Directors as parties in the suit.
"28. Learned counsel for the Petitioner has rightly relied on the judgment of the Coordinate Bench in Mukesh Hans (supra), which, in my view, squarely covers the present case and fortifies the view taken by this Court. Relevant passages from the judgment are as follows : "10. The short question which arises for consideration in the present appeal is as to whether the appellants as erstwhile Directors of the Company, M/s. Dawson Leasing Limited (In Liquidation) can be made liable in a suit for recovery of money when the Directors have not made themselves personally liable by extending any guarantee, indemnity, etc. "11. Indubitably, a company incorporated under the Companies Act, whether as a private limited company or a public limited company, is a juristic entity. The decisions of the Company are taken by the Board of Directors of a Company. The Company acts through its Board of Directors, and an individual Director cannot don the mantle of the Company by acting on its behalf, unless he is so authorized to act by a special resolution passed by the Board or unless the Articles of Association so warrant. It is equally well settled that a Director of a Company though he CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 31 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 owes a fiduciary duty to the Company, he owes no contractual duty qua third parties. There are, however, two exceptions to this rule. The first is where the Director or Directors make themselves personally liable, i.e., by execution of personal guarantees, indemnities, etc. The second is where a Director induces a third party to act to his detriment by advancing a loan or money to the Company. On the third party proving such fraudulent misrepresentation, a Director may be held personally liable to the said third party. It is, however, well settled that this liability would not flow from a contract, but would flow in an action at tort, the tort being of misrepresentation and of inducing the third party to act to his detriment and to part with money.
"12. This is the settled position ever since 1897 when the House of Lords decided the case of Salomon vs. Salomon & Co. Ltd.
1897 AC 22, and Lord Macnaghten, observed as under: "the company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by that Act."
"13. However, with the passage of time inroads have been made into the aforesaid legal principle that the company is a legal entity distinct from its shareholders and directors and certain exceptions have been carved out. One such inroad is commonly described as lifting or piercing of the corporate veil. This has been succinctly put by the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. State of Bihar [1964]6SCR885 as follows:
"24. The true legal position in regard to the character of a corporation or a company which owes its incorporation to a statutory authority, is not in doubt or dispute. The Corporation in law is equal to a natural person and has a legal entity of its own. The entity of the Corporation is entirely separate from that of its shareholders; it bears its own name and has a seal of its own; its assets are separate and distinct from those of its CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 32 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the Corporation. This position has been well established ever since the decision in the case of Salomon v. Salomon and Co. was pronounced in 1897; and indeed, it has always been the wellrecognised principle of common law. However, in the course of time, the doctrine that the Corporation or a Company has a legal and separate entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the Corporation can be lifted and its face examined in substance. The doctrine of the lifting of the veil thus marks a change in the attitude that law had originally adopted towards the concept of the separate entity or personality of the Corporation. As a result of the impact of the complexity of economic factors, judicial decisions have sometimes recognised exceptions to the rule about the juristic personality of the corporation. It may be that in course of time these exceptions may grow in number and to meet the requirements of different economic problems, the theory about the personality of the corporation may be confined more and more."
"14. Similar observations were made by the Supreme Court in the case of New Horizons Ltd. v. Union of India:
(1995)1SCC478 :
"27. The conclusion would not be different even if the matter is approached purely from the legal standpoint. It cannot be disputed that, in law, a company is a legal entity distinct from its members. It was so laid down by the House of Lords in 1897 in the leading case of Salomon v. Salomon & Co. Ever since this decision has been followed by the courts in England as well as in this country. But there have been inroads in the doctrine of corporate personality propounded in the said decision by statutory provisions as well as by judicial pronouncements. By the process, commonly described as "lifting the veil", the law either goes behind the corporate personality to the individual members or ignores the separate personality of each company in favor of the economic entity constituted by a group of associated CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 33 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 companies. This course is adopted when it is found that the principle of corporate personality is too flagrantly opposed to justice, convenience or the interest of the Revenue. (See :
Gower's Principles of Modern Company Law, 4th Edn., p.112.) This concept, which is described as "piercing the veil" in the United States, has been thus put by Sanborn, J. in US v. Milwaukee Refrigerator Transit Co.4:
"When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons.' "15. The question therefore in the instant case is Can the corporate veil be lifted in the present case to reveal the identity of the person or persons behind it? The respondents in their plaint have not made out any such case to justify the piercing of the corporate veil. Therefore, this matter is not required to be dwelt upon by this Court any longer.
"16. The next question which arises for consideration is whether the appellants as Directors made themselves personally liable for the dues of the Company. Reference in this context may be made to the judgment of this Court in Tristar Consultants vs. Customer Services India Pvt. Ltd. And Anr., 139 (2007) DLT
688. Paragraphs 28 to 30 of the said judgment, which are apposite, read as under: "28. To interpret the law as is sought to be projected by the petitioner would mean negation of the concept of a company being limited by its liability as per the memorandum and articles of association of the company. Other than where directors have made themselves personally liable i.e. by way of guarantee, indemnity, etc. liabilities of directors of a company, under common law, are confined to cases of malfeasance and misfeasance i.e. where they have been guilty of tort towards those to whom they owe a duty of care i.e. discharge fiduciary obligations. Additionally, qua third parties, where directors have committed tort. To the third party, they may be personally liable.
"29. For example by making false representations about a company, a director induces a third party to advance a loan to the company. On proof of fraudulent misrepresentation, a director may be personally liable to the third party.CS DJ No. 6673/2016
CNR No. DLST010002862010 Page 34 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 "30. But this liability would not flow from a contract but would flow in an action at tort. The tort being of misrepresentation of inducement and causing injury to the third party having induced the third party to part with money."
"17. In the case reported as Space Enterprises vs. M/s. Srinivasa Enterprises Ltd. 72 (1998) DLT 666, this Court while dealing with the liability of the Directors of a company for the dishonor of cheques of the company, in a suit filed under Order XXXVII of the Code of Civil Procedure, made the following observations: "11. In so far as the liability of defendant No. 2 is concerned, the effect of the registration of a company under Section 34 of the Companies Act is that it is a distinct and independent person in law and is endowed with special rights and privileges; a person distinct from its members. Consequently, the company is enabled to contract with its shareholders also, to use common seal and acquire and hold property in its corporate name. The company is distinct from its shareholders and its directors. Neither the shareholders nor the director can treat the companies assets as their own. Directors of a company are liable for misappropriation of company's funds and other misfeasance, but not for an ordinary contractual liability of the company. The liability of the members or the shareholders or the directors is limited to the capital invested by them. So long the liability is not unlimited under Sections 322 and 323 of the Companies Act and no special resolution of the limited company making liability of the directors or the managing directors unlimited is alleged. The doctrine of lifting of the corporate veil could be applied in cases of tax evasion, or to circumvent tax obligation or to perpetuate fraud or trading with an enemy are concerned. It is not alleged that the director has lost the privilege of limited liability and has become directly liable to the plaintiff i.e. creditor of the company on the ground that with his knowledge the company carries on business six months after the number of its members was reduced below the legal minimum number. In absence of such a case it would be totally inappropriate and improper to say that defendant No. 2 is patently covered under Order 37 CPC.
"12. There is no contract between the plaintiff and defendant CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 35 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 No. 2. therefore, case against defendant No. 2 is not based on any contract nor there is any such liability on defendant No.2. Consequently, there is no cause of action against defendant No.
2. Since there is no cause of action against defendant No. 2, the plaint is liable to be rejected so far as defendant No. 2 is concerned."
"18. In the instant case, there is admittedly no assertion in the plaint that the appellants had extended any contract of guarantee or had even undertaken to make payment to the respondents of the loan amount on behalf of the company, M/s. Dawson Leasing Limited. No case of joint and several liability is, therefore, made out and the liability, if any, is the sole liability of the Company, which is stated to be under liquidation. There is also no denial to the fact that the respondent No.4 himself was one of the Directors of the Company and therefore part and parcel of the Company. When the decision to invite secured nonconvertible debentures was taken by the Board, the names of the respondent No.4 and his brother appeared in the offer document issued on behalf of the Company. In such circumstances, merely because the respondent No.4 subsequently resigned as a Director, it is not open to the respondents to allege that they have been deceived and defrauded.
"19. It is also well settled that fraud, if alleged, must be pleaded meticulously and in detail and proved to the hilt. A mere assertion that fraud has been committed is neither here nor there. Precisely and in what manner fraud has been committed is required to be delineated by the party alleging the same if the plea of fraud is to be made the basis of a decree against the other party. Bald assertions and vague allegations will not be countenanced by the Courts. Rule 4 of Order VI specifically lays down that the particulars of the fraud alleged (with dates and items, if necessary) shall be stated in the plaint. "20. To conclude, the instant case is not one in which the appellants could have been held jointly and severally liable as Directors to pay the amount invested by the respondents in the Company. The appellants are not even alleged to be guarantors or indemnifiers for payment of the amount due from the Company nor it is pleaded in the plaint that the respondents had CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 36 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 undertaken to make payment on behalf of the Company. As stated above, no particulars of fraud are set out, presumably for the reason that the respondent No.4 himself was a functional Director of the Company responsible for the daytoday affairs of the Company. In such circumstances, in my considered opinion, it is the Company and the Company alone upon whom the liability can be fixed at all."
15. In the present case, the plaintiffs have not alleged any fraud or misrepresentation on the part of the defendant no.2. The only averment in relation to the defendant no.2 is that he had signed the deed on behalf of the defendant no.1. However, a company has to function through its officials, directors etc. Therefore, the deed was signed by the defendant no.2 on behalf of the defendant no.1. However, he did not bind himself in his personal capacity for any act done by the defendant no.1. Therefore, the defendant no. 2 is not liable in his personal capacity in an action of damages brought by the plaintiffs against the defendant no.1. The issue is therefore decided against the plaintiffs.
16. Issue no.1 - The issue reads as under:
"Issue No.1. Whether the plaintiff is entitled to the decree of recovery as prayed for? OPP"
17. The plaintiffs have claimed the recovery alleging that the defendant had damaged the suit premises when it was vacated by defendant no.1. The total claim of the plaintiffs is based on CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 37 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 an inspection report which is on record as Ex.PW1/7 and the photographs of the premises which are Ex.PW1/6. The claim of the plaintiffs is that the defendant damaged the flooring and false ceiling of the basement and the ground floor, removed the sanitary fitting seats in four toilets in the premises, dismantle the doors of the toilets, removed the conduit wiring and glazed windows. They have claimed that the premises required white wash of the basement and the ground floor, restoration of the glazed windows, conduit wiring, fixing of doors and the sanitary fittings, fresh flooring and false ceiling. The defendant, on the other hand has claimed that the plaintiffs had not provided any granite flooring, false ceiling, conduit wiring or glazed windows at the time of providing the premises on rent. It is also averred that the sanitary fittings were also in damaged condition. The defendant had to lay the granite flooring and false ceiling, it got the conduit wiring done, and got the new sanitary fittings installed. It is stated that after fixing of the cabins and cubicles etc., the granite flooring and the false ceiling were installed. Therefore when the cabins were removed there appeared some gaps in the flooring and the false ceiling. The defendant was not required to lay new flooring and new false ceiling as they were fixed by the defendant without any CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 38 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 assistance from the plaintiffs. Therefore, this Court is required to decide as to whether the plaintiffs have proved that the premises was given to the defendant as claimed by them.
18. There is only one witness examined by the plaintiffs in this regard i.e. PW1. Statements made by him in his testimony are worth noting. PW1 in his cross examination would state that before giving the premises on rent to the defendant, they were doing some industrial activities relating to manufacturing work in the suit premises. Generally, no false ceiling is fixed in the premises where industrial activity for manufacturing is done. Similarly, in such premises, granite flooring is also not fixed. He would admit that there is no photograph on record to show the condition of the premises when they were given on rent to the defendant.
19. PW1 would further admit in his cross examination that the suit property was initially let out to M/s. Telexcell Information Systems Ltd. vide deed dated 06.07.2006 which is admitted on record as Ex/PW1/D1. He would admit that M/s. Telexcell Networking Systems Pvt. Ltd. and M/s Telexcell Information Systems Pvt. Ltd. were related to each other prior to execution of lease deed in favour of M/s. Telexcell Networking Systems Pvt. Ltd. He would say that he did not CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 39 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 remember whether there was any list of fittings and fixtures prepared at the time of letting the property on vide lease deed Ex.PW1/D1. He would state that basic amenities were provided e.g. good wiring, perfect walls, lightings, fans, toilet fittings. The witness did not remember providing any granite floor and false ceiling in the premises at the time of letting the premises. Certainly conduit wirings could not have been provided by the plaintiffs as they must have been laid by the defendant as per its requirements.
20. The witness PW1 would specifically state that he did not remember whether premises were having granite flooring when they were given to the defendant on rent. He would state that there were false ceiling at some places in the premises, however, he did not remember the places where there were such false ceilings. Later on, during his cross examination recorded on 17,04,2018, he would admit that the defendant had spent considerable amount on renovation as per their needs. He would also admit that no interior work was done by the plaintiffs while leasing the premises on rent and that the defendant got the work of false ceiling, wooden partition and flooring done at its own cost.
21. Before discussing further, it would be relevant to mention CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 40 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 whether the photographs Ex.PW1/6 (colly) and the inspection report Ex.PW1/7 have been proved or not. The photographer who is stated to have taken the photographs could not be examined as the process issued by the Court for his appearance as witness in the Court was received back with the report that he had expired. However, PW1 has stated in his testimony that the photographs are of the suit premises and that they were taken immediately after the defendants had vacated the suit premises. Even the DW1 in his cross examination has admitted that the photographs Ex.PW1/6 were of the suit premises. Therefore, I hold that the photographs have been proved as per law. Further, PW2 has proved the signature of the person who had prepared the report Ex.PW1/7. He has also stated that he was with the said engineer at the time when he had inspected the suit premises. The engineer could not be examined by the plaintiffs as his whereabouts were not known to them after he was convicted in a criminal case. Thus, I am of the considered opinion that the report Ex.PW1/7 has also been proved as per law. The defendants have not brought any material contrary to the report.
22. The testimony of PW1 would prove that the plaintiffs had not provided any granite flooring and the false ceiling in the CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 41 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 premises when they were leased out the defendant. Therefore, the plaintiffs can not claim that the defendant should provide new granite flooring and false ceiling in the premises as per the inspection report. Therefore, they are not entitled to recover any amount for new granite flooring and false ceiling from the defendant as mentioned in the inspection report.
23. PW1 would also state in his cross examination that no air conditioning duct was provided. He has stated that glazed windows, conduit wiring and electrical fittings etc. were provided, however, he does not remember the year when he got them installed. He also does not remember the name of the contractor through whom he had got them installed.
24. Plaintiffs have claimed amount of Rs.1,00,000/ for providing sanitary fittings seats in four toilets. However, as already stated, the plaintiff have not brought on record any material to show that they had got fixed new sanitary fittings in the toilets at the time of letting out the suit premises to the defendant. Similarly, there is nothing on record to show that the plaintiffs had provided glazed windows in the premises when the premises were given on rent to the defendant. Similarly the electric fittings in the premises are admitted to be done by the defendant as per its requirement. There is nothing on record CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 42 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 brought by the plaintiffs to show that the conduit wiring was done in the premises by the plaintiffs and not by the defendants. Therefore, the plaintiffs can not recover the amount to be spent on these items from the defendant as mentioned in the document Ex.PW1/7. The plaintiffs have not brought any material on record to prove that they had actually spent any such amount on those items. Therefore they are not entitled to recover any such amount from the defendant.
25. The plaintiffs have claimed amount of Rs.40,000/ for white wash of the basement and ground floor. Admittedly, the defendant had not got the premises white washed after it had vacated the premises. In the photographs Ex.PW1/6 at various places some damages in the premises are seen which require repairing work. As per agreement and also as per the general practice a tenant must restore the premises to its original state at the time of vacating the premises. The defendant itself has admitted that it was ready to get the necessary repairing done to restore the premises to its original state. Now, the total area of the three floors is mentioned as 12,000 sq.feet which shows that one floor was having area of about 4,000 sq.feet. Thus, the total area of the basement and the ground floor comes to 8,000 sq.feet. Amount of Rs.40,000/ for white wash in an area of CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 43 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 8,000 sq.feet appears to be a nominal amount for white wash/colour wash in the premises. In the Photographs Ex.PW1/6, the doors of the toilets are seen to be dismentalled. The plaintiffs have claimed amount of Rs.10,000/ for fixing of those doors which appears to be reasonable. Similarly, the defendant was required to remove the granite flooring and the false ceiling from the premises to restore the same to their original state. The plaintiffs have claimed amount of Rs.45,000/ and 35,000/ for the said purpose which appears to be reasonable. Nothing contrary has been brought on record by the defendant to show that the said works could have been done by spending lesser amount.
26. The PW1 has averred in the plaint that electricity dues amounting to Rs.23.80 lakhs were pending against the defendant. However, this suit is not a suit for recovery of the dues of electricity. There is no prayer in the suit in this regard. Therefore, no discussion on that aspect has been done while deciding the present suit. Also, in the written arguments, Ld. Counsel for the plaintiff has mentioned about subletting of first floor by the defendant no. 1 without permission. However, no evidence has been led in this regard. Nor any relief has been sought in relation to the said averment. Therefore, no further CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 44 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 discussion has been done on that aspect.
27. On the basis of the testimony of the PW1, the photographs Ex.PW1/6 and the inspection report Ex.PW1/7, I hold that the plaintiffs are entitled to recover an amount of Rs. 1,30,000/ from the defendant no.1. The issue is accordingly decided in favour of the plaintiffs.
28. Issue no.2 - This issue reads as under:
"Issue No.2: Whether the defendant is entitled to the decree of counter claim as prayed for? OPD
29. This issue is related to the counter claim/set off presented by the defendant. As per law, the defendant is required to prove its claim independently. The defendant has claimed the amount of Rs.22,78,587.99 stating the value of the goods/material belonging to the defendant were lying in the suit premises and which could not be removed due to the acts of the plaintiffs.
30. The defendant has examined defendant no.2 as DW1 to prove its claim. The defendant has relied upon a list which is Ex.DW1/5. Perusal of the list would show that there are various items mentioned in the list which must have been purchased by the defendant from the market. However, no bills/ invoices of those items have been filed on record. It is also not clear from the record whether those items were lying in unused condition CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 45 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 or they were being used in the premises for running its business activities due to which their value could have been diminished during the period of their use.
31. The defendant has claimed that the plaintiffs had called the police on the spot on the day when it was under process of vacating the premises and that the plaintiffs and their associates had stopped its employees from doing so. It is alleged that on that day the police had colluded with the plaintiffs and handed over the possession of the suit premises to the plaintiffs. However, in the legal notice issued by the defendant there is no allegation that the plaintiffs had taken the possession of the suit premises in collusion with the local police. Therefore, it appears to be an allegation which has not been proved on record. If the items were new and in unused condition for resale there must be invoices/bills of those items with the defendant which should have been filed in the present matter. It those were the items which were installed in the premises for running the business of the defendant, there must have been invoices along with the inventory of those items prepared from time to time by the employees of the defendant. However, no such documents have been brought on record.
32. There is one more aspect. As per the defendant the CS DJ No. 6673/2016 CNR No. DLST010002862010 Page 46 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 possession of the suit premises was taken forcibly by the plaintiffs. It means the defendant has alleged that it was forcibly dispossessed from the suit premises. In such a situation, a prudent person would have approached law authority e.g. police or Court to get the possession back or to recover its material. There was no need of issuing any notice in this regard. However, no such steps are shown to be taken by the defendant. Therefore, it appears to be a vague contention that the defendant could not collect goods/material worth Rs.22,78,587.99 from the suit property due to acts of the plaintiffs. The defendant has failed to prove, on the preponderance of probability that any such material was lying in the suit premises. The list of items filed by the defendant can not be considered as sufficient evidence to prove the said contention. The defendant is therefore not entitled to recovery or set off as claimed in the counter claim. The issue is accordingly decided against the defendant no. 1/counterclaimant.
33. Issue No.4: Relief: In the light of the discussion herein above the suit of the plaintiff is decreed. The plaintiff is entitled to a decree of recovery of Rs.1,30,000/ from the defendant no.1. The plaintiff is also entitled to interest @ 10% per annum from the date of filing of the suit till realization of the amount.
CS DJ No. 6673/2016CNR No. DLST010002862010 Page 47 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023 The plaintiff is also entitled to costs of the suit. The Counter claim is dismissed. In the Counter claim, no order to cost.
34. Decree sheet be prepared accordingly.
Digitally signedPronounced in the open Court by DINESH DINESH KUMAR KUMAR Date:
on this 15th day of April 2023.
2023.04.15 15:56:12 +0530 (DINESH KUMAR) ADDL. DISTRICT JUDGE02 SOUTH, SAKET COURTS, NEW DELHI.CS DJ No. 6673/2016
CNR No. DLST010002862010 Page 48 of 48 Dinesh Kumar/ADJ02/South/Saket/15.04.2023