Bangalore District Court
Shivashakthi Builders And Developers vs Enpro Oil P Ltd on 30 October, 2024
1
O S No.5561/2014
KABC010063962014
C.R.P.67 Govt. of Karnataka
Form No.9 (Civil)
Title Sheet for
Judgments in Suits
(R.P.91)
TITLE SHEET FOR JUDGMENTS IN SUITS
IN THE COURT OF THE XIX ADDL. CITY CIVIL &
SESSIONS JUDGE AT BENGALURU CITY : (CCH-18)
::Present::
Smt. Gomati Raghavendra, LL.M., DIPR, DCL.,
XIX Addl. City Civil & Sessions Judge,
Bengaluru City.
Dated this the 30th day of October, 2024.
O S No.5561/2014
PLAINTIFFS :: 1. Shivashakthi Builders and
Developers, A registered
Partnership Firm having its
office at Shivashakthi, No.255,
Kanakapura Main Road,
th
Jayanagar 7 Block,
Bangalore-560070
Represented by its Managing
Partner Mr. B. Venkatesh.
2. B.Venkatesh, S/o. Late.
Babu.K, Aged about 53 years,
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O S No.5561/2014
Residing at Shivashakthi
Nilayam, No.1, 1st Cross,
Kathriguppa Main Road BSK III
Stage, Bangalore-560 085
3. B. Shaktivel, S/o. Late.
Babu.K, Aged about 37 years,
Residing at Shivashakthi
Nilayam, No.1, 1st Cross,
Kathriguppa Main Road BSK III
Stage, Bangalore-560 085
4. B.J.Sridhar, S/o. Late.
B.Jayaram, Aged about 28
years, Residing at Shivashakthi
Nilayam, No.1, 1st Cross,
Kathriguppa Main Road, BSK
III Stage, Bangalore-560 085
(By Sri. A.G.V., Advocate)
V/s.
DEFENDANTS :: 1. Enpro Oil Pvt., Ltd., A
Company incorporated under
the Companies Act, 1956,
having its registered Office at
No.1517, 15th Floor, Devika
Towers, No.6, Nehru Place,
New Delhi-110019 by its
Managing Director.
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O S No.5561/2014
2. M/s. Food Express Stores,
having its corporate office at
Total Mall, 4th Floor,
Kaikondarahalli, Varthur Hobli,
Sarjapura Main Road,
Bangalore-35. Rep by its Chief
Executive Officer.
3. Jubilant Agri and Consumer
Products Limited, A Company
incorporated under the
Companies Act, 1956. Having
its registered office at Plot
No.1A, Sector 16-A,
Institutional Area, Noida 201
301
4. M/s. Jubilant Retail
A retail division of defendant
No.3, having its corporate
office at Suryodai Complex,
No.7, New No.143, Kodihalli,
Old Airport Road,
Bangalore-560 008.
(By Sri. R.B.B., Advocate)
(As per the order dated
30-06-2017 defendant No.1 &
2 are struck off)
Date of Institution of the Suit :: 19-07-2014
Nature of the Suit :: Money Suit
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O S No.5561/2014
Date of commencement of
recording of evidence :: 25-11-2015
Date on which the Judgment
was pronounced. :: 30-10-2024
Year/s Month/s Day/s
Total Duration :: 10 03 10
(Smt. Gomati Raghavendra),
XIX Addl. City Civil & Sessions Judge,
Bengaluru City.
JUDGMENT
The present suit is filed by the plaintiffs for the relief of recovery of Rs.21,88,58,098/- (Rupees Twenty- one Crore Eighty-eight lakhs Fifty-eight thousand ninety-eight only) with interest at the rate of 18% and cost of the suit.
2. Case of the plaintiffs in brief is as under :-
Plaintiff No.1 is a registered Partnership Firm carrying its business of developing and building 5 O S No.5561/2014 apartments, Commercial Complexes, Convention halls etc., The plaintiff No.2 is Managing Partner and plaintiffs No.3 & 4 are the other partners. The said Firm is the owner of property bearing Sy. No.10 & 12 of Ramagondanahalli Village, Varthur Hobli, Bangalore-
Whitefield Road, Bangalore measuring 1 acre 24.56 guntas. The said property now falls within the jurisdiction of Bruhat Bengaluru Mahanagara Palike.
The plaintiff-firm wanted to put up construction of a Commercial Complex in the above said property for the purpose of leasing out the same to third parties. Thus, the plaintiff-firm obtained license and sanctioned plan from Bangalore Development Authority. Since the property falls within the jurisdiction of BBMP therefore, the construction could not be initiated. Thus, again plaintiff-firm obtained licence and sanctioned plan on 07-04-2007 from BBMP. The BBMP issued licence and 6 O S No.5561/2014 sanctioned plan on 18-06-2007. The plaintiff-firm applied for the commencement certificate on 22-09-2007 after putting up the foundation and pillars.
The BBMP Officials, after visiting the property and inspecting the same, issued a commencement certificate on 23-10-2007. Later, the plaintiff-firm put up basement, ground + 3 floors in the above said property as per sanctioned plan and accordingly, put up super built up area of 1,20,578.14 square feet along with 39501.81 square feet of basement area. The structure of basement, ground and 3 floors was completed in the month of December-2008.
3. It is further pleaded that the plaintiff-firm put up external structure, but had left the internal structure to be completed as per the wishes and requirements of the proposed occupants. Besides, the flooring, the 7 O S No.5561/2014 power, lifts and other amenities were also not completed in order to attend the same as per the requirements of occupants. However, the space for lifts and power stations were ready and provided. Thus, the occupation certificate was not yet applied. The said structure has been put up by the partners of the plaintiff- firm and they did not opt any contractors and thereby invested money of Rs.6,20,78,000/- (Rupees Six Crore Twenty Lakhs Seventy-eight thousand only). The number of proposed occupants approached, but ultimately, one company by name ZM Property Consultants shown their interest to take the commercial complex on lease. The defendant No.1 is a company represented by its Managing Director having its Head Office in New Delhi. Whereas, the defendant No.2 is the Retail Division of defendant No.1 and defendant No.3 is a company represented by its Managing Director having 8 O S No.5561/2014 its office at Noida and defendant No.4 is the retail division of the defendant No.3. The letter of intent was signed by the defendant No.2 on the letter head of defendant No.4. So, all the four defendants have been added in the suit.
4. It is further pleaded that the defendants were running three outlets in Bangalore in the name and style of 'Total Mall'. The representative of defendant No.1 visited the property of the plaintiff and letter of intent was signed after the defendants made clear that they have certain requirements for the property. The letter of intent was signed on 10-06-2010 wherein, it is made clear that for finalising the lease of commercial building premises, an amount of Rs.10,00,000/- (Rupees Ten Lakhs only) was to be paid as part of security deposit by the defendant No.1 to the plaintiff. Their requirement 9 O S No.5561/2014 was an AC, Traveler Cargo Lift, Passenger Lifts, Vitrified Tile flooring, Generator etc., The plaintiffs placed all the necessary documents to the defendants for verification of title and other approvals. The defendant No.1 entered into Lease Deed dated 18-09-2010. The defendant No.2 was acting on behalf of defendant No.1 and later, Rs.1,00,00,000/- (Rupees One crore only) was paid as part of security deposit by way of six cheques dated 20-09-2010. As per the Lease Deed, the defendant No.1 was to be handed over the possession along with occupation certificate within a period of three months from the date of Lease Deed and after delivery of possession, 150 days were permitted to use as rent free period.
5. It is further pleaded that the defendants completely had knowledge and acknowledged that the 10 O S No.5561/2014 internal walls, flooring, front facades, electrical and lifts etc., work completely not ready and even they were aware that the occupation certificate could not be applied unless building is completely constructed both external and internal. The Fire Clearance Certificate was to be obtained subject to all the relevant requirements. Since the said amenities yet to be attended thus, the plaintiffs could not apply for completion certificate and this fact was well within the knowledge of defendants. The defendants had appointed one Manasara Architects for the purpose of monitoring and the said Architects was in co-ordination with the plaintiffs Architect Vernekar Associates. The defendants and Manasara Architects recommended for structural changes to the building itself including the Atrium opening on the third floor, which is not in contemplation at the time of letter of intent. Besides, the 11 O S No.5561/2014 defendants sought for Atrium opening in the roofs of the ground and first floor for putting escalators.
6. It is also sought for opening up of roofs at three floors for putting up travellators and the said provision for putting up travellators was shown by the defendants on a different side of the building. In this regard, there were series of communication between Manasara Architects and Vernekar Associates and other consultants. The requirement of the defendants was outside the purview of the amenities of the Letter of Intent. According to the requirements of defendants, the structural changes have been made out and all the floors below were to be cut open proportionately for putting the travellator. The said job involved a time and skill and same could be attended by only one person in India thus, the said change took around two months. 12
O S No.5561/2014 BBR India Pvt., Ltd., only the one company doing the said job. Therefore, the plaintiffs were compelled to wait for them. As such, there was a delay in completing internal construction.
7. It is further pleaded that even the defendants sought for Air Handling Unit Rooms (AHU) with smaller sizes and hence, it has been complied by the plaintiff- firm by demolishing the AHU rooms. Subsequently, the Blue Star Company, which had to install Air Conditioners found that the AHU rooms were very small and hence, the said rooms were required to be rebuilt, which is resulted in wastage of time and money. The defendants again sought for change even in respect of front round elevation. The entire front round elevation were done with concrete blocks as per the requirements of defendants. But they again demanded 13 O S No.5561/2014 thus, the said concrete blocks were removed and glasses are replaced. It is also alleged that the defendants sought for 70% block work and 30% glass fittings resulted in wastage of time and money. The front facade requirements were being finalised by the defendants after three months time. They again took two more months to finalise the change, which resulted loss of five months time. Therefore, the defendants are solely responsible for the same. The defendants having complete knowledge about the delay in completing the internal construction of the building as per their requirements therefore, the plaintiffs met the defendants on 30-03-2011 and decided that the handing over dates would be 30-04-2011 for entire building interior works and 15-05-2011 for entire site works. The said meeting also stipulated what further works were required to be carried out in the building.
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O S No.5561/2014
8. Further, it is stated that The series of communications have been rendered even after the above said meeting with Manasara Architects on one side and Nikitha Facade Systems on the other side with regard to canopy. Ultimately, the plan was approved for canopy and two leaf automatic door on 11-05-2011 by Manasara Architects. The defendants had agreed to take the three floor also on rent. Therefore, the third floor roof was also opened and provision for travellators was also given to three floors. There were series of consultations and only the rent for the third floor was to be finalised. The range per square feet for the three floors was Rs.32/- to Rs.34/-. The plaintiffs were compelled to cut open the second floor roofs on two points and changed the structure for three floors as per the requirements of the defendants. In fact, the defendants had started to dump their fit-out materials in 15 O S No.5561/2014 the schedule property by sending their men. The defendants shown every intention of occupying the schedule premises.
9. Such being the fact, later, the plaintiffs came to know that there was a change in the management of the defendants and one Mr. Takesh Mathur was appointed as the new CEO by substituting earlier persons Mr. Dinesh Malpani and Mr. Paul Varghese. Subsequent to change of management, the response from the defendants was not up to speed. However, the plaintiffs requested for meeting to the new management and accordingly, the said CEO promised to convey the meeting on 19-07-2011 at 11-30 a.m. But the said CEO did not turn up for the meeting and postponed. On 13-07-2011 the plaintiffs dropped e-mail communication to the defendants mentioning all the details and sought 16 O S No.5561/2014 further advance. But the defendants sent legal notice on 02-08-2011 to the plaintiffs contending that they have unilaterally cancelled the Lease Deed dated 18-09-2010. The reason assigned that (1) there was a delay in handing over the occupation certificate within three months, (2) there was a failure to provide diesel generator set to ensure 100% electricity backup, (3) there was a failure to provide four travellators, (4) there was a failure to provide adequate toilet facilities. The said notice is violation of lease deed Clause No.15.3 . The plaintiffs sent a reply on 14-08-2011 denying all the allegations of the defendants and on the contrary, the plaintiffs were always ready and willing to comply with the requirements of lease deed. The plaintiffs applied for the Occupation Certificate on 21-07-2011 and got the Fire Clearance Certificate on 16-07-2011. They had got the Diesel Generator set also on 07-06-2011. But 17 O S No.5561/2014 the defendants had not shown the proper area for fixing the Generator Set. The plaintiffs could not fix the Generator set due to non co-operation of defendants. The plaintiffs provided the toilet facilities as per the requirements and also they had imported the travellators worth of Rs.1,00,00,000/- (Rupees One Crore only) from Chinese manufacturers in the month of December-2010. The provisions for fixing these travellators was also made by opening up the roofs and this fact is well within the knowledge of defendants. On 05-09-2011 the defendants issued a rejoinder to the reply and attempted to deny the terms of lease deed. Therefore, plaintiffs left no alternative but to terminate the lease deed dated 18-09-2010 by issuing legal notice dated 21-09-2011. It is made clear by the plaintiffs that the security deposit was forfeited and they reserved right to recover Rs.15,00,00,000/- (Rupees Fifteen 18 O S No.5561/2014 Crores only) with interest and also for recovering a sum of Rs.39,76,538/- (Rupees Thirty-nine Lakh Seventy-six thousand Five hundred and thirty-eight only) per month till the property remained unoccupied by the other tenants.
10. It is further stated that the plaintiffs spent around Rs.12,50,00,000/- (Rupees Twelve Crores Fifty Lakhs only) to attend the requirements of defendants as per letter of intent and the lease deed. The plaintiffs had raised money from another firm M/s. God Granites apart from spending their own money. Besides, they raised loans from Tata Capital Limited for a sum of Rs.10,00,00,000/- (Rupees Ten Crores only), which was sanctioned on 27-11-2010. The EMI for the Tata capital Limited loan was Rs.14,05,954- with a tenure of 120 months and processing fee of Rs.11,03,000/-. Besides, 19 O S No.5561/2014 the plaintiffs raised a loan of Rs.5,00,00,000/- (Rupees Five Crores only) from the Bajaj Finance to meet the liabilities incurred towards specifications of the defendants. The EMI for the Bajaj Finance loan was Rs.7,57,005/-. All the said loans have been availed only to meet out the requirements of the defendants, which is well within the knowledge of the defendants. So, the plaintiffs totally spent around Rs.12,50,00,000/-(Rupees Twelve Crores Fifty Lakhs only) for the requirements of defendants.
11. It is further pleaded that the plaintiffs trying their level best to dispose off the travellators, cargo lifts etc., in order to reduce the expenditure. But nobody came forward to buy the said travellators, cargo lifts etc., and on account of that the plaintiffs suffered a loss. The travellators are still lying unused whereas, the 20 O S No.5561/2014 cargo lifts disposed as a scrap, which fetched around Rs.80,000/-. The difference between the amount spent on the works and the amount spent on the work, which was retained by the later tenant is Rs.7,67,19,034/-. The said Rs.80,000/- has been deducted, which was secured from scrap. Therefore, the plaintiffs suffered loss to the tune of Rs.7,66,39,034/-. Thus, defendants are liable to pay the said amount. Apart from that, the defendants are liable to pay Rs.11,17,60,588/- towards interest including processing fee and other expenses. The defendants are very well aware that the plaintiffs had to pay equal monthly installment towards loan. The plaintiffs incurred the following liability by raising loans.
Sl. Account Amount
No.
01 Processing Fees paid for Tata Rs. 10,97,485/-
Capital Limited Loan.
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O S No.5561/2014
02 Interest paid from 10-01-2011 to
10-10-2012 towards Tata Capital Rs. 3,55,72,187/- Limited Loan.
03 Pre-closure charges for the Tata Rs. 20,00,997/-
Capital Limited Loan.
04 Processing Fees for the old Bajaj Rs. 8,83,005/-
Finance Limited Loan.
05 Insurance (Non refundable) for the Rs. 7,00,000/-
old Bajaj Finance Limited Loan.
06 Interest paid from 06-07-2011 to 05-12-2013 towards the old Bajaj Rs. 1,55,63,805/- Finance Limited Loan.
07 Processing Fees for the merged Rs. 16,96,636/-
Bajaj Finance Limited Loan.
08 Insurance (Non refundable) the merged Bajaj Finance Limited Rs. 10,00,000/- Loan.
09 Interest paid from 04-12-2013 to Rs. 1,11,04,949/-
20-06-2014 towards the merged Bajaj Finance Limited Loan.
10 Interest to be paid from 01-07-2014 to 15-12-2018 towards the merged Rs. 4,21,41,524/- Bajaj Finance Limited Loan.
11 Total Rs.11,17,60,588/-
12. The plaintiffs were compelled to change the very nature of building permanently and for that reason, the plaintiffs spent under putting up the work as per the 22 O S No.5561/2014 specifications of the defendants and their representation. So, the defendants are liable to pay damages for the loss of profits in the form of rentals till the Columbia Asia Hospitals started to pay the rent. The plaintiffs sustained a loss of profits from the period from March 2012 till July 2013. So, the defendants had to pay Rs.7,15,77,684/- till July-2013. The plaintiffs also sustained a loss of profits of Rs.3,26,44,422/- (Rupees Three Crores Twenty six lakhs Forty-four thousand four hundred and twenty two only) towards loss of rent and in this regard, the defendants are liable to pay interest to the extent of 18% p.a. The defendants are liable to pay the following sums;
Sl.
Towards which liability Amount in Rupees No. 01 For the expenses incurred by the plaintiffs for putting up the work as per the requirements of the Rs. 7,66,39.094/- defendants on their representation 23 O S No.5561/2014 02 For the interest and the other liabilities that the plaintiffs have incurred as a liability in respect of the loan taken by the plaintiffs with the knowledge of the Rs.11,17,60,588/- defendants to pay for the expenses incurred for putting up the works as per the requirements of the defendants on their representations.
03 For the loss of profits which the plaintiffs are entitled by virtue of their time and efforts and also for not receiving rentals towards the Rs. 3,26,44,422/- commercial complex as per the representation of the defendants.
04 For interest at 18% p.a. on the loss of profits as in commercial Rs. 88,13,994/- practice 05 Total Rs.22,98,58,098/-
06 To deduct from the above total the Rs. 1,10,00,000/-
security deposit paid by the defendants.
07 Total liability of defendants after Rs.21,88,58,098 deduction
13. So, in view of the above said averments, the plaintiffs requested to decree the suit directing the defendants to pay a sum of Rs.21,88,58,098/- with 24 O S No.5561/2014 interest at the rate of 18% p.a. along with cost of the suit.
14. In response to the suit summons, the defendants No.1 to 4 entered their appearance through their counsel and resisted the plaint averments by filing written statement. During the pendency of suit, the defendant No.1 & 2 have been struck-off as per the order dated 30-06-2017.
15. The defendants denied the plaint averments specifically as false contending that the suit is bad for misjoinder of parties. The Partnership Deed has not been produced and even the proper court fee has not been paid hence, on this count the suit is liable to be dismissed. It is also contended that the majority of the claims made by the plaintiffs are barred by limitation and the plaint does not contain the correct factual 25 O S No.5561/2014 background. Defendants have admitted entering into Lease Agreement in September-2010 in relation to suit building with plaintiffs.
16. It is further stated that initially there was a letter of intent dated 10-06-2010. The said lease was on a month to month basis and lease was entered subject to following conditions;
(i). To provide defendants with a diesel generator set to ensure 100% electricity back up,
(ii) to provide the premises with four travellators,
(iii) to provide adequate toilet facilities in the premises and
(iv) to provide the premises with an occupancy certificate within three months from the execution of the Lease Deed Based on the various assurances of the plaintiffs, the defendants paid the security deposit of Rs.1,10,00,000/- 26
O S No.5561/2014 (Rupees One Crore Ten Lakhs only). But the plaintiffs were unable to comply with its various obligations on a timely basis despite knowing fully well that time was the essence of the lease arrangement. They went on making various excuses for not complying with their obligations.
17. It is further stated that the defendants further have invested Rs.2,74,00,000/- (Rupees Two Crores Seventy Four lakhs only) as a Capital Investment . But due to delay by the plaintiffs, the commercial activities of the defendants could not have been commenced, from which the defendants sustained substantial loss. Though the plaintiffs were required to submit the Occupancy Certificate within three months from the date of lease arrangement, but they did not do so. On the contrary, defendants requested the plaintiffs on 27 O S No.5561/2014 several occasions to get the occupancy certificate. So, the defendants were constrained to terminate the lease arrangement and the plaintiffs were required to return the capital investment to the defendants with interest at the rate of 18% p.a. The plaintiffs were expressly notified the said aspect in legal notice dated 02-08-2011. But the plaintiffs neither returned the capital investment with interest nor refunded the security deposit. On the other hand, the plaintiffs made various allegations against the defendants, which were refused by the defendants through legal notice dated 05-09-2011. So, the loss or damages claimed to be sustained by the plaintiffs is on their own conduct. So, the defendants cannot be held responsible.
18. It is further stated that the figures contended in the plaint are artificial and fraudulent. There is no 28 O S No.5561/2014 agreement between the plaintiffs and defendants as alleged at all which would make the defendants liable to pay the sums claimed by the plaintiffs. The defendants are not responsible for various work construction of the building. But the plaintiffs on their own wish made changes in respect of the front round elevation including a covering of the round elevation with 70% block work and 30% with glass fittings were in deed part of the initial understanding. The plaintiffs are solely responsible for the construction of AHU rooms contrary to the understanding between the parties, which lead to the demolition and construction of the same. Hence, plaintiffs are solely liable for the said additional expenditure of Rs.5,00,000/- (Rupees Five Lakhs only) or any additional expenditure.
19. It is further stated that the cutting of the PT slabs for the creation of atrium in the premises was 29 O S No.5561/2014 confirmed by the plaintiffs architect. However, the plaintiffs have unduly delayed in making necessary arrangements in this regard. So, the defendants are not liable to pay any additional expenditure of Rs.60,00,000/- said to have been sustained by the plaintiffs. Because, the defendants never promised to pay an additional deposit for the atrium. The defendants never caused delay in financing the front elevation. But on the other hand, the plaintiffs have committed unjustifiable delay. So, the plaintiffs sustained loss of Rs.1,50,00,000/- (Rupees One Crore Fifty Lakhs only) is utter false. The plaintiffs are left with no justification for the delay in installation of the diesel generator and the travellators. So, the plaintiffs are desperately making attempts for wrongful gain. In fact, the defendants never caused any delay. But on the other hand, the delay was purely attributable from the 30 O S No.5561/2014 plaintiffs alone. The plaintiffs failed to provide occupancy certificate by December-2010, which was agreed. The defendants put to irreparable loss, since the plaintiffs never provided occupancy certificate. So, the defendants constrained to terminate the lease agreement by issuing notice under Section 106 of the Transfer of Property Act.
20. Further it is stated that the defendants spent an amount of Rs.2,74,00,000/- (Rupees Two Crores Seventy-four Lakhs only) on investments in HVAC electrical, fire hydrants, flexible pipes, check out counters, shopping trolleys, POS machines, Bose Audio Systems, architects and consultants. So, the plaintiffs solely liable to reimburse the said expenses. The plaintiffs are not in possession of premises even retaining security deposit of Rs.1,10,00,000/- and 31 O S No.5561/2014 significant investment of Rs.2,74,00,000/-. The defendants are neither aware nor responsible for any loan raised by the plaintiffs and hence, the defendants are not liable to pay the alleged loans of Rs.21,88,58,098/- or any interest. The allegations made by the plaintiffs is nothing but an attempt to retain the security deposit of Rs.1,10,00,000/- and also trying to dispute the repayment of Rs.2,74,00,000/-. The plaintiffs were unable to comply with its various obligations on a timely basis despite knowing fully well that time was the essence of the lease agreement. But on the other hand, the plaintiffs went on seeking various excuses for not complying with their obligations.
21. Further it is stated that it was agreed to hand over the possession within the time limits but, the delay is caused by the plaintiffs. The defendants requested 32 O S No.5561/2014 the plaintiffs on several occasions to get the occupancy certificate. But they failed to do so. Therefore, the defendants terminated the lease arrangement. Hence, the plaintiffs are liable to return the capital investment with interest at the rate of 18% p.a.. But the plaintiffs neither returned the said capital investment nor refunded the security deposit. The defendants are not aware as to when the premises were let out by the plaintiffs and also they are not aware of what works were retained by the tenants of plaintiffs. The conduct of the plaintiffs made to the defendants to suffer irreparable loss. By looking to the delay being caused by the plaintiffs, the defendants terminated the lease arrangement by issuing notice dated 02-08-2021. Denying rest of the plaint averments, these defendants have sought for dismissal of the suit with exemplary and compensatory cost.
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22. On the basis of rival pleadings and materials on records, following issues have been framed;
1. Whether the plaintiffs prove that the defendants are liable to pay the plaintiffs a sum of Rs.7,66,39,094/- towards the expenses incurred by the plaintiffs for putting up the works as per the requirements of the defendants on their representation ?
2. Whether the plaintiffs prove that the defendants are liable to pay the plaintiffs a sum of Rs.11,17,60,588/- towards the interest and the other liabilities that the plaintiffs have incurred as a liability in respect of the loan taken by the plaintiffs with the knowledge of the defendants to pay the expenses incurred for putting up the works as per the requirements of the defendants on their representation ?
3. Whether the plaintiffs prove that the defendants are liable to pay to the plaintiffs a sum of of Rs.3,26,44,422/- for alleged loss of 34 O S No.5561/2014 profits for allegedly not receiving rentals towards the commercial complex ?
4. Whether the defendants prove that they have incurred expenditure of Rs.2,74,00,000/- towards investments in respect of the commercial complex ?
5. Whether the defendants prove that they are entitled to set-off from sums due to the plaintiffs (if any) the sum of Rs.2,74,00,000/- in respect of the commercial complex which are alleged to be in the possession of the plaintiffs ?
6. Whether the suit is barred by limitation ?
7. What order or decree ?
(Issue No.5 is deleted as per Order dated 16-10-2024, since set-off is not pleaded by defendants.)
23. In support of plaint averments, plaintiff No.2 the Managing Partner of plaintiff firm entered into 35 O S No.5561/2014 witness box and led evidence as PW-1. One more witness is examined as PW-2. They have got marked documents at Ex.P-1 to P-103.
24. On the other hand, the authorised representative of defendants led evidence as DW-1, but no documents got marked on their behalf.
25. Heard both learned counsel for the parties. Perused the pleadings, evidence and materials on record.
26. Learned counsel for the plaintiff has relied upon the decisions reported in (1) Civil Appeal No.4816/2016 in the case of Muddasani Venkata Narsaiah (d) Th. LRs. Vs. Muddasani Sarojana, (2) 2016 SCC ONLine ALL 2926 between Mohd. Ahmad Vs. Karamat Hussain, (3) 1998 SCC OnLine Del 179 36 O S No.5561/2014 between Allora Electric & Cable Co. Vs. M/s. Shiv Charan and Brothers and others, (4) WP No.1195/2012 order dated 25-08-2015 between Badri Singh Vs. Shantibai @ Shavba Bai, (5) (2006) 11 SCC 181 between McDermott International Inc. Vs. Burn Standard Co., Ltd., and others, (6) 2000 SCC OnLine Ker 239 between Tomkos Engineer and Contractors Vs. Union of India, (7) 1981 WL 186912 between F.G.Minter Limited Vs. Welsh Health Technical Services Organisation, (8) 1985 WL 310862 between Rees & Kirby Limited Vs. The Council of the City of Swansea, (9) Damages of Breach of Contract, Richard Lawson 1st Edition Sweet & Maxwell South Asian Edition 2021, (10) Delay and Disruption in Construction Contracts, 4th EditionKeith Pickavance Sweet and Maxwell South Asian Edition, 2014 (11) The Law of Damages The Butter Worths Common Law Series 2nd Edition, Andrew 37 O S No.5561/2014 Tettenborn, David Wilby, Lexis Nexis, 2019, (12) (1963) HCA 57 between TC Industrial Plant Pty. Ltd., Vs. Rober's Queensland Pty Ltd., (13) AIR 1993 Delhi 315 between Nayak Builder and Investments Pvt. Ltd., Vs. Vinod Kumar, (14) (1993) between Subimal Chanda Chatterji Vs. Radnanth Ray, (15) AIR 1923 PC 47 between Harichand Macharam Vs. Govind Luxman Gokhale, (16) 1959 Supp (2) SCR 107 between Trivenibai and another Vs. Smt. Lilabai, (17) SC OnLIne Cal 1264 between Jute Corporation of India Ltd., Vs. ABL International Ltd., (18) 2020(2) BOMCR 135 between Rainbow Ace Shipping S.S. Vs. Lufeng Shipping Company Limited (19) 1971 D No.618 between Donnelly Vs. Joyce and (20) BBMP Building Bye-laws 2003.
27. Learned counsel for the defendants has relied upon the decisions reported in (1) (2006) 1 SCC 751 38 O S No.5561/2014 between Dresser Rand S.A. Vs. Bindal Agro Chem Limited, (2) 2021 SCC OnLine SC 486 between South Eastern Coalfields Limited and Others. Vs. S. Kumar's Associates AKM (JV), (3) (1996) 10 SCC 405 between Rajasthan Co-Operative Dairy Federation Limited Vs. Maha Laxmi Mingrate Marketing Services Private Limited and Another, (4) 1993 (1) SCC 519 between Chand Rani Vs. Kamal Rani, (5) (2004) 5 SCC 109 between Bharat Coking Coal Ltd., Vs. L.K. Ahuja, (6) (1940) 1 K.B. 740 between Sunleyn (B) & Co., Ltd., Vs. Cunard White Star Ltd., (7) 2016 SCC OnLine Delhi 6112 between NHAI Vs. HCC, (8) 2019 SCC OnLine Del 9037 between Union of India Vs. Om Constructions Co., (9) FAO (OS) 143/2006 decided on 02-02-2009 a Division Bench of the Delhi High Court in the case of DDA Vs. PC Sharma, (10) 2016 SCC OnLine Bom 9697 between Essar Procurement Service Ltd., Vs. 39 O S No.5561/2014 Paramound Constructions, (11) 2015 SCC OnLIne Bom 1412 between Ajay Singh Vs. Suneel Darshan, (12) 2000 SCC OnLine Bom 89 between Maharashtra State Electricity Board Vs. Sterlite Industries (India) Ltd., (13) 2013 SCC Online Bom 18 between Edifice Developers and Project Engineers Ltd., Vs. Essar Projects (India) Limited, (14) MANU/GJ/1360/2017 between Umedmiya R Rathod and Others Vs. State of Gujarat, (15) (2009) 2 SCC 606 between U.P. State Electricity Board and others Vs. Aziz Ahmad, (16) AIR 1962 SC 366 between Murlidhar Chiranjilal Vs. Marishchandra Dwarkadas, (17) (2004) 9 SCC 619 between Managing Director, Army Welfare Housing Organisation Vs. Sumangal Services Pvt. Ltd., (18) (1977) 4 SCC 467 between Arivandandam Vs. T.V. Satyapal, (19) (2016) 4 ALD 354 between The Andhra Pradesh Mineral Development Corporation Ltd., Vs. Pottem Brothers, (20) AIR 1985 40 O S No.5561/2014 Ker 49 Kerala High Court between Sate of Kerala Vs. K. Bhaskaran, (21) (2019)5 ARBLR 384 between Jute Corporation of India Ltd., Vs. Abl International Ltd., (22) (2008) 8 SCC 564 between K.B. Saha and Sons Private Limited Vs. Development Consultant Limited, (23) 1997 (43) DRJ 754 between Cofex Exports Ltd., Vs. Canara Bank (24) (2009) 12 SCC 1 between State of Rajasthan Vs. Ferro Concrete Construction Private Limited and (25) Arb. P.No.253/2009 decision dated 04-02-2010 between Satender Kumar Vs. Municipal Corporation of Delhi.
This Court has gone through the ratio laid down in the said cases.
28. For the reasons assigned below, above said issues are answered as follows:
ISSUE No.1 :: Partly in the Affirmative 41 O S No.5561/2014 ISSUE No.2 :: In the Negative ISSUE No.3 :: Partly in the Affirmative ISSUE No.4 :: In the Negative ISSUE No.5 :: Deleted as per Order dated 16-10-2024 ISSUE No.6 :: In the Negative ISSUE No.7 :: As per final order for the following;
REASONS
29. ISSUE NO.1 :: The burden of proving this issue is on the plaintiff to establish that the defendants are liable to pay a sum of Rs.7,66,39,094/- towards expenses incurred by the plaintiff for putting up works as per the requirements of defendants on their representation.
30. During pendency of the suit, all the liabilities of defendants No.1 & 2 were taken over by defendants 42 O S No.5561/2014 No.3 & 4 and as such defendants No.1 & 2 were struck off as per the order dated 30-08-2017.
31. It is not in dispute that plaintiffs are the owners of property bearing Sy.No.10 & 12 of Ramagondanahalli Village, Varthur Hobli, Bangalore- Whitefield Road, Bangalore measuring about 1 acre 24.56 guntas which now falls within the jurisdiction of BBMP (Bruhat Bengaluru Mahanagara Palike) wherein plaintiffs have put up Basement, Ground + 3 Floors and it has totally put up super built up area of 1,20,578.14 Sq.Ft. along with 39.501.81 Sq.Ft. of basement area. It is also not in dispute that 1st plaintiff had put up external structure, but had left the internal structure to be completed as per the wishes and requirement of occupant/lessee and that the internal, flooring, the power, lifts were not completed, as the needs of the 43 O S No.5561/2014 occupant were to determine the same. The plaintiffs were stated to be waiting for arrival of suitable lessee for the commercial complex and some companies also shown their interest in the building including Bharti Retail etc.,
32. It is an undisputed fact that on 10-06-2010 the letter-letter of intent (LOI) was entered into between plaintiffs and defendants and as per the said letter, the Lease Deed has to be executed within three months and the term of lease will be 25 years with lock-in period of five years and the rent amount was fixed at Ex.34/- per square feet. Plaintiff was required to provide an AC, Travellator, Cargo Lift, Passenger Lift 2 Nos., Vitrified Tile flooring, Generator etc.,.
33. It is not in dispute that an amount of Rs.1,10,00,000/- (Rupees One Crore Ten Lakhs only) 44 O S No.5561/2014 was paid as part of security deposit by defendant No.1 to the plaintiff by way of cheques etc.,.
34. Plaintiff has although specifically pleaded in the plaint that the Lease Deed contained many conditions and among them the defendant No.1 shall be handed over the possession along with occupancy certificate within a period of three months from the date of Lease Deed, but however, no such Lease Deed is forthcoming before the Court. Upon perusal of Ex.P-1 the Letter- Letter of Intent (LOI), it clearly reflects that the Lease Deed shall be executed within 90 days from the date of execution of Letter of Intent. Further it reveals that the plaintiffs herein shall establish its title to the premises within said 90 days, failing which Food Express Stores reserves the right to terminate the LOI with no liabilities. However, in the instant case, plaintiff 45 O S No.5561/2014 has although categorically pleaded about the execution of the Lease Deed having been entered between plaintiffs and defendants on 18-09-2010, but there is no whisper about the existence of any such Lease Deed before the Court. Ex.P-1 is dated 10-06-2010. Within 90 days from execution of Ex.P-1, Lease Deed was supposed to be executed. It means to say that, within 10th of September, 2010 said Lease Deed should have been entered between parties to the suit. However, plaintiffs themselves in their plaint though specifically pleaded about entering of Lease Deed on 18-09-2010, but plaintiffs remain silent with respect to production of Lease Deed.
35. Upon perusal of the reply dated 05-09-2011 marked at Ex.P-4 by the defendants in response to the notice issued by plaintiff dated 02-08-2011 defendants 46 O S No.5561/2014 have stated that the Lease Deed dated 18-09-2010 could at best create a lease from month to month and the arrangement between both parties in respect of occupation and use of the premises was that of lease on month to month basis terminable on fifteen days notice by either party.
36. In the case on hand, defendants have issued notice of termination to the plaintiffs on 02-08-2011 as per Ex.P-2. This document clearly reveals about entering into Lease Deed between plaintiffs and defendants on 18-09-2010. This notice is issued under Section 106 of Transfer of Property Act by terminating the lease of premises with effect from 20-08-2011 by providing plaintiffs fifteen days notice as required for termination of lease from month to month. Lease Deed if at all executed between the parties herein, it could 47 O S No.5561/2014 have been produced by the plaintiffs, who specifically pleaded about the same in the plaint in order to ascertain the terms and conditions stipulated therein if any in so far as knowing the rights and liabilities of the parties and non production of the lease deed is certainly to some extent fatal to the plaintiffs to assess the quantum of the money to be recovered by the plaintiffs from defendants.
37. The reason behind causing termination notice by the defendants to the plaintiffs is that the defendants have made significant investment of Rs.2,74,00,000/- on the premises, due to the delay in providing occupancy certificate and completing other facilities on time as committed by the plaintiffs, commercial activities in the premises could not commence, it has caused tremendous loss of business and revenue to the 48 O S No.5561/2014 defendants. Further, it reflects that not having been provided with the Occupancy Certificate, which was to be furnished within three months from the date of execution of Lease Deed dated 18-09-2010, defendants after giving several opportunities to the plaintiffs to get the occupancy certificate, same is not obtained and defendants have no option but to terminate the Lease Deed from month to month. On the other hand, plaintiffs have submitted that alleged termination notice is illegal and contrary to law.
38. Basis for defendants in issuing notice of termination at Ex.P-2 is that the Occupancy Certificate was not provided by the plaintiffs within three months from the date of execution of Lease Deed and so also completing other facilities on time by the plaintiffs, which according to the defendants have caused tremendous loss of business and revenue.
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39. In the backdrop of said contentions of parties, it appears material to go through the recitals of Ex.P-1. On page No.2 of Ex.P-1 it clearly shows that nothing contained in the LOI shall be construed as a commitment from Food Express Stores or creating any liability to take the premises and car parking space on lease until all the conditions mentioned are satisfied. The said conditions shows that there must be clear title in the name of plaintiffs prior to the execution of Lease Deed, which is not in dispute. The other conditions are completion of legal due diligence in relation to the premises to the satisfaction of Food Express Stores and also execution of the Lease Deed between the parties on mutual acceptable terms and conditions.
40. It is the specific contentions of these defendants that the conditions mentioned in Ex.P-1 are 50 O S No.5561/2014 not satisfactorily complied by the plaintiffs. Ex.P-1 further clearly states that "Please note that Food Express Stores shall not be held liable or responsible for any loss, damage or loss of profit that may be caused to Shivashakthi/plaintiffs as a result of the Lease Deed not being signed. This letter and Letter of intent is merely an expression of Food Express Stores's intention to take on lease the premises and the car parking space subject to above mentioned conditions and the terms and conditions as mentioned in the LOI shall not be construed as creating a binding legal obligation to take the premises and car parking space on lease".
41. The above referred terms of Ex.P-1 shows that Ex.P-1 is the merely an intention to take the premises and car parking space, but it does not create binding legal obligation to take the premises. 51
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42. No doubt, both parties to the suit have entered into Letter-LOI for leasing of commercial building premises and have conveyed their intention to accept offer of making available the suit schedule premises for the use of defendants as per terms and conditions as mentioned in Ex.P-1, now the crucial question that arises before the Court is that, whether the plaintiffs have committed breach of agreement as per Ex.P-1 that has to be determined since no lease deed is produced by either of the parties.
43. It is the main defence of the defendants that the Occupancy Certificate was not obtained by the plaintiffs within the stipulated period and according to them, Occupancy Certificate should have been obtained within three months from the date of Lease Deed dated 18-09-2010. When the said Lease Deed is not 52 O S No.5561/2014 produced either by the plaintiffs or defendants, there is no point to consider the said terms and conditions, which says that the Occupancy Certificate must have been obtained within three months from execution of Lease Deed. Even during the course of cross- examination, PW-1 on page No.56 has clearly stated that he has not produced Lease deed. Further, the non production of Lease Deed is also relevant for both plaintiffs and defendants to understand the nature of tenancy whether it is month to month or year to year. But in the absence of any Lease Deed, it cannot be presumed the nature of tenancy existing between the parties. However, defendants in their termination notice at Ex.P-2 as well as their reply notice at Ex.P-5 have clearly specified the nature of tenancy as from month to month basis. But the question that arises before the Court is that whether defendants are justifiable in 53 O S No.5561/2014 terminating the tenancy by assigning reasons stated therein with respect to non obtaining of Occupancy Certificate by the plaintiffs well within the time as agreed therein.
44. In the absence of Lease, which is the condition precedent to ascertain the time frame for obtaining the Occupancy Certificate, it cannot be certainly said that there is a breach of condition as stated in Ex.P-2. It is also equal liability on the part of the plaintiffs, who base their claim for recovery of money, to produce the Lease Deed dated 18-09-2010 in order to determine the respective duties and obligations on the part of both parties. Plaintiffs have failed in discharging their duties effectively. As per Section 101 of Indian Evidence Act the plaintiff, who has approached the Court of law with certain reliefs is under obligation to 54 O S No.5561/2014 prove his case with convincing materials. Plaintiff is expected to stand on his own legs without relying upon the weakness on the part of the defendant. The flaws on the part of the defendant cannot be the trump card for the plaintiff to succeed his case.
45. As referred above, Ex.P-2 the Notice of Termination is dated 02-08-2011. The Occupancy Certificate is issued on 16-12-2011 as evident in Ex.P-
10. But however, letter was caused by plaintiffs to BBMP to issue Occupancy Certificate on 17-01-2011 itself as evident in Ex.P-9. The further letter caused by the plaintiffs to BBMP is dated 20-07-2011. The alleged Lease Deed in question stated to be executed is on 18-09-2010. If three months time period is calculated from the said date, it comes to 18-12-2010. But however, the letter submitted by the plaintiffs itself is 55 O S No.5561/2014 subsequent to the alleged three months time. However, learned counsel for the plaintiffs during the course of arguments has vehemently stated that time was not an essence of contract. In this regard, learned counsel for plaintiffs has relied upon the e-mails sent by representative of defendants to the plaintiffs dated 29-10-2010 as per Ex.P-28, an e-mail sent by defendants Architect to plaintiffs dated 12-11-2010 pertaining to HVAC drawing as per Ex.P-29, e-mails sent by defendants Architect to the plaintiffs dated 12-11-2010 pertaining to Air Handling Unit as per Ex.P-33 and P-37, e-mail dated 30-03-2011, the minutes of meeting dated 30-03-2011 as per Ex.P-40 wherein, time was extended till 15-05-2011 and e-mail dated 11-05-2011 sent by defendants architect to the plaintiffs as per Ex.P-43.
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46. By relying upon the said documents, the plaintiffs aim to show that the said communication clearly reveal the fact that defendants were aware of the work being carried out by the plaintiffs and the defendants had demanded various changes in the work as revealed in the said e-mails. Undoubtedly, Ex.P-40 an e-mail dated 30-03-2011 is subsequent to completion of alleged three months period to obtain Occupancy Certificate and Ex.P-40 is the minutes of meeting wherein, the time was extended till 15-05-2011.
47. It is material to note that, by exchanging the said e-mails as referred above, the defendants asked plaintiffs to carryout work as they intended to take the property for lease. Aforementioned e-mail exchange are not denied by the defendants, which shows the conduct of defendants about the work being carried out 57 O S No.5561/2014 by the plaintiffs, which shows that the terms and conditions mentioned in Ex.P-1 were not strictly followed by both parties to the suit. Under these circumstances, the terms of Ex.P-1 assumes little significance as far as the agreement between the parties with respect to leasing of the suit premises is concerned.
48. It is also submitted by the plaintiffs that for obtaining Occupancy Certificate law mandates that no objection certificate should be obtained from Fire Department as per BBMP bye-laws, which was also known to the defendants. However, in the course of his cross-examination, DW-1 in clear terms admitted that there was no agreement to provide Occupancy Certificate within three months. Under these circumstances, in the absence of the Lease Deed dated 58 O S No.5561/2014 18-09-2010, it cannot be stated that Occupancy Certificate should have been obtained by the plaintiffs within three months from the date of execution of said Lease Deed. It is worth to mention here that defendants in Ex.P-2 the termination of tenancy notice explicitly stated about the alleged lease deed dated 18-09-2010 and this is the base of the alleged termination of tenancy. But they have also not put any efforts to produce the said document. Now defendants cannot opt both approbation and reprobation as per their wishes to choose some aspects in Ex.P-1 and leave other things that goes against to their interest. When there is no lease agreement or lease deed, how can defendants terminates the lease agreement as per Ex.P-2 is not proved by defendants. In view of the fact of undisputed e-mails sent by defendants as referred supra, and so also in the absence of lease deed, the 59 O S No.5561/2014 very termination of lease by defendants as per Ex.P-2 does not survive for consideration.
49. In the light of arriving to said finding, now the question arises is that whether plaintiffs have succeeded in manifesting the liability on the part of defendants to pay a sum of Rs.7,66,39,094/- towards expenses incurred by them for putting up the works as per the requirement of defendants. It is un-denying that plaintiffs after having entered into the Letter-Letter of Intent as per Ex.P-1 with defendants, they carried out internal work in the suit premises. They have produced invoices for having allegedly incurred expenses of Rs.11,75,12,497/- marked at Ex.P-54 to P-61. Plaintiffs have produced 200 invoices collectively marked at Ex.P-54 and also produced 178 invoices collectively marked at Ex.P-55. According to the plaintiffs, all the 60 O S No.5561/2014 said invoices produced pertain to the work carried out by them at the instance of defendants.
50. It is also the case of the plaintiffs that making atrium, AHU and front round elevation were requirements of defendants in addition to the requirements of providing of AC, Travellators, Cargo Lift, Passenger Lift-2 Nos., Floor Vitrified-Tile, Generator etc., mentioned in Ex.P-1(a) the Letter of Intent.
51. The plaint as well as evidence of PW-1 reveal that plaintiffs are not claiming entire sum of Rs.11,75,12,497/-, but they have deducted a sum of Rs.4,08,73,403/-, which was retained by the subsequent tenant the M/s. Columbia Asia Hospital Pvt., Ltd., and the part of the work done retained by the subsequent tenant and in this regard, the Senior Project 61 O S No.5561/2014 Manager, Columbia Asia Hospital Private Limited, the subsequent tenant is examined as PW-2, who in his affidavit evidence has stated about the retention of Travellators, RO Equipments, Goods Lift, Front Facades, internal structure like Walls, Rooms, Toilets etc., AC GI Ducts, Electrical conduits, Staircase, all the floor tiles, Lift Lobby, wall granite slabs, atrium openings etc., Hence in view of the same, plaintiffs have claimed a sum of Rs.7,66,39,094/- from the defendants. It is not in dispute by the defendants that aforesaid retained as well as non retained materials were procured by the plaintiffs as per Ex.P-1 and the work carried out by the plaintiffs in the suit premises as per demands of the defendants as per Ex.P-1, which is also evident in the e-mail correspondence between them.
52. In his cross-examination, PW-1 at para No.74 has admitted as to what is still working/retained by the 62 O S No.5561/2014 subsequent tenant. He has admitted that pump-set installed in the building is still working and present occupants are using the same. At para No.93, PW-1 has further stated that there is DG set, which is installed and existing till today. Sewage plant is existing till today and he does not know the total cost of sewage plant construction. He has further stated that installed transformer is still existing in the building and defendants asked them to lay the power cables or HD cables. Said cables were used for development of the project which have been still used today. Said materials have been listed as Item No.104, 165, Sl.No.224 & 225 etc.,
53. Other than the aforesaid materials/articles, no contra materials are produced by the defendants to disbelieve or discredit the evidence of PW-1 or plaint 63 O S No.5561/2014 averments to show that plaintiffs have not incurred the said expenditure for procuring the materials or carrying out the work in the building. Plaintiffs have deducted a sum of Rs.4,08,73,403/- the materials retained by the subsequent tenant and after deducting the same, it has mentioned a sum of Rs.7,66,39,094/-. But however as stated supra, PW-1 in his cross-examination has clearly revealed about some other materials that have been retained by the subsequent tenant. The question that arises before the Court is that whether the remaining materials, which remain unused by the subsequent tenant have been re-sold or scrapped by the plaintiffs is not forthcoming before the Court.
54. Plaintiffs in paragraph-40 of the plaint have stated that they tried their level best to dispose off the items like travellators, cargo lifts etc., so as to reduce 64 O S No.5561/2014 the expenditure incurred. They have given advertisements in this regard also. But no one was willing to buy these including the companies, which sold these items, who are dealing with these items. Hence, plaintiffs suffered total loss on account of these items also and that the travellators are still lying unused with the plaintiffs. While the Cargo lifts when given to scrap, fetch around Rs.80,000/- and hence plaintiffs could get only Rs.80,000/- while trying to dispose off the items.
55. It has come in the evidence of PW-2 that the Columbia Asia Hospital has rejected certain items such as, travellators, RO Equipments, goods lift, front facades, internal structures like walls, rooms toilets etc., AC, GI Ducts, Electrical Conduits, staircase, all the floor tiles, lift lobby, wall granite slabs, AUS, as it was not suitable, atrium openings were closed, MS spiral 65 O S No.5561/2014 staircase, MS additional steel beams for travellator support etc.,
56. The cost of travellator is stated as Rs.1,00,00,000/-, which has not been used by subsequent tenant and same is with the plaintiff unused. It is the defence of defendants that there is no document to show that at the instance of defendant, said travellator was purchased from the Company. But there are many other items as referred above, which are still with the plaintiff not being retained by PW-2/Columbia Asia Hospital, which are also not scrapped, but remain lying unutilised. It appears that on account of all these items, plaintiffs suffered loss.
57. As per Section 73 of Indian Contract Act, 1872 that provides for compensation for loss or damage caused by breach of contract. When a contract has 66 O S No.5561/2014 been broken the party, who suffers by such breach is entitled to receive from the party, who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
58. By relying upon the e-mail conversations between plaintiffs and defendants as referred supra, by producing Ex.P-28, P-29, P-33, P-37, P-40 and P-43 plaintiffs have shown that obtaining Occupancy Certificate was not the condition precedent for continuing the agreement between the plaintiffs and defendants and the time was extended by the defendants as per said e-mail conversations. Even otherwise, if Ex.P-2 the termination notice for the sake 67 O S No.5561/2014 of presumption but not acceptance, taken into consideration, it is dated 02-08-2011 and the items from Sl.No.1 to 357 lastly dated 01-08-2011 if considered, (which are prior to issuance of termination notice at Ex.P-2) the total expenses incurred by the plaintiffs for procuring these materials and carrying out works comes to more than Rs.9 Crores. By producing the aforementioned documents, plaintiffs have established before the Court the breach of contract as well as loss incurred by them due to such breach of contract.
59. By deducting a sum of Rs.80,000/- that has been taken out by disposing/scrapping and also by deducting some of the items referred above that have been used/retained by the plaintiffs, it appears at this stage that a sum of Rs.7,00,00,000/- if directed to be paid to the plaintiffs by the defendants, that would meet 68 O S No.5561/2014 the ends of justice. Hence, Issue No.1 is answered partly in the affirmative.
60. ISSUE NO.2 & 3 :: As these issues are interlinked with each other, they have been taken up together for common discussion to avoid repetition of facts.
61. It is the case of the plaintiffs that defendants are liable to pay a sum of Rs.11,17,60,588/- to the plaintiffs towards interest and other liabilities in respect of loan taken by the plaintiffs with the knowledge of defendants for putting up works as per their requirements on their representation and so also defendants are liable to pay a sum of Rs.3,26,44,422/-, which is loss of profit for not receiving rentals towards commercial complex.
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62. It is not in dispute that the defendants had promised to take the building on rent for a period of 25 years with lock-in period of five years if plaintiffs fulfill various requirements of the defendants such as, providing Travellator, generator, facade, atrium, lifts etc., as evident in Ex.P-1 and P-10. According to the plaintiffs, they raised a loan of Rs.10,00,00,000/- from Tata Capital Limited which was sanctioned on 27-11-2010. Ex.P-11 is the loan sanction letter dated 27-11-2010 for total sanctioned amount of Rs.10,00,00,000/- and the EMI payable by the plaintiffs was Rs.14,05,954/-. Plaintiffs are also stated to have raised a loan of Rs.5,00,00,000/- from Bajaj Finance Limited as the money raised from Tata Capital was not enough. The EMI for Bajaj Finance Limited was Rs.7,57,005/-/-. Ex.P-12 is the loan sanction letter dated 29-06-2011 issued by Bajaj Finance Limited for a 70 O S No.5561/2014 sum of Rs.5,07,00,000/- and EMI payable at Rs.7,57,000/-.
63. Defendants were stated to have had the knowledge of plaintiffs raising the said loan and plaintiffs have relied upon Ex.P-50 the e-mail dated 26-08-2010 sent by plaintiffs to the defendants about the plaintiffs having approached Banks for financial assistance, which has asked for Audited balance sheet of defendants Company to share the same with the Bank. However, during the course of cross-examination, DW-1 at para No.26 has expressed ignorance about the defendants having the knowledge of plaintiffs raising loans in this regard.
64. It is material to note that, the loan raised by the plaintiffs cannot be fastened on the defendants because, it was the responsibility on the part of plaintiffs 71 O S No.5561/2014 being the owner of the building to repair the internal structure and hand it over to the defendants on lease. There is no such term or a condition in Ex.P-1 regarding raising of loans by the plaintiffs and in default by defendants, to get the loan recovered from defendants. Ex.P-1(a) also specifies the items/work to be carried out by the plaintiffs for its customization. Plaintiffs are solely responsible for the loan raised by them. An amount of delay that has been caused by the plaintiffs cannot be denied. At the same time, the delay that has been caused on account of the demands by the defendants in finalizing things such as elevation/front facade etc., of internal structure also cannot be denied, which is evident in their e-mail correspondence referred supra. Raising of loan is always at the risk of borrower/guarantor which cannot be the tool for borrower to claim its repayment from outsider. Since it 72 O S No.5561/2014 is the responsibility casted upon the plaintiffs to provide the building to the defendants as specified in Ex.P-1, it is up to the plaintiffs to hand over the building on lease with or without raising loans and because, the plaintiffs have borrowed loan from the said financial institutions, defendants cannot be directed to make good the loss, since there is no such agreement to that effect, much less Ex.P-1. The alleged Lease Deed is not produced by the plaintiffs to substantiate their contentions. Plaintiffs have failed to establish that in what way defendants are liable to pay the loans raised by the plaintiffs. Because, defendants are neither co-borrowers nor they are guarantors for borrowing said loan.
65. It is not in dispute that after the period of two years and two months, plaintiffs were able to get the Columbia Asia Hospital as a subsequent tenant for the 73 O S No.5561/2014 suit premises and the entire building was given to them on rent i.e., monthly rent of Rs.47,50,000/-. It cannot be denied or disputed that plaintiffs have suffered inconvenience and also monetory loss for more than two years till the subsequent tenant took over the building on rent.
66. This Court has observed in the previous issue that because of the act of defendants, which had conversation with the plaintiffs in the e-mails as per Ex.P-28, P-29, P-33 to 37, P-40 to P-43 the defendants had orally agreed for continuation of their relationship and asked the plaintiffs to carryout work by demanding certain changes in the work as revealed in the e-mails. When such being the case, by mere termination of lease by the defendants as per Ex.P-2, in the absence of lease deed cannot disentitle the plaintiff to recover 74 O S No.5561/2014 money for the loss they have suffered in the period during which the building was kept vacant till it was occupied by the subsequent tenant.
67. It is also relevant to mention here that plaintiffs base for money recovery is on the strength of Lease Deed, but no such Lease Deed is produced by the plaintiffs. No convincing material is forthcoming to show the loss of profit incurred by the plaintiffs for such an alleged amount. Under these circumstances, having regard to the expenses incurred by the plaintiffs, the measurement of the property in question, e-mail transactions between plaintiffs and defendants, monthly rental, Ex.P-1, P-1(a) and other materials on record, it appears proper to grant a sum of Rs.1,00,00,000/- (Rupees One Crore only) towards loss of profit under this head. Hence, Issue No.2 is answered in the 75 O S No.5561/2014 Negative and Issue No.3 is answered partly in the Affirmative.
68. ISSUE NO.4 :: Under this issue defendants are burdened to establish that they have incurred expenditure of Rs.2,74,00,000/- towards investment in respect of commercial complex. It is material to note that except making averments in their written statement defendants have not inclined to produce any documents in this regard. Defendants have admittedly not claimed set off nor counter claim except mentioning the same that they have made investment for the said sum as a capital investment on the premises. No record is forthcoming by these defendants to substantiate their defence. However, a sum of Rs.1,10,00,000/- paid by the defendants towards security deposit is with the plaintiffs, which has also been admitted by the plaintiffs 76 O S No.5561/2014 in their plaint. But said amount is not claimed by defendants. In the absence of proof for incurring a sum of Rs.2,74,00,000/- by defendants, it cannot be accepted. Hence, Issue No.4 is answered in the Negative.
69. ISSUE NO.5 :: This issue is deleted as per order dated 16-10-2024.
70. ISSUE NO.6 :: It is specifically pleaded by the defendants that suit is barred by limitation. According to these defendants, plaintiffs after having slept over its right for nearly 3-4 years are attempting to resurrect claims that are barred by the law of limitation and that limitation Act prescribes time period within which a claim has to be prosecuted. If the period expires, a person is debarred from claiming such remedy.
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71. In the instant case, the termination notice said to have been issued by the defendants at Ex.P-2 is dated 02-08-2011. As per Article 55 of the Limitation Act, 1963 the limitation is for three years from the said period. Even if the said three years period is reckoned from causing said notice, the plaint is filed on 19-07-2014, which is within three years from the date of Ex.P-2. Moreover, the cause of action to file the present suit for the plaintiffs is stated to have arisen on 02-08-2011 when defendants terminated the lease deed.
72. Defendants have although taken up such contention, but failed to produce reliable materials in this regard as to how the suit filed by the plaintiffs is barred by law of limitation. Hence, having regard to these aspects, it appears that there is no substance in 78 O S No.5561/2014 the case of defendants to hold that the suit of the plaintiffs is barred by limitation. Hence this issue is answered in the negative holding that suit is filed within period of limitation.
73. ISSUE NO.7 :: Plaintiffs have prayed for the interest at the rate of 18% p.a. on the amount claimed by them. However, the rate of interest claimed by the plaintiffs appears to be exorbitant. Admittedly, the nature of suit claim is commercial in nature. No convincing materials is produced by the plaintiffs for claiming 18% interest. Having regard to the nature of the suit claim, evidence and materials on record, at this stage, it appears proper to impose rate of interest at 8% p.a. from the date of suit till its realisation. In the light of foregoing discussion, I proceed to pass the following; 79
O S No.5561/2014 ORDER The suit filed by the plaintiffs is decreed in part with costs.
Defendants No.3 & 4 are jointly and severally liable to pay a sum of Rs.8,00,00,000/- (Rupees Eight Crores only) together with interest at the rate of 8% p.a. from the date of suit till its realisation.
Draw decree accordingly.
(Dictated to the Stenographer, transcribed by her, transcription corrected and then pronounced by me in the open Court on this the 30th day of October, 2024.) (Smt. Gomati Raghavendra), XIX ADDL. CITY CIVIL & SESSIONS JUDGE, BENPGALURU CITY (CCH-18) 80 O S No.5561/2014 ANNEXURE I. LIST OF WITNESSES EXAMINED ON BEHALF OF :
(a) PLAINTIFFS SIDE ::
PW-1 :: B.Venkatesh
PW-2 :: P.Pravin Kumar Das
(B) DEFENDANTS SIDE ::
DW-1 :: Raman Mangalorkar
II. LIST OF DOCUMENTS EXHIBITED ON BEHALF OF:
(a) PLAINTIFFS SIDE :
Ex.P-1 :: Letter of Intent dated 10-06-2010 Ex.P-1(a) :: Annexure Ex.P-2 :: Legal Notice dated 02-08-2011 Ex.P-3 :: Reply dated 14-08-2011 Ex.P-4 :: Re-joinder dated 05-09-2011 Ex.P-5 :: Reply to rejoinder dt. 21-09-2011 Ex.P-6 :: Letter dated 11-06-2010 written by defendant No.2 to the plaintiff Ex.P-7 :: Form-A issued by Registrar of Firms Ex.P-8 :: No Objection Certificate issued by Fire and Emergency Service Department 81 O S No.5561/2014 Ex.P-9 :: Office copy of letter dt. 20-07-2011 Ex.P-10 :: Occupancy Certificate issued by BBMP Ex.P-11 :: Sanction Letter issued by TATA Home Equity Loan to the plaintiff Ex.P-12 & :: Two sanction letters issued by Ex.P-13 :: Bajaj FinServ Ex.P-14 :: EMI Calculation sheet issued by TATA Capital Financial Service Ltd., Ex.P-15 & :: Two E-mail conversations with Ex.P-16 :: OLX.com Ex.P-17 to :: 35 E-mail conversations between Ex.P-51 :: plaintiffs, defendants and other parties Ex.P-52 :: C.D. containing all the above E-mail conversations Ex.P-53 :: Certificate under Section 65-B of Indian Evidence Act Ex.P-54 :: 200 Invoices Ex.P-55 :: 178 Invoices Ex.P-56 :: 2nd Copy of Lease deed Ex.P-57 & :: Two Invoices for having purchased Ex.P-58 :: materials from Securecenterics Pvt.
Ltd., Ex.P-59 :: Invoice of BBR (India) Pvt., Ltd., 82 O S No.5561/2014 Ex.P-60 & :: Two Invoices issued by Aqua Tech Ex.P-61 :: Enviro Engineers Ex.P-62 :: Form-A issued by the Registrar of Firms pertaining to God Granites Firm Ex.P-63 :: Form VAT-180 dated 17-02-2012 issued by CTO, Bengaluru.
Ex.P-64 :: Order dated 17-02-2012 issued by CTO, Bengaluru.
Ex.P-65 to
Ex.P-72 :: Six photographs with CD
Ex.P-73 :: IT Returns for the Assessment year
2005-06
Ex.P-74 :: Audited Balance Sheet of Plaintiffs
firm as on 31-03-2005
Ex.P-75 :: IT Returns for the Assessment Year
2006-07
Ex.P-76 :: Audited Balance Sheet of plaintiffs
firm as on 31-03-2006
Ex.P-77 :: Audited Balance Sheet of plaintiffs
firm as on 31-03-2006 with
schedule-2
Ex.P-78 :: Audited Balance Sheet of plaintiffs
firm as on 31-03-2007
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Ex.P-79 :: Audited Profit and Loss Account of plaintiffs firm as on 31-03-2007 with schedule No.2 Ex.P-80 :: IT Returns for the Assessment year 2008-09 Ex.P-81 :: Audited Balance Sheet of plaintiffs firm as on 31-03-2008 Ex.P-82 :: Profit and Loss Account of plaintiff firm for 31-03-2008 with schedule No.2 Ex.P-83 :: IT Returns for the Assessment Year 2009-10 Ex.P-84 :: Audited Balance Sheet of plaintiffs firm as on 31-03-2009 Ex.P-85 :: Audited Balance Sheet of plaintiffs firm as on 31-03-2009 Ex.P-86 :: Audited Balance Sheet with Schedule No.1 & 2 of plaintiffs firm as on 31-03-2010 Ex.P-87 :: IT Returns for the Assessment year 1990-91 of God Granites Firm Ex.P-88 :: Audited Balance Sheet of God Granites firm as on 31-03-1990 Ex.P-89 :: Audited Profit & Loss Account of God Granites Firm as on 31-03-1990 84 O S No.5561/2014 Ex.P-90 :: Audited Balance Sheet of God Granites firm as on 31-03-1992 Ex.P-91 :: Audited Profit and Loss Account of God Granites Firm as on 31-03-1992 Ex.P-92 :: Audited Balance Sheet of God Granites firm as on 31-03-1995 Ex.P-93 :: Audited Profit and Loss Account of God Granites firm for 31-03-1995 Ex.P-94 :: IT Returns for the Assessment year 1996-97 Ex.P-95 :: IT Returns for Assessment year 1997-98 of God Granites Firm Ex.P-96 :: Audited Balance Sheet of God Granites firm as on 31-03-1997 Ex.P-97 :: Audited Profit and Loss Account of God Granites Firm for 31-03-1997 Ex.P-98 :: Authorisation Letter Ex.P-99 :: Xerox copy of Legal Notice sent through RPAD dated 02-01-2014 Ex.P-100 :: Downloaded E-mail message copy dated 09-10-2017 (Hard Copy) containing E-mail of 28-09-2012 Ex.P-101 :: Downloaded E-mail message copy dated 11-01-2013 (Hard copy) Ex.P-102 :: CD Containing E-mail matter Ex.P-103 :: Certificate U/s. 65-B of Indian Evidence Act 85 O S No.5561/2014 (B) DEFENDANTS SIDE : NIL (Smt. Gomati Raghavendra), XIX ADDL. CITY CIVIL & SESSIONS JUDGE, BENGALURU CITY (CCH-18)