Delhi District Court
Indian Energy Exchange Limited vs Bhl Forex And Finlease Limited on 4 November, 2024
IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 03 - SOUTH EAST
DISTRICT, SAKET COURTS, NEW DELHI.
CS (COMM) 325/22
INDIAN ENERGY EXCHANGE
9th Floor, Max Towers,
Sector 16 B, Noida, Gautam Buddha Nagar,
Uttar Pradesh- 201301
Email ID : [email protected]
..... PLAINTIFF
VERSUS
BHL FOREX & FINLEASE LTD.
6, Mohan Singh Palace,
Connaught Place, New Delhi, 110001
.....DEFENDANT
Date of Institution : 28.03.2022
Date of final arguments heard : 07.10.2024
Date of Judgment : 04.11.2024
JUDGMENT
1. Vide this judgment, I shall decide the suit for recovery of Rs. 1,68,85,498/- being refund of security deposit under the lease deed dated 20.08.2014 alongwith interest @ 21 % per annum filed on behalf of the plaintiff against the defendant.
2. Brief facts of the case as per plaint that plaintiff is a public incorporated company engaged in the business of electronic system based power trading exchange for the physical delivery of electricity, CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 1 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited renewables and certificates and the defendant company provides different types of foreign exchange consultancy and financial consultancy services. Defendant is the owner of the property bearing No. 3, 4, 5 & 6 on the 4 th floor, TDI, Plot no. 7, Jasola District Centre, New Delhi-110044. On 20.08.2014, the plaintiff and the defendant entered into a registered commercial lease deed qua the abovesaid property. As per clause 2.4 of the lease deed, the lock-in period was for the period of 36 months which expired on 12.10.2017 and plaintiff took decision to terminate the lease deed, accordingly on 11.09.2020, issued a notice for termination to the defendant. On 01.11.2020, the plaintiff was shocked and surprised to receive a response to the letter dated 11.09.2020 wherein the defendant stated that it could not return the security deposit due to financial constraints and requested the plaintiff to continue the lease till the entire security deposit is adjusted. Thereafter, the plaintiff constrained to issue the letter dated 06.11.2020 calling upon the defendant to refund the security deposit. Subsequently, the plaintiff on 05.12.2020 again issued a reminder letter to the defendant highlighting the terms of the lease deed and called upon the defendant to refund the security deposit. Thereafter, another letter dated 10.12.2020 was written and plaintiff was ready to handover the possession on 10.12.2020, however defendant neither turned up to take the possession on 10.12.2020 nor refunded the security deposit.
3. On 10.12.2020, defendant issued an email to Cannes India, the maintenance company responsible for maintaining the building that the plaintiff was vacating the premises on that date i.e. 10.12.2020 and the CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 2 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited defendant shall continue to pay the maintenance charges from 10.12.2020 onwards. Therefore, on 30.12.2020, a legal notice was issued by the plaintiff. Pursuant to the issuance of the notice, the defendant interacted with plaintiff during a meeting held on 14.01.2021 and proposed a staggered mechanism of refund of the security deposit. The defendant subsequently issued a proposal via email on 16.01.2021 wherein proposed terms that were contrary to the discussions held on 14.01.2021. Defendant requested that the plaintiff hand over the premises on an as is basis, including all furniture and fixtures without any payment in lieu thereof. The plaintiff vide letter dated 28.01.2021 placed its objection to such proposal on record and stated that it would consider the proposal only if the terms were reasonable. The letter also highlighted the fact that the plaintiff had vacated the premises on 10.12.2020, however, defendant defendant did not turn up for the handover formalities, and as per clause 3.5 of the lease deed, the possession was still with the plaintiff till the remaining security deposit was refunded.
4. The letter dated 28.01.2021 also highlighted the fact that the plaintiff had received the premises in a bare shell condition and was to return it the same way and if the defendant was interested in the furniture and fixtures, it could purchase the same for a reasonable cost of Rs. 10 Lakh or in the alternative, the plaintiff would remove such fixtures. The plaintiff on 26.04.2021 issues a letter to the defendant to refund the security deposit alongwith interest, however defendant failed to refund, therefore plaintiff filed pre-mediation dated 09.08.2021 CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 3 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited before the Delhi Mediation Centre, Saket Courts Complex, Delhi, however mediation failed. Thereafter, on 22.02.2022, plaintiff issued a fresh debit note to the defendant quantifying the interest accrued till 31.01.2022, thereafter, filed the present suit claiming the following relief :
(a) For recovery of sum of Rs. 1,68,85,498/- in favour of the plaintiff and against the defendant;
(b) For granting pendente lite and future interest @ 21% p.a. as contractually agreed to between the parties;
(c) For costs under section 35 of the Code of Civil Procedure 1908 as amended by the Commercial Courts Act, 2015; and/or
(d) Pass any other or further decree as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case.
Written statement
5. It is stated that the suit filed for the recovery of the security deposit without vacating and handing over the vacant peaceful possession of the tenanted premises is grossly misconceived and not tenable. Furthermore, the relief of vacation of tenanted premises is pre- mature and has been filed without any cause of action. The lease deed dated 20.08.2014 for a lease term of nine years commencing w.e.f. 12.10.2014 and expiring on 11.10.2023. At the time of entering into the lease agreement, the plaintiff deposited an interest free security deposit of Rs. 1,57,37,120/- being equivalent to 10 months initial rentals which was further enhanced after every three years by 15% i.e. in proportion with the enhancement of the rentals so as to ensure that the security deposit shall always be equal to 10 months lease rent during the entire term of lease. In this manner, an amount of Rs. 1,80,97,690/- was CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 4 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited deposited by the plaintiff with the defendant as interest free security deposit. The plaintiff apart from the right to terminate the lease as provided in Clause 12, has not other right to terminate the registered lease deed after the expiry of the lock-in period, except on the breach of any material term of the lease deed by the defendant. It is contended by the plaintiff that the tenancy has been terminated w.e.f. 10.12.2020 vide its notice dated 11.09.2020, however the plaintiff has no such right of terminating the tenancy by serving the alleged notice of termination after expiry of the lock-in period of initial three years. Furthermore, even while issuing the notice dated 11.09.2020, the plaintiff's intentions were dishonest as the plaintiff had no intentions of delivering the vacant peaceful possession of the demised premises as till date the plaintiff has not removed its fitting and fixtures from the demised premises and till date have not restored the demised premised in the original position. The notice dated 11.09.2020 regarding the termination was contrary to the agreed terms and conditions, however defendant offered for terminating the lease mutually after the expiry of 10 months so as to adjust the security deposit which offer was refused by the plaintiff vide reply dated 06.11.2020 whereby the plaintiff again reiterated its contention that the vacant peaceful possession of the demised premises would not be handed over to the defendant till the security deposit is not returned/refunded. Plaintiff despite offering to handover the possession of the premises did not remove its fittings and fixtures and not handed over the vacant peaceful possession of the demised premises to the defendant on 10.12.2020 or thereafter, till date.
CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 5 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited The plaintiff also not maintained financial discipline despite retaining the physical possession, the plaintiff refused, neglected and defaulted in making the payment of the monthly rentals and the plaintiff was in arrears of rentals to the tune of Rs. 3,94,47,120/- alongwith arrears of GST of Rs. 71,00,479/- totaling to Rs. 4,65,47,599/-. The defendant vide notice dated 09.04.2022 was constrained to terminate the tenancy of the plaintiff w.e.f. 30.04.2022 and called upon the plaintiff to remove all its fittings and fixtures and to hand over the vacant peaceful physical possession of the premises on 30.04.2022 in the same condition in which it was first let out to the plaintiff. Defendant further called upon the plaintiff to pay arrears of rentals and GST totaling Rs. 4,65,47,599/- alongwith interest @ 18 % per annum, however the plaintiff despite termination of tenancy continued to retain the possession, therefore liable to pay further use and occupation charges for the period w.e.f. 01.05.2022 till dated 31.01.2023 to the tune of Rs. 2,21,02,704/-. The plaintiff also refused, failed and neglected to make the payment of the maintenance charges to the maintenance agency to the tune of Rs. 95,36,003/- and electricity charges to the tune of Rs. 15,72,318/-. In reply on merits.
6. It is denied that the notice of termination has been served by the plaintiff. No right had been vested with the plaintiff under registered lease deed dated 20.08.2014 and plaintiff could not unilaterally terminate the lease in violation of the lease deed, therefore the alleged claim of the refund of security deposit is misconceived and baseless. It is also stated that receipt of letter dated 11.09.2020 is not disputed, CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 6 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited however plaintiff was not vested with the right to terminate the lease in violation of the terms and conditions of the registered lease dated 20.08.2014. It is admitted that the letter dated 01.11.2020 was sent by the defendant thereby offering to terminate the lease deed after the security deposit is adjusted, however the same was not accepted by the plaintiff, thus no variation to the terms and conditions of the registered lease deed was agreed upon. The said offer was rejected by the plaintiff vide letter dated 06.11.2020. It is denied that the letters dated 05.12.2020 or 10.12.2020 were sent by the plaintiff to the defendant and stated that the same appear to have been fabricated for the purpose of fling of this present suit. It is further stated that the officials of the plaintiff verbally communicated that they propose to vacate and handover the vacant peaceful possession of the tenanted premises on 10.12.2020, however the same was not done, in fact the plaintiff had no intention of vacating the tenanted premises as the fittings and fixtures were never removed either before 10.12.2020 or thereafter. On 10.12.2020, the officials of the defendant visited the tenanted premises and found that the entire fittings and fixtures were intact and the vacant peaceful possession of the tenanted premises was never handed over to the defendant in the same condition in which it was first handed over to the plaintiff, therefore there was no occasion for the refund of the security deposit on 10.12.2020.
7. The email was sent by the defendant to the maintenance agency that the plaintiff was vacating the demised premises on 10.12.2020, however plaintiff failed to vacate and hand over the peaceful CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 7 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited possession of the premises to the defendant, therefore plaintiff is liable to pay the maintenance charges to the maintenance agency for the period the plaintiff retained the possession of the demised premises. The defendant also denied that any legal notice dated 30.12.2020 was sent by the plaintiff to the defendant company. It is also denied that the discussions were held pursuant to the issuance of the notice. The plaintiff was demanding the security deposit without handing over the vacant peaceful possession of the premises before the expiry of the lease deed, therefore discussions were going on, and another proposal vide email dated 16.01.2021 was sent by the defendant to the plaintiff. It is denied that proposed terms sent by the defendant vide email dated 16.01.2021 were contrary to the discussion held on 14.01.2021. The said proposal dated 16.01.2021 was never replied by the plaintiff thus no variations to the original lease deed. The proposal dated 16.01.2021 was not replied by the plaintiff, therefore, it is denied that plaintiff vide letter dated 28.01.2021 placed its objections to the proposal of the defendant. It is pleaded that the no such letter dated 28.01.2021 was received by the defendant from the plaintiff.
In replication
8. It is stated that the entire purpose of inserting lock-in period was to ensure that the parties could not terminate the lease deed within the said period whereas no such restriction was placed on the parties post expiry of the lock-in period. Therefore, defendant's interpretation that the lease could only be terminated at the end of the lock-in period is not only absurd but also legally redundant. Vide letter dated 01.11.2020, CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 8 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited the defendant accepted the termination and stated that it could not return the security deposit due to financial constraints. Defendant acted upon the termination and issued an email dated 10.12.2020 to the maintenance company that the plaintiff was vacating the premises on 10.12.2020 and the defendant shall continue to pay the maintenance charges from 11.12.2020 and onwards. On 14.01.2021, defendant proposed a staggered mechanism of refund of the security deposit and the plaintiff requested the defendant to capture the minutes of the meeting in writing. Defendant issued a proposal via email on 16.01.2021 wherein it proposed terms that were contrary to the discussions held on 14.01.2021. Defendant additionally requested that the plaintiff hand over the demised premises on as-is where-is basis including all furniture and fixtures without any payment in lieu thereof. Vide the said proposal, the defendant offered to refund the entire security deposit, therefore accepted the termination.
9. At no point of time prior to the present suit, the plaintiff dispute the validity of the termination and the entire approach or endeavor of the defendant throughout had been to negotiate and seek more time for refund of the security deposit admittedly lying with the defendant. During the pendency of the present suit, the defendant around 17 occasions requested the plaintiff to grant access to the demised premises in their possession for showing the same to the potential tenants representing and assuring that when a new tenant would lease the premises and pay the security deposit to the defendant then the security deposit of the plaintiff would be refunded. The plaintiff is also CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 9 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited entitled to remove all property, fittings, equipment and furniture & fixtures etc. The defendant had indicated the plaintiff that it wishes to purchase the fixtures installed and accordingly, the same was offered vide letter dated 11.09.2020. It was also indicated in the discussions held on 14.01.2021 and defendant itself vide email dated 16.01.2021 agreed to take over possession on an as-is where-is basis. There is no scope or occasion for the defendant to argue that the fixtures have not been removed. Vide letter dated 11.09.2020, the plaintiff had intimated to the defendant that it was willing to provide vacant and peaceful possession of the property under reference to the defendant on 10.12.2020, however the defendant neither turned up to accept the possession of the property nor refunded the security deposit. Therefore, the plaintiff again issued legal notice dated 30.12.2020 highlighting non-acceptance of the handover of possession of the demised premises by the defendant. The defendant repeatedly failed to respond to the plaintiff's correspondences up until February 2022 when the plaintiff filed its plaint seeking recovery before this court, however defendant sent a legal notice dated 09.04.2022 to the plaintiff and took an entirely different stand from what had been taken by it earlier. The plaintiff is well within its right to retain possession of the property under reference without the payment of any charges whatsoever, therefore defendant cannot demand of any arrears whatsoever.
In para wise reply
10. It is stated that the defense set up by the defendant in the written statement is contrary to the provisions of the lease deed. The defendant CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 10 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited did not turn up to take over the possession on 10.12.2020, and failed to refund the security deposit. The plaintiff is well within its right to retain possession of the demised premises under Clause 3.5 and 3.6 of the lease deed without any obligation to pay any rental or further charges. The plaintiff had written letters dated 06.11.2020, 05.12.2020 and 10.12.2020 called upon the defendant to accept possession on 10.12.2020 and refund the security deposit, however defendant paid no heed to the same. It is also denied that the plaintiff could not terminate the agreement after the end of lock-in period. The defendant contemporaneously accepted to the termination and did not raise any such objection qua the lock-in which itself suggest that the defendant was well aware that post the lock-in period the lease could be terminated by providing three months of notice. During the pendency of the suit, around 17 occasions defendant requested to grant access of the premises to show the same to potential tenants. It is specifically denied by the plaintiff that the plaintiff failed to remove its fittings and fixtures and stated that the defendant wishes to take all the equipments from the property and it was also reflected in email dated 16.01.2021. It is also denied that the defendant terminated the lease deed vide notice dated 09.04.2022, however the lease deed stands terminated on 10.12.2020. This notice was nothing more than an afterthought and a counterblast. The contents of the said legal notice are contrary to the correspondences/records. It is also denied that the plaintiff has to pay the maintenance charges post December 2020 i.e. date of termination. Defendant itself issued an email to the maintenance company dated CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 11 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited 10.12.2020 stated that the liability to pay maintenance charges would lie with the defendant. It is also denied that no electricity charges post termination are payable by the plaintiff, however the plaintiff as per Clause 3.5 and 3.6 of the lease deed, has right to retain possession of the demised premises without paying the rental and any other charge till the defendant refunds the security deposit alongwith interest.
11. The plaintiff denied that the plaintiff has no right to terminate the lease deed vide notice dated 11.09.2020. Defendant accepted plaintiff's termination and liable to return the security deposit and was only trying to negotiate with the plaintiff to seek more time to refund such security deposit. It is denied that the letters dated 05.12.2020 and 10.12.2020 were not issued. The plaintiff is enclosing emails demonstrating due service of the said letters dated 05.12.2020 and 10.12.2020. In affidavit of admission/denial of documents
12. In affidavit of admission/denial of documents filed by defendant, the defendant admitted the lease deed dated 20.08.2014, notice of termination dated 11.09.2020, the defendant's letter dated 20.11.2020, the letter dated 06.11.2022 of the plaintiff, however denied the plaintiff's letter dated 05.12.2020 and 10.12.2020. The defendant admitted to have sent the email dated 10.12.2020, however denied of receiving notice dated 30.12.2020, defendant admitted email dated 16.01.2022 sent by the defendant, however denied to have received letter dated 28.01.2021, 26.04.2021, debit note issued to plaintiff regarding the financial statements. The defendant raised the plea that CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 12 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited financial statements are not legible, therefore cannot be admitted or denied, however denied the board resolution dated 26.10.2016.
13. Plaintiff in his affidavit of admission/denial of documents of the defendant admitted to have received copy of notice dated 09.04.2022, reply dated 05.05.2022, however denied the board resolution dated 02.02.2023.
14. On completion of the pleadings, vide order dated 21.07.2023 following issues were framed as under :
1. Whether the plaintiff is entitled for a decree for recovery of Rs. 1,68,85,498/- against the defendant, as prayed for? OPP
2. Whether the plaintiff is entitled to interest. If yes, at what rate and for which period ? OPP
3. Whether the plaint has not been signed, verified and filed by a competent person? OPD
4. Relief.
15. Thereafter, the matter is referred to Ld. Local Commissioner recording of evidence. Plaintiff examined PW-1 Sh. Vineet harlalka and defendant examined DW-1 Sh. GS Suri.
Brief Summary of Evidence
16. PW-1 Sh. Vineet Harlalka tendered his affidavit of evidence as Ex.PW1/A and in cross-examination stated that it is correct that the lease deed was registered for the period of nine years and the plaintiff had taken demised premises in a bare shall condition at the commencement of the lease. He stated that it is also correct that plaintiff made desired renovation and install fitting and fixtures in the demised premises as per their requirement. He also stated that after the CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 13 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited lock-in period was over and they were within their rights to terminate the lease by service the due notice to the defendant. He further stated that all the fittings and fixtures were removed by them on 10.12.2020 except few fixtures and furniture at the request of Mr. Suri representing the defendant, however no list of any furniture and fixtures which have been removed for those which were left in the said premises on 10.12.2020 has been filed by them in the present suit. No such list was provided to the defendant, however Volunteered that Mr. Suri had physically seen the premises to oversee which furniture and fixtures had been removed by them and which had been left in the premises. He denied suggestion that Mr. Suri had not physically seen the premises to oversee which furniture and fixtures had been removed and which had been left in the premises. No joint inspection was offered by the plaintiff to the defendant regarding removal of furniture and fixtures. He also stated that plaintiff had sent correspondences to defendant company regarding removal of fittings and fixtures on 10.12.2020, however do not recall the exact date but it is mentioned in the legal notice dated 30/31.12.2020. He denied suggestion that they have not removed fittings and fixtures and also denied the suggestion till 09.04.2022, the furniture and fixtures were not removed by the plaintiff as finds reference in the notice dated 09.04.2022 sent by the defendant to the plaintiff. He stated that it is correct that the basic left over fixtures and furniture as left by the plaintiff is still there in the said premises, however denied suggestion that no furniture and fittings were have been removed by the plaintiff and all those furniture fixtures and CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 14 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited fittings installed at the premises are still lying intact in the premises. He also denied suggestion that it was not removed because the plaintiff has no intention to handover the vacant and peaceful possession of the premises to the defendant. He also stated that plaintiff did not handover the possession of the suit premises even after receipt of legal notice dated 09.04.2022 issued by the defendant and volunteered that because the plaintiff has to take the refund of the security deposit from the defendant. He denied suggestion that the plaintiff was in arrears of rent amounting to Rs. 4,65,47,599/- as on the date of issuance of notice dated 09.04.2022.
17. He further stated that last rent was paid by the plaintiff in September 2020 to the defendant which was for the month of September 2020. Vol. The rent for the notice period was adjusted from the security deposit till 10.12.2020 i.e. the date when the vacation of the premises was done by the plaintiff. No invoice from October 2020 to 10.12.2020 was issued by the defendant to the plaintiff towards the rent. He denied suggestion that no such advise for adjustment of rent with the security deposit for the notice period was made by the Mr. Suri to the plaintiff. He stated that it is correct that the defendant company had given a counter offer vide their letter dated 01.11.2020 to the plaintiff to mutually terminate the lease deed dated 20.08.2014 after adjustment of the security deposit, however it is correct that the plaintiff did not accept the said offer. He stated that it is correct that plaintiff has not paid the GST on the rental amount for the month September 2020. (Volunteered) the same was required to be adjusted CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 15 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited from the security deposit upon providing of proof of such deposit by the plaintiff. He denied that the plaintiff is in arrears of Rs. 8,61,67,053/- towards arrears of rent/GST as well as mesne profit with respect to the suit property. He stated that plaintiff was liable to pay the maintenance charges with respect to the leased premises to the maintenance agency. Vol. The same stands paid till 10.12.2020. He also stated that it is correct till today the plaintiff company is holding the possession of the leased premises under their lock and key with plaintiff. He denied suggestion that the plaintiff is in arrears of electricity charges since December 2020 till August 2023. He further stated that the plaintiff is holding the premises as per the terms of the lease deed dated 20.08.2014 due to non refund of security deposit.
18. During defendant evidence, defendant also filed affidavit of evidence of Mrs. Kamleen Suri, Director of defendant company, however only examined DW-1 Mr. G.S. Suri, Director of defendant company.
19. DW-1 Mr. G.S. Suri tendered his affidavit of evidence as Ex. DW1/A and in cross-examination stated that as per email dated 05.12.2020, he had discussed with the plaintiff that their security deposit can be exhausted for 10 months towards rentals for the leased premises and then plaintiff can vacate the premises. He further stated that as per letter dated 01.11.2020 (Ex.PW1/3 (Colly)) the financial distress was due to the covid period that the balance sheet during F/Y 2019-20 on 31.03.2020 has shown the other liabilities. The liability of the security deposit of Rs. 1,80,97,690/- towards the plaintiff. He CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 16 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited further stated that he does not remember, however the balance sheet has shown the security deposit as liabilities during the financial year ending i.e. 31.03.2022. He stated that there is no such clause which permits the defendant to refund the security deposit in installments to the plaintiff. He stated that it is correct that defendant was obligated to refund the security deposit to the plaintiff on the date of handing over the demised premises to the defendant. He denied suggestion that neither the defendant nor any of its representatives showed up to take the possession of the premises on 10.12.2020. He also denied suggestion that defendant has wrongfully withheld the security deposit which was to be returned to the plaintiff.
20. After filing report of the Ld. Local Commissioner, Ld. Counsel for the defendant filed application under Order 16 Rule 1 (sub rule 2 &
3) r/w section 151 CPC for summoning a witness from M/s Cannes Property Management Services Pvt. Ltd. Vide order dated 27.01.2024, the said application was allowed, pursuant to which DW-2 Sh. Rajender Prasad, Field executive from M/s Cannes Property Management Services Pvt. Ltd. was examined. In evidence, he brought summoned record i.e. statement of outstanding dues of maintenance charges and electricity charges (Ex.DW2/1) in respect of leased premises in question. In cross-examination stated that he is not aware as to whether his company issued a 'No due certificate' dated 31.12.2020 to the plaintiff (Mark D2/1). He stated that it might be issued but he does not have any knowledge, however there are signatures on the certificate (Mark D2/1) of Amit Sharma, Executive CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 17 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited Director of the maintenance company who expired about a year back. He stated that he is not aware about no demand was ever raised on the plaintiff in this case with respect to any alleged outstanding dues. He was confronted with the email (Mark D2/2 and Mark D2/3) he in response stated that these emails may have been exchanged but he do not know personally. He has no knowledge of the contractual stipulation between plaintiff and defendant. He also not aware as to any email being written by the defendant to the plaintiff to the effect that the maintenance charges w.e.f. 11.12.2020 will be paid by the defendant as the plaintiff is vacating the premises on 10.12.2020. Material Exhibits
21. Ex.PW1/1 and Ex.DW1/1 is the lease dated 20.08.2014, Ex.PW1/9 is the email dated 16.01.2021 of the defendant, Ex.PW1/11 is the letter dated 26.04.2021 from the plaintiff to the defendant regarding payment of accrued interest on the remaining security deposit to be refunded by defendant, Ex.PW1/2 is notice of termination dated 11.09.2020, Ex.PW1/3 is defendant's letter dated 01.11.2020, Ex.PW1/4 is plaintiff's letter dated 06.11.2020 alongwith postal receipts, Ex.PW1/5 is plaintiff's letter dated 05.12.2020, Ex.PW1/6 is plaintiff's letter dated 10.12.2020 alongwith postal receipts, Ex.PW1/7 email dated 10.12.2020, Ex.PW1/8 legal notice dated 30.12.2020, Ex.PW1/10 plaintiff's letter dated 28.01.2021 alongwith postal receipts, Ex.PW1/11 plaintiff's letter dated 26.04.2021, Ex.PW1/12 debit notes issued to the defendant, Ex.PW1/13 is Non Starter Report of mediation, Ex.PW1/14 various financial statements, Ex.PW1/15 CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 18 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited Board resolution dated 26.10.2016, Ex.PW1/16 (Colly) defendant's emails requesting access to the demise premises and responses, Ex.PW1/17 (Colly) email dated 05.12.2020 and 10.12.2020, Ex.PW1/18 email dated 28.01.2021 rejecting defendant's proposal, Ex.PW1/19 (Colly) email dated 24.02.2022 issuance of debit notes
22. Ex.DW1/1 lease deed dated 20.08.2014 (Ex.PW1/1), Ex.DW1/2 is office copy of the notice dated 09.04.2022. Ex.DW2/1 is the copy of statements of outstanding dues of maintenance charges and electricity charges in respect of premises in question, Mark D2/1 is no due certificate dated 31.12.2020 Mark D2/2, email dated 24.12.2020 sent by Cannes India to plaintiff alongwith account statement, Mark D2/3 email dated 29.12.2020 by plaintiff to Cannes India, Mark D2/4 Email dated 30.12.2020 from Cannes India to plaintiff.
Submissions of Counsels
23. Ld. counsel for the plaintiff submitted that the plaintiff and the defendant executed registered leased deed dated 20.08.2014 for nine years having lock-in period of 36 months commencing from 12.10.2014 till 11.10.2017. The security deposit was enhanced by Rs. 23,60,670/- in compliance to Clause 3.2 of the lease deed, however thereafter plaintiff issued three months notice dated 11.09.2020 for termination of the tenancy ending on 10.12.2020. The defendant in response to the notice of termination dated 11.09.2020 admitted its liability for refund of security deposit, however stated that due to financial constraints he could not return the same and requested the plaintiff till the entire security was adjusted, however the plaintiff again CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 19 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited called upon the defendant to refund the security deposit and issued letter dated 06.11.2020 and 05.12.2020. On 10.12.2020, plaintiff again issued reminder to the defendant was ready to hand over the demised premises, however defendant did not turn up to take the possession and not refunded security deposit. Defendant sent an email 10.12.2020 to maintenance agency that the plaintiff is vacating the premises and defendant shall pay the maintenance from 10.12.2020. The plaintiff again issued notice dated 30.12.2020 to complete the hand over formalities and to return the security deposit. Thereafter, the defendant engaged in the discussion, and on 16.01.2021 sent a mechanism for return of security deposit and additional requested to hand over the demised premises as is where is basis. The plaintiff objected to the proposal of the defendant on the basis of Clause 3.5 of the lease deed, however highlighted that if defendant is interested in purchasing the furniture then he can purchase the same with cost of Rs. 25 Lakh. The plaintiff sent several reminders vide emails and also issued debit notes then filed the application for pre-mediation, however on 09.04.2022 after expiry of 18 months, defendant took stand that plaintiff had no right to terminate the lease after expiry of lock-in period. On 05.05.2022, the plaintiff responded to the legal notice of the defendant. During the pendency of the suit between the plaintiff and the defendant from April 2022 to February 2023, the defendant around 17 th separate occasions requested plaintiff to grant access to the demise premises to the potential tenants and the defendant was assuring when the new tenant would take the lease premises and pay the security deposit then CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 20 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited the security deposit of the plaintiff would be returned. Ld. Counsel for the plaintiff submitted that there is no explicit clause in the lease that prohibits the termination after lock-in period. The purpose of lock-in period is to ensure that the parties are not permitted to terminate the lease deed within the said period. The possibility that the plaintiff could not terminate the lease deed beyond the lock-in period of three years does not stand the test of business efficacy and commercial common sense. (relied upon 'Harish Mariine Products Vs. Export Credit Guarantee Corporation Limited, 2022 SCC OnLine SC' and 'The Union of India Vs. M/s D.N. Revri and Co. and Ors., 1976 4 SCC 147').
24. Ld. counsel for the plaintiff submitted that the defendant acquiesced the termination of lease deed and never objected the termination before institution of the present suit. The provisions of lease deed, correspondences exchanged and subsequent conduct also suggest that the parties understood the concept of lock-in period and the lease deed can be terminated at any time after the expiry of the lock-in period. The defendant only after 18 months of the sending of the notice of termination dated 11.09.2020 raised the issue of termination and never responding to any emails/letters regarding handing over the demised premises. The defendant on its own also wrote the maintenance agency taking full responsibility to pay the maintenance charges from 11.12.2020. The defendant send several proposal to the plaintiff to refund the security deposit and failed to claim any arrears of rent from the plaintiff till the filing of the present CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 21 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited suit. The defendant is also showing the premises to the potential tenants and never intended that the lease deed cannot be terminated after the lock-in period, therefore their plea is also barred by principle of estopple. (relied upon 'Amalgamated Investment & Property Co. Ltd. (In Liquidation) Vs. Texas Commerce bank, (1982 Q.B.84)').
25. Ld. counsel for the plaintiff further submitted that if a document does not record all the terms of the contract then there is nothing in section 92 of the Evidence Act which prohibits the court from considering the evidence regarding other terms and conditions of the contract which are not in conflict with the terms and conditions of the contract. The defendant despite notice of termination, failed to take the possession. The defendant never ready to take the possession and only interested in delaying the possession with intention to misappropriate the security deposit. (relied upon 'Tikka Brijinder Singh Bedi Vs. Mesto Minerals (New Delhi) Pvt. Ltd., (2010) 114 DRJ 653' and 'HS Bedi Vs. National Highway Authority of India, (2015) 220 DLT 179'). Ld. Counsel further submitted that the plaintiff is entitled for the relief claimed.
26. Ld. counsel for the defendant submitted that admittedly the lease deed is registered for nine years though there is provision of vacation of premises on completion of lock-in period, however there is no other provision to vacate the premises before nine years by the tenant by writing notice of three months. The plaintiff in this case, issued notice after six years, and in terms of the lease deed, he cannot terminate the lease pre-matuarally and in that case has to pay the landlord entire CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 22 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited amount of rent till the validity of the registered lease deed i.e. nine years. (relied upon 'Hansalaya Properties Vs. Reservation Data Maintenance India Pvt. Ltd., 2012 Legal Eagle (DEL) 3872'). Ld. Counsel submitted that the tenant cannot remain in the possession of the properties without paying the rent on account of non refund of security amount. The plaintiff is retaining the premises without payment of rent by taking the plea that the defendant has to first refund the security deposit which is not permissible (relied upon 'Uberoisons (Machines) Ltd. Vs. Samtel Color Ltd., 2003 Legal Eagle (DEL) 449, Dt. 16.05.2003, DHC'). Ld. Counsel further submitted that the judgments as relied by the counsel for the plaintiff are not related to the registered lease deed condition, therefore not applicable in the present facts and circumstances (relied upon 'UOI Vs. Major Bahadur Singh, 2005 Legal Eagle (SC) 1004'). Ld. Counsel submitted that the present suit is not filed by the competent person, therefore liable to be dismissed on this ground (relied upon 'Rajghria Paper Mills Ltd. Vs. General manager Indian Security Press & Another, 2000 (56) DRJ (Supp.) 764). Ld. Counsel submitted that in the present case there is no novation of contract as the defendant has never accepted the representation of the plaintiff to adjust the security deposit. Furthermore, the defendant though addressed the letter to the maintenance agency to pay the maintenance charges, however the plaintiff never vacated the premises, therefore, the defendant is not liable to pay the maintenance charges and plaintiff is liable to pay the same. The plaintiff has never intended to vacate the premises in the CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 23 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited original condition, therefore at no point of time removed the fixtures and fittings. Ld. Counsel submitted that the defendant had received the notice dated 11.12.2020 which bears the signatures of receiving, however it does not mean the defendant has accepted all the terms and conditions of the said notice and the plea of the plaintiff's that defendant by accepting the notice is estopped from taking any other plea is malafide. Ld. Counsel submitted that the plaintiff at no stage was ready to vacate the premises and thus liable to pay the monthly rental amount in terms of the lease deed. The lease deed at no point of time is legally determined by the plaintiff. The plaintiff is not entitled to determine the lease deed after the expiry of the lock-in period of three years. Ld. Counsel further submitted that the present suit is liable to be dismissed.
27. Ld. counsel for the plaintiff filed written submissions, however written submissions are not filed on behalf of the defendant.
28. Arguments heard. Record perused.
29. My issues wise findings are as under :
1. Whether the plaintiff is entitled for a decree for recovery of Rs. 1,68,85,498/- against the defendant, as prayed for? OPP
2. Whether the plaintiff is entitled to interest. If yes, at what rate and for which period ? OPP
30. The case of the plaintiff that the plaintiff and the defendant entered into registered lease deed dated 20.08.2014 of the demised premises for nine years. As per clause 2.1, the lease deed commenced from 12.10.2014 and shall expire after nine years on 11.10.2023.
CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 24 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited Clause 2.4 states that lock-in period duration is 36 months and in case lessee desired to vacate premises prior to expiry of lock-in period of 36 months, the lessee shall pay to the lessor, the lease rent alongwith maintenance charges and other charges for unexpired lock-in period. Clause 2.5 states that if lessee intends to vacate the demised premises at the end of abovesaid lock-in period of 3 years. The lessee shall give a notice of three months prior to the end of lock-in period to the lessor. As far as security deposit is concerned, the lessee has paid interest free refundable security deposit of Rs. 1,57,37,120/- equivalent to the monthly lease rent for 10 months. Clause 3.2 states that the security deposit shall be increased after every three years by 15% to ensure that the security deposit shall always be equal to 10 months lease rent. Clause 3.3 states that security deposit shall be refunded without interest at the time of handing over vacant and peaceful physical possession after adjusting arrears of rent and other outstanding dues. It is pertinent also to reproduce clauses 3.2 to 3.6 as under :
"3.2 The security Deposit shall be increased after every (three) 3 years by 15% to ensure that the Security Deposit shall always be equal to 10 months Lease Rent at that point of time and the difference in amount shall be deposited by the lessee with the Lessor. 3.3 That the total amount of Security Deposit shall be refunded by the LESSOR to the LESSEE, without any interest, at the time of the LESSEE handing over vacant and peaceful physical possession of the Demised Premises to the LESSOR, after adjusting arrears of rent and other outstanding amounts/dues including maintenance charges, electricity, water or any other dues if any.
3.4 That in case the LESSOR fail to refund the Security Deposit as stipulated in Clause 3.1, 3.2 and 3.3.
3.5 Provided always, in the event LESSOR defaults in refunding or repaying the unadjusted advance rent/security deposit, if any, to the LESSEE simultaneously upon the handing over of the vacant and peaceful physical possession of the Leased Premises by CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 25 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited the LESSEE to LESSOR, in accordance with the terms hereof, on the expiry of the term or earlier termination of this Lease Deed, then notwithstanding anything to the contrary contained herein, the LESSEE shall have a right to retain possession of the Leased Premises without payment of any rent or any other charges together with the right to recover the said amount of unadjusted advance rent alongwith interest @21 % per annum thereon from the date LESSOR was to refund such amount, in accordance with terms hereof, till the date of full and final payment. 3.6 The LESSEE shall hold the possession of the Premises with right to gainful use of the same without any obligation to pay any rental and any other or further charges whatsoever till the date of payment or realization of the Security Deposit."
31. As per clause 3.5 in case the Lessor defaults in paying the security deposit to the Lessee simultaneously upon the handing over the vacant and peaceful physical possession of the lease premises by the Lessee to the lessor then notwithstanding anything to the contrary contained therein the Lessee shall have right to retain the possession of the leased premises without payment of any rent or any other charges together with right to recover the said amount of unadjusted advance rent alongwith interest.
32. Bare perusal of the lease deed suggests that in case the lessee/plaintiff wishes to vacate the premises before expiry of lock-in period then the lessee has to pay the rent for the unexpired lock-in period duration, and in case wishes to vacate the premises at the end of lock-in period of three years then shall give a notice of three months prior to the end of lock-in period to the lessor, however there is no other explicit clause for the lessee to vacate the premises after expiry of lock-in period but there is also a condition that at the time of handing over the vacant possession, the lessor has to refund the entire security CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 26 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited deposit otherwise the lessee has right to retain the possession without any payment of rent or any other charges with right to recover of said amount alongwith interest. DW-1 also admitted in cross-examination that they have to refund the security deposit on the date of handover.
33. There is no dispute between the parties prior to issuance of notice dated 11.09.2020 (Ex.PW1/6) by plaintiff for termination of lease deed dated 20.08.2014 which was duly received by the defendant on 14.09.2020. The defendant vide letter dated 01.11.2020 (Ex.PW1/3) replied to the termination notice stating therein that Covid-19 pandemic caused serious financial distress and there is no/negligible business of the defendant, therefore unable to refund the security deposit of Rs. 1,80,97,690/- and requested to the plaintiff to continue the lease deed till the entire security deposit is adjusted. However, the plaintiff vide letter dated 06.11.2020 (Ex.PW1/4) replied that the lease deed entitles the plaintiff to retain the demised premises without obligation to pay rent or any other charges till the date of payment of the entire security deposit, therefore, whether or not plaintiff opts to continue the lease deed beyond the lease termination date, the obligation of the defendant to pay the security deposit cannot be adjusted against the rent. The plaintiff did not receive any reply to his letter dated 06.11.2020, therefore wrote another letter dated 05.12.2020 (Ex.PW1/5) wherein categorically stated that they did not receive any reply to the letter dated 06.11.2020 and stated that they have no intention to continue with the lease deed and prepare to vacate the premises on lease termination date, therefore the obligation of BHL/defendant to refund CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 27 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited the remaining amount is not extinguished, however the defendant did not reply to the letter dated 05.12.2020, thereafter another letter dated 10.12.2020 (Ex.PW1/6) was written by the plaintiff with request to take a physical possession and refund the remaining amount at the time of handing over the possession and further stated that they shall be liable to pay the maintenance charges upto the termination date. The defendant vide email dated 10.12.2020 (Ex.PW1/7) informed the maintenance agency that the plaintiff is vacating the premises, therefore the maintenance charges from 11.12.2020 will be paid by the defendant. It is to be noted that the defendant is accepting the pleas of the plaintiff regarding the demand of security deposit in terms of the lease deed and the right of the plaintiff to retain the possession till the handing over the security deposit.
34. The defendant did not approach to take over the physical possession expiry of the lease period on 10.12.2020, therefore wrote the letter dated 30.12.2020 (Ex. PW1/8) and invited the attentions of the defendant that the plaintiff waited for the arrival of the defendant to complete the hand over formalities on lease termination dated 10.12.2020 but the defendant failed to turn up, and also there is no communication from their side regarding the remaining security deposit other than the email sent to the maintenance agency confirming that the plaintiff is vacating the premises on 10.12.2020. The plaintiff again vide this letter reminded that from 11.12.2020 the maintenance charges will be paid by the defendant and in terms of Clause 3.5, the plaintiff has right to retain the possession without obligation to pay rent and any CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 28 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited other charges till the defendant paid the amount due in full to the plaintiff. The defendant, however vide email dated 16.01.2021 (Ex.PW1/9) had given the proposal to the plaintiff including the terms of paying Rs. 25 Lakhs immediately on vacation, 40% of the balance amount of security deposit by 31.03.2021 and 60% alongwith interest on or before 30.06.2021 and the plaintiff shall handover the possession on 25.01.2021 'as is where is basis' condition. However, the plaintiff vide letter dated 28.01.2021 (Ex.PW1/10) replied that it did not agree to the terms and conditions but reiterated its stand that he is not liable to pay any rent and charges after 10.12.2020, and further raised the plea that the plaintiff has not removed the furniture from the demised premises because the defendant has shown interest in purchasing the same and the plaintiff offered to sale for an amount of Rs. 10 Lakh, however nothing is finalized between the parties, thereafter vide letter dated 26.04.2021 (Ex.PW1/11), the plaintiff in terms of clause 3.5 of the lease deed demanded the remaining security deposit alongwith interest accrued till 31.03.2021, and also raised the debit notes (Ex.PW1/12) and thereafter filed the pre-mediation proceedings before the DLSA, however the pre-mediation failed.
35. From the communications between the parties, it is clear that the defendant has received the termination letter dated 11.09.2020 (Ex.PW1/2). The defendant also replied to the same showing his inability to refund the security deposit with direction to use the premises till the expiry of the ten months of the security deposit, however the plaintiff relied upon clause 3.5 of the lease deed and took CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 29 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited the stand they are not liable to pay any rent or charges after the date of termination of the lease deed i.e. 10.12.2020 and kept on demanding the amount in accordance to the said lease deed till the filing of the present suit. The defendant at no point of time raised the plea that the plaintiff is not entitled to terminate the lease deed, however only sought modification of the terms and conditions, and the manner to return the security deposit through its communication dated 16.01.2021 which is not accepted by the defendant.
36. Now the question before this court is whether the lease deed dated 20.08.2014 could be determined by the plaintiff by issuing the termination notice. Admittedly, there is no explicit clause to terminate the tenancy after lock-in period, however, the plaintiff/lessee has right to terminate the lease deed prior to lock-in period but with condition that lessee has to pay the rent till the expiry of lock-in period or can terminate the tenancy by issuing three months advance notice before expiry of the lock-in period of three years.
37. The lock-in period clause itself suggest that both the parties are protected for terminating the lease deed during the said period. The said lock-in period could not extend for nine years in case the plaintiff/lessee do not opt to vacate the premises on the expiry of the lock-in period. Ld. Counsel for the defendant relied upon the judgment of Hon'ble High Court of Delhi in case title 'Hansalaya Properties (Supra), however in the said case the lease deed is registered for one year without any termination clause but in present case the lease deed is registered for nine years with the condition of lock-in period. The CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 30 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited lease could be terminated even before the lock-in period, however in that case the plaintiff has to make payment of the unexpired period. In these facts and circumstances, this judgment is of no help to the case of the defendant. The lease deed cannot be read in the manner that the plaintiff is not entitled to terminate the lease after lock-in period. The insertion of lock-in period clause itself suggests that the plaintiff could not in normal course terminate the lease till the expiry of the lock-in period, however entitled to terminate the lease after giving the reasonable notice of three months for vacation of the premises after lock-in period. In present case, the plaintiff has given a notice of termination after six years of lease. There is no dispute between the parties of any nature till the notice of termination dated 11.09.2020.
38. The defendant also not raised any objection over the terms of the lease deed in reply to the legal notice dated 11.09.2020, however took plea that they are not in a financial position to pay the security deposit. Furthermore, not replied or even repelled the terms and conditions of the lease deed particularly clause 3.5 that plaintiff is not entitled for refund of security deposit at the time of handing over the physical possession. The defendant, however offered his terms and conditions through email dated 16.01.2021 which is not found acceptable to the plaintiff. The defendant also acknowledged the rights of the plaintiff by sending the email dated 10.12.2020 to the maintenance agency that the defendant will be liable to pay the maintenance charges after 11.12.2020.
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39. The communications between the parties after termination notice dated 11.09.2020 do not in any way suggest that the plaintiff is not entitled to terminate the lease after expiry of the lock-in period. The plaintiff is found within its right to terminate the lease deed dated 20.08.2014 and also entitled for refund of security deposit and other charges at the time of handing over the vacant possession. The plaintiff has to hand over the vacant possession of the premises on 10.12.2020, and in this regard the plaintiff reminded the termination notice and its conditions to the defendant through letter dated 06.11.2020 (Ex.PW1/4), letter dated 05.12.2020 (Ex.PW1/5) and thereafter also written a letter dated 10.12.2020 (Ex.PW1/6) to the defendant. The defendant though taken stand that came for taking the possession however not given by the plaintiff but the said stand of the defendant is not even corroborated through their email dated 16.01.2021. It is also not the case of defendant that it is ready to refund the security deposit on that day or any subsequent day.
40. The plaintiff unequivocal stand since the issuance of termination dated 11.09.2020 that they are vacating the premises on 10.12.2020, however with the condition that they shall be refunded security deposit in terms of Clause 3.5 on the said date and they are not obliged to pay any rent/charges after the said date in terms of the said clause. The defendant admittedly have received the legal notice dated 11.09.2020, the plaintiff thereafter also written various communication reiterating the same stand through letters dated 06.11.2020, 05.12.2020, 10.12.2020. The defendant though denied these communication dated CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 32 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited 06.11.2020, 05.12.2020 and 10.12.2020 in affidavit of admission/denial of documents, however there is nothing in cross-examination of PW-1 that these were not received by the defendant. The defendant, however also informed the maintenance agency through email dated 10.12.2020 that they will pay the maintenance charges from 11.12.2020. The defendant not denied the said email dated 10.12.2020 sent to the maintenance agency, however taken the stand that as the plaintiff not vacated the premises, therefore they are not liable to pay the maintenance charges but the defendant did not written any further communications to the maintenance agency or to the plaintiff that they are not liable to pay the maintenance charge as the plaintiff has not vacated the premises in question.
41. The plaintiff vide legal notice dated 30.12.2020 (Ex.PW1/8) categorically stated that because of non refund of security deposit, the plaintiff is entitled to retain the possession of the premises without obligation to pay rent and any other charges in terms of Clause 3.5 of the lease deed. The said notice is denied in affidavit of admission/denial of document, however there is nothing in cross- examination of PW-1 that the said notice was not received by the defendant, however admittedly the defendant vide email dated 16.01.2021 offered to make some payments on vacation and also to take the possession on 'as is where is basis' and the defendant to hand over the premises on 25.01.2021, but the plaintiff is not agreeable to the said offer through letter dated 28.01.2021, thereafter the plaintiff again reiterated its stand through letter dated 26.04.2021.
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42. On overall consideration of the communications between the parties, the plaintiff's stand is clear and unequivocal that at the time of handing over of the premises, plaintiff is entitled for simultaneous refund of security deposit and in case of failure to refund the security deposit, plaintiff has right to retain the possession with right not to give any rent or charges in terms of clause 3.5 of the lease deed. The clause 3.5 is never disputed. It is also clear from the communications that the plaintiff is ready to give the possession in terms of termination notice.
43. It is pertinent to notice the nature of Clause 3.5 and 3.6 of the lease deed. These clauses appear to be highly tilted in favour of the lessee and against the lessor, particularly in a situation when the lessor is not in a financial condition to pay the security deposit and the lessee has the right to determine the lease after lock-in period. The lessee can always issue the notice of termination with demand of refund of security deposit simultaneous with the vacation of the premises. In case, the lessor unable to refund the security deposit the lessee shall have right to retain the possession without any further payment of rent or any other charges indefinitely till the payment of the security deposit. In this case also because of this clause 3.5 and 3.6, plaintiff/lessee is retaining the premises without payment of rent or other charges since December 2020. However, defendant has not questioned the conscionability and enforceability of the said clause. Defendant even not disputed the interpretation of clauses 3.5 and 3.6.
44. The defendant also took the plea that the plaintiff has not removed the fitting and fixtures which itself suggest that they are not CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 34 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited ready to vacate the premises, however the said plea is also stands repelled from the email dated 16.01.2021 (Ex.PW1/9 of the defendant ) showing that the defendant is agreed to take the possession on as is where as basis. The plea of non removal of fittings and fixtures is an after thought and hardly any impact on the plaintiff's intent to vacate the premises on the basis of the termination notice.
45. The defendant did not appear in the pre-mediation proceedings, therefore the present suit is filed and instituted on 28.03.2022, however after filing of the said suit the defendant issued the legal notice dated 09.04.2022 (Ex.DW1/2) raising the plea first time that plaintiff has no right to terminate the said lease after expiry of lock-in period of initial three years. Furthermore, the defendant also not agreed to the reply dated 06.11.2020, therefore there is no variation in the contract, hence the defendant is entitled for vacant of peaceful possession alongwith arrears of rent. The plaintiff in reply dated 05.05.2022 reiterated its stand. The defendant plea that the plaintiff cannot vacate after expiry of initial lock-in period of 36 months has already been negated. The plaintiff's stand that they are entitled to retain the possession and not to pay any rent and other charges after determination of the lease deed is supported by Clause 3.5 of the lease deed.
46. The plaintiff, therefore entitled for recovery of security deposit on vacation of the premises, and till the security deposit is not refunded, the plaintiff is not obliged to hand over the vacant peaceful possession, and also not entitled to pay rent or other charges. There is an explicit stipulation in clause 3.5 that the lessee shall have right to CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 35 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited retain the possession without payment of any rent or any charges together with right to recover of the said amount of adjusted advance rent alongwith interest at the rate of 21 % per annum, thereon from the date the lessor was to the refund the said amount. The plaintiff is also entitled for the interest at the rete of 21% till the date of filing of the suit which is calculated around Rs. 34,95,760. The security deposit amount payable on 10.12.2020 was Rs. 1,37,15,495/- and the plaintiff has shown the adjustment of Rs. 3,75,758/- of GST amount, hence entitled for total sum of Rs. 1,68,85,498/- alongwith interest @ 12 % per annum from the date of filing of the suit till its realization and also the cost of the suit, however plaintiff has to vacate the premises simultaneously on receiving this amount. There is nothing in cross- examination to dispute the calculation and interest entitlement. Accordingly, issue no. 1 and 2 are decided in favour of the plaintiff and against the defendant.
47. Issue no. 3
3. Whether the plaint has not been signed, verified and filed by a competent person? OPD PW-1 in his affidavit of evidence (Ex.PW1/A) categorically stated that he is currently holding the position of CFO and Company Secretary of the plaintiff company. Furthermore, the lease deed was executed by him and also aware of the facts and circumstances of the present matter and duly authorized by the plaintiff company through board resolution dated 03.08.2021 to act on behalf of the plaintiff company. In cross-examination, stated that there is a general resolution CS (COMM) 325/22 Dt. 04.11.2024 Page nos. 36 of 37 Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited to file any suit on or behalf of the plaintiff company. This witness though not filed minutes of meetings authorizing him, however considering the fact that there is a board resolution and the fact, he is the person who executed the lease deed as well as aware of the facts and circumstances of the present case, therefore cannot be held that he is not authorized to file the present suit, hence, issue no. 3 is decided against the defendant and in favour of the plaintiff. Relief
48. Plaintiff prayed for relief as under :
(a) For recovery of sum of Rs. 1,68,85,498/- in favour of the plaintiff and against the defendant;
(b) For granting pendente lite and future interest @ 21% p.a. as contractually agreed to between the parties;
(c) For costs under section 35 of the Code of Civil Procedure 1908 as amended by the Commercial Courts Act, 2015 In view of above discussions, the present suit is decreed in favour of the plaintiff and against the defendant for a sum of Rs.
1,68,85,498/- (Rupees One Crore Sixty Eight Lakh Eighty Five Thousand Four Hundred Ninety Eight Only) alongwith interest @ 12 % per annum from date of filing of the suit till its realization. Cost of the suit be awarded to the plaintiff. Decree sheet be drawn accordingly.
File be consigned to record room after due compliance.
AJAY Digitally signed
Announced in the open court by AJAY KUMAR
KUMAR JAIN
on 4th November 2024 JAIN
Date: 2024.11.04
16:16:56 +0530
(Ajay Kumar Jain)
District Judge(Commercial Courts- 03),
SE/Saket Courts/Delhi
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Indian Energy Exchange Limited Vs. BHL Forex and Finlease Limited