Bangalore District Court
Mrs. Venkataravanamma vs M/S. Takshasila Hospital Operating on 6 August, 2022
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH-84]
:Present:
Ravindra Hegde,
M.A., LL.M.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this 6th day of August 2022
COM.O.S.No.7348/2014
Plaintiff Mrs. Venkataravanamma
W/o Tam Tam Pedda Guruva Reddy
Aged about 50 years,
R/at No.1427, 18th Main,
2nd Cross, J.P.Nagar,
Bengaluru-560078.
Represented by her
power of attorney holder
Mr.Tam Tam Pedda Guruva Reddy
S/o Mr. Pedda Guruva Reddy,
aged about 59 years,
Residing at No.1427, 18th Main,
2nd Cross, J.P.Nagar,
Bengaluru-560078.
(By Sri.V.B.S, Advocate)
// versus //
Defendant M/s. Takshasila Hospital Operating
Private Limited,
No.8, 7th Floor, 'Embassy Star',
Palace Road, Vasanthanagar,
Bengaluru-560052.
Represented by its Managing Director
Mr. Toshimasa Yashima.
(By Sri.S.S, Advocate)
[
Date of Institution of the : 22/09/2014
2
CT 1390_Com.O.S.7348-2014_Judgment.doc
suit
Nature of the suit : Recovery of Money
Date of commencement of : 05/04/2019
recording of the evidence
Date on which the : 06/08/2022
Judgment was pronounced.
: Year Month/ Day/s
Total duration /s s
07 10 15
JUDGMENT
This suit is filed by the plaintiff praying to direct the defendant to pay Rs.3,62,47,215/- towards arrears of rent, mesne profits, service tax, interest and towards compensation for all the work done as per the requirements of the defendant and to direct the defendant to continue paying mesne profits/ damages at the rate of Rs.6,03,750/- with further increase of 5% on the said amount on completion of each 12 months period from the date of original lease along with applicable service tax and also praying to award interest @18% per annum on the delayed payment from the date of suit.
2. The case of plaintiff in brief is as under:
The plaintiff is absolute owner of the property bearing No.123, 12th Main, 5th Sector, HSR Layout, Bengaluru. The defendant is a multi-national company which runs Hospital. The plaintiff had made construction on her property and was intending to give apartments on rent. When the 3 CT 1390_Com.O.S.7348-2014_Judgment.doc construction was nearly completed, defendant approached the plaintiff and offered to take the property on lease for the purpose of housing its staff working in the Hospital. Plaintiff spent crores of rupees to put up the construction and had put 8 apartments of 2 BHK and 16 apartments of 1 BHK and they were ready to occupy immediately for residential purposes. The defendant gave assurance that it would take the property on rent for a period of 20 years and promised the continuous rental income and requested the plaintiff make drastic alterations to the building to suit the defendant's use. Based on the defendant's request, Letter of intent dated 25/1/2013 came to be signed by the parties. Under this Letter of intent drastic and dramatic alterations were contemplated to the premises. Though it was taken as a non-binding document, plaintiff believed that the defendant would go through with its commitments. Accordingly plaintiff removed the kitchens in all the apartments and converted the same into additional bath rooms at significant cost. The defendant had cast several onerous obligations on the plaintiff as a pre-condition to enter into lease. The removal of kitchens and converting them into additional bath rooms was specifically at the defendant's request. The plaintiff had also raised loan of Rs.3 crores from the bank for construction of the building on the said premises and related works. After Letter of intent, plaintiff was made to spend Rs.88 lakhs towards construction of kitchens in all apartments and also incurred 4 CT 1390_Com.O.S.7348-2014_Judgment.doc expenses towards other alterations. This was also laborious work and took about 3 months and during this period plaintiff has lost rental income of Rs.17.25 lakhs. The plaintiff will have to spend over Rs.80 to 90 lakhs to bring back building to its earlier position by converting the bathrooms into kitchens. Under the belief that the defendant is a reputed multi-national company the plaintiff spent huge amounts of money and provided and installed all the facilities and amenities required by the defendant. After plaintiff fulfilling its obligation under the letter of intent a lease deed dated 28/2/2013 was entered into between the plaintiff and defendant. Though the defendant had promised to take the premises for 20 years, lease deed was executed for a period of 3 years and defendant explained that the liability of the stamp duty was on the defendant and hence he wanted a shorter period of time. The monthly rent agreed to be paid was Rs.5,75,000/- plus service tax and defendant had given security deposit of Rs.57,50,000/-. The defendant has failed to pay stamp duty on the lease deed and got it registered. The plaintiff has spent Rs.88 lakhs for converting the kitchen into bathrooms and incurred Rs.17,25,000/- towards loss of rentals for 3 months for putting the kitchen on the schedule premises again. The dues of TDS, service tax dues are also due from the pefendant. There is also liability on the defendant to pay the cost of Rs.80 lakhs towards cost of construction and also Rs.6.5 lakhs towards cost of installing diesel generator.5
CT 1390_Com.O.S.7348-2014_Judgment.doc Rs.5,75 lakhs towards cost of providing 65KVA transformer. There is also due of Rs.16 lakhs towards cost of providing wardrobes to all apartments and Rs.1.5 lakhs towards cost of geysers and Rs.11 lakhs towards cost of passenger lift. Rs.12 lakhs towards painting, rent for the period of lease is also payable by defendant. Compensation for damages caused to the building by the defendant and damages to which the plaintiff is entitle are also to be paid by the defendant. The defendant has not regularly paid the rent. Defendant on 15/2/2014 sent illegal letter of terminating the agreement and the same has been replied by the plaintiff. The defendant instead of complying with the reasonable demand made in the reply notice has issued another reply dated 20/3/2014 by making untenable claim. The plaintiff got another reply on 21/4/2014. Despite its assurances of continuing for the entire tenure of 20 years the defendant has left the plaintiff in its lurch. The defendant has not handed over possession to the plaintiff, despite its false claims. The defendant is liable to continue the payment of rent for the period of the original lease and also liable to pay increase rate of 5% per annum along with applicable tax. The total amount to which the defendant is liable to pay to the plaintiff is Rs.3,62,47,215/- and the defendant is also liable to pay mesne profits or damages of Rs.6,03,750/- with annual increase of 5%. For recovery of this amount and direction to the defendant to continue to pay the mesne profits, plaintiff has filed this suit.6
CT 1390_Com.O.S.7348-2014_Judgment.doc
3. Defendant has filed written statement and denied various averments of the plaint. The defendant admitted that it approached plaintiff in order to secure the plaint schedule premises on lease for the purpose of Hostel to accommodate its hospital staff, but denied that the said premises was nearing completion and and was meant for residential apartment. The plaintiff spendinf crores of rupees for alteration on the request of the defendant are all not admitted by the defendant. The defendant has stated that the parties are governed by lease agreement dated 28/2/2013 and it do not reflects any alteration or construction made by the plaintiff at the instance of the defendant. It is stated that the plaintiff was duty bound to handover schedule premises to the defendant with all the basic amenities. The defendant has denied that plaintiff has lost rent of Rs.17,25,000/- for 3 months during the period of rebuilding of the schedule premises. The contention that the plaintiff requires Rs.80 lakhs to Rs.90 lakhs in order to bring back to its earlier position is also denied. It is stated that the plaintiff has failed to produce the original lease agreement to substantiate his claim and adverse inference is to be drawn. It is stated that the letter of intent has no legal consequences and on the basis of that letter of intent, suit cannot be instituted. It is denied that defendant had promised to take the premises on lease of 20 years. The defendant has stated that he has not made any such assurance and stated that the lase deed entered between the 7 CT 1390_Com.O.S.7348-2014_Judgment.doc parties was for 3 years only. Defendant has stated that the claim of the plaintiff is bad in law. It is stated that claim of the plaintiff on several headings are the basic amenities which ought to have been provided by the plaintiff being the landlord while leasing out the premises. The defendant had stated that they are not liable to pay arrears and other charges as contended by the plaintiff. Defendant has stated that it had communicated to the plaintiff in respect of untenable conditions of schedule premises and contamination of the drinking water supplied to the schedule premises, but the plaintiff did not bother to rectify the irregularities of the schedule premises and violated the terms stipulated in the lease deed. It is stated that for this reason, defendant has terminated the lease on 15/2/2014 in accordance with the stipulation of lease deed as plaintiff committed breach of contract. It is stated that the termination of the tenancy is in accordance with law and stated that the plaintiff has sent vague and untenable reply to the said termination notice and made illegally unsustainable claims. It is stated that the plaintiff failed to act upon the termination notice and consequently defendant was constrained to issue a letter dated 26/8/2014 wherein once again called upon the plaintiff to take possession of the schedule premises on 31/8/2014. It is stated that instead of taking possession of the schedule premises plaintiff sent a reply on 1/9/2014 to the defendant by taking untenable contention. It is stated that inspite of the letter, the plaintiff 8 CT 1390_Com.O.S.7348-2014_Judgment.doc did not bother to comply with the letter and plaintiff has taken possession of the premises only on 25/11/2014 by giving written acknowledgment. It is stated that despite taking possession of the premises, the plaintiff has wrongly contended that until now the defendant has not handed over the possession. It is also stated that claiming interest and making other claims by the plaintiff is contrary to lease agreement. On all these grounds the defendant has prayed to dismiss the suit.
4. On these pleadings, following issues are framed:
ISSUES
1. Whether the plaintiff proves that the defendant is liable to pay Rs.3,62,47,215/- to the plaintiff?
2. Whether the plaintiff is entitle to claim damages at the rate of Rs.6,03,750/- with further increase of 5% on the said amount on completion of each 12 months?
3. Whether the plaintiff is entitle for the relief as prayed for?
4. What decree or order?
5. In support of the plaintiff's case PW.1 is examined.
Ex.P.1 to Ex.P.49 documents are marked. For defendants DW.1 is examined. Ex.D.1 to Ex.D.20 documents are marked.
6. Heard arguments. Both the counsels have filed written arguments also. Perused records.
9CT 1390_Com.O.S.7348-2014_Judgment.doc
7. My answer to the above issues are :
Issue No.1 : In the negative.
Issue No.2 : In the negative.
Issue No.3 : In the negative.
Issue No.4 : As per final order for the following:
REASONS
8. ISSUE No.1 : Case of the plaintiff is that the defendant has approached the plaintiff for taking the apartment building constructed by the plaintiff in the schedule premises for use of the staff of the defendant in its Hospital and promised to continue in the premises for a period of 20 years, but executed the agreement for lease only for 3 years. According to the plaintiff, LOI was executed between the parties on 25/1/2013 and the defendant requested the plaintiff to make several drastic alterations to the building like converting kitchen into bathrooms, providing wardrobes etc. According to plaintiff, she has made all alterations as per the requirement of defendant and incurred huge expenses and has also lost the income for 3 months during this period of alteration. Defendant has given notice of termination of lease on 15/2/2014 for the reasons mentioned in the notice which has been objected. Since plaintiff has incurred huge expenses for alteration and the defendant has terminated the lease, seeking this amount which are specified in plaint para 12 plaintiff has filed this suit. Plaintiff has quantified the amount as Rs.3,62,47,215/-. Defendant denied such expenses being incurred by plaintiff for alteration to meet the requirement of 10 CT 1390_Com.O.S.7348-2014_Judgment.doc defendant and also liability to pay the suit claim amount to the plaintiff. Defendant has stated that due to several breach of conditions of the lease, defendant has terminated the agreement and has vacated the premises and stated that after several correspondences, finally on 25/11/2014 the plaintiff has taken possession of the premises. The defendant denied its liability to pay any of the amount claimed in the suit.
9. Power of Attorney Holder of the plaintiff who is also husband of the plaintiff has given evidence as PW.1. In the chief examination, he has reiterated the plaint averments. In the cross examination he has stated that in 2013, defendant approached the plaintiff to take schedule premises on lease and stated that after two months of execution of letter of intent the lease agreement was executed between the parties. He has stated that there are no records to show that defendant had agreed to continue the lease for 20 years. PW.1 has stated that to avoid stamp duty, defendant had executed lease deed for 3 years and agreed to renew it for further period. The witness has stated that after LOI, there was no correspondence between the parties before execution of lease agreement relating to duration of lease, lease amount, monthly rent etc. Witness stated that after the defendant vacated the premises, the premises was vacant for one and half year. He has stated that 11 months rent was paid as deposit. Witness stated that the defendant had collected the original lease deed 11 CT 1390_Com.O.S.7348-2014_Judgment.doc stating that it was required for registration and denied that the original lease agreement is with the plaintiff. Witness has stated that defendant was paying rents to the plaintiff from April 2013 and stated that lockin period of the lease was 11 months and stated that the lease was to be terminated by issuing notice of 6 months. Witness denied that defendant never requested plaintiff to make alteration in the premises. Witness admitted that the alteration in part B of Annexure-B of Ex.P.38 were carried out by the defendant at their own cost. Witness stated that the alteration as appearing in part A of Annexure B of Ex.P.38 were carried out as per the specific instructions of the defendant. He has stated that plaintiff had already got those works as required for the building, but subsequently alterations and additional works were carried out as per the request of the defendant. PW.1 has stated that the tenant who is now in occupation of the schedule premises has been paying monthly rent of Rs.4 lakhs to the plaintiff and now also there is no lease deed entered into between the plaintiff and the new tenant who is in the occupation of the schedule premises. Witness has stated that the schedule premises was let out to the new tenant about one year back without making any alteration. Witness has denied that he has created false bills at Ex.P.2 to Ex.P.25, Ex.P.27 to Ex.P.29 for making false claim. PW.1 has stated that there is no agreement or contract entered between the plaintiff and defendant for payment of cost of alterations works as shown 12 CT 1390_Com.O.S.7348-2014_Judgment.doc in schedule of Ex.P.38. PW.1 has stated that the defendant had agreed to continue lease of the premises for a period of 20 years, but defendant vacated the premises within one year 9 months and then defendant failed to handover the key of the premises for about 3 years. The witness denied that due to contaminated and polluted water of the suit premises, staff of the defendant, who were in the occupation of the premises were facing frequent ill-health. Witness denied that they were requested the plaintiff several times to attend drainage problem and electricity problem etc, plaintiff has not taken steps.
10. Plaintiff has produced estimation and valuation of the residential apartment given by the Engineer as Ex.P.1. Plaintiff has produced several tax invoices, receipts to establish the expenses incurred for making alteration and purchase of equipments for alteration and modification which are said to have been made on the request of the defendant. These invoices, purchase bills, vouchers, receipts etc are all produced as Ex.P.2 to Ex.P.29. The bills and receipts for payment of electricity charges are produced as Ex.P.30. The receipts for payment made to BWSSB and BBMP are produced as Ex.P.31 to Ex.P.33. Ex.P.34 is a notice given by the defendant's counsel to the PA holder of the plaintiff asking them to produce original lease agreement, reply given to this notice is produced as Ex.P.35, wherein the plaintiff has stated that the original lease agreement is not with the plaintiff, but is with the 13 CT 1390_Com.O.S.7348-2014_Judgment.doc defendant. Statement of account of the plaintiff's bank account are produced as Ex.P.36 and Ex.P.37. Ex.P.38 is the Letter of intent(LOI) dated 25/1/2013 given by the defendant which contains signature of both the parties. This is the important document on which the entire case of the plaintiff regarding lease of the schedule premises by the respondent and the alterations, modification etc made to the schedule property on the request of the defendant is based. Notice of termination of the lease issued by the defendant on 15/2/2014 is marked as Ex.P.39. For this notice, plaintiff has given reply on 10/3/2014 as per Ex.P.40. The reply to this notice is produced as Ex.P.43. Thereafter, plaintiff again gave another legal notice on 21/4/2014 claiming amount from the defendant towards expenses incurred by the plaintiff which are even stated in the present suit. This notice is marked as Ex.P.44. The letter dated 26/8/2014 of the defendant stating that six months notice of termination expires on 31/8/2014 and stating that the defendant is ready and willing to handover possession and asking the plaintiff to collect key and to refund the security deposit amount given at the time of lease agreement is produced as Ex.P.46. Ex.P.48 is the reply to Ex.P.46 wherein the plaintiff has stated that the defendant still continued in possession without paying rent and has not handed over the key or possession and calling upon the defendant to join inspection to see the damages caused to the building before plaintiff 14 CT 1390_Com.O.S.7348-2014_Judgment.doc receiving possession. Power of Attorney given to PW.1 by the plaintiff is marked as Ex.P.49.
11. For the defendant, its Company Secretary and Senior Manager-Legal has given evidence as DW.1 and has reiterated the defence that has been raised in the written statement. Witness has stated that the lease is for a period of 3 years and is renewable by mutual agreement of the parties and that original lease agreement is with the plaintiff and also stated about payment of Rs.57,50,000/- as security deposit amount and stated that there is lock in period of 11 months. He has also stated about issues which led to termination of the lease and stated that as mentioned in the lease deed 6 months termination notice was given. In the cross examination, DW.1 has stated that he has not seen the suit schedule premises and stated that their company had inspected the spot before entering into lease. Witness has stated that around 200 nurses were stationed in this building after taking on lease and stated that he do not know how many rooms this hostel had. Witness has stated that COO of the defendant company asked Dr. Shwetha Narendra to conduct laboratory test of water and he has stated that he do not know whether the plaintiff was informed about water sample taken for test and admitted that Ex.D.1 to Ex.D.3 were generated from the testing laboratory and denied that Ex.D.1 to Ex.D.3 are not pertaining to hostel of the plaintiff and admitted that MPN count in all the 3 reports are same. Witness has stated that 15 CT 1390_Com.O.S.7348-2014_Judgment.doc after receiving this report, they have not complained to BWSSB or KSPCB. Witness admitted that the reason for termination of the lease is poor water quality and stated that as their staff fell ill due to poor water quality, they were not interested in continuing in the premises. Witness has stated that he has seen xerox copy of the lease agreement. Witness has stated that even before 15/2/2014 they have complained about contaminated water and violation of building plan through email. Witness denied that for the first time in this termination notice, they have stated about issue of contaminated water. Witness has stated that Ex.P.38 is signed by the Managing Director of the defendant and denied that defendant was responsible to bear the stamp duty and registration charges. Witness has stated that the lock in period is the period during which either party cannot terminate the agreement. Witness admitted that they were first tenant in the premises and stated that he has not seen the schedule property and stated that he do not know whether any additional bathrooms, toilets are constructed in the schedule property. It is stated that the defendant took possession of the schedule property on 1/3/2013 and stated that he do not know whether there was any formal communication from the defendant for taking possession of the premises from 1/3/2013. Witness denied that they have restrained the plaintiff from finding any new tenant from 28/1/2013 till 1/3/2013 and this period was reserved for making necessary structural 16 CT 1390_Com.O.S.7348-2014_Judgment.doc changes at their instance. Witness has stated that they have paid electricity charges and water charges till end of January 2014. He has stated that they have handed over the key of the premises at the end of August 2014. Witness denied that the plaintiff has spent Rs.80 lakhs to Rs.90 lakhs to rectify the structural changes made to the schedule property. Witness expressed ignorance to the suggestion that at the time of vacating the premises they have taken kitchen and canteen equipments from the premises and denied that plaintiff had incurred additional expenses for removing kitchen and canteen equipments. Witness has stated that they have not made any structural changes. Witness denied suggestion that all renovation are made by the plaintiff on the instruction of the defendant. DW.1 denied the suggestion that for half of March 2013, April 2013 and January 2014 they have not paid the rent to the plaintiff. Witness denied that plaintiff has incurred expenses as per Ex.P.2 to Ex.P.33 at their instance and denied the suggestion that Rs.88 lakhs expenses was incurred by the plaintiff for construction of kitchen in the premises. Witness denied the suggestion that the plaintiff has lost rent of Rs.17,25,000/- for the period from LOI till giving possession. Witness denied the suggestion that at their instance diesel generator was installed in the premises by incurring cost of Rs.6.5 lakhs and also denied the suggestion that plaintiff has incurred expenses of Rs.5.75 lakhs for providing transformer. Witness denied that 17 CT 1390_Com.O.S.7348-2014_Judgment.doc plaintiff put wardrobes at the instance of the defendant by incurring expenses of Rs.6 lakhs. Witness expressed ignorance to the suggestion that the plaintiff has incurred cost of Rs.1.5 lakhs for cost of geysers and plaintiff incurred expenses of Rs.11 lakhs towards cost of passenger lift and Rs.12 lakhs for painting.
12. Defendant has produced 3 Lab reports regarding water analysis for bacterial contamination as Ex.D.1 to Ex.D.3, as per which, water quality is unsatisfactory. Copy of termination notice is marked as Ex.D.4. Reply given by the plaintiff is produced by the defendant as Ex.D.8. Reply dated 20/3/2014 is produced as Ex.D.9. Ex.D.10 is the notice dated 1/4/2014 given by the plaintiff. Ex.D.11 is the letter dated 26/8/2014 stating that the defendant is ready to hand over vacant possession with effect from 31/8/2014 as the notice period of 6 months expires on 31/8/2014. The reply given by the plaintiff is produced as Ex.D.15. Ex.D.16 is the reply given to the letter of plaintiff dated 1/9/2014. Letter of the defendant to the plaintiff asking the plaintiff to produce original lease agreement is produced as Ex.D.19. Ex.D.20 is the email correspondence exchanged between the parties.
13. On looking to the pleadings, evidence and hearing learned senior counsel for the plaintiff and also the learned counsel for the defendant and perusing the records, there is no dispute that the LOI as per Ex.P.38 was executed between the parties on 25/1/2013. It is also not in dispute 18 CT 1390_Com.O.S.7348-2014_Judgment.doc that the defendant had agreed to take the suit schedule premises for providing accommodation to the staff of the defendant's hospital. It is also not in dispute that the lease agreement or lease deed dated 28/02/2013 was executed between the parties with lease period of 3 years and with Lock in period of 11 months. This lease agreement is not produced before the court. Both the parties have blamed each other for non production of the document and contended that the original lease agreement is with other party. The defendant after filing of the suit has sent notice to the plaintiff on 10/12/2015 as per Ex.P.34 which is even produced as Ex.D.19 by the defendant, stating that original lease agreement is with the plaintiff and asking plaintiff to produce the same. This notice has been replied by the plaintiff as per Ex.P.35 on 22/8/2016 stating that original lease agreement is not with the plaintiff, but it is with the defendant and it is the duty of the defendant to take steps for registration of the lease deed and to pay the stamp duty. Though these notices are exchanged between the parties and both the parties have contended that the lease agreement or lease deed is with other party, fact remains that neither the plaintiff nor the defendant have produced the lease agreement or lease deed dated 28/2/2013 and have not even produced copy of the same.
14. The defendant has contended that when lease deed is not produced, contention of the plaintiff about the terms and conditions of the lease etc cannot be accepted. The 19 CT 1390_Com.O.S.7348-2014_Judgment.doc defendant also contended that LOI is not a binding contract as clearly mentioned in Ex.P.38 and on the basis of Ex.P.38 plaintiff cannot make a claim. It is clearly mentioned in clause 24 of this LOI-Ex.P.38 that it do not contain all of the material terms that would be included about lease if the parties elect to negotiate the Lease and it is also mentioned that the lease will not have binding effect unless and until lease has been executed by both parties. Therefore, as per this clause 24, LOI is not having any binding effect. However, clause 22 provides that this letter of intent is governed by laws of India and courts in Bengaluru would have jurisdiction. In view of this clause, this LOI is also an agreement which is entered between the parties and contains and imposes right and obligations on the parties.
15. It is argued for the Plaintiff that, defendant who was required to pay stamp duty and register lease deed has not registered it and has not even produced the lease deed before the court and as such adverse inference is to be drawn against the defendant. The learned senior counsel has relied on the decision of Hon'ble Supreme Court reported in (1968) 3 SCR 862 (Gopal Krishnaji Ketkar v. Mohamed Haji Latif and others). In this decision in para 5 the Hon'ble Supreme Court has held as under
"...Even if the burden of proof does not lie on a party the court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain 20 CT 1390_Com.O.S.7348-2014_Judgment.doc state of facts to withhold from the court the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof...."
16. It is argued on the basis of this decision that when the defendant has not produced lease agreement and strangely recollected and reproduced the clauses of the lease agreement in the pleading and evidence and has failed to pay stamp duty and registering the document, cannot take advantage of non availability of lease agreement before the court. By considering these lapses on the part of the defendant, as the only available document is LOI, same can be considered.
17. Regarding acceptance of LOI as contract between the parties the learned senior counsel for the plaintiff has relied on the decision of the Hon'ble Supreme Court reported in (2006)1 SCC 751 ((Dresser Rand S.A v. Bindal Agro Chem Limited and another). In this decision in para 40, it is held as under:
"It is no doubt true that a letter of intent may be construed as a letter of acceptance if such intention is evident from its terms. It is not uncommon in contracts involving detailed procedure, in order to save time, to issue a letter of intent communicating the acceptance of the offer and asking the contractor to start the work with a stipulation that the detailed contract would be drawn up later. If such a letter is issued to the contractor, though it may be termed as a letter of intent, it may amount to acceptance of the offer resulting in a concluded contract 21 CT 1390_Com.O.S.7348-2014_Judgment.doc between the parties. But the question whether the letter of intent is merely an expression of an intention to place an order in future or whether it is a final acceptance of the offer there by leading to a contract, is a matter that has to be decided with reference to the terms of the letter observes that where parties to a transaction exchanged letters of intent, the terms of such letters may, of course, negative contractual intention; but, on the other hand where the language does not negative contractual intention, it is open to the courts to hold that the parties are bound by the document; and the courts will, in particular, be inclined to do so where the parties have acted on the document for a long period of time or have expended considerable sums of money in reliance on it. Be that as it may."
18. The learned counsel for the defendant has relied on the decision of Hon'ble Supreme Court reported in 1996(10) SCC 405 (Rajastan Co-operative Dairy Federation Limited v. Mahalaxmi Mingrate Marketing Service Private Limited and others) in which the Hon'ble Supreme Court has held in para 20 that "The judicial views before us leave little doubt over the proposition that an LOI merely indicates a party's intention to enter into a contract with the other party in future." On this basis the learned counsel for the defendant argued that the letter of intent did not create any binding relationship between the parties. However as stated in the decision relied by the plaintiff referred above, added to LOI, subsequent event showing the parties performing their part of terms and conditions mentioned in the LOI would establish that the 22 CT 1390_Com.O.S.7348-2014_Judgment.doc binding relationship between the parties was created and the parties have even complied with the same. Though lease agreement is not produced before he court, the terms and conditions appearing in LOI would be binding on the parties as they have acted on it. When parties have acted in furtherance of this LOI and the evidence before the court clearly show that the defendant has occupied the premises on lease and most of the terms and conditions appearing in LOI is stated by the parties in the pleading and even this clause 22 of Ex.P.38 provides for enforcement of this LOI by providing jurisdiction to the court, it is clear that this LOI is acted upon and as such, it would also be a enforceable agreement and parties are governed by the said document. In the absence of a properly executed lease agreement produced before the court, Ex.P.38 is to be accepted as a document establishing the relationship between the parties as that of lessor and lessee. Accordingly objection raised for considering the LOI as a binding agreement between the parties would not survive.
19. Ex.P.38 contains several terms and conditions agreed between the parties. Period of the lease is shown as 3 years and lock in period is 11 months. After 11 months of lock in period, lessee may terminate the agreement by giving 6 months notice to the lessor as per Ex.P.38. It also mentions the date of handing over and also beginning of the lease period and also provides for base rent and other provisions like payment of security deposit of 10 months 23 CT 1390_Com.O.S.7348-2014_Judgment.doc rent and escalation of 5% on expiry of every 12 months etc. Apart from this, Ex.P.38 also provides that requirement of Annexure-B is to be complied and the lessor and lessee have to do certain acts and have to make improvements. In Annexure-B to the LOI several work to be done by lessor is stated, which include providing wardrobe in each bed room, additional toilet plus two bathrooms in each apartment, two coats of paint, all electrical light fittings, solar geyser, 65 KVA power with transformer, one gents and two ladies toilets to be provided in the terrace area, diesel generator etc. Therefore, LOI clearly states that before start of lease period, several works are to be done as improvement by the lessor and after that, possession of the premises is to be given. Very fact that defendant has taken possession of the premises and the lease deed was executed on 28/2/2013 by showing the lease period as starting from 1/3/2013 as admitted by the parties, it is clear that the said improvement in Annexure-B of Ex.P.38 has been carried out by the plaintiff.
20. Plaintiff has contended that for doing these improvements mentioned in Annexure-B of Ex.P.38, plaintiff has incurred huge expenses which are listed in the plaint and according to plaintiff, these expenses are made on the promise of the defendant that they will take the premises on lease for a period of 20 years. Though the plaintiff has stated in his plaint, evidence and also in several notices about this promise of continuing this lease for 20 years, 24 CT 1390_Com.O.S.7348-2014_Judgment.doc defendant nowhere admitted this oral promise to take the schedule premises on lease for 20 years. PW.1 has stated that on this promise to continue the premises for a period of 20 years, plaintiff has made several investment and incurred huge expenses. In the absence of any document showing that the parties had agreed to continue the lease for a period of 20 years as stated by the plaintiff, contention of the plaintiff that the parties had agreed to have the lease agreement for a period of 20 years is without any proof and same cannot be accepted. When, defendant which is a Private limited company has before occupying the premises issued LOI, explaining the terms and conditions governing the parties and specifically mentioned the period of lease as 3 years, the contention of the plaintiff regarding oral agreement for 20 years lease cannot be accepted. Even PW.1 has stated that the lease agreement was executed for 3 years as against oral promise of 20 years. Oral promise is not established.
21. As admitted by parties, lease agreement was executed on 28/2/2013 and period of lease starts from 1/3/2013. In LOI, period of lease is mentioned as 3 years, lock in period is shown as 11 months, 5% escalation of rent is also mentioned, interest free security deposit is also mentioned as 10 months rent. It is clearly admitted by the plaintiff that the defendant had paid Rs.57,50,000/- as refundable security deposit. PW.1 in his cross examination has clearly admitted that lock in period of the lease was 11 25 CT 1390_Com.O.S.7348-2014_Judgment.doc months only as eve appearing in Ex.P.38. As admitted by DW.1, this lock in period is a period during which lessee is barred from vacating the premises and even if he do not occupy or continue, 11 months rent is required to be paid by the lessee. After occupying the premises on 1/3/2013, after plaintiff carrying out several works as improvement as provided in Ex.P.38, defendant continued in occupation of the premises and on 15/2/2014 the defendant sent termination notice as per Ex.P.39, which is even produced by defendant as Ex.D.4. In this letter Ex.P.39 the defendant has stated that due to contaminated water, inmates of the premises have been frequently falling ill and the neighbor of the premises are causing nuisance to the inmates and inspite of several communications to set right the things, plaintiff has failed to comply with the request and therefore, the defendant, after expiry of the lock in period on 28/2/2014 would stop the hostel facility in the schedule premises and have given this notice as 6 months notice for termination of the lease as provided in the agreement and stated that the termination operates from 1/3/2014. This notice has been replied by the plaintiff as per Ex.P.40 on 10.3.2014, copy of which is produced as Ex.D.8. Plaintiff raised objection for such vacating of the premises and termination of the lease and contended that the lease was agreed for 20 years and that the plaintiff has made huge investment to meet the requirements of the defendant to occupy the premises by making alteration like putting bath 26 CT 1390_Com.O.S.7348-2014_Judgment.doc rooms and toilet in place of kitchen etc. This has been further replied by rejoinder by the defendant on 20/3/2014 as per Ex.P.43 and plaintiff gave further reply on 21/4/2014 as per Ex.P.44. Though plaintiff consistently contended that, defendant had agreed to continue in the premises for 20 years and on that basis, she had agreed to carry out the improvement as appearing in Annexure-B in Ex.P.38, there is no documentary proof to this contention. When there is a document as admitted by parties, stating that lease is for 3 years, contention of the plaintiff about 20 years lease cannot be accepted. There is also no material before the court to show that on the promise of the defendant to occupy the premises for 20 years, plaintiff has made these improvement and structural changes like converting kitchen into bathroom etc in the premises. Therefore these contentions of the plaintiff cannot be accepted. On the basis of the documents produced before the court, this court could come to the only conclusion that plaintiff and defendant had agreed for lease of schedule premises for a period of 3 years.
22. Plaintiff was required to make some alteration, improvement etc to the premises as mentioned in Ex.P.38. According to the defendant, all these alterations, improvements are regular amenities provided for occupation of premises. On looking to Annexure-B of Ex.P.38 converting kitchen into bathroom cannot be termed as simple improvement for the purpose of making the premises ready for occupation. However, it is the parties who have 27 CT 1390_Com.O.S.7348-2014_Judgment.doc agreed for such alteration to be made. Ex.P.38 letter of intent though is addressed by the defendant to the plaintiff, it bears the signature of both the parties. Though it is suggested to PW.1, that last two pages of Ex.P.38 are not signed, seal of the defendant is appearing in those pages. As such entire Ex.P.38 is to be accepted as the admitted document entered between the parties. In entire Ex.P.38, there is no clause providing any compensation to plaintiff or for payment of expenses incurred for making alterations in the premises, for the purpose of enabling the defendant to occupy the premises for the purpose for which it is required. Under such circumstances it could be only held that all the improvements that are made as per Annexure-B by the plaintiff are in terms of LOI and there is no agreement between the parties for payment of any expenses that are incurred by either party for carrying out such alteration, improvement or modification etc.
23. There is lock in period of 11 months before which the party cannot cancel the lease. This itself appears to be security given to the plaintiff to get return on its investment or expenses incurred for those alterations. As appearing in Ex.P.38, lease period starts from 1/3/2013. Hence, lock in period would end after period of 11 months from 1/3/2013. After this 11 months of lock in period, there is no any restriction for the lessee to cancel the lease except complying with requirement of termination notice. The defendant has stated that as per the lease terms, 6 28 CT 1390_Com.O.S.7348-2014_Judgment.doc months notice is required before vacating the premises. Even in Ex.P.38, it is so mentioned. However, Plaintiff has denied the entitlement of the defendant to cancel the deed. As per Section 106 of Transfer of Property Act, a lease of immovable property can be terminated by 15 days notice. According to the defendant, agreement provided for 6 months notice to vacate the premises. Even Ex.P.38 clearly states in clause 13 that, lessee may terminate the agreement by giving 6 months notice to the lessor. Even lessor may terminate the lease if lessee fails to pay base rent for 3 continuous months and lessee do not cure its failure within 5 business days after lessors written notice to lessee as per clause 14. Therefore, contention of plaintiff that lease cannot be terminated falls to the ground.
24. For this termination by giving 6 months notice by lessee under clause 13, after completion of Lock in period, there is no obligation on the part of the lessee to give any reason for vacating the premises. Since, termination by the lessee i.e. defendant is not under first part of clause 14 of LOI, for the default in complying the obligation by lessor, reasons need not be given for termination. Defendant contends that water was contaminated and due to that, staff who were stationed in this premises fell ill continuously and there was also issue of neighbor and other problems due to which they have decided to vacate the premises. To establish that water was contaminated the water report are produced as Ex.D.1 to Ex.D.3 by the defendant and all the 3 29 CT 1390_Com.O.S.7348-2014_Judgment.doc reports show same quality for the cauvery water, borewell water and DW.1 could not successfully establish that the water in the premises was contaminated. These reports which are prepared by the defendant themselves and without giving even notice to the plaintiff and not collecting sample in the presence of the plaintiff may not bind the plaintiff. However the termination is not for failure of the plaintiff to perform its obligation. The termination is simple termination by giving 6 months notice as provided in the lease agreement and LOI. PW.1 also, in his cross examination has clearly stated that as per the terms of lease deed, lease was terminable by either of the parties by issuing 6 months prior notice. Therefore, even plaintiff is aware that by giving 6 months prior notice after the lock in period of 11 months lease could be terminated. Hence, correctness of the reasons mentioned in Termination notice is not relevant for consideration. As stated above, notice for termination of lease is given on 15/2/2014 as per Ex.P.39 wherein it is clearly stated this is the 6 months termination notice as provided in the lease deed and the period of notice of termination starts from 1/3/2014.
25. According to the defendant they were required to vacate the premises by 1/9/2014 after expiry of 6 months from the date of termination notice. In this connection the defendant by Ex.D.11 (which is produced by the plaintiff as Ex.P.46) informed the plaintiff that they are ready to vacate the premises by 1/9/2014. For this the plaintiff has replied 30 CT 1390_Com.O.S.7348-2014_Judgment.doc on 1/9/2014 as per Ex.P.48. This is replied by defendant as per Ex.D.16 on 27/9/2014. These documents and also the notice and reply and rejoinder which are all produced at Ex.P.39 to Ex.P.48 and even produced by the defendant clearly show that from 15/2/2014 there are exchange of notice regarding termination of the lease by the defendant. As admitted by the parties, by 6 months notice the lease could be terminated. Since the agreement itself provides for termination of the lease by giving 6 months notice and 6 months notice has been given by the defendant, the defendant appears to have complied with the requirement of lease agreement. Admittedly 11 months lock in period has also expired. After expiry of such period, there is no obstacle to the defendant in terminating the lease by giving 6 months notice.
26. According to the plaintiff, possession of the property was not handed over by the defendant and defendant has not come for joint inspection etc. However, plaintiff has not given the date on which according to her, possession of the schedule premises was taken. PW.1 has admitted that the premises are given on lease to another tenant in 2021. Therefore it is clear that, at present defendant is not in occupation of the premises. According to plaintiff, at time of filing of the suit, defendant was still in possession of the schedule premises. Subsequently, when the defendant has vacated and handed over the possession is not stated by the plaintiff. On the other hand, in the 31 CT 1390_Com.O.S.7348-2014_Judgment.doc written statement in para 17, defendant has clearly sated that they have finally vacated the premises on 25/11/2014. Since plaintiff has not stated any date on which possession is taken and since, there is no dispute that possession of the schedule property is already taken by the plaintiff and premises are even leased now to new tenant, contention of the defendant that the plaintiff has taken possession of the premises on 25/11/2014 is to be accepted. If possession was not taken on 25/11/2014 and was taken subsequently, it was the plaintiff who was required to state the same in the evidence of PW.1 and by suggesting in the cross examination of DW.1 or by producing necessary documents. In the absence of any such materials placed by the plaintiff, only conclusion to which the court could arrive is that possession was handed over by 25/11/2014 as stated by defendant.
27. Therefore, from 1/3/2013 to 25/11/2014 the lease was operating and the defendant can be said to have been in possession of the schedule premises. In termination notice dated 15/2/2014, defendant has stated that he has paid upto date rent. This is not seriously disputed by the plaintiff and plaintiff has not stated as to what is the rent due from the defendant as on the date of suit with details. Plaintiff has not produced any document like account statement showing the receipt of rent from the defendant of particular months. Even the defendant has not produced any such document. Therefore, it could be accepted that the rent upto date of termination notice is paid. Plaintiff has not 32 CT 1390_Com.O.S.7348-2014_Judgment.doc issued any notice, seeking arrears of rent earlier. Hence, rent is considered as paid upto January 2014. Rent from February could be considered as due. If the rent after January 2014 is not paid as stated by the plaintiff upto 25/11/2014 there would be rent due for a period of 10 months. Admittedly defendant had given security deposit of Rs.57,50,000/- which is stated to be 10 months rent. If after January 2014 rent is not paid upto 25/11/2014 the date of which plaintiff took possession of the property, rent would be exactly for 10 months which could be adjusted in the security deposit already available with the laintiff. Therefore, though there is due from defendant, security deposit amount given by the defendant was available with the plaintiff and the same could be adjusted. Though defendant requested the plaintiff to take possession from 1/9/2014 after expiry of 6 months notice, the plaintiff appears to have raised dispute and asked for joint inspection etc and finally plaintiff is said to have taken possession of the. premises on 25/11/2014. For the rent due, plaintiff is entitle to adjust the security deposit amount. As such there would not be any balance of lease amount payable to the plaintiff.
28. Plaintiff has stated that rent for the period of lease is to be paid. Such claim would be rent for 3 years. In the absence of any such clause providing lock in period of 3 years, plaintiff cannot contend that the defendant cannot vacate the premises before 3 years and that even if they 33 CT 1390_Com.O.S.7348-2014_Judgment.doc vacate they have to pay the rent. When the lease itself provides for termination of lease by 6 months notice and such notice has been given after lock in period and the lease premises is vacated after expiry of lock in period plus 6 months, plaintiff cannot claim the rent for the entire period of the lease as prayed in the present suit.
29. One more contention of the plaintiff is that the defendant have to make payment of Rs.17,25,000/- towards loss of rent for 3 months which is caused due to time taken for renovation at the instance of the defendant and another Rs.17,25,000/- for loss of rent for 3 months during the period of putting up kitchen back again after vacating the premises. In total Rs.34,50,000/- has been claimed under this head. However, relationship between the parties is governed by LOI. As per the conditions mentioned in the LOI, these alterations are made. LOI do not provide for payment of any rent for the period during which plaintiff lost rental income due to time taken for these alterations. LOI do not say about payment of amount towards loss of rental for 3 months prior to and subsequent to termination of lease. When the parties have entered into agreement if there is an understanding for payment of these amount towards loss of rental the same would have been found in the lease agreement or LOI. When that is not mentioned, it is clear that the plaintiff had agreed to make alteration to the premises on his own, to enable the defendant to occupy the premises. As such these claims for loss of rent before 34 CT 1390_Com.O.S.7348-2014_Judgment.doc defendant occupying the premises and after defendant vacating the premises is not justifiable. There is no scope and there is no agreement or contract between the parties for payment of such amount. Hence the plaintiff is not entitle for Rs.34,50,000/- towards loss of rent.
30. Other claims made by the plaintiff are expenses incurred for construction of kitchen, converting kitchen into bathroom and then converting bathroom into kitchen. Totally Rs.2,56,00,000/- is stated to be the expenses for such alteration. No such documents are produced to establish such expenses incurred by the plaintiff. These expenses stated in the plaint are not established by producing documents. Moreover, providing bathroom in place of Kitchen is condition appearing in Annexure B of LOI. At the time of accepting LOI and later, at the time of entering into Lease agreement, plaintiff had the option of denying the request of defendant for converting kitchen into bath room or insist for payment of expenses which plaintiff would incur for this purpose. However, LOI do not contain any such clause obligating defendant to pay the expenses incurred by the plaintiff for making these alterations. Lock in period of 11 months is the only security available to the plaintiff to get return on his investment for these alterations and thiscondition of lock in period of 11 months is complied by the defendant. There is absolutely no agreement between the parties for payment of any expenses incurred for converting kitchen into bath room or bath room into kitchen.
35CT 1390_Com.O.S.7348-2014_Judgment.doc Therefore this claim made by the plaintiff are not justified. If there was understanding between the parties for payment of such amount, same would have been mentioned in their contract. If a landlord make some alteration on the demand of the tenant and agreement between parties, which provides for such alterations, do not provide for reimbursement of such expenses, then, after termination of lease in terms of agreement, landlord cannot claim compensation for the expenses incurred, as parties out of their free will and consent entered into lease and agreed for the terms and same cannot be varied. As such the plaintiff is not entitle for this amount claimed in the suit.
31. Apart from this, there is no such documents produced before the court to establish these expenses incurred by the plaintiff for forming the kitchen and then converting the kitchen into bath room as stated. Though Ex.P.2 to Ex.P.29 invoices, receipts, vouchers etc are produced, most of the receipts are subsequent to 1/3/2013 by which date, defendant had already occupied the premises. Total of the amount mentioned in Ex.P.2 to Ex.P.29 also do not come up to the claim made by the plaintiff in the suit, towards expenses incurred for making alterations to suit the requirements of defendant to occupy the premises. Looking from any angle, defendant cannot be said to be liable for the expenses incurred by the plaintiff to make alteration to the building as per the requirement of the defendant, when there is no agreement between the parties 36 CT 1390_Com.O.S.7348-2014_Judgment.doc for making such payment and these expenses are incurred on the basis of specific understanding between the parties. Hence this claim also cannot be accepted.
32. The claim based on not giving TDS certificates, non payment of service tax dues, painting cost stated in the plaint are not supported by acceptable documents. Regarding painting cost, Ex.P.38 itself states that two quotes of painting both external and internal is to be done by the lessor. No order can be passed regarding painting cost as it is covered by LOI. Similarly installing diesel generator, Transformer, wardrobes, geysers and passenger lift are all included in Annexure-B of Ex.P.38. Since Ex.P.38 do not contain any clause for payment of any amount towards expenditure incurred by the plaintiff for providing these facilities and the plaintiff has installed these amenities as per the understanding with the defendant, without there being any clause for payment of amount towards these expenses by the defendant, plaintiff has not justified in claiming these amounts.
33. There is also a claim for compensation for damages to the building by the defendant and its staff and there is also a claim for damages to the plaintiff. However no documents are produced to show that the defendant has caused damage to the premises and that plaintiff has incurred any expenses for setting it right. In para 12 of the plaint this claim is mentioned, but plaintiff has not even quantified the compensation for damages caused to the 37 CT 1390_Com.O.S.7348-2014_Judgment.doc building. Even there is no any estimation of damages caused to the building by the defendant during the occupation. Unless there is evidence before the court showing that the defendant has caused damage to the building, compensation for damage cannot be ascertained and cannot be awarded. Since the lessee is required to vacate the premises in good condition, if any damage is caused to the building by the defendant during the occupation of the building, plaintiff would be definitely entitle for such damage caused to the building and for any permanent structure put up in the premises, provided such damage caused to the building is established. In the present case except stating that damage is caused to the building, plaintiff has not placed any material to show such damage or to establish the expenditure incurred by the plaintiff to set right these damages caused to the building. Under such circumstances plaintiff is not entitle for any compensation even under these heads.
34. Plaintiff has stated that the total arrears of rent and service tax with interest as on 15/9/2014 would be Rs.18,97,215/- after appropriating security deposit of Rs.57,50,000/-. However plaintiff has not produced any document to show that even after deduction of security deposit of Rs.57,50,000/-, Rs.18,97,215/- would be due from the defendant. Plaintiff has not produced any account statement or even a calculation sheet showing rent, its payment and outstanding due. Among the documents 38 CT 1390_Com.O.S.7348-2014_Judgment.doc produced, Ex.P.1 is valuation and estimation which is dated 28/10/2012 i.e. much before LOI. Ex.P.2 to Ex.P.29 are invoices, receipts, vouchers etc and many of them were of subsequent to defendant occupying the premises. Ex.P.30 is bills from BESCOM and Ex.P.31 to Ex.P.33 are BWSSB and BBMP bills and deposit receipts. Ex.P.36 and Ex.P.37 are bank statements. These documents only show that the plaintiff has incurred certain expenses, but they do not establish that these expenses are to be compensated by the defendant. The deposits made to the BWSSB and BBMP cannot be claimed from the defendant unless there is an agreement between the parties for such claim. Even in Ex.P.30, plaintiff has produced BESCOM receipt and bill, but there is no specific amount mentioned which according to the plaintiff was required to be paid by the defendant and plaintiff has made the payment. These documents also do not show that during the occupation of the premises by the defendant the electricity, water charges etc were not paid by the defendant in violation of terms of lease and plaintiff was compelled to make payment which he can recover from the defendant.
35. Looking from any angle the claim made by the plaintiff are not supported by any proof. Many of the claims made by the plaintiff are for improvement made in the building to meet the requirement of the defendant as mentioned in Ex.P.38, but it do not provide for any extra payment other than rent, to recoup the expenses. Since the 39 CT 1390_Com.O.S.7348-2014_Judgment.doc relationship between the parties is contractual relationship and by understanding between the parties the lease has come into force for a period of 3 years with lock in period of 11 months and by giving right to the lessee to terminate the lease by giving 6 months notice, plaintiff cannot make the claim for the expenses incurred to make the building suitable for occupation by the defendant. When there is no such agreement between the parties, evidence given by PW.1 and DW.1 regarding cost incurred by either party and loss suffered etc., would not have any relevance. Moreover, documentary evidence placed, do not even bring the calculation to the amount claimed under different head in the present suit. For the expenses incurred to make the building suitable, plaintiff cannot make the claim as these alterations, improvement or modification made are in terms of the LOI which do not provide for payment of any amount to the plaintiff to reimburse the expenses incurred by him.
36. The learned senior counsel for the plaintiff has vehemently argued that the specific contention of the plaintiff with regard to different expenses incurred and the amount spent for such improvement are not specifically denied in the cross examination of PW.1 by suggesting the same and as such these claims are deemed to have been accepted by the defendant. In this connection he has relied on the decision of the Hon'ble Supreme Court reported in (2016) 12 SCC 288 (Muddasani Venkata Narsaiah (dead) 40 CT 1390_Com.O.S.7348-2014_Judgment.doc through Lrs v. Muddasani Sarojana) in which the Hon'ble Supreme Court has held in para 16 as under:
"..In Maroti Bansi Teli v. Radhabai, it has been laid down that the matters sworn to by one party in the pleadings not challenged either in pleadings or cross examination by other party must be accepted as fully established. The High Court of Calcutta has laid down that the party is obliged to put his case in cross examination of witnesses of opposite party. The rule of putting one's version in cross examination is one of essential justice and not merely technical one. A Division Bench of Nagpur High Court has laid down that when attestation is not specifically challenged and witness is not cross examined regarding details of attestation, it is sufficient for him to say that the document was attested. If the other side wants to challenge that statement, it is their duty, quite apart from raising it in the pleadings, to cross examine the witness along those lines...."
For the discussions made above, oral evidence of the parties is of little consequence, when there is binding agreement between the parties, which govern their contractual relationship. Hence this decision is not of any help to the plaintiff in this case.
37. The learned senior counsel for the plaintiff has relied on the decision of Hon'ble Supreme Court reported in (1968) 3 SCR 214 (Mulamchand v. State of Madhya pradesh) in which in para 6 the Hon'ble Supreme Court has held as under:
"...In other words, if the conditions imposed by Section 70 of the Indian Contract Act are satisfied then the provisions of that section can be invoked by the aggrieved party to 41 CT 1390_Com.O.S.7348-2014_Judgment.doc the void contract. The first condition is that a personal should lawfully do something for another person or deliver something to him; the second condition is that doing the said thing or delivering the said thing he must not intend to act gratuitously; and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied, Section 70 imposes upon the latter person the liability to make compensation to the former in respect of, or to restore, the thing done or delivered. The important point to notice is that in a case falling under Section 70 the person doing something for another delivering something to another cannot sue for the specific performance of the contract, nor ask for damages for the breach the contract, for the simple reason that there is no contract between him and the other person for whom he does something or to whom he delivers something. So where a claim for compensation is made by one person against another under Section 70 it is not on the basis of any subsisting contract between the parties but a different kind of obligation. The juristic basis of the obligation in such a case is not founded upon any contract or tort but upon a third category of law, namely, quasi contract or restitution...."
38. In the present case, in terms of the agreement provided for making alterations and on complying such terms, defendant had occupied the premises and has also continued in the premises till expiry of Lock in period and thereafter, by giving termination notice as permitted in agreement, has vacated the premises. Hence, question of defendant compensating plaintiff beyond the terms of 42 CT 1390_Com.O.S.7348-2014_Judgment.doc agreement do not arise. Hence this decision do not help the plaintiff in this case.
39. In another decision reported in (1960) 2 SCR 793 (Alopi Parshad and sons Limited v. Union of India) in para 24 the Hon'ble Supreme Court has considered quantum meruit and has held as under:
"....Compensation quantum meruit is awarded for work done or services rendered, when the price thereof is not fixed by a contract. For work done or services rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for the consideration payable in that behalf. Quantum meruit is but reasonable compensation awarded on implication of a contract to remunerate, and an express stipulation governing the relations between the parties under a contract, cannot be displaced by assuming that the stipulation is not reasonable."
40. In another decision reported in 1962 SCC Online Ker 102 (Krishna Menon v. Chchin Devaswom, Board and another) in which the Hon'ble High Court has considered the principle of quantum meruit and held in para 24 as under:
"..It is impossible to bring under any particular legal rubric action for compensation on quantum meruit. It may be either contractual or quasi-contractual. From the mere fact that the contract is an implied in fact contract it does not follow that the obligation is quasi-contractual. It is a genuine contract, the only thing is that the contract is made out not by express words but by implication from the facts and circumstances of the particular case. Therefore, I think that this 43 CT 1390_Com.O.S.7348-2014_Judgment.doc is a case where the work done by the plaintiff, although not according to the specification, was accepted by the defendant and it enjoyed the benefit thereof and a promise to pay has to be inferred, not by any imputation of law but by implication from the facts and circumstances of the case...."
41. These decisions are also not applicable for the same reasons. Consideration for the expenses incurred by the plaintiff in this case is, defendant occupying the premises and paying rent for minimum 11 months, which is shown as Lock in period. Since there is binding relationship created by LOI and subsequent conduct of the parties in following the terms mentioned in LOI, relationship between the parties is a simple relationship of lessor and lessee, without any provision for making payment of expenses incurred by lessor. As such the principle of quantum meruit cannot be applied in the present case. For all these reasons, plaintiff has failed to prove issue No.1 and same is answered in the Negative.
42. ISSUE No.2 : Plaintiff has stated that he is entitle for the rent of Rs.6,03,750/- along with interest @12% per annum from the date of suit and prayed to direct the defendant to pay the same as mesne profit or damages. However for the discussion made above on issue No.1 the rent upto 25/11/2014 which is alleged date of plaintiff taking possession, is to be adjusted in the security deposit available with the plaintiff. Since plaintiff has not placed any material showing the adjustment of security deposit 44 CT 1390_Com.O.S.7348-2014_Judgment.doc amount for the earlier arrears of rent if any, available security amount is to be adjusted for these rent upto 25/11/2014. On adjustment of the same, plaintiff would not be entitle for the amount as mesne profit or damages. Though the amount claimed is Rs.6,03,750/- per month, by adding 5% escalation as provided in LOI, that escalation is after one year. Before expiry of one year, defendant issued termination notice and as such escalation clause may not come not effect. On considering all these, no direction could be given to the defendant to make payment of Mesne profits or damages from the date of suit as claimed. Moreover, though admittedly the defendant has vacated and plaintiff has taken the possession and has given the premises to new tenant, Plaintiff has not stated the actual date on which plaintiff has taken possession of the premises and Mesne profit is to be calculated upto which date. Hence, there cannot be any order for Mesne profits as prayed. Accordingly, Issue No.2 is answered in the Negative.
43. ISSUE No.3 : For the discussions made on Issue No.1, Plaintiff has failed to establish her contentions and her entitlement to the reliefs prayed and also the liability of the defendant to pay the amount claimed in the suit. Plaintiff has also failed to establish that she is entitle for mesne profits as prayed. Accordingly, issue No.3 is answered in the negative.
44. ISSUE No.4 : For the discussion made on above issues, following order is passed:
45CT 1390_Com.O.S.7348-2014_Judgment.doc ORDER Suit of the plaintiff is dismissed.
In the peculiar circumstances of the case, there is no order as to costs.
[Dictated to the Judgment Writer, transcript thereof corrected, signed and then pronounced by me, in the Open Court on this the 6th day of August 2022] [Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.
ANNEXURE
1. List of witnesses examined on behalf of Plaintiff:
PW.1 : Tam Tam Pedda Guruva Reddy
2. List of witnesses examined on behalf of Defendants:
DW.1 : K.N.Vijayabhaskar
3. List of documents marked on behalf of Plaintiff:
Ex.P.1 : Estimation & Valuation report.
Ex.P.2 : Tax Invoice dt.28/3/2013.
Ex.P.3 : Tax Invoice dt.28/3/2013.
Ex.P.4 : Tax Invoice dt.28/3/2013.
Ex.P.5 : Tax Invoice dt.12/3/2013.
Ex.P.6 : Excise Invoice dt.30/1/2013.
Ex.P.7 : Tax Invoice dt.14/3/2013.
Ex.P.8 : Tax Invoice dt.23/3/2013.
Ex.P.9 : Tax Invoice dt.22/3/2013.
Ex.P.10 : Invoice dt.4/3/2013.
Ex.P.11 : Tax invoice dt.22/2/2013.
Ex.P.12 : Tax Invoice dt.28/8/2013.
Ex.P.13 : Tax Invoice dt.1/3/2013.
Ex.P.14 : Invoice dt.25/2/2013.
Ex.P.15 : Invoice dt. 16/2/2013.
Ex.P.16 : Invoice dt.9/2/2013 .
Ex.P.17 : Invoice dt.9/2/20134 .
46
CT 1390_Com.O.S.7348-2014_Judgment.doc Ex.P.18 : Invoice dt.6/2/2013.
Ex.P.19 : Bill dt.31/1/2013 and payment voucher. Ex.P.20 : Bill dt.2/2/2013 and payment receipt dt.18/5/2013.
Ex.P.21 : Bill dt.12/6/2013 and payment receipts dt.17/5/2013 .
Ex.P.22 : Bill dt.12/6/2013 with payment receipt dt.17/5/20213.
Ex.P.23 : Bills dt.25/6/2013, 20/6/2013, 28/6/2013 with payment receipts dt.18/5/2013 .
Ex.P.24 : Bill dt.7/5/2012 with payment receipt dt.7/5/2012.
Ex.P.25 : Invoice dt.6/2/2013.
Ex.P.26 : Letters from Realtech Elevators
dt.4/3/2013, 24/1/2015 and 14/6/2014.
Ex.P.27 : Four Invoice and payment receipt
dt.14/1/2013.
Ex.P.28 : Invoice dt.7/1/2013.
Ex.P.29 : Invoice dt.29/1/2013
Ex.P.30 : 7 bills from BESCOM and payment
receipts
Ex.P.31 : BWSSB Challan dt.16/3/2013
Ex.P.32 : Payment acknowledgement from BWSSB
Ex.P.33 : Reciept issued by BBMP dt.26/2/2013.
Ex.P.34 : Notice and postal cover
dt.11/12/2015
Ex.P.35 : Reply notice dt.22/8/2016 and postal
receipt and postal acknowledgement.
Ex.P.36 : Statement of Account in respect of
Plaintiff SB Account.
Ex.P.37 : Statement of Account in respect of
Plaintiff's Husband's SB Account.
Ex.P.38 : Letter of intent dt.25/1/2013.
Ex.P.39 : Letter dt.15/2/2014.
Ex.P.40 : Reply notice dt.10/3/2014.
Ex.P.41 : Postal Acknowledgement.
Ex.P.42 : Notice dt.10/3/2014.
Ex.P.42(a) : Registered postal Receipt.
Ex.P.43 : Notice dt.20/3/2014.
Ex.P.43(a) : Registered Postal Cover.
47
CT 1390_Com.O.S.7348-2014_Judgment.doc Ex.P.44 : Notice dt.21/4/2014.
Ex.P.44(a)& Ex.P.44(b) : Two registered postal receipts. Ex.P.45 : Postal acknowledgment of speed post.
ExP.46 : Letter dt.26/8/2014.
Ex.P.47 : Registered Postal Cover.
Ex.P.48 : Letter dt.1/9/2014.
Ex.P.48(a) : Registered Postal Receipt.
Ex.P.49 : Original Power of Attorney.
4. List of documents marked on behalf of Defendants:
Ex.D.1 : Lab Report dt.12/12/2013.
Ex.D.2 : Lab Report dt.12/12/2013.
Ex.D.3 : Lab Report dt.14/12/2013.
Ex.D.4 : Reply of termination notice dt.15/2/2014.
Ex.D.5 : Postal Acknowledgment.
Ex.D.6 : RPAD Acknowlegment.
Ex.D.7 : Courier Receipt.
Ex.D.8 : Reply Notice dt.10/3/2014.
Ex.D.9 : Reply Notice dt.20/3/2014.
Ex.D.10 : Reply Notice dt.21/4/2014.
Ex.D.11 : Letter dt.26/8/2014.
Ex.D.12 : Postal Receipt.
Ex.D.13 : RPAD Acknowledgement.
Ex.D.14 : Courier Receipt.
Ex.D.15 : Copy of the letter dt.1/9/2014.
Ex.D.16 : Copy of reply letter dt.27/9/2014.
Ex.D.17 : Postal Receipt.
Ex.D.18 : RPAD Acknowledgement.
Ex.D.19 : Copy of Notice dt.10/12/2015.
Ex.D.20 : Copy of trailing email dt.15/11/2014.
[Ravindra Hegde]
LXXXIII Additional City Civil
Judge.
Digitally signed
RAVINDRA
by RAVINDRA BENGALURU.
SANTHARAMA
SANTHARAMA HEGDE ***
HEGDE Date: 2022.08.06
08:19:23 -0400