Delhi District Court
J.S. Chawla And Sons (Huf) And Others vs Airplaza Retail Holdings Private ... on 22 October, 2024
In the Court of Shri Ashutosh Kumar, District Judge (Commercial
Court)-01, Tis Hazari Courts, West District, Delhi
Civ DJ No. 232/2020
CNR No.DLWT01-003972-2020
1. J. S. Chawla & Sons (HUF),
Through its Karta Shri J.S. Chawla
Resident of:
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.1
2. K. S. Chawla & Sons (HUF),
Through its Karta Shri J.S. Chawla
Resident of:
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.2
3. Ms. Jasbir Kaur Chawla,
Wife of Late Sh. KS Chawla
Resident of:
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.3
4. Ms. Gurpreet Kaur Chawla,
Wife of Sh. HS Chawla
Resident of:
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.4
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 1
5. Ms. Harmeet Kaur Dhingra,
Wife of Sh. GS Dhingra
Resident of:
H.No.25, Road No.64,
West Punjabi Bagh,
New Delhi - 110026
...Plaintiff No.5
6. Mr. Rajvinder Singh Gandhi.
Son of Shri. Joginder Singh Gandhi
Resident of:
House No.81, Narang Colony,
Janak Puri, New Delhi - 110058
...Plaintiff No.6
7. Mr. Jaspal Singh Chawla,
Son of Late Sh. KS Chawla
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.7
8. Mr. Harpal Singh Chawla,
Son of Late Sh. KS Chawla
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038 ...Plaintiff No.8
9. Mr. Surinderpal Singh Chawla,
Son of Late Sh. KS Chawla
KH No.482/483, KS Farms,
Near Air Force Camp Rajokari,
New Delhi - 110038
...Plaintiff No.9
10.Mr. Rajnish Handa,
Son of Shri Ratan Lal Handa
Resident of:
D-56A, Moti Nagar,
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 2
New Delhi.
...Plaintiff No.10
11.Ms. Chanchal Adhlak,
Wife of Sh.Sanjay Adhlak
Resident of:
F-143, Mansarover Garden,
New Delhi - 110015
...Plaintiff No.11
All the Plaintiffs through their POA Holder
Mr. Mohan Kumar Nair
Son of Mr. Karunakaran Nair
Resident of 28C, B-12 A,
Dhawlagiri Apartment,
Sector-34, Noida-201301.
Versus
M/s. Airplaza Retail Holdings Private Limited
Through its Authorized Signatory,
Shri Amit Kumar
Having its registered office at:
3rd Floor, Mookambika Complex No.4,
Lady Desika Road,
Mylapore, Chennai-600004
Also having its Corporate Office at:
Plot No.184, 5th Floor,
Platinum Tower,
Udyog Vihar Phase-1,
Gurgaon - 122016.
.... Defendant
Date of Institution : 17-09-2020
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 3
Date of hearing of arguments : 08-10-2024
Date of decision : 22-10-2024
Plaintiffs' counsel - Lokesh Bhola
Defendant's Counsel - Kapil Sankhla
JUDGMENT
1. Initially, the present suit for possession, permanent injunction, arrears of rent and mesne profits was filed by the plaintiffs against the defendant. However, since the keys and possession of the suit property were handed over by the defendant to the plaintiffs in court on 04-12-2021, there is no longer any need to decide the present suit for the purposes of possession and permanent injunction, as no issue was framed in that regard.
2. Briefly stated, the case of the plaintiffs is that they are the joint owners of the structure comprising of First Floor and Second Floor at the property situated at J-1/162-B, Rajouri Garden, New Delhi, comprising of a total area of 9000 square feet (hereinafter referred to as "the suit property"). The present suit has been filed by the Power of Attorney holder of all the Plaintiffs, Mr. Mohan Kumar Nair, vide Power of Attorney, dated 02.09.2020. It has been averred that the plaintiff no.10 is the son of Late Joginder Singh Gandhi, who was also one of the owners of the suit property, and had passed away on 12.05.2020, to be survived by plaintiff no.10 and his two sisters viz. Manpreet Kaur and Harpreet Kaur (who have since relinquished their shares in the suit property, in favour of plaintiff no.10, vide a registered Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 4 relinquishment deed dated 21.07.2020).
3. It is the claim of the plaintiffs that the defendant had approached them to take the suit property on lease, in order to carry out commercial activity and open a retail showroom, under the name "Vishal Mega Mart", and upon such request of the defendant, they agreed to lease out the suit property, vide lease deed dated 14-04- 2015, on the defendant's assurance that it would be paying the agreed monthly rent on time.
4. It is further the case of the plaintiffs that the said lease deed was executed with the following terms and conditions between the parties: -
a) The rent for the First And Second Floor was fixed at the rate of Rs.50/- per square feet and the same came out to be Rs.4,50,000/- (Rupees Four Lakhs Fifty Thousand Only) per month, which was agreed to be payable by Defendant.
b) The said Lease Deed was executed for a time period of 9 years, starting from 14.05.2015 to 13.05.2024 and the lock in period for the said Lease Deed was to end on 25.10.2015.
c) It was agreed under Article 2 of the said Lease Deed that the rent would be payable on 10th of every month and if there shall be any delay in payment of rent, then the same shall attract delay interest at the rate of 18% per annum.
d) It was further agreed under Article 10 of the said Lease Deed that in case the Defendant defaults in making the payment of agreed rent for a continuous period of three months, then the Plaintiffs shall have the right to terminate the said Lease Deed by issuing a Termination Notice, wherein one months' time period will be given to the Defendant to pay the outstanding monthly rent and if the Defendant thereafter also defaults in paying the outstanding Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 5 rent, then the Lease Deed would stand terminated and the Defendant is bound to hand over the vacant physical possession of the said Suit Property to the Plaintiffs alongwith outstanding dues.
e) It was further agreed between the Plaintiffs and the Defendant that the monthly rent shall be increased at the rate of 15% of the last payable rent, after every three year, as given below:
(i) 14.05.2015 to 13.05.2018 rent payable was Rs.4,50,000/-
(ii) 14.05.2018 to 13.05.2021 rent payable was Rs.5,17,500/-
(iii) 14.05.2021 to 13.05.2024 rent payable was Rs.5,95,125/-
5. It is further averred that after the execution of the said lease deed, and upon the request of the defendant, the plaintiffs agreed to reduce the amount of rent on two occasions, which are summarised as under:
i. Rent for the First Floor and Second Floor was reduced from Rs.4,50,000/- to Rs.4,16,000/- for a period starting from 01.01.2016 to 31.05.2016.
ii. Rent for the First Floor and Second Floor was again reduced from Rs.4,50,000/- to Rs.3,98,112/- for a period starting from 01.06.2016 to 31.12.2017.
6. It is further claimed that despite the generosity shown by the plaintiffs to the defendant on several such occasions in the past, the defendant, with a mala fide intention, gave frivolous excuses qua the spread of COVID-19 and the purported reductions in the sales/revenue from the business, and in an arbitrary and unilateral manner, decided to reduce the rent payable for the suit property, Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 6 without the consent of the plaintiffs, and despite the absence of any agreement to this effect. It is further averred that this unilateral reduction of the rent payable, on the basis of the above flimsy reasons, was devoid of any merit, as the rent agreed upon in the lease deed had no relation whatsoever with the revenue generated from the store of the defendant. Also, it is averred that during the time period, starting from the last week of March till the first week of May, when the government had ordered a lockdown in the city, the store/business of the defendant continued with its operations, in the absence of any governmental restriction to this regard.
7. It is further claimed by the plaintiffs that the emails/letters of the defendant, dated 06.04.2020, 11.05.2020, 18.05.2020 and 05.06.2020, wherein the defendant had sought to unilaterally change the terms of the said lease deed, were unlawful and against the terms of the said lease deed. It is further averred that through its letter dated 06.04.2020, the defendant had falsely stated that its business had been impacted due to COVID (whereas the defendant had begun the home delivery of goods from its store), and had thus proposed to reduce the rent payable from the agreed fixed amount to a meagre revenue sharing basis, which the authorised representative of the plaintiffs had rejected as being against the agreed upon terms of the said lease deed, vide their letter dated 27.04.2020. It is further the case of the plaintiffs that Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 7 the emails of the defendant, dated 11.05.2020 and 18.05.2020, were written in complete disregard of their letter dated 27-04- 2020, and had completely ignored the above mentioned rejection by the plaintiffs (with respect to the offer of the defendant, qua the arbitrary and unilateral change in the rent amount payable, and the arbitrary remittance of such rent in the bank accounts of the plaintiffs, at its own whims and fancies). It is also submitted that the defendant had additionally stated therein that it would be deducting the excess rent paid for the last week of March, 2020, from the month of June, 2020, in three equal instalments. It is also claimed by the plaintiffs that the averments made in the above two emails of the defendant (dated 11.05.2020 and 18.05.2020) were also denied by the Authorised Representative of the plaintiffs (vide their emails dated 11.05.2020 and 04.06.2020). It is also claimed that vide their email dated 04.06.2020, the Authorised Representative of the Plaintiffs had withdrawn the accommodation earlier extended to the defendant (vide reply dated 27-04-2020) to enable it to pay the rent after the scheduled date, and instead sought the immediate payment of the outstanding amount towards rent, with interest on the delayed payments, from the defendant. It is also submitted that the defendant failed to respond to the same, and instead kept unlawfully transferring meagre amounts in the name of rent to the bank accounts of the plaintiffs.
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 88. It is further averred that seeing the indifferent attitude and mala fide intention of the defendant, the plaintiffs were constrained to issue a legal notice dated 16.06.2020, terminating the said lease deed in terms of the Article 10 (ii) of the same, seeking payment of the outstanding dues towards the rent, along with interest @ 18% per annum from the date of the respective due payments of rent, for each month, and also seeking the handover of the peaceful and vacant possession of the suit property, within 30 days from the receipt of the said notice. It is then submitted that the defendant very cleverly, and without responding to the said notice, wrote two emails to the plaintiffs, both dated 04.07.2020, seeking certain concessions to reduce the rent, and also sought withdrawal of the said legal notice dated 16.06.2020. It is further averred that vide the same, the defendant had also sent a summary of the reduced rent transferred by it, which mails were responded to by the plaintiffs on the same day through their Authorised Representative, clearly denying any such understanding between the parties, and seeking the urgent payment of rent as per the said lease deed, and further seeking the defendant's compliance with the legal notice dated 16.06.2020. It is further claimed that despite the above emails of the plaintiffs, the defendant not only continued paying the meagre amounts of rent (as per its unilateral decision), but also started deducting rent on the pretext of having paid excess rent for the month of March, 2020. It is further the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 9 case of the plaintiffs that vide their email dated 11.08.2020, they had objected to the unlawful act of the defendant, and denied any agreement for the reduction in rent (which the defendant had expressed in its email, dated 08.08.2020, vide which it had sent the details of payments of the reduced rent it made to the plaintiffs), and the plaintiffs once again sought the urgent payment of the outstanding rent, and also demanded that the defendant act as per the termination notice dated 16.06.2020. It is further claimed by the plaintiffs that the defendant had been in default of the payment of agreed rent for the suit property for four consecutive months, i.e. the months of April, May, June and July, 2020, since 10.04.2020, which unlawful action has been causing wrongful loss to the plaintiffs, at the cost of wrongful gain to the defendant.
9. It is claimed by the plaintiffs that the defendant (in terms of the said lease deed), was liable to make a payment of Rs.20,46,320/- towards the rent alongwith applicable GST against the Suit Property, for the months of April, May, June, July (till 15.07.2020), after giving due credit to the payments already received by the plaintiffs. It is further claimed that the defendant had only made a payment of Rs. 20,995/- against the above mentioned huge outstanding and thus, the defendant was now liable to make a payment of Rs.21,60,611/- as on 31.08.2020 to the plaintiffs, inclusive of interest @18% per annum, on the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 10 monthly rent overdue from the respective months, till 31.08.2020, and that the defendant was further liable to pay the above amount of rent due along with delay interest @ 18% per annum, from the date of filing of the present suit till actual realisation. It is also claimed that the plaintiffs are also entitled to receive mesne profits @ Rs.5,93,396/- per month (excluding GST), with effect from 16.07.2020, for the suit property, along with interest @ 18% per annum, and are also entitled to receive the amount payable against the electricity and water charges by the defendant. They have also claimed that the security amount lying with the plaintiffs would be adjusted with the final amount recoverable.
10. The plaintiffs, inter-alia, have prayed for the following reliefs from this court, to:
b) Pass a decree for recovery of arrears of rent for Rs.21,60,611/- (Rupees Twenty One Lakhs Sixty Thousand Six Hundred and Eleven Only) together with interest @ 18% p.a. from the date of filing of Suit being pendente-lite and future interest @ 18% p.a. till the realization of the amount as well as the amount payable by the Defendant towards the electricity and water consumption and
d)Pass a decree of damages/mesne profits @ Rs.5,93,396/-
(Rupees Five Lakhs Ninety Three Thousand Three Hundred and Ninety Six Only) (GST included) per month with effect from 16.07.2020 till the time the Defendant continues to remain in possession of the said property beyond 16.07.2020 together with pendente-lite and future interest @ 18% p.a. till the realization of the amount along with costs of the suit.
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 1111. The summons of the suit were sent to the defendant, and appearance was duly made on its behalf.
12. Defendant in the preliminary objections of its written statement, inter-alia, claimed that the suit is not maintainable as the same has been filed by the plaintiffs in violation of Section 12A of Commercial Courts Act. It is further claimed that the plaintiffs in the legal notice dated 16.06.2020 had raised an alleged claim of Rs. 17,80,187/- arrears of rent due for the months of April, May and June 2020, but in the present suit, the plaintiffs have raised an alleged claim of Rs 20,46,320/- from April-July 2020. It is also claimed that the plaintiffs have not approached the court with clean hands as there are no arrears pending for the months of April, May, June, 2020, as outstanding towards the defendant. It is further claimed that the present suit filed by the plaintiffs, is pre-mature as the Legal notice dated 16.06.2020 is defective and does not effectually terminate the said Lease Deed and that as per clause 4 of the said Lease Deed, the plaintiffs were to refund the amount of the security deposit of Rs. 13,50,000/- at the time when the said Lease Deed comes to an end or sooner and there is not even a whisper about the same in the Legal Notice of even date. It is also claimed that plaintiffs, even after terminating the said Lease Deed, as per their whims and fancies, have illegally retained the said security deposit since 16.06.2020. It is further the case of the defendant that the plaintiffs are misleading this court Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 12 as even after receiving the rent as per mutually agreed terms in the meeting held between the parties dated 26.06.2020 for the months of April, May and June 2020, have again raised the claims for the said period. It is also claimed that plaintiffs have chosen not to disclose or even mention about the security deposit of Rs. 13,50,000/- illegally retained by them, which they are liable to refund alongwith interest and plaintiffs have also suppressed the settlement arrived between the parties. It is also claimed that the plaintiffs have served the said Legal Notice beyond the period of limitation of 15 day and it is trite law and a settled preposition that where the lease deed is unregistered, it has to be considered as a month to month Lease and the notice of termination required was of 15 days whereas claim of plaintiff is that one month notice was given. It is also claimed that as per own case of the plaintiffs, the lease deed dated 14-04-2015 is an unregistered document and legal notice was sent on 16-06-2020.
13. On merits, the defendant has admitted the factum of the plaintiffs ownership of the suit property, and has avouched to have been making regular payments of the rentals as agreed upon between the parties, and has further stated that it did not elect to terminate the said lease deed, despite the economies bleeding financially globally, and continued making payments to the plaintiffs as per the oral agreement dated 26.06.2020, which payments were admitted by the plaintiffs. It further asserted that Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 13 its store was not operational from the last week of March 2020 to the first week of May 2020, when there was a lockdown in the city.
14. The defendant has denied any false or unilateral interpretation of the terms and conditions of the lease deed on its part, and has asserted that there have been instances in past when the parties had negotiated the rates for payment of rent, followed by appropriate revisions of rent, with the acceptance of plaintiffs. In doing so, the defendant asserts that the parties had acted in furtherance of their business interests and had modified the terms to suit their prevailing conditions.
15. The defendant denied having acted with malafide intention and asserted that the ground of Covid-19 pandemic was not a frivolous one, and that he had not unilaterally reduced the rent for the Suit Property, without the consent of and / or any agreement with the Plaintiffs. The defendant further emphasised that the plaintiffs had admittedly agreed to reduce the rent on two previous occasions.
16. The defendant further insisted that the entire world was hit by the sudden outbreak of the COVID 19 pandemic, economies across the globe were crippled due to the lockdown imposed by the Government, and a nationwide lockdown was imposed in India from 22.03.2020 till 14.05.2020, due to which the suit property could only be partially occupied / utilised, and no Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 14 commercial activities except for the sale of essential items such as groceries were permitted. The defendant has then stated that the outbreak of the Covid-19 pandemic, being an Act of God, was declared to be 'Force Majeure' event by the Government of India, vide memorandum bearing No. F.18/4/2020-PPD dated 19th February 2020, inter alia directing the closure of commercial establishments dealing in non-essential goods and services. It submits that the same had severely restricted its business and commercial operation, since it was not in a position to use/ occupy the suit property, except for the mere sale of 10% of its merchandise constituting essential items such as groceries, due to which it was entitled to withhold the payment of the monthly lease rent amount, in terms of the lease deed. In furtherance of this, it claims that it is entitled to pay rent to the plaintiffs on a pro-rata basis, due to this Force Majeure Clause. The defendant then avers that thus, it sent various emails dated 06.04.2020, 11.05.2020, 18.05.2020 and 05.06.2020, apprising the plaintiffs of its financial inability to pay rent on the terms of the lease deed, in view of the Force Majeure situation, which had arisen because of the pandemic, and instead offered to pay rent on revenue sharing basis. The defendant then claims that the plaintiffs (through their representative) accepted its proposal for revenue sharing by way of an oral agreement, in the meeting held between the parties through their representatives on 26.06.2020, which was not Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 15 recorded in writing, as the defendant did not expect them to go back on their words or wrongly interpret the same to their convenience or deny its existence, owing to the longstanding and good business relation between the parties.
17. The defendant has further claimed to have arrived at similar agreements with other landlords as well, with respect to its several other stores across the nation, owing to the nationwide lockdown and resultant force majeure situation. In furtherance of this, it claims that it was not obligated to pay rent to the plaintiffs as agreed in the lease deed but, despite the aforesaid and in good faith, it had proposed to gradually make the complete payments to the plaintiffs as and when the scenario improved.
18. The defendant further denied remitting the amount of rent to the plaintiffs as per its own whims and fancies. It asserted that the emails sent by the plaintiffs, dated 11.05.2020 and 04.06.2020, were sent prior to the oral agreement arrived at by the parties wherein the plaintiffs had agreed with its proposal of payment of rent on a revenue sharing basis. The defendant then denied that the authorised representative of the plaintiffs (vide their email dated 04.06.2020) had withdrawn the accommodation (extended vide reply dated 27.04.2020) for paying the rent after the scheduled date.
19. The Defendant has denied having any malafide intention, has denied its liability to pay any amount as claimed by the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 16 plaintiffs, and has prayed for the dismissal of the suit with cost.
20. The plaintiffs filed a 'rejoinder' (incorrectly titled as rejoinder and be read correctly as replication) to the written statement, denying its contents, and reiterating the contents of the plaint.
21. Since the keys and possession of the suit property were handed over by the defendant to the plaintiffs in court on 04-12- 2021, no issue qua possession of the suit property was required to be framed.
22. From the pleadings of the parties, following issues were framed on 14-09-2023:
1. Whether the plaintiffs are entitled for arrears of rent Rs. 21,60,611/- along with interest together with electricity and water charges from the defendant as alleged? OPP
2. Whether the plaintiffs are entitled for damages / mesne profits @ Rs. 5,93,396/- PM from the filing of the suit till 4-12-2021 alongwith interest from the defendant? OPD (it appears that there was an inadvertent typographical mistake as the onus to prove this issue should have been on the plaintiffs and as such the same is now corrected as OPP)
3. Whether the suit is not maintainable as alleged? OPD
4. Whether plaintiffs have suppressed material facts? OPD
5. Whether there is no cause of action in favour of the plaintiffs? OPD
6. Whether in the absence of registered lease deed the lease deed between the parties would be tenancy on month to month basis under the Transfer of Property Act and not falling within the ambit of commercial dispute? (Onus to prove on both the parties)
7. Relief.Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 17
23. To prove its case, the plaintiffs examined Mr. Mohan Kumar Nair, the Power of Attorney Holder of the plaintiffs, as PW-1, and vide his affidavit of evidence Ex. PW-1/A, he deposed on the lines of plaint and exhibited the following documents:
1. The Power of Attorney, dated 02.09.2020 - Ex.PW-1/1.
2. Copy of the Death Certificate of Joginder Singh Gandhi dated 12.05.2020 - Ex. PW-1/2
3. Copy of Relinquishment Deed dated 21-07-2020 - Ex.PW-1/3.
4.Copy of the lease deed dated 14-04-2015 - Ex.PW-1/4. Copy of letter dated 05-07-2016 - Ex. PW-1/4A
5.Copy of letter dated 15-03-2017 - Ex. PW-1/5 and emails/letters dated 06-04-2020, 11.05.2020, 18.05.2020, 05.06.2020 and 27-04- 2020 - Ex.PW-1/6 to Ex. PW-1/10 respectively.
6. E-mails dated 11.05.2020 and 04.06.2020 of plaintiffs and Letter dated 04.06.2020 - Ex.PW-1/11 to Ex.PW-1/13 respectively.
7. The Legal Notice dated 16.06.2020 - Ex.PW-1/14.
8. E-mails dated 04.07.2020 sent by the defendant -Ex.PW-1/15 (Colly).
9. E-mail dated 04.07.2020 sent by the plaintiffs - Ex.PW-1/16.
10. E-mail dated 08.08.2020 sent by the defendant and E-mail dated 11.08.2020 sent by plaintiffs are Ex.PW-1/17 and Ex.PW-
1/18 respectively.
11. Certificate under section 65 B of Indian Evidence Act - ExPW- 1/19.
PW-1 was cross-examined by the Ld Counsel for the defendant.
24. On the other hand, the defendant examined Mr. Anil Kumar, Authorised Representative, as DW-1, and vide his affidavit of evidence Ex. DW-1/A, he deposed on the lines of the written statement and exhibited the following documents:
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 18i) Copy of Board Resolution dated 21.04.2016 Ex. DW1/1 (original thereof is filed in connected suit bearing CS (Comm) No. 231/20).
ii) Copy of authorization letter dated 23.12.2020 issued in my favour by the plaintiffs Ex. DW1/2 (original thereof is filed in connected suit bearing CS (Comm) No. 231/20).
iii) Account statement of J.S. Chawla & sons (HUF) for the period from 01.01.2020 to 09.12.2020 Ex. DW1/3.
iv) Account statement of K.S. Chawla & Sons for the period from 01.01.2020 to 09.12.2020 Ex. DW1/4.
v) Account statement of Jasbir Kaur Chawla for the period from 01.01.2020 to 09.12.2020 Ex. DW1/5.
vi) Account statement of Gurpreet Kaur Chawla for the period from 01.01.2020 to 09.12.2020 Ex. DW1/6. Vii) Account statement of Harmeet Kaur Dhingra Chawla for the period from 01.01.2020 to 09.12.2020 Ex. DW1/7
viii) Account statement of Rajvinder Singh Gandhi for the period from 01.01.2020 to 09.12.2020 Ex. DW1/8.
ix) Account statement of Jaspal Singh Chawla for the period from 01.01.2020 to 09.12.2020 Ex. DW1/9.
x) Account statement of Harpal Singh Chawla for the period from 01.01.2020 to 09.12.2020 Ex. DW1/10.
xi) Account statement of Surinder Pal Singh for the period from 01.01.2020 to 09.12.2020 Ex. DW1/11. Xii) Account statement of Rajnish Handa for the period from 01.01.2020 to 09.12.2020 Ex. DW1/12.
xiii) Account statement of Chanchal Adlakha for the period from 01.01.2020 to 09.12.2020 Ex. DW1/13. Xiv) Copy of sales ledger of the defendant Ex. DW1/14.
xv) Certificate under Section 65B of Indian Evidence Act, 1872 Ex. DW1/15.
25. I have heard the final arguments on behalf of the parties, perused the comprehensive written submissions filed on behalf of Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 19 the parties and have also perused the judicial file.
26. During the course of final arguments, the Ld. counsel for the plaintiffs had relied upon the following judgments in their support:
1. Grafitek International vs K.K. Kaura And Ors, 2002 (62) DRJ
72.
2. Shivshankara vs H.P.Vedavyasa Char (2023 SCC OnLine SC
358)
3. M/s. Madhucon Projects Ltd. vs National Highways Authority of India 2011 SCC OnLine Del 1248
4. Ramanand and Others Vs. Dr. Girish Soni (2022 SCC Online Del 2007)
5. Halliburton Offshore Services Inc Vs. Vedanta Limited and Ors.
reported as (MANU/DE/1130/2020)
6. Siddhartha Singh Vs. Ajit Singh Bawa (2022 SCC Online Del 2007)
7.Hotel Leela Venture Limited Vs. Airport Authority of India reported as 2016 SCC Online Del 5862 passed by the Hon'ble High Court at Delhi.
8. Jagmohan Behl v. State Bank of Indore (22.09.2017-DELHC):
MANU/DE/2930/2017
9.Ambala Sarabhai Enterprises Ltd. vs. K.S. Infra space LLP and Ors. (04.10.2019 - SC): MANU/SC/1378/2019
10. K.B. Consortium vs. Zenith Timber Products Pvt. Ltd. and Ors. (07.10.2021 - CAL HC): MANU/WB/0711/2021
11. Hari Lal v. Amrik Singh: MANU/UP/0073/1978
12. J.N. Banerjee vs. Sohan Lal Bhargava (24.12.1970 - DELHC):
MANU/DE/0053/1971
13. Rai Chand Jain vs. Chandra Kanta Khosla (15.11.1990 - SC):
MANU/SC/0185/1991
14.Dhanti Devi vs. Firm Goyal Iron Trading Company and Ors. (15.01.1993 - PH HC) : MANU/PH/0240/1993
15. Ram Mohan & Co v. Ganesar Ginning Co. Ltd. 1999:
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 20MANU/TN/0182/199
16. SNG Developers Limited versus Vardhman Buildtech Private Limited, 294 (2022) DLT764
27. During the course of final arguments, the Ld. counsel for the defendant had relied upon the following judgments in its support:
1. Birla DLW Ltd. v. Prem Engineering Works, 1998 SCC OnLine Del 504
2.Isherdas Sahni & Bros vs. Impresario Entertainment and Hospitality Pvt Ltd. 2024 SCC OnLine Del 1833
3.Kailash Nath Associates v. Delhi Development Authority & Anr, (2015) 4 Supreme Court Cases 136
4.Deepak Polymers Private Limited Vs Anchor Investments Private Limited 2021 SCC OnLIne Cal 4323
5. Kusum Entreprises vs Vimal Kochhar (2013 SCC OnLine Del 5127)
6. K.B. Saha & Sons Pvt Ltd Vs Development Consultant Ltd. (2008) 8 SCC 564
28. My issue wise findings are as under:
29. ISSUE Nos. 1, 5 & 61. Whether the plaintiffs are entitled for arrears of rent Rs.21,60,611/- along with interest together with electricity and water charges from the defendant as alleged? OPP
5. Whether there is no cause of action in favour of the plaintiffs? OPD and
6. Whether in the absence of registered lease deed the lease deed between the parties would be tenancy on month to month basis under the Transfer of Property Act and not falling within the ambit of commercial dispute? (Onus to prove on both the parties) All these issues being inter-connected are taken up together for disposal.
30. The onus to prove issue no. 1 was on the plaintiffs, onus to Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 21 prove issue no. 5 was on the defendant and onus to prove issue no. 6 was on both the parties.
31. In its reply to para nos. 4 & 5 of the plaint, the defendant, in its written statement, has not specifically denied the said lease deed executed between the parties and the terms thereof, qua the suit property, and has merely sought leave to refer to and rely upon the same for its true meaning and interpretation as and when required. However, Ld Counsel for the defendant has claimed that plaintiffs are relying on an unregistered and unstamped lease deed dated 14.04.2015 Ex. PW-1/4 and it is claimed that the present suit is not a commercial suit since the lease of the suit property which was for 9 years, required mandatory registration as per the provisions of Section 17 of the Registration Act, 1908 and the same being un-registered lease deed, is not admissible in evidence as per section 49 of the Registration Act, 1908 and therefore the plaintiffs cannot file a suit on the basis of said unregistered lease deed. It is also claimed by Ld Counsel for the defendant that notice under section 106 of the Transfer of Property Act, the lease deed being unregistered deed, the tenancy should have been treated as a month-to-month tenancy and accordingly the present suit does not fall under definition of a Commercial dispute as defined under section 2 (1)(C) of the Commercial Court Act, 2015 and therefore this court has no jurisdiction to entertain the present suit.Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 22
32. In support of his said contentions, Ld counsel for the defendant has relied upon following judgments, relevant paragraphs of which are reproduced as under:-
33. In case titled as "Deepak Polymers Private Limited Vs. Anchor Investments Private Limited", C.O. No. 759 of 2021 (DOD: 24.06.2021), the Hon'ble High Court of Calcutta has held as under:
"33. However, the dispute itself, in the present case, arises out of refusal by the defendants to comply with the notices issued by the lessor under Section 106 of the Transfer of Property Act, 1882, which is based on a statutory right independent and irrespective of any clause of the lease agreements"
"34. Hence, the suits squarely arise out of a statutory right conferred by section 106 of the Transfer of Property Act, having no direct nexus with the lease agreements in respect of the immovable properties concerned. Thus, the pre-
condition of the applicability of Section 2(1)(c)(vii), that is, the emanation of the dispute out of the lease agreement, is not satisfied in the present suits. Thus, the secondary question as to whether the immovable properties are used exclusively in trade or commerce, pales into insignificance"
34. Similarly, in K.B. Saha & Sons Pvt. Ltd. Vs. Development Consultant Ltd. (2008) 8 SCC 564, it was held that "34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that :-
1. A document required to be registered is not admissible into evidence under Section 49 of the Registration Act.
2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to Section 49 of the Registration Act.Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 23
3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immoveable property of the value of one hundred rupees and upwards.
5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.
35. In our view, the particular clause in the lease agreement in question cannot be called a collateral purpose. As noted earlier, it is the case of the appellant that the suit premises was let out only for the particular named officer of the respondent and accordingly, after the same was vacated by the said officer, the respondent was not entitled to allot it to any other employee and was therefore, liable to be evicted which, in our view, was an important term forming part of the lease agreement. Therefore, such a Clause, namely, Clause 9 of the Lease Agreement in this case, cannot be looked into even for collateral purposes to come to a conclusion that the respondent was liable to be evicted because of violation of Clause 9 of the Lease Agreement. That being the position, we are unable to hold that Clause 9 of the Lease Agreement, which is admittedly unregistered, can be looked into for the purpose of evicting the respondent from the suit premises only because the respondent was not entitled to induct any other person other than the named officer in the same."
35. Per contra, Ld Counsel for the plaintiffs has stated that as per Section 6 of the Commercial Courts Act, 2015, the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 24 Commercial Court would have the jurisdiction to try the suits relating to a commercial dispute of a specified value arising out of the entire territory of the State over which it has been vested territorial jurisdiction and the unregistered lease deed affecting the immovable property, may be received as evidence of any collateral transaction as provided by Section 49 of the Registration Act, 1908 and since the dispute in the present suit is relating to immovable property used exclusively in trade or commerce, the present suit is a commercial dispute as defined under Section 2(1)
(c) (vii) of the Commercial Courts Act, 2015.
36. Ld Counsel for the plaintiffs has also relied upon Section- 106 of Transfer of Property Act, 1882, which is relevant and is being reproduced as hereunder:
"106. "Duration of certain leases in absence of written contract or local usage."
(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice.
(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice. (3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 25 mentioned in that sub-section.
(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property)."
37. In support of his contention with respect to the present suit being a commercial dispute, Ld Counsel for the plaintiffs has relied upon the following judgments and their relevant paragraphs:
38. In the case titled as Jagmohan Behl v. State Bank of Indore (22.09.2017-DEL HC): MANU/DE/2930/2017, it was held as under:-
"11. ...The natural and grammatical meaning of clause
(vii) is that all disputes arising out of agreements relating to immoveable property when the immoveable property is exclusively used for trade and commerce would qualify as a commercial dispute. The immoveable property must be used exclusively for trade or business and it is not material whether renting of immoveable property was the trade or business activity carried on by the landlord. Use of the property as for trade and business is determinative.
Properties which are not exclusively used for trade or commerce would be excluded.
12. The explanation stipulates that a commercial dispute shall not cease to be a commercial dispute merely because it involves recovery of immoveable property, or is for realisation of money out of immoveable property given as security or involves any other relief pertaining to immoveable property, and would be a commercial dispute Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 26 as defined in sub-clause (vii) to clause (c). The expression "shall not cease", it could be asserted, has been used so as to not unnecessarily expand the ambit and scope of sub- clause (vii) to clause (c), albeit it is a clarificatory in nature. The expression seeks to clarify that the immoveable property should be exclusively used in trade or commerce, and when the said condition is satisfied, disputes arising out of agreements relating to immoveable property involving action for recovery of immoveable property, realization of money out of immoveable property given as security or any other relief pertaining to immoveable property would be a commercial dispute. The expression "any other relief pertaining to immoveable property" is significant and wide. The contours are broad and should not be made otiose while reading the explanation and sub- clause (vii) to clause (c) which defines the expression "commercial dispute". Any other interpretation would make the expression "any other relief pertaining to immoveable property" exclusively used in trade or commerce as nugatory and redundant.
13. Harmonious reading of the explanation with sub-clause
(vii) to clause (c) would include all disputes arising out of agreements relating to immoveable property when used exclusively for trade and commerce, be it an action for recovery of immoveable property or realization of money given in the form of security or any other relief pertaining to immoveable property. ...
18. Lease of immoveable property is dealt with under the Transfer of Property Act in Chapter V thereof. The said enactment vide section 105 defines what is lease, lessor, lessee and rent and vide section 107 stipulates how leases are made and can be terminated. Leases can be both oral or in writing. Noticeably, sub-clause (vii) to clause (c) in Section 2 of the Act does not qualify the word "agreements" as referring to only written agreements. It would include Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 27 oral agreements as well. The provisions of the Transfer of Property Act deal with the effect of non-payment of rent, effect of holding over and most importantly the determination of the leases or their termination. It cannot be disputed that action for recovery of immoveable property would be covered under sub-clause (vii) to clause (c) when the immoveable property is exclusively used in trade or commerce. Read in this manner, we do not think that claim for recovery of rent or mesne profit, security deposit etc., relating to immoveable property which was used exclusively in trade or commerce should not be treated as a commercial dispute in view of the language, ambit and scope of sub-clause (vii) to clause (c) to Section 2 of the Act. These would qualify and have to be regarded as commercial disputes. The use of expression "any other relief pertaining to immoveable property" would mean disputes relating to breach of agreement and damages payable on account of breach of agreement would be covered under sub-clause (vii) to clause (c) to Section 2 of the Act when it is arising out of agreement relating to immoveable property exclusively used in trade and commerce."
39. In the case titled as Ambala Sarabhai Enterprises Ltd. vs. K.S. Infra space LLP and Ors. (04.10.2019 - SC):
MANU/SC/1378/2019, it was held as under:
"10. ...In that view, we would refer to the decision of a Division Bench in the case of Jagmohan Behl v. State Bank of Indore, MANU/DE/2930/2017 relied on by the learned senior advocate for the Appellant. In that regard, it is noticed that in the said case on taking note of the provision contained in Clause 2(1)(c)(vii) of the CC Act, 2015 it is held that the dispute involved therein would constitute a Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 28 commercial dispute and the expression "arising out of" and "in relation to immovable property" should not be given the narrow and restricted meaning and the expression would include all matters relating agreements in connection with the immovable properties. The said conclusion reached was in a circumstance where the immovable property in question was undoubtedly being used for a trade or commerce and it was held so when the claim in the suit is for recovery of rent or mesne profit, security deposit etc. for the use of such immovable property...
12. Though we are informed that the said decision is assailed before this Court in a Special Leave Petition we are inclined to agree with the view expressed therein. This is for the reason that this Court while examining the issue relating to exclusive land use, though in the different context has laid emphasis on the present user of the land either for agriculture or non-agriculture purpose being relevant. In that regard, the decision relied on by the learned senior advocate for the Respondent in the case of Federation of A.P. Chambers of Commerce & Industry and Ors. v. State of A.P. and Ors., MANU/SC/3075/2000: (2000) 6 SCC 550 is noticed, wherein it is observed as under:
"6. Section 3 of the said Act speaks of "land is used for any industrial purpose", "land is used for any commercial purpose" and "land is used for any other non-agricultural purpose". The emphasis is on the word "is used". For the purpose of levy of assessment on non-agricultural lands at the rate specified in the Schedule for land used for industrial purposes, therefore, there has to be a finding as a fact that the land is in fact in praesenti in use for an industrial purpose. The same would apply to a commercial purpose or any other non-agricultural purpose."
37. A dispute relating to immovable property per se may not be a commercial dispute. But it becomes a commercial Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 29 dispute, if it falls under Sub-clause (vii) of Section 2(1)(c) of the Act viz. "the agreements relating to immovable property used exclusively in trade or commerce". The words "used exclusively in trade or commerce" are to be interpreted purposefully. The word "used" denotes "actually used" and it cannot be either "ready for use" or "likely to be used" or "to be used". It should be "actually used". Such a wide interpretation would defeat the objects of the Act and the fast tracking procedure discussed above."
40. In the case titled as K.B. Consortium vs. Zenith Timber Products Pvt. Ltd. and Ors. (07.10.2021 - CAL HC):
MANU/WB/0711/2021, it was held as under:
"17. The Hon'ble Supreme Court of India in Ambalal Sarabhai (supra) held that the dispute relating to immovable property per se may not be a commercial dispute but it becomes a commercial dispute if it falls under Sub-clause (vii) of Section (2)(1)(c) of the 2015 Act. It was further held therein that the words "used exclusively in trade or commerce" are to be interpreted purposefully. The word "used" denotes "actually used" and it cannot be either "ready for use" or "likely to be used" or "to be used". It should be "actually used".
18. In the instant case, the plaintiff took the property for using the same for sawmill. It appears from a plain reading of the plaint that the property is actually used exclusively in trade or commerce. Thus, the dispute involved in the instant suit is a commercial dispute.
19. The co-ordinate bench in Deepak Polymer(supra) while dealing with a suit for recovery of possession of immovable property under Section 106 of the Transfer of Property Act held that the dispute involved in such suit is not a commercial dispute as the cause of action therein arose by Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 30 virtue of the rights conferred under Section 106."
41. Ld Counsel for the plaintiffs has further submitted that even if a document is a unregistered lease deed, the same can be looked into for collateral purposes for defining the usage of the property. In support thereof, Ld Counsel for the plaintiffs has relied upon following judgments:
42. In the case of Hari Lal v. Amrik Singh:
MANU/UP/0073/1978, it is held as under:
"14..... Antecedent title, nature & character of possession, an admission or an acknowledgement, relationship of parties & their state of mind may be some instances of collateral purpose for which a document requiring registration may be looked into even though it is unregistered."
43. J.N. Banerjee vs. Sohan Lal Bhargava (24.12.1970 - DELHC): MANU/DE/0053/1971 "10. In this case, the lease deed is not admissible in evidence to prove that lease or for showing the creation, declaration, assignment, limiting or the extinguishing of a right to immovable property; but it provides good evidence to prove the nature of the respondent-tenant's possession, that he is in possession of the premises in dispute for purposes of having his residence and carrying on his profession there. Clause 8 of the said deed, therefore, can be looked into for this purpose, which is only a collateral purpose.
Clause 8 of which reads as follows:-
"That the said premises shall be used for residential and Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 31 clinic purpose and the tenant in no way will sublet, assign or part with possession of the same or a part thereof"."
44. In the case titled as Rai Chand Jain vs. Chandra Kanta Khosla (15.11.1990 - SC): MANU/SC/0185/1991, it was held as under:-
"11...the lease deed Ex. P1 dated 19th May, 1978 executed both by the appellant and the respondent i.e. the landlady and the tenant, Rai Chand Jain, though unregistered can be considered for collateral purposes and as such the findings of the Appellate Authority to the effect that the said deed cannot be used for collateral purposes namely to show that the purpose was to lease out the demised premises for residential purposes of the tenant only is not at all legally correct. It is well settled that unregistered lease executed by both the parties can be looked into for collateral purposes. In the instant case the purpose of the lease is evident from the deed itself which is as follows: "The lessor hereby demises House No. 382, Sector 30-A, Chandigarh, to lessee for residential purposes only". This clearly evinces that the property in question was let out the tenant for his residence only."
The Hon'ble Supreme Court observed that lease deed executed though not registered, can be considered for "collateral purposes".
45. In the case titled as Dhanti Devi vs. Firm Goyal Iron Trading Company and Ors. (15.01.1993 - PHHC) :
MANU/PH/0240/1993, it was held as under:
"3. ... The Supreme Court in Rai Chand Jain v. Ms. Chandra Kanta Khoslas 1991 (1) R.C.R. 128, has held that unregistered lease-deed executed by both the parties can be looked into for collateral purposes. In the case before the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 32 Supreme Court, what was sought to be proved by the unregistered lease-deed was the purpose for which the premises were let out. This was held to be collateral purpose. In this case, the petitioner wants to show from the unregistered lease-deed the nature and condition of the building as well as the purpose for which it was let out. These are collateral purposes and therefore, the document can be looked into for these purposes."
46. In the case titled as Ram Mohan & Co v. Ganesar Ginning Co. Ltd. 1999: MANU/TN/0182/199, it was held as under:
"20. A single Judge of the Delhi High Court has also taken the same view holding that the purpose of the lease is a collateral one and the unregistered document can be looked into for ascertaining the said purpose vide judgment reported in S.K. Gupta v. R.C. Jain .
21. Therefore, in my opinion Exs.P-22 and P-23 can be relied upon to ascertain the purpose and nature of the lease and a reading of the same discloses undoubtedly a composite lease."
47. Thus, the plaintiffs have claimed that even as per section 49 of the Registration Act, even though the said lease deed is a unregistered document, this court can still look into the said lease deed for the purpose of determining its usage i.e. collateral purpose. Further defendant himself has admitted the existence, correctness of contents and execution of the said unregistered lease deed Ex. PW-1/4 in his affidavit of admission / denial at Sr No. 1 filed on 17-02-2021.
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 3348. Thus, in view of the aforesaid submissions made by the Ld counsel for the plaintiffs and also in view of the judgments relied upon by him, it is clear that the lease deed Ex. PW-1/4 executed between the parties, though unregistered can be looked into for collateral purposes and on doing so, it is clear that the purpose of the said lease deed of immovable property i.e. suit property was exclusively for trade or commerce. Even otherwise, it is admitted case of the defendant that 'Vishal Mega Mart' was being run from the said premises, which admittedly used to sell various goods to the public at large. Thus this is a commercial dispute as per section 2 (1) (c) (vii) of the Commercial Court Act, 2015.
49. Yet another objection taken by Ld counsel for the defendant is that the purported lease deed was an unstamped document and therefore the same cannot be taken into consideration for deciding the present suit. In support of his contentions, Ld Counsel for the defendant has relied upon the follwing paragraphs of the case titled as Kusum Entreprises vs Vimal Kochhar 2013 SCC OnLine Del 5127, which are reproduced as under:-
"15. I am unable to sustain the finding of the learned ADJ of the total rent agreed between the parties being Rs.60,000/- per month instead of Rs.40,000/- per month as stipulated in the two registered lease deeds for the following reasons:
(a) the unregistered lease deed is admittedly for the same premises for which the two registered lease deeds have been executed;Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 34
(b) neither of the three lease deeds bears the date of execution thereof; however the two registered lease deeds were registered on 28.08.2006 and the unregistered lease deed bears the stamp dated 01.09.2006 of the Notary Public; the date of execution of the registered lease deeds is thus taken as 28.08.2006 and of the unregistered lease deed as 01.09.2006;
(c) Section 91 of the Indian Evidence Act, 1872 provides that where the terms of a contract have been reduced in the form of a document and where the matter is required by law to be reduced in the form of a document, no evidence shall be given in proof of the terms of such contract except the document itself; Section 92 of the Evidence Act provides that where the terms of the contract required by law to be reduced in the form of a document have been proved according to Section 91, no evidence of any oral agreement between the parties for the purpose of contradicting, varying, adding to, or subtracting from its terms shall be admitted; though there are exceptions to both the said provisions but the same have not been invoked by the respondents / plaintiffs or their counsel and the case is not found to be falling in any of the exceptions;
(d) it is also the settled position in law (See Chandrakant Shankarrao Machale Vs. Parubai Bhairu Mohite (2008) 6 SCC 745 and S.Saktivel Vs. M.Venugopal Pillai (2000) 7 SCC 104) that the terms of a registered document can be varied / altered by a registered document only; in Raval & Co. Vs. K.G. Ramachandran (1974) 1 SCC 424 it was specifically held that any variation of rent reserved by a registered lease deed must be made by another registered instrument;
(e) the learned ADJ has failed to notice the said binding provisions of law and the finding returned by the learned ADJ is contrary thereto;
(f) a lease of immovable property for any term exceeding Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 35 one year, as the instant leases were, as per Section 107 of the Transfer of Property Act, 1882 could be made only by a registered instrument; the finding / observation of the learned ADJ of there being no bar to make a lease orally is also contrary to law;
(g) the leases for the period of two years were thus required in law to be reduced to the form of a document and were so reduced and the only evidence of the terms could be that document only and not other;
(h) the plea and evidence of the respondents / plaintiffs of the total rent agreed for area of 3800 sq. fts. being not Rs.40,000/- per month as mentioned in the said lease deeds but being Rs.60,000/- amounted to contradicting or varying the registered lease deeds;
(i) even though the unregistered lease deed is recorded in the impugned judgment to have been impounded and the deficient stamp duty penalty having been paid thereon, but the same will still not cure the defect of non registration;
(j) Section 49 of the Registration Act, 1908 prohibits a document required to be registered from being received as evidence of any transaction affecting such property unless it has been registered.
The unregistered lease deed, even if had been cured from the defect of deficiency of stamp duty thus could not have been received in evidence; the rent in a lease deed cannot be a collateral transaction; reference if any required in this regard can be made to K.B. Saha & Sons Pvt. Ltd. Vs. Development Consultant Ltd. (2008) 8 SCC 564;
(k) I am surprised that the learned ADJ has glossed over the aforesaid mandatory provisions of law; and,
(l) there could be no estoppel against law; the Supreme Court in Raghunath Rai Bareja Vs. Punjab National Bank (2007) 2 SCC 230 has held that equity cannot defeat the law;
(m) even otherwise, the plea of the respondents / plaintiffs Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 36 amounts to the respondents / plaintiffs having indulged in violation of laws, obviously for the purpose of saving of stamp duty and income tax and have no equity in their favour and are rather barred from any relief on the said ground on the principle of pari delicto.
16. I am also of the view that the reasoning of the learned ADJ of the respondents / plaintiffs being entitled to mesne profits / damages for use and occupation with effect from 01.07.2008 and till the date of delivery of possession at the rate of Rs.6,000/- per day, on the basis of a clause to the said effect in the lease deeds is erroneous. The said finding again overlooks the consistent stream of judgments from Fateh Chand Vs. Balkishan Dass AIR 1963 SC 1405 till the dicta of the Division Bench of this Court in Vishal Engineers & Builders Vs. Indian Oil Corporation MANU/DE/6829/2011 holding that Section 74 of the Contract Act merely provides the maximum compensation which could be given for breach of contract and without any evidence of loss, merely because of a penalty clause, such penalty cannot be awarded."
50. Per contra, Ld Counsel for the plaintiffs has stated that the defendant did not take any such objection at the time when the said document was being exhibited and has also relied upon judgment in case of SNG Developers Limited versus Vardhman Buildtech Private Limited, reported as, 294 (2022) DLT764 wherein it was held ".....if the party has consented to the document being marked as an exhibit, it cannot then object to it on the ground of it being under-stamped. It was held that once the document has been marked as an exhibit and is being used for the purpose of examination and cross-examination, Section 36 of the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 37 Indian Stamp Act, 1899 comes into play".
51. It is submitted by Ld Counsel for the plaintiffs that as per Section 36 of The Indian Stamp Act, 1899, an instrument once admitted in evidence, such admission cannot be called in question at any stage of same suit or proceedings on the ground that the instrument has not been duly stamped and the defendant is precluded from taking the said plea at this final stage and the judgment in the cases K.B. Saha & Sons Pvt. Ltd. Vs. Development Consultant Ltd. (2008) 8 SCC 564, cited by Ld Counsel for the defendant is not applicable in the facts of the circumstances of the present case. I find force in the said arguments of the Ld Counsel for the plaintiffs in view of the judgments relied upon by him.
52. The said lease deed Ex. PW-1/4 dated 14-04-2015 and its contents are deemed to be admitted by the defendant. Even otherwise, PW-1 has deposed on the lines of plaint, and has exhibited the said lease deed dated 14-04-2015 executed between the parties as Ex. PW-1/4. No denial suggestion qua the said lease deed was given to PW-1 in his cross-examination by the defendant. Thus, the said lease deed Ex. PW-1/4, proves that it was executed for a period of nine years, commencing from 14-05- 2015 till 13-05-2024, and the rental agreed between the parties for the suit property was @ Rs. 50/- per square feet, i.e. Rs. 4,50,000/- per month, and the same was to be increased @ 15% Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 38 from the last payable rent after every three years in the following manner:
(i) 14.05.2015 to 13.05.2018 rent payable was Rs.4,50,000/-
(ii) 14.05.2018 to 13.05.2021 rent payable was Rs.5,17,500/-
(iii) 14.05.2021 to 13.05.2024 rent payable was Rs.5,95,125/-
53. Furthermore, the defendant has not specifically denied the contents of said para 5 of the plaint in the written statement, which is deemed to be admitted. Further, it is the admitted case of the parties that at the insistence of the defendant, the plaintiffs had agreed to reduce the amount of rent payable vide the said lease deed, on two different occasions, subject to the timely payment of the rentals in the following manner:
i. Rent for the First Floor and Second Floor was reduced from Rs.4,50,000/- to Rs.4,16,000/- for a period starting from 01.01.2016 to 31.05.2016.
ii. Rent for the First Floor and Second Floor was again reduced from Rs.4,50,000/- to Rs.3,98,112/- for a period starting from 01.06.2016 to 31.12.2017.
54. The defendant vide its letter dated 06.04.2020 (Ex. PW- 1/6), its email dated 11.05.2020 (Ex. PW-1/7), its letter dated 18.05.2020 (Ex.PW-1/8), and its email dated 05.06.2020 (Ex PW- 1/9), has claimed that the terms of the aforesaid lease deed were modified, with rental becoming a percentage of the revenue share on net sales, by virtue of the Covid-19 pandemic. However, there is no written agreement or admission of plaintiffs qua the same.
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 39The plaintiffs' claim is that the said changes mentioned therein were made by the defendant unilaterally. Admittedly, the Covid-19 pandemic was not specifically covered under the Force Majeure clause [Clause No. 16] in the said lease deed (Ex. PW-1/4). Once it was not specifically covered, the defendant cannot take benefit of the same, or of the assertion that it was difficult for him to perform the contract, in view of the lockdown due to the Covid-19 pandemic, and the defendant cannot be allowed to escape its liability towards making regular payments of rent, in terms of the said contract. Admittedly, there was no clause providing such kind of waiver or suspension of rent in the aforesaid lease deed, in the absence of which the defendant cannot claim the same. Thus, the defendant possessed no right to unilaterally reduce the rent of the suit property to a mere percentage of the revenue share on net sales, without the consent of or any further agreement with the plaintiffs.
55. Merely since the business of the defendant was affected due to Covid-19 Pandemic, which purportedly caused a reduction in the sales/revenue from its business, the unilateral reduction in the rental by the defendant (vide aforesaid letters/emails), thus changing the rent to be percentage of actual revenue (net sales, net of GST), is not legally permissible, specifically when the said proposals for the reduction of rent were specifically denied by the plaintiffs vide their letter dated 27-04-2020 (Ex. PW-1/10). This Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 40 arbitrary act of remitting the reduced rental to the bank account of the plaintiffs by the defendant, on its own whims and fancies, does not absolve the defendant from its liability to pay the agreed rental, in terms of the lease deed. The plaintiffs have specifically claimed that the rentals remitted by the defendant, vide its emails dated 11-05-2020 (Ex PW-1/7) and letter dated 18.05.2020 (Ex PW-1/8), were arbitrary. The said communications also claimed that the defendant would deduct the excess rent paid for the last week of March, 2022 from the month of June 2020. The plaintiffs vide their emails dated 11.05.2020 (Ex PW-1/11) and 04.06.2020 (Ex. PW-1/12), denied all the contentions made by the defendant in the aforesaid emails, and sought the payment of the outstanding rent amount, along with delayed interest. The plaintiffs have also claimed that this deduction of rent was arbitrary, and without any cogent basis, since the store of the defendant was fully operational, and there were no restrictions by the Government on such operation. In his cross-examination dated 06-03-2024, DW-1 had admitted that the defendant had not placed on record any document/agreement executed between the parties whereby the monthly rent was to be paid by the defendant on a revenue sharing basis. He had further admitted that the defendant had not placed on record the minutes of meeting dated 26.06.2020, whereby parties had allegedly agreed for rent to be paid on a revenue sharing basis. In the absence of the same, and in view of the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 41 specific denial of the said facts by the plaintiffs, it is held that the plaintiffs had never agreed for the reduction of rent and had not accepted that rent be paid on a revenue sharing basis, vide any oral agreement dated 26-06-2020, between the parties. In any case, the terms of the lease deed dated 14-04-2015 (Ex. PW-1/4) qua the rental amount, could have been varied/modified only on the basis of another written agreement between the parties, which was admittedly not executed, and thus the plea of the defendant qua such an oral agreement between the parties, with respect to rental being determined on a revenue sharing basis, is rejected.
56. The plaintiffs have specifically claimed that during the Covid-19 lockdown from the last week of March till first week of May, 2020, the defendant was operating the said store, there was no restriction by the Government on such operation, and the defendant was delivering its goods to the customers via home delivery. In his cross-examination dated 14-09-2023, the defendant's witness, DW-1, has also admitted that the suit property was open for the sale of essential commodities during the lockdown period.
57. In this regard, the Ld Counsel for the plaintiffs has placed reliance upon the the judgement of the Hon'ble High Court of Delhi, in the case of Ramanand and Others Vs. Dr. Girish Soni (2022 SCC Online Del 2007), which clarifies that section 56 of the Indian Contract Act, 1872 is not applicable to a lease Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 42 agreement and other similarly situated contracts, which are "executed contracts" and not "executory contracts".
58. I also find force in the argument of the Ld Counsel for the plaintiffs, wherein he relies upon another judgement of the Hon'ble High Court of Delhi, in the case of Halliburton Offshore Services Inc Vs. Vedanta Limited and Ors.
(MANU/DE/1130/2020), to assert that the Force Majeure clause has to be interpreted narrowly and not broadly, parties ought to be compelled to adhere to the contractual terms and conditions, and that excusing any non-performance would be allowed only in exceptional situations. In furtherance of the same, he avers that the said judgement states that the burden of the non-performance cannot be justified merely on the ground of force majeure, and clarifies that it is not in the domain of the Courts to absolve parties from performing their part of the contract, and it is not its duty to provide shelter for the justification non-performance.
59. While relying upon yet another judgement of the Hon'ble High court of Delhi in the case of Siddhartha Singh Vs. Ajit Singh Bawa (2022 SCC Online Del 2007), which held that the law is well settled on the principle the temporary non-use of premises during the lockdown period cannot be construed as rendering either the stipulated term of the lease deed void, or giving any benefit to the tenant i.e. appellant to claim the suspension of rent on the ground of mere non-use thereof, the Ld Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 43 Counsel for the plaintiffs argued that the defendant in the present case was not entirely stopped from carrying on its business from the suit property, and essential commodities were supplied by the defendant during such a lockdown period. There is substance in the said argument.
60. Furthermore, even if merely for argument's sake, it is assumed that the defendant had serious issues in running its business from the suit property, it still had the option to terminate the said lease deed and to vacate the suit property, which is clearly not the case herein. By not doing so, the defendant cannot expect the ground of the Covid 19 induced lockdown (as cited by him) claimed, to be held sufficient for its unilateral reduction of rentals.
61. The defendant has also claimed that the suit of the plaintiffs is not maintainable, as the plaintiffs failed to comply with section 12A of the Commercial Courts Act, 2015, as no pre-litigation mediation was carried out. However, the plaintiffs had moved an application under Order XXXIX, Rules 1 & 2 of the CPC, 1908, seeking urgent relief for injunction, and whether the injunction was initially allowed or not, the plaintiffs were well within their right not to resort to pre-litigation mediation (as per the mandate section 12A of Commercial Courts Act, 2015) and hence this plea of the defendant is rejected.
62. In their pleadings, the plaintiffs have claimed that the security deposit of Rs. 13,50,000/- lying with them would be Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 44 adjusted from the final recoverable amount, to be awarded by this court, in favour of the plaintiffs and against the defendant.
63. The Ld Counsel for the defendant argued that after the vacation of the suit property by the defendant on 04-12-2021, it was entitled to the refund of the security amount of Rs. 13,50,000/-. Per contra, the Ld counsel for the plaintiffs has stated that since the defendant had not paid the rentals due for the months of April, May, June and July, 2020, therefore the plaintiffs were entitled to adjust the said security deposit against such due rentals; the refund of such an amount to the tenant, especially in case of non-payment of due rentals or default committed by the paying party, would defeat the purpose behind the deposit of such a security amount at the time of the inception of any lease deed. I find force in the said argument made by Ld Counsel for the plaintiffs. The term "security amount" by itself entitles the landlord entitled to adjust such an amount towards the rentals due, in case of non-payment or defaults committed by the tenant.
64. Thus, from the material on record and in view of the testimony of PW-1, it is clear that the rental for the months of April, 2020 to 15-07-2020 @ Rs. 5,17,500/- per month, totalling to Rs.18,11,250/-, was not paid by the defendant, and the claim of the defendant that it was liable to pay only the reduced rent on a revenue sharing basis, has no basis. Hence, the plaintiffs are entitled to total arrears of rent of Rs. 18,11,250/- from the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 45 defendant qua the suit property.
65. Plaintiffs have also claimed interest @ 18% per annum on the arrears of rentals.
66. As regards the interest to be awarded to the plaintiffs on the due amount, in the case of Cimmco Limited Versus Pramod Krishna Agrawal (2019 SCC OnLine Del 7289), the Hon'ble High Court of Delhi held as follows;
"3..........Hon'ble Supreme Court has now mandated that lower rates of interest be granted and therefore the pre-suit and also the pendente lite and future interest is liable to be reduced by this Court. Reliance is placed upon the judgments in the cases of Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority, (2005) 6 SCC 678, McDermott International Inc.v Burn Standard Co. Ltd.,(2006) 11 SCC 181,Rajasthan State Road Transport Corporation v. Indag Rubber Ltd.,(2006) 7 SCC 700, Krishna Bhagya Jala Nigam Ltd v. G. Harischandra, (2007) 2 SCC 720 & State of Rajasthan v. Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC)..."
67. In the given facts and circumstances, and keeping in view the prevalent rate of interest, the plaintiffs are entitled to simple interest @ 9% per annum on the outstanding rentals.
68. In the absence of any evidence, including any duly proved document, to corroborate the claim of the plaintiffs with regard to the claim of electricity and water consumption charges, no order is being passed in this regard, awarding any such amount in favour of the plaintiffs.
69. Accordingly, issue nos. 1 & 6 are decided in favour of the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 46 plaintiffs and against the defendant, and the plaintiffs are entitled to the recovery of arrears of rent of Rs. 18,11,250/-, along with interest @ 9% per annum, from the date of filing of the suit till realisation of the amount from the defendant. Issue no. 5 is accordingly decided against the defendant and in favour of the plaintiffs.
ISSUE NO. 2"2. Whether the plaintiffs are entitled for damages / mesne profits @ Rs. 5,93,396/- PM from the filing of the suit till 04.12.2021 alongwith interest from the defendant? OPD"
70. The onus to prove this issue was on the plaintiffs.
71. Ld Counsel for the defendant has claimed that plaintiffs themselves admitted in their plaint as well as evidence that the rent was reduced on two occasions and last reduction was on the basis of oral understanding and therefore plaintiffs cannot claim mesne profit @ Rs. 5,93,396/- per month (excluding GST) with effect from filing of the suit till 04.12.2021. Ld Counsel for the defendant also stated that plaintiffs has also failed to prove on record that similar property in same locality was fetching rent of Rs. 5,93,396/- per month during the said period and plaintif suffered loss due to the same. Ld Counsel referred to section Section 73 of the Indian Contract Act vide which compensation for breach of contract can only be claimed upon damage or loss caused to by such breach of contract by the other side.
72. In support of his contentions, Ld Counsel for the defendant Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 47 has relied upon judgement in the case of M/s Kusum Enterprises & Ors versus Vimal Kochhar & Anr, 2013 SCC, OnLine Del 5127.
73. Per contra, Ld Counsel for the plaintiffs has stated that the judgment relied upon by the defendnat does not help the case of the defendant as in the cited case, the tenant had denied and not admitted the unregistered lease deed executed but in the present case, the unregistered lease deed dated 14-05-2015 Ex. PW-1/4 has been admitted by the defendant and also being relied upon. I find force in the said argument made by Ld Counsel for the plaintiffs.
74. PW-1 has proved the legal notice dated 16-06-2020 (Ex. PW-1/14), vide which the plaintiffs terminated the lease deed in terms of Article 10 (ii) of the lease deed, as per which defendant was under an obligation to pay the rental due for three months or more, within one month of the said notice. I do not find any force in the arguments of Ld counsel for the defendant relying upon section 106 of the Transfer of Property Act that since it was an unregistered lease deed, therefore it was month to month tenancy and hence legal notice of only 15 days period was required to be served upon the defendant and since in this case legal notice period of one month has been claimed by the plaintiffs, therefore the said legal notice was defective and cannot be relied upon. However, in my considered opinion, vide said provision, it was Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 48 obligatory for the plaintiffs to give notice of minimum 15 days from the date of receipt of notice and if the plaintiffs have given legal notice for a period greater than 15 days i.e. one month in this case, no benefit can accure to the defendant on that technical ground as statutory requirement stood duly complied. Furthermore, the defendant vide its email dated 4-07-2020 (Ex. PW-1/16), once again sought a concession qua rent and withdrawal of the said legal notice (thereby admitting the receipt of said legal notice), however, the plaintiffs vide their email dated 04-07-2020, once again refused the said request of defendant, and reiterated the contents of the said legal notice. Thus, the tenancy of the defendant stood terminated w.e.f. 15-07-2020. In spite of such termination of tenancy, the defendant did not hand over the vacant physical possession of the suit property to the plaintiffs, which was handed over to them only on 04-12-2021 in court, and hence the plaintiffs are entitled to mesne profits/damages on the suit property w.e.f. 15-07-2020 to 04-12-2021. The Ld Counsel for the plaintiffs has claimed that the reduction in the monthly rental was mutually agreed between the parties subject to timely payment of the rental by the defendant in terms of Ex. PW-1/12 but since defendant failed to pay monthly rental in time, therefore the defendant was liable to pay full monthly rentals as stipulated in the lease deed. I find force in the said arguments of Ld Counsel for the plaintiffs, as the said condition is specifically mentioned in Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 49 the email of the plaintiffs addressed to defendants, dated 04-06- 2020 (PW-1/12, at page nos. 83 & 84 of the paper book filed by the plaintiffs), which document was not specifically denied by the defendant and hence deemed to be admitted.
75. Hence, in view of the aforesaid discussion and also in view of the finding to issue no. 1, I am of the considered opinion that the defendant is liable to pay damages / mesne profits w.e.f. 16- 07-2020 to 13-05-2021 @ Rs. 5,17,500/- per month totalling to Rs. 51,23,250/- and w.e.f. 14-05-2021 to 04-12-2021 @ Rs. 5,95,125/- totalling to Rs. 39,67,500/-, exclusive of GST, which were the original agreed rates of rent as per lease deed (Ex. PW-1/4), total of which comes to Rs. 90,90,750/- along with interest @ 9% per annum from respective due dates of payment of rent till their realizataion. Accordingly, this issue is also decided in favour of the plaintiffs and against the defendant.
76. During the course of the arguments, the Ld Counsel for the plaintiffs had claimed that since the full payment toward the rentals due were not received by the plaintiffs, the plaintiffs had not deposited the requisite GST amount with the concerned GST authority, and the same would be deposited by them as and when they receive the full rent of the suit property, along with the GST, as was agreed between the parties.
77. Perusal of the documents at running page nos. 109 and 117 of the paper book filed by the plaintiffs, which are the emails Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 50 dated 4-07-2020 and 08-08-2020 sent by defendant to plaintiffs (Ex. PW-1/15 and Ex. PW-1/17) respectively, also reflect the GST @ 18% on the rentals being paid by the defendant to different plaintiffs. Both these documents have been proved and exhibited by PW-1 in his examination-in-chief and not disputed by the defendant during the tendering of the examination-in-chief of PW- 1, as well as during his cross-examination. Furthermore, the above two documents are the defendant's own documents. Accordingly, I find force in the said arguments of Ld counsel for the plaintiffs that plaintiffs would have to deposit the GST if they receive the arrears of rental and mesne profit/damages of the suit property. If the plaintiffs default in paying the necessary taxes on the rentals received by them, they will face the requisite consequences.
78. Accordingly, the defendant is also directed to pay GST @18% on the arrears of rent, damages / mesne profits to the plaintiffs and the plaintiffs are directed to deposit the same with GST authorities as and when the said amounts are received.
79. Accordingly, issue no. 2 is decided in favour of the plaintiffs and against the defendant.
ISSUE NO. 3"3. Whether the suit is not maintainable as alleged? OPD"
80. The onus to prove this issue was on the defendant.
81. The Ld Counsel for the defendant had submtited that PW-1 was not competent to depose as the power of attorney dated 02- Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 51 09-2020 Ex. PW-1/1 executed by the plaintiffs in his favour, was not proper and hence the suit of the plaintiffs is not maintainable. The Ld. Counsel for the defendant had argued that Ex PW-1/1 does not show the physical presence of PW 1 when it was allegedly executed by the plaintiffs in favour of PW-1 before the Notary Public on 02-09-2020, the date of execution of the said document is mentioned as 02.08.2020 and the date of notarization is mentioned as 02.09.2020 and therefore Ex PW-1/1 cannot be relied upon and looked into. In this context, Ld Counsel for the defendant has relied upon a judgement of Hon'ble Delhi High Court in case titled as Birla Dlw Ltd. v. Prem Engineering works (77 1999 DLT 171) wherein it was held as under:
8. We have perused the Power of Attorney on record as well as the evidence recorded in support thereof. The original Power of Attorney is stated to be executed by Shri M.D. Poddar in the presence of one Shri G.K. Sureka. It is based on a Resolution of the Board of Directors dated 14.7.1981. Appellant has neither produced on record the Resolution of the Board of Directors which authorised Shri M.D. Poddar to execute the Power of Attorney, nor Shri M.D. Poddar or Shri G.K. Sureka appeared as witnesses to prove the execution of the said Power of Attorney.
Mr. Saraogi, on behalf of the plaintiff, in his statement, did not depose anything about either being familiar with the signatures of Shri Poddar or the said Power of Attorney having been executed by Shri Poddar in his presence. The Power of Attorney was routinely tendered in evidence and exhibited. The question that comes up for consideration is whether a presumption of its due execution and validity can be raised under Section 85 of the Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 52 Indian Evidence Act? A Division Bench of this Court had occasion to consider this aspect in Electric Construction & Equipment Co. Ltd. Vs. Jagjit Works (supra). The Division Bench observed as under :
"It is useful to note that Section 85 raises a presumption about the execution of a POA provided two conditions are satisfied. Firstly, it must be executed before a Notary Public and secondly. It must be authenticated by him . In this case, there is no authentication at all. There is no statement of facts by the Notary Public regarding the manner of execution or the persons executing the document. If reference is made to the judgments cited before us, the contrast is striking. In the case of the City Bank, the authentication made by the Notary Public in New York covers nearly two printed pages of the Report and quotes extensively the circumstances in which the General POA was executed. Similarly, in the case of the National & Grindlays Bank Ltd., the authentication shows that the seal of the Bank was impressed on the POA in the presence of the Notary and the same was the genuine seal of the Bank. Thus, it was the authentication that proved both the execution as well as the due authentication of POA and, therefore, satisfied the test laid down in Sec. 85 of the Evidence Act."
9. In Syndicate Bank Vs. M/s. S.A. Trading Corpn. & Ors. (supra), a Division Bench of this Court while dealing with the question of proof of Power of Attorney, where presumption under Section 85 of the Evidence Act could not be raised, observed as under :
In case the person who has conferred the Power of Attorney has not got it executed, so as to enable him to raise the presumption which may be raised in terms of Section 85 of the Evidence Act, then he is left with no option, but to prove the same in accordance with law. This is done by proving the resolution of the Board of Directors of the company, which gives its officers power to grant Power of Attorney to Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 53 persons the company considers worthy of it, and also prove the factual execution of the Power of Attorney by the empowered officer or officers. This proof has to be tendered in Court by proving the passing of the resolution by the company in accordance with sections 193 and 194 of the Companies Act, 1956.
10. In the instant case, the Power of Attorney, admittedly, was not executed in the presence of the Notary. The Power of Attorney is stated to be dated 17.7.1981 while the notarial certificate is dated 18.7.1981. It clearly shows that the Power of Attorney was not executed before the Notary. The endorsement by the Notary, stating that he had verified the signatures to be that of Mr. M.D. Poddar, is vague. It does not disclose the basis of such verification. In these circumstances, it cannot be said that the twin requirement of execution and authentication by the Notary are met so as to draw the presumption of validity under Section 85 of the Indian Evidence Act.
82. Per contra, Ld Counsel for the plaintiffs has stated that the date of execution mentioned as 02.08.2020 in the Power of Attorney Ex PW1/1, is a typographical inadvertent error and also that the Power of Attorney was notarised on 02.09.2020 and thus presumption under Section 85 of the Indian Evidence Act, 1872, gets attracted in favour of the Plaintiffs. It is also claimed that PW-1 was also not cross-examined on the aspect of signing Ex.
PW-1/1 and was only cross examined on the fact that the Power of Attorney was not executed before the Public Notary and the said date as well as date of stamp paper were different. In this context, ld Counsel for the plaintiffs has relied upon the judgment in case Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 54 titled as M/S. Madhucon Projects Ltd. vs National Highways Authority of India, 2011 SCC OnLine Del 1248, wherein it is held as follows:
"15. In view of the aforesaid clauses, we now proceed to examine the rival contentions:
The validity of Power of Attorney:
17. Thus, the typed date as given is of 12.8.2010. This is followed up by the signatures of the Managing Director of the petitioner company - above the address of the company at Hyderabad. On the left side of the document there is an acceptance by Mr. S.V. Patwardhan, Chief Executive Director of the petitioner, who has been authorized as per the Power of Attorney to submit the bid followed by the signatures and addresses of the two witnesses. Mr. S.V. Patwardhan after appending the signatures has put down the date as 19.8.2010. There is a seal of the Notary putting down the number at which it is authorized, the signatures of the Notary followed by the date stamped of 19.8.2010.
43. There is no prescribed manner of authentication by a Notary. In the present case the Notary has affixed his seal and signed it and put down the seal of attestation. This is the manner in which such notarization take place in Delhi.
The judgement cited on behalf of the respondents are not of much assistance as they only deal with the general principles set out in Section 85 of the Evidence Act or are in the given facts of the case as in Jugraj Singh & Anr. case (supra) where the very identity of the person who was supposed to be a Notary was in doubt. There was nothing to show that the person was a Notary Public in California. There is, of course, no doubt about the twin principles set out aforesaid for the purposes of drawing a presumption under Section 85 of the Evidence Act. The Advanced Law Lexicon of P. Ramanatha Aiyar referred to in this behalf Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 55 also provides that authentication is to confirm the identity of the person and further to test the authenticity of a signature. This has, in fact, been done. In our considered view, the real question is whether there is a defect in the Power of Attorney by reason of there being a typed date of 12.8.2010 while the date of acceptance and attestation by the Notary was 19.8.2010. This discrepancy is sought to be explained by the petitioner by stating that the document was typed on 12.8.2010 but was presented for attestation by Mr. N. Seethaiah on 19.8.2010. Mr. N. Seethaiah's signature does not bear a date below and the specification of the address of the company at Hyderabad can hardly draw a conclusion that it was executed at Hyderabad. The format does not prescribe the place to be mentioned where it is executed. The acceptance is on 19.8.2010. The question is - has the petitioner been able to explain this discrepancy and whether it is permissible for the petitioner to explain away this discrepancy?
44. There is no doubt about the proposition that the terms & conditions of a tender document must be strictly adhered to. However, the legal position in this behalf is enunciated in Poddar Steel Corporation Vs. Ganesh Engineering Works & Ors. (1991) 3 SCC 273. It was held that deviations from non-essential or ancillary/subsidiary requirement being a minor technical irregularity can be waived. The issue, thus, arises whether the discrepancy in the present case can be stated to be of such minor technical nature.
46. A typographical error of a date in the Power of Attorney when it is duly signed, accepted and notarized can at worst be a technical defect."
83. Further, Ld Counsel for the plaintiffs has claimed that the defendant has failed to substantiate its argument on the said point as it failed to summon the concerned notary as a witness to prove Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 56 his argument. It is also claimed that the judgement M/s Birla DLW Ltd versus M/s Prem Engineering Works, reported as 1998 SCC OnLine Del 504, relied upon by the defendant is also not applicable to the facts of the present case. I find force in the said contentions of the Ld Counsel for the plaintiffs.
84. The said SPA cannot be held to be invalid since what would be material is the date of attestation of the said SPA by the Notary Public, which is the date of 02-09-2020 as mentioned in the said document itself, and hence the date of the notarization of the said document i.e. 02-09-2020, would be treated as the date of execution of the said document. Even otherwise, it was open to the defendant to get the said notary public summoned for evidence in case of any doubt, which is not the case herein and hence no benefit can accrue to the defendant in this regard.
85. In view of the fact that PW-1 Mohan Kumar Nair, in his affidavit of evidence (Ex. PW-1/A) has proved the said power of attorney Ex. PW-1/1 in his favour, in his cross-examination dated 18-03-2023 had claimed himself to be the Power of Attorney Holder of the plaintiffs and, also claimed that he is well aware of the facts and circumstances of the case, it is held that he was competent to depose in the present suit and Ex. PW-1/1 was the proper authority executed by the plaintiffs in favour of PW-1 Mohan Kumar Nair,. Accordingly, this issue is decided against the defendant and in favour of the plaintiffs.
Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 57ISSUE NO. 4.
"4. Whether the plaintiffs have suppressed material facts? OPD"
86. The onus to prove this issue was on the defendant. However, except for bald assertion that the plaintiffs have concealed material facts, no evidence on the said point has been brought on record by the defendants. In view of this, the bald plea of defendant is unsubstantiated, does not hold water and this issue is accordingly decided against the defendant and in favour of the plaintiffs.
ISSUE NO. 7RELIEF
87. In view of my findings to above issues, following reliefs are granted in favour of the plaintiffs:
a) A decree for a sum of Rs.18,11,250/- towards arrears of rent for the months of April, 2020 to 15-07-2020 @ Rs. 5,17,500/- per month along with interest @ 9% per annum from the date of filing of the suit till its realisation, is passed in favour of the plaintiffs and against the defendant.
b) A decree of damages/mesne profits is passed in favour of plaintiffs and against the defendant for a total sum of Rs. 90,90,750/- w.e.f. 16-07-2020 to 13-05-2021 @ Rs. 5,17,500/-
per month (totalling to Rs. 51,23,250/-) and w.e.f. 14-05-2021 to 04-12-2021 @ Rs. 5,95,125/- per month (totalling to Rs. 39,67,500/-) exclusive of GST exclusive of GST, which was the original agreed rate of rent as per lease deed Ex. PW-1/4 alongwith interest @ 9% per annum from respective due date of payment of rent till its realizataion.
c) The defendant is also directed to pay GST @18% on the arrears of rent, damages / mesne profits to the plaintiffs, who shall deposit Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 58 the same with the concerned GST authority.
88. It is to be noted that defendant shall pay the total amount recoverable under the above two heads after adjusting the amounts of security deposit of Rs. 13,50,000/- and also the amount of Rs. 35,47,722/- (unilateral reduced rental paid by the defendant to the plaintiffs including TDS), admittedly paid by the defendant from April, 2020 till 03-12-2021, as reflected in Annexure A filed by the plaintiffs along with their comprehensive written arguments, and admittedly not denied by the defendant.
Costs of the suit are also awarded to the plaintiffs.
Decree sheet be prepared after deposit of deficient Court fees.
File be consigned to the record room.
Digitally signed ASHUTOSH by ASHUTOSH KUMAR KUMAR Date: 2024.10.22 16:27:40 +0530 (Announced in the open (Ashutosh Kumar) Court) District Judge (Commercial Court)-1 West, Tis Hazari Courts, Delhi 22-10-2024 Civ DJ No. 232/2020 JS Chawla & Sons HUF & Ors Vs Airplaza Retail Holdings Pvt Ltd. Page No. 59