Delhi District Court
Rajinder Rai vs Smt. Ritika Arora on 15 January, 2021
Through Video Conferencing via Cisco Webex
Link :https://delhidistrictcourts.webex.com/meet/ddc.vc.south12
CS (Comm) 202/2020
Rajinder Rai ........ plaintiff
s/o late Sh. Gulshan Rai
r/o S-53, Panchsheel Park,
New Delhi-110017
Versus
Smt. Ritika Arora ......... defendant
w/o Sh. Sachin Arora
r/o 25/1, Punjabi Bagh Extension
New Delhi-110026
Date of Institution: 30th July 2020
Arguments concluded on :14th January 2021
Date of Judgment: 15th January 2021
JUDGMENT
BACKGROUND FACTS
1. This is a suit for recovery of possession of the tenanted premises ,rent, maintenance & utility charges alonwith interest at 18% p.a.
2. In brief, the admitted facts are that the premises bearing no. C-4, First Floor, Community Center, Safdarjung Development Area, New Delhi admeasuring 1080 Sq. ft. was let out by the plaintiff-Shri Rajinder Rai for commercial use to defendant-Smt. Ritika Arora ,proprietor of M/s Salt & Straw Food Chain for running a restaurant, bar and club. Initially the premises was let out on 21.12.2015 and thereafter a registered lease deed dated 05.08.2016 was executed between the parties for seven years . Dispute having arisen between the parties primarily in connection with delay Rajender Rai vs Ritika Arora Page 1 and non-payment of rent and restoration of the premises, Plaintiff served legal notice to defendant and chose to file this suit on 30.07.2020.
3. Defendant contested the suit by filing written statement on 31.08.2020 but had not filed affidavit of admission/denial of documents alongwith written statement. Affidavit of admission/denial of documents dated 17.10.2020. was filed but it was not in accordance with Order XI amended CPC r/w Commercial Court Act. On 20.10.2020 plaintiff filed an application for amendment u/O VI Rule 17 CPC which was withdrawn. after making some arguments thereon.
4. On 20.10.2020 plaintiff filed an application for summary judgment u/O XIII A Cpc r/w Commercial Court Act , 2015 . One month time as required under order XIII-A rule 4(2) was granted to the defendant to file reply to the application . On 22.11.2020, defendant filed reply to the said application as well as another affidavit of admission/denial of documents u/OXI rule 4 CPC and also another application u/O VI rule 17 r/w section 151 CPC dated 27.10.2020 alongwith amended written statement and a counter claim for recovery of security amount of Rs. 4,11,257/- The application for amendment in written statement was allowed and counter claim was taken on record subject to cost of Rs. 5,000/- .Both the parties were directed to file bank account details in a tabular form highlighting the amount paid by or on behalf of defendant and received by plaintiff on account of rent in connection with the suit premises since the inception of tenancy till date and case was listed for final disposal and hearing on the application for summary judgment u/O XIII-A CPC .
5. There is no dispute between the parties that it is a commercial dispute and the premises in question was let out by the plaintiff to the defendant for commercial use. Alongwith the suit an application for seeking urgent interim relief was filed. Originally plaintiff had sought relief of possession and permanent injunction and recovery of outstanding rent maintenance and GST for the period between September 2019 till July 2020 inclusive of interest @18% as well as future rent till physical possession was handed over by the defendant to the plaintiff and also a decree in the sum of Rs. 1,79,076/-
Rajender Rai vs Ritika Arora Page 2 towards unpaid water and electricity charges as per the bills of BSES and Delhi Jal Board and also a decree for permanent injunction directing defendant to restore the leased premises to its original condition in favour of plaintiff against the defendant apart from legal expenses and costs incurred in relation to the suit.
6. On appearance by the defendant on 05.08.2020 , she had undertaken not to transfer the tenanted premises and create any third party's right, title or interest in the tenanted premises and also undertook to clear the due water and electricity bills by or before 30.08.2020. Defendant had handed over the keys of the premises on 29.08.2020. Thus, it is not in dispute that possession had been received by the plaintiff by or before 30.08.2020. Thus, the prayer regarding possession stood satisfied . The only question which was to be decided was regarding payment of arrears of rent and electricity and water charges. Counsel for plaintiff had not pressed relief regarding mandatory injunction and restoration of the premises.
7. On asking, counsel for parties did not dispute that the case was based on documentary evidence and the interpretation of the lease agreement as well as Government/Executive order issued during the Covid 19 Pandemic situation. After hearing counsels for both the sides , this court is satisfied that adducing of oral evidence is not necessary and summary trial judgment is appropriate in this case having regard to the factual situation and documentary evidence on record. Therefore, this Court has proceeded to hear the parties on merit and dispose of the matter by way of summary judgment.
Submission advanced by the counsel for plaintiff
8. Sh. Shiv Chopra Ld. counsel for plaintiff submits that this suit has been filed by the plaintiff, Shri Rajinder Rai against the defendant, Smt. Ritika Arora seeking recovery of possession, rent, maintenance, utility charges, interest at 18% p.a. It is submitted that the defendant does not have a tenable, reasonable or bonafide defence. It is stated that defendant has admitted facts and documents material to the plaintiff's suit in her Rajender Rai vs Ritika Arora Page 3 written statement and affidavit of admission and denial of documents in terms of Order VIII and Order XI Rule 4 of the CPC as amended by the Commercial Courts Act. It is further submitted that the defendant has admitted the terms of the Lease Deed, non-payment of rent, the valuation of the monthly rent as well as the notices date 19.05.2020 and 08.06.2020 as per which she had to vacate the property by 20.07.2020. It is stated that the defendant has made bare denials in her pleadings without stating any reasons, stating any new facts or producing any documents to substantiate her illusory and sham defence. It is submitted that if the pleadings are assumed to be true, no triable issues exist.
8.1. It is stated that defendant's main defence is that the lockdown imposed from 24.03.2020 till 01.06.2020 is a forcemajeure event covered by Clause 7 of the Lease Deed for which she has no liability to pay rent. However, the following admitted facts demolish this defence:
a. As per registered lease deed dated 05.08.20, the Defendant took the suit property on rent to operate a restaurant with live cooking, as follows:
"That the Lessee' nature of work shall be Restaurant, Bar and Clud, in the name of M/s Salt and StrawFood Chain (Brand name- Scooter on the wall) with live cooking."
b. As per Clause 7, the force majeure clause, the parties intentionally excluded a "pandemic" from the force majeure events listed. Further, as per the clause, rent could be suspended only in the event property was rendered "unusable" by natural calamities such as earthquakes, fire or any govt. or municipal prohibition, as follows:
"7.That if during the period of this Lease or any extension thereof said premises is rendered unusable on account of any earthquakes, fire, other natural calamities, or any govt. or municipal prohibition the payment of rent shall be suspended during the subsistence of such force majeure condition passes off and the premises are restored to good and usable condition."
c. As per MHA order dated 24.03.20, delivery of food and shops dealing with food were declared "essential services" and exempted from being closed during the lockdown. As per MHA order dated 29.03.20, no Rajender Rai vs Ritika Arora Page 4 exemption from paying rent was granted with regard to commercial properties and operation of restaurants and as per MHA orders dated 30.05.2020 and 29.06.2020, restaurants were permitted to operate without any restrictions whatsoever from 08.06.20. Therefore, the suit property was not rendered unusable, even if it is assumed, without prejudice, that Pandemic was a force majeure event in the lease.
d. As per the admitted utility bills for the property, the defendant was in use and occupation of the suit property. The defendant never sent any notice invoking Clause 7 or terminated the lease deed, in fact, admittedly, the suit property was vacated only on 30.08.20 much after the lockdown was imposed.
e. The defendant has admitted non-payment of monthly rent from 07.03.2020 till 07.08.2020 in para13 of the written statement and has admitted the plaintiff's statement of account reflecting non-payment and delay in payment of arrears of rent from September, 2019 till February, 2020 in her affidavit of admission and denial of documents as per Order XI Rule 4 of CPC amended by Commercial Courts Act. The Defendant on 20.10.2020 has further admitted before this Hon'ble Court that Rs.1,31,151/- was liable to be paid, without prejudice to the Plaintiff's suit. The defendant has further not filed any statement of account or purported any facts to support bare denial of liability to clear outstanding dues from September 2019 till February, 2020 and in terms of Order VIII of CPC, no set-off can be claimed and the Plaintiff's suit stands admitted. 8.2. It is submitted that the monthly rent, maintenance and GST charges claimed in the present suit may be divided in three parts: i.e Prior to Lockdown for the period from 7thSeptember 2019 till 7th February 2020 the Defendant is liable to pay the principal amount of Rs. 2,95,552/-.During the period of lockdown from 24.03.20 till 01.06.20,the defendant is liable to pay a principal amount of Rs. 3,99,060/- for the period from 07.04.2020 till 07.05.2020.After the lockdown was lifted w.e.f 01.06.20,the Defendant is liable to pay a principal amount of Rs.5,98,590/- from 07.06.2020 till 07.08.2020.
Rajender Rai vs Ritika Arora Page 5 8.3. It is further submitted that defendant has admitted receipt of legal notices dated 19.05.2020 and 08.06.2020, as per which the plaintiff claimed outstanding dues, interest at 18% per annum on outstanding dues from the due date, inter alia, and the defendant was liable to vacate the suit property by 20.07.2020 in a restored condition. It is submitted that legal notices dated 03.09.2019, 06.10.2019, 03.12.2019, 29.01.2020 and 08.06.2020 stand admitted as per the written statement and affidavit of admission and denial of documents in terms of Order VIII and Order XI Rule 4 of CPC amended by the Commercial Courts Act.
8.4 Ld. Counsel for plaintiff has further argued that Under Order XIII-A read with Order XII Rule 6 of the CPC as amended by Commercial Courts Act, this Court has the power to pass a judgment on the defendant's admissions qua the plaintiff's suit, being, the defendant admission of the tenancy relationship as per the Lease Deed, Receipt of termination notices dated 19.05.2020 and 08.06.2020 as per which defendant was required to vacate the Leased Premises by 20.07.2020 and the admitted non-payment of rent as claimed in the suit.
8.5. It is argued that as per the following case law, the clauses in a lease deed a restrictly construed, Section 56 of the Indian Contract Act has no application in such interpretation. Even if the building is destroyed, the tenant cannot rely upon the doctrine of frustration to avoid paying rent if no such clause exists. In support ld. counsel has relied upon Alanduraiappar v. TSA Hamid & Anr., reported in AIR 1963 Mad 94; T. Lakshmipathi v. P. Nithyananda Reddy reported in (2003) 5 SCC150 and Raja Dhruv Dev Chand v. Raja Harmohinder Singh reported in AIR 1968 SC1024. 8.6. It is submitted that if a lessee does not terminate the lease on account of the alleged event which purportedly made the leased premises unusable, frustration of contract in terms of Section108 (e) of the Transfer of Property Act cannot be claimed and the lessee cannot avoid paying rent on account of unusability as per the Hon'ble Delhi High Court's decision in 'Sangeeta Batra v. VND Foods' reported in (2015) 4 BC476.
Rajender Rai vs Ritika Arora Page 6 8.7. It is further submitted that Covid-19 is not an event which can automatically be interpreted in a lease to be a force majeure event and that a party relying upon the lockdown to excuse non- performance and liability has to adduce facts and materials to substantiate such defence. It is further submitted that a tenant who continues to stay in possession of the property despite the lockdown being declared cannot rely upon the force majeure clause to avoid paying rent for the use. Further, a tenant whose business fell under the exception of "essential services" is not permitted to rely upon the lockdown to seek any suspension or rent. It is further submitted that a tenant who has already been in default and in breach of the lease prior to the lockdown cannot rely upon the same to avoid performance and liability under the contract.
8.8 Lastly, it is further argued that the lockdown was imposed was temporary and only for two months, it would be completely unfair if the defendant is permitted to rely upon the same to seek avoidance and frustration of Lease Deed. In support, Ld. Counsel for the plaintiff has relied upon the decisions titled as, The Delhi High Court's decision dated 15.06.20 in 'Gaurav Jain v. union of India corporation' in WP (c) NO.3519/20; ii) The Delhi High Court's decision dated 21.05.20 in 'Ramanand v. Dr. Girish Soni' in RC RP No.447/17; The Delhi High Court's decision dated 29.05.20 in 'Haliburton Offshore vs.Vedanta'in OMP Comm No. 88/20; The Delhi High Court's decision dated 13.04.20 in 'Indrajit Power Ltd. v. union of India' in WP
(c) No.2957/20 and The Bombay High Court's decision dated 08.04.20 in 'Standard Retail v. G.S. Global Corp.' in Arb Pt. No.404/20. 8.9 It is submitted that the present case is covered by the Hon'ble Delhi High Court's decisions in'K-7 Impex Pvt. Ltd. v. Shailendra Garg' reported in 2016 (230) DLT 59 and 'Pradyuman Kumar v. Orchid Salon services' in CS (Comm) No. 29/2018 vide judgment dated 14.09.2018. It is submitted that Hon'ble Court ought to pass a judgment on the defendant's admissions and direct the Defendant to pay outstanding monthly rent, maintenance and GST in terms of the Hon'ble Delhi High Court's decision in 'Parineeta v. Soni' reported in (2014) 5 HCC (Del317).
Rajender Rai vs Ritika Arora Page 7 8.10. Ld. Counsel for the plaintiff has further argued that the defendant cannot be permitted to resile from her admissions under the claim of "procedural defects" or "curable defects" as per this Hon'ble Court's decision in'Kanwar Singh Yadav v. AIIMS' in CS(Comm) No. 222/19 as upheld by the Hon'ble Delhi High Court's order in 'Kanwar Singh Yadav v. AIIMS' in CM (M) No. 409/20 dated 28.07.2020. In the light of the above facts, circumstances and law, it is submitted that this Court may be pleased to allow the Plaintiff's application under Order XIII-A read with Order XII Rule 6 of CPC.
Submission advanced by the counsel for defendant
9. On the other hand, Ld. Counsel for the defendant has argued that the present dispute is in relation to arrear of rent as prayed under prayer clause (C) of the Plaint. It is submitted that plaintiff has substantiated his claim on the basis of a table of outstanding monthly rent, maintenance and GST and interest calculated till 20.07.2020 given at para 7 (iii) at page no. 16 of the plaint. It is submitted that the monthly rent, maintenance and GST for the period for the period from 31.12.2018 to 20.12.2019 is Rs.1,56,279/-, Rs.5,000/- and Rs.29,030/- respectively.
9.1 It is stated that the total monthly payout of the defendant amounts to Rs.1,74.181/- after deducting TDS amount of Rs.16.128/-. It is submitted that the monthly rent, maintenance and GST for the period from 21.12.2019 to 20.12.2020 is Rs.1,64,074, Rs.5,000/- and Rs.30,434/- respectively. The total monthly payout of the defendant amounts to Rs.1,82,617/- after deducting TDS amount of Rs.16,907/-. It is submitted that the comparative chart in relation to the table of dues given by the plaintiff is annexed with the affidavit filed by defendant as per order dated 21.11.2020 for the kind perusal of the Court. The comparative chart shows that there is outstanding of payouts only for the period from 01.03.2020 to 23.03.2020. The most of the payments given by the defendant to the plaintiff are from the normal banking transactions except a few transactions in cash total amounting to Rs.44,493/- in total.
9.2 It is submitted that the defendant at present is not in a position to give Rajender Rai vs Ritika Arora Page 8
detail of the cash acknowledgement as it seems that the relevant acknowledgement are misplaced during the vacation of the rented premises on 29.08.2020. It is further submitted that the Plaintiff did not raise any issue of arrears of rent in legal notice issued on 29.01.2020 replied by the defendant. It is further submitted that under the lease agreement there is no provision for interest on delay in payment of rent. Even the plaintiff never talked about the interest on delay in payment It is respectfully submitted that the story of arrears of rent and interest on delayed payment of rent are afterthought and have no legal force.
9.3 It is argued that the rent for the period 24.03.2020 till the date of vacation i.e. 29.08.2020 was suspended in the light of clause 7 of the Lessor Covenant in the lease agreement registered on 05.08.2016. The clause 7 is reads "That if during the period of this lease or any extension thereof said premises is rendered unusable on account of any earthquakes, fire or other natural calamities or any govt, or any municipal prohibition the payment of rent shall be suspended during the subsistence of such force majeure condition passes off and the premises are restored to good and usable condition".
9.4 Defendant had placed reliance upon GNCT Health & Family Welfare Department order dated 22.03.2020 and orders of GNCT Delhi Disaster Management Authority dated 25.03.2020; 14.04.2020; 03.05.2020, 18.05.2020, 01.06.2020, 31.07.2020 and 03.09.2020. The restaurant activities were allowed by the GNCT GNCT Delhi Disaster Management Authority vide Annexure-A of its order dated 18.05.2020. 9.5 Ld. Counsel for the defendant has argued that there are many notifications and orders issued by the various government authorities which put prohibition to open and run the leased premises as Restaurant cum Bar and that it is an acknowledged fact that the premises was used as Restaurant cum Bar. It is submitted that the notice to open Bar came only on 03.09.2020 after vacation of the leased premises on 29.08.2020. It is submitted that the Restaurants served cooked food and Bar served liquor.
9.6 It is submitted that the license of Bar is in relations to the Rajender Rai vs Ritika Arora Page 9
whole leased premises and there was express prohibition to open the bar. It is stated that plaintiff is aware that the leased premise was not open from 22.03.2020 till 29.08.2020 as the premises was under the security and surveillance of the Plaintiff. The copy of notification of Government /Authorities pertaining to prohibition on opening of Bar is annexed with the Affidavit filed by Dependent as per order dared 21.11.2020. It is further submitted that a Bar Cum Restaurant had no permission to open the Bar premises but not to serve liquor. The prohibition is towards the opening of the Bar and not on the serving of the liquor. It is further submitted that the defendant's kitchen is not to serve online deliveries. It is stated that the averments of the plaintiff are based on surmise and conjectures and have no force in the light of Government prohibitory orders and facts of the present case. Ld. Counsel has argued that even at no point of time plaintiff informed the defendant that her restaurant Cum Bar activity does not fall under the Government prohibitory orders and Clause 7 of the Lease Agreement is not applicable to the defendant. It is stated that on the contrary the plaintiff stopped issuing Rent Invoices to the defendant. 9.7. Ld. counsel for defendant submitted that there was no activity of restaurant in the lease premises due to the prohibition of operation of bar activity. It is submitted that the defendant in bonafide belief have not even operated her live kitchen as in the live kitchen orders are placed by the customers generally sitting in the restaurant-cum-bar. The defendant even does not have her take away services and online delivery system. It is submitted that there was an agreement with Zomato but there also Zomato used to take delivery from the restaurant-cum-bar of the defendant. There were penal provisions for the violation of GNCT Delhi Disaster Management Authority's order. The consequence of penal provision also lead to cancellation of licence and imprisonment.
9.8. It is submitted that the Restaurant Cum Bar in the same locality of the Leased premise namely Typsy Crow (Bar and Cafe) located at C-8, Second Floor, Community Centre, Safdarjung Development Area Market, New Delhi-110016 and Helter Skelter (Bar and Cafe) located at C-5, Rajender Rai vs Ritika Arora Page 10 First and Second Floor, Community Center, Safdarjung Development Area Market, New Delhi-110016 remained close till 09.09.2020. It is submitted that the notice of vacation dated 19.05.2020 and 08.06.2020 sent to the Leased Premises was not received by the defendant as the leased premises were locked and under the custody of the security staff of the plaintiff and hence the said notices were not proper notices as per Clause 6 of the Lessor Covenant of the Lease Agreement. It is submitted that defendant filed her Counter Claim on 15.10.2020 as the plaintiff has not returned the security deposit amounting to Rs.4,05,000/- along with an interest of 12% payable from 30.08.2020 as provided in Clause 9 of the Lessor Covenant of Lease Agreement after vacation of the Leased premises.
9.9. It is further submitted that the defendant is not liable for any damages as the whole commercial premises is under the security surveillance of the plaintiff and plaintiff never raised the issue of damages. It is submitted that the defendant has not raised any construction of any nature in terms of the Lease Agreement dated 05.08.2016. It is further stated that the plaintiff has not raised the issue of structural change and damages in his notices issued in January 2020 and prior to it and hence the present issue of damage is an afterthought merely to harass the defendant. 9.10. Ld. Counsel for the defendant has argued that the plaintiff only in order to file the present case and to dilute the effect of provisions of Section 16 of the Commercial Courts Act. 2015 falsely stated before the Court that the defendant was trying to create a third party interest over the Leased premises. Ld. Counsel for the defendant prayed that this court may be pleased to dismiss the present Application with heavy cost and a decree for recovery of Rs.4,11,258/- along with pendent lite interest @ 12% per annum till date of realization may be passed.
10. This Court has heard arguments advanced by Sh. Shiv Chopra Ld. counsel appearing for the plaintiff and Sh. Mayank Kumar and Sh. Shambu Chaturvedi Ld. counsels appearing for the defendant and has perused the material on record.
Rajender Rai vs Ritika Arora Page 11 Legal position
11. The legal standard and the relevant observations of the higher courts may be noted before discussing the factual position .The Commercial Courts Act is aimed at speedier disputes resolution mechanisms . Order XIII-A is an instrument to allows faster resolution of commercial disputes when it is brought to the court's attention that the trial is unnecessary, it may not undertake the trial. Three conditions for passing summary judgment are (a) that there is no real prospect of a party succeeding in a claim; (b) that no oral evidence would be required to adjudicate the matter; and (c) there is a compelling reason for allowing or disallowing the claim without oral evidence.(Rockwool International A/s vs.Thermocare Rockwool (India) Pvt. Ltd., Del HC Judgment dated October 16, 2018 in CS (Comm) 884/2017).
12. The Purpose of Order XIII-A CPC is that as most of the contemporary business transactions are carried out in writing , so the courts do not have to rely on oral testimony about intention behind a contract and transactions. Therefore, unless adducing of oral evidence is found necessary, courts can summarily decide claims based on documentary evidence.(Jindal Saw Ltd. v. Aperam Stainless Services and Solutions Precision SAS, Del HC Judgment dated July 16, 2019 in CS (Comm) 1314/2016).
13. Conventional trial should not be the default procedure in all cases , irrespective of nature of claim and defence .Court uses tool of summary judgment when court is satisfied that there will be no genuine issue requiring a trial and is able to reach a fair and just determination on the merits on the basis of material on record and documentary evidence and the process allows the judge to make the necessary findings of fact and apply the law to the facts .This is a proportionate, more expeditious and less expensive means to achieve a just result.
14.. Legislative intention in providing the mechanism of case management hearing and passing summary judgment in commercial disputes is to facilitate quicker decision through the process. on reading the provisions contained in order X111-A as a whole , if the court finds that defence is Rajender Rai vs Ritika Arora Page 12 moonshine or Smokescreen and defendant has no reasonable prospects of succeeding, then it has to dispose of the matter by passing a summary judgment. In the present case.
15. Suit regarding recovery of rent for the period affected by Covid 19 has to be seen in light of the force majeure clause in the lease agreement,In Ramanand vs Dr. Girish Soni relied upon by both the parties ,it was observed that where there is a force meajure clause ,waiver of rent would be governed by Section 32 of the Indian Contract Act .
16. In Re Hitz Restaurant Group's case decided by Northern Illinois Easter Division United State Bankruptcy Court , Bankruptcy No. 20 B , 05012 decided on 36/2020 relied upon by the defendant pertained to the space leased by the landlord for operating a restaurant at Chicago . Hitz failed to pay rent since February 2020 and filed bankruptcy proceeding. Illinois stay at home order came into effect on 16.03.2020 prohibiting restaurant from providing inhouse services dining and landlord filed a motion to compel the tenant to pay the rent between February 2020 t June 2020. It was held in this case that to the extend that debtor could have continued to perform those services ,its obligation to pay rent is not excused by the force majeure clause and debtors' obligation to pay rent wasreduced to a proportion to its reduced ability to generate revenue due to the executive order.
17. In P. K. Roy vs Bimla Mukherjee 1976 ILR 2 Cal 306 ,it was observed that suspension of rent or partial abetment of rent is question of facts and circumstances in each case. In NAFED's case (supra) an agreement between the parties was in relation of export of foodgrains and there was Government Executive order prohibiting the export of food grains and force majure clause was having reference to the Government prohibition . It was held that it would be unlawful for NAFED to affect the supply in view of Government's refusal to accord permission and both parties knew it very well and agreed that contract would be cancelled in such an exigency for non- supplying quantity.
Rajender Rai vs Ritika Arora Page 13 Analysis and conclusions
18. After hearing the submissions advanced at Bar and perusal of material on record, this court is of the considered view that Facts- in -issue are totally based on documentary evidence and there is neither any scope of oral evidence nor further trial to adjudicate the real controversy . Application for summary judgment has to be allowed in this case as this court is satisfied that defendant has no real prospect of success and there is no other compelling reason why the case should not be disposed of on the basis of pleadings and documentary evidence on record as well as submission advanced by the learned counsels appearing for the parties.
19. There is no dispute that plaintiff is the landlord and owner and the defendant is the tenant and the fact that property was let for commercial use i.e. for operating a commercial kitchen, restaurant, club and bar. It is also admitted position of the parties that the relationship between the parties is governed strictly by the provisions of the registered lease deed dated 05.08.2006. It is also admitted position of the parties that the lessee/ defendant has already handed over the vacant possession of the tenanted premises to the lessor/plaintiff on 30th August, 2020. The defendant continued to remain in occupation of the premises from 24 th March, 2020 till 30th August, 2020 without making any payment of rent. It is also admitted position of the parties that the plaintiff is having a security deposit of Rs.4,05,000/- as per clause 1 of the rent agreement.
20. Now, the only dispute left to be adjudicated is as regards payment of arrears of rent as well as electricity and water charges.
21. Relevant clause 7 of the lease deed dated 05.08.2016 reads as under:
"That if during the period of this lease or any extension thereof said premises is rendered as unusable on account of any earthquakes, fire, natural calamities or any government or municipal prohibition the payment of rent shall be suspended during the subsistence of Rajender Rai vs Ritika Arora Page 14 such force majeure condition passes off and the premises are stored to good and usable condition".
22. As per lease deed, rent was to be paid in the following manner:-
"From 21st December, 2015 to 20th January, 2016 is rent free period for renovation and fit outs. W.e.f 21st January, 2016 to 31st January, 2016, Rs.47,903/- plus applicable service tax. W.e.f 1st February, 2016 to 20th December, 2016, Rs.1,35,000/- per month plus applicable service tax. W.e.f 21st December, 2016 to 20th December, 2017, Rs.1,41,750/- per month plus applicable service tax. W.e.f 21st December, 2017 to 20th December, 2018, Rs.1,48,838/- per month plus applicable service tax. From 21st December, 2018 to 20th December, 2019, Rs.1,56,279/- per month plus applicable service tax. W.e.f 21st December, 2019 to 20th December, 2020, Rs.1,64,093/- per month plus applicable service tax."
23. The stand of the plaintiff is that the force majeure clause does not permit any remission of rent to the defendant due to covid-19 pandemic. Premises was "usable" and thus, defendant could have continued use and occupation of the leased premises. The government's notification of Govt. of India and Delhi Government - permitted commercial kitchens to operate during lockdown and serve the customers via means of home delivery services and pick up services. Pandemic situation is not covered under force majeure clause and therefore, the defendant cannot take recourse to force majeure clause in the registered lease deed because the premises was usable and defendant could have run her commercial kitchen and accessibility of customers was not a condition to which payment of rent depended.
24. The lease deed was for a period starting from 21st December, 2015 and was to end on 20th December, 2022. The clause 12 of the lease deed dated 05.08.2016 states that in case of default in payment of rent, the lessor is required to serve a written notice of one month to lessee to pay the outstanding leased rent and to rectify the default. However, in the event lessee still failed to pay the outstanding leased rent, the lease could be terminated by the lessor by giving a 60 days' notice to the lessee As per Rajender Rai vs Ritika Arora Page 15 clause 6 of the lease deed dated 05.08.2016, all notices sent to the parties were deemed to be sufficiently sent if they are sent by registered post at their abovementioned addresses.
25. The contention of the defendant that the rent should be suspended on account of government prohibition and notifications due to which the leased premises was not used for restaurant and bar activities cannot be accepted and submission of defendant that she came to know about 29th January, 2020 notice and duly replied the same to the plaintiff whereas other notices dated 03.09.2019, 06.10.2019, 03.12.2019 and 29.01.2020 were only in relation to some LPG cylinder storage and the demand of rent was only raised vide notice dated 19.05.2020 and 08.06.2020 is not of any significance as possession has already been handed over by her to the plaintiff on 30-08- 2020 and admittedly rent for the relevant period has not been paid by her.
26. As per the lease agreement, the month starts from 21st of every English calendar month to 20th of every English calendar month and that advance rent was payable on 7th of each English calendar month. The amount of paid by the defendant as per the lease agreement, for the period 21st January, 2016 to 30th January, 2016 is separate for ten days and has no bearing in the advancement of the date or the period for which rent was payable every month. There is no merit in this contention of Ld. counsel for defendant that rent was payable by the defendant on monthly basis from 1 st of each English Calendar month to last date of that English Calendar month, in advance.
27. During the pendency of the suit, as per the undertaking of the defendant given in the Court, defendant paid the water charges of Rs.24,817/- as per the suit on 07.09.2020 which was stated to be in excess of Rs.2,803/- as per the Delhi Jal Board's bill dated 03.10.2020 and had also paid the electricity dues amounting to Rs.1,54,260/- (Rs.75,000/- and Rs.79,620/- ) on 08.09.2020 and 16.10.2020. There can be no dispute that dues if any , as regards water and electricity charges upto the period defendant was in the possession of the premises are required to be paid by her.
Rajender Rai vs Ritika Arora Page 16
28. There is no dispute that a security amount of Rs.4,05,000/- had been deposited by the defendant as per lease agreement. According to the counsel for defendant, the security amount bears interest of 12% per annum as per clause 9 of the of the lease agreement and the security amount alongwith the interest is lying with the plaintiff since 30th August, 2020. Interest will be payble on the net balance by the concerned party
29. During argument, counsel for defendant submitted that the defendant had not paid the rent amount as per the lease agreement because she bonafidely believed that the rent was suspended due to the government prohibition to operate bar and restaurant. It was submitted that there was no order or guidelines of the government which explained how the restaurant having bar could be opened during the period under dispute i.e. 24 th March, 2020 to 30th August, 2020. As regards, the bar, it cannot be disputed that for the first time the standard operating procedure to run restaurant-cum-bar and directions to Excise Department to have vigilance on restaurant-cum-bar in relation to operating hour of bar was issued by the government of NCT of Delhi, Delhi Disaster Management Authority on 3rd September, 2020.
30. This Court finds substance in the submission advanced by Ld. counsel for plaintiff that defendant could use the tenanted premises. As per the lease deed, rent cannot said to be dependent upon customers being able to access the leased premises and defendant was permitted and she could have used the leased premises for making food and serving by way of take away and home delivery.
31. Defendant was permitted to operate her commercial kitchen for the purpose of Take Away and Home Delivery as per Order dated 22.03.2020 passed by Health and Family Welfare Department, Govt of NCT, Delhi wherein it has been stated that "However, the following services/establishments are excluded from the purview of this order and shall continue to function normally: ....(s) Take away/home delivery in restaurants. Order dated 25.03.2020 of the Delhi Disaster Management Authority contains Annexure A which clearly states that "commercial and private establishments shall be closed down except the following: (a) Shops including ration shops, Rajender Rai vs Ritika Arora Page 17 dealing with food, groceries .... However, district administration may encourage and facilitate home delivery to minimize the movement of individuals outside their homes".
32. Moreover, as per MHA order dated 24.03.20, delivery of food and shops dealing with food were declared "essential services" and exempted from being closed during the lockdown. As per MHA order dated 29.03.20, no exemption from paying rent was granted with regard to commercial properties and operation of restaurants and as per MHA orders dated 30.05.2020 and 29.06.2020, restaurants were permitted to operate without any restrictions whatsoever from 08.06.20.
33. It cannot be accepted that merely because 'bar' could not be reopened, the defendant could not use the premises for restaurant and for operating kitchen as well. Plaintiff/landlord cannot be allowed to suffer for the belief of the defendant in not opening the restaurant as well as home delivery services permitted by the Government. There is no merit in the contention of learned counsel that it was for the plaintiff to inform to the defendant that her restaurant Cum Bar activity does not fall under the Government prohibitory orders or Clause 7 of the Lease Agreement was not applicable. The rent could be suspended as per clause 7 of the lease deed was unusable ,therefore, it was for the tenant to see whether as per the government notification and executive orders, she could or could not run the restaurant and or provide home delivery of food etc., once she had chosen to retain the possession with herself and no fault can be found with the plaintiff in not informing the defendant that she could conduct her restaurant business during the lockdown period and in the unlockdown period upto 30.08.2020 i.e. when defendant vacated the possession.
34. This contention of the counsel for defendant is not tenable that as the defendant obtained licences for running restaurant as well as bar for the leased premises and therefore, those services of restaurant and bar were not separable in the absence of any proper guidelines for the same. It matters not that defendant had any agreement with Zomato, who used to take delivery from the restaurant-cum-bar of the defendant. The point is whether Rajender Rai vs Ritika Arora Page 18 premises in question was "useable" The word 'useable' is of utmost significance. Whether defendant actually 'used ' the same or not is not relevant to decide the question of liability of the defendant for payment of rent to the landlord/plaintiff in view of clause 7 of the lease deed. The rent could be suspended when the premises was totally "unusable". In the present case, it is clear that premises could be used and was "usable" for restaurant and live kitchen and was "unusable" for "bar" purposes, therefore, this Court is of the considered view that in the factual situation, as desired by defendant, she cannot be allowed to abate the full amount of rent,that she owed to the plaintiff ,as restaurant was not forced to completely closed during the lockdown period till the relevant time i.e 30.08.2020. It cannot be held that the premises was totally unusable. It was partly usable and could have generated revenue by operating kitchen and by providing take out and delivery services in the restaurant . Having regard to the totality of facts and in the interest of justice , this court decides that the tenant shall pay proportional rent to the landlord and both of them share and bear fifty-fifty. Rent payable by the defendant to the plaintiff is ordered to be abated by 50% which will lead to the proportional distribution of economic pain inflicted by the Covid virus & pandemic situation, between the plaintiff and the defendant.
35. Now, the question as to how much amount defendant is liable to pay is to be examined. According to the plaintiff, the arrears of rent pertains to three periods:-prior to the lockdown period i.e. prior 20th March, 2020 the total outstanding due to the plaintiff towards rent was Rs.2,27,996/-. (ii) During the lockdown period i.e. 21st March, 2020 till 20th May, 2020, the rent due to the plaintiff was Rs.3,99,060/- (iii) For the period 21st May, 2020 till 30th August, 2020, rent due was Rs.6,67,297/-.
36. As regards, the period prior 20th March, 2020 the total outstanding due to the plaintiff towards rent, GST @18% and TDS deducted @10% was Rs.2,27,996/- as per the bank account statement of the plaintiff. Vide order dated 22.11.2020, this Court had directed both the parties to furnish their bank account statement in a tabular form on affidavit as regards the rent Rajender Rai vs Ritika Arora Page 19 which had been paid by the defendant to the plaintiff during the relevant period. During the period between 21.04.2019 till 20.03.2020 i.e. for the rent payable w.e.f 07.05.2019 to 07.03.2020, the analysis of bank accounts statement maintained at Yes Bank Green Park branch (bank account no. 05584600000296) shows that according to the plaintiff the claimed amount of Rs. 2,27,996/- was due. According to the defendant herself, as per her affidavit, she was liable to pay Rs. 1,31,151/- .
37. During argument, on asking, counsel for the defendant acknowledged to pay the cash amount of Rs. 44,493/- regarding which defendant was not having any proof or receipts of cash payments and thus, a sum of about Rs.1,75000 only was due and payable to the plaintiff. As noted in the lease deed, the rent for ten days i.e. w.e.f 21st January, 2016 to 31st January, 2016 was Rs.47,903/- plus applicable service tax. This Court does not find any substance in the contention of Ld. counsel for defendant that since payment was made for ten days, therefore rent payable for the successive months would be w.e.f 01st day to the 31st and not from 21st to 20th as noted in the lease deed or that the said sum of Rs. 53,000/- i.e. Rs. 47,903 plus GST should be adjusted is not tenable. On consideration of the bank account statement, the amount which had been deposited by the defendant towards rent , this Court agrees with the submission advanced by Ld. counsel for the plaintiff and finds that the defendant is liable to pay Rs. 2,27,996/- for the pre- lockdown period i.e. upto 20.03.2020.
38. Now, coming to the lockdown and covid affected period i.e. 21st March, 2020 till 30th August, 2020 , the total period works out to be five months 10 days. In view of the findings of the Court that during this period, defendant is liable to pay 50% of the rent , the rent payable by the defendant is calculated as under:
Rent -Rs. 164,093/- per month; GST -Rs. 30,437/- per month; Maintenance- Rs. 5,000/- per month, Total =Rs. 1,99,530/- per month. Now, 50% of the rent= Rs. 99,765/- per month. rent for 5 months and 10 days would work out to be Rs. 5,32,080/- and in this amount, when we add previous arrears noted above Rs. 2,27,996, then total amount of rent due =7,60,076/-. The security Rajender Rai vs Ritika Arora Page 20 amount deposited by the defendant with the plaintiff was Rs..4,05,000/-.thus, net balance rent payable by defendant to the plaintiff is Rs. 3,55,076/- , Electricity Charges:
39. As per the electricity bill dated 07.09.2020 (for the billing cycle upto 01.09.2020) on record the electricity dues demanded by the authority concerned was Rs. 2,20,540/- . Defendant paid a sum of Rs. 75,000/- on 09.09.2020 and thereafter paid further amount of Rs. 79,620/- on 16.10.2020 and thus the balance amount is due Rs. 48,280/- .
40. Ld. counsel for defendant submits that as per electricity bill dated 07.11.2020 for the period 02.10.2020 to 02.11.2020 , the bill amount payable was Rs. 59,840/- which includes the arrears of Rs. 40,961/- and late payment surcharge is Rs. 10,346/-. It is submitted that defendant had vacated the premises on 30.08.2020 and this bill includes electricity charges for the month of September and October as well as previous arrears upto 30.08.2020.
41 Ld. counsel for defendant has pointed out that for the electricity bill for the period 02.09.2020 to 01.10.2020, the monthly charges were Rs. 7,393.50/- which were added in the arrears and similarly for the period 02.10.2020 to 02.11.2020, the monthly charges were Rs. 8,291.98/-. Thus, total sum of Rs. 15,685.28/- was the billing charges for the month of September and October, 2020 and if the said amount is subtracted from the bill of Rs. 59,840/- , the balance amount payable on account of electricity charges by the defendant would be Rs. 44,155/- . This Court is in agreement with the said calculation regarding electricity charges . thus this Court holds that defendant is liable to pay sum of Rs. 44,155/- which were due upto 30.08.2020, the period defendant remained in the possession of the tented premises.
Interest
42. Plaintiff has claimed interest @18 % pa. Having regard to the lending Rajender Rai vs Ritika Arora Page 21 rate of the bank in the commercial transaction, this Court is of the view that grant of 12% interest would serve the ends of restitutive justice. Plaintiff is entitled to the said interest from the date of filing of present suit till the realization of the entire amount.
43 Now, it has to be considered as to whether plaintiff is entitled to any interest and if so, what would it be the appropriate rate.
44. As per Section 34 CPC, Wherein and in so far as a decree is for payment of money, the court may , in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged , from the date of suit to the date of decree , in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% pa at Court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the Court deems thinks .
45. Proviso to sec 34 CPC says that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I.-In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970). Explanation II.-For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
46. As regards the security deposit Rs. 4,05,000 clause 9 of lease deed dated 05.08.2016, if the lessor fails to refund the security deposit after adjusting pending dues (if any) on the decided date of handing over of vacant possession, the lessor shall pay interest on the said deposit @ 12%.
47. Admittedly, defendant had vacated the premises in question on 30.08.2020. From 21.12.2020 to 20.12.2020 Rs. 1,72,298 per month plus applicable tax. There is notice dated 19.05.2020 is on record vide which Rajender Rai vs Ritika Arora Page 22 plaintiff the terminated the tenancy and postal receipt is on record and then another notice dated 08.06.2020 regarding vacation from the lease premises and payment for outstanding dues etc. was given vide courier. During argument, on asking counsel for plaintiff had submitted that since the defendant had already handed over the possession for the premises on 30.08.2020, therefore, the question of termination of tenancy and possession had come irrelevant and no finding of fact was required on that count.
48. After adjustment of the security amount of Rs. 4,05,000/-, it has already been noted in the aforesaid discussion that defendant is liable to pay a sum of Rs. Rs. 3,55,076/- This Court is of the considered view that defendant is liable to pay interest @12% from the date of filing of suit till the date of its realization .
Costs
49. As per section 35 A (1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine: (a) whether costs are payable by one party to another; (b) the quantum of those costs; and (c) when they are to be paid. Explanation.--For the purpose of clause (a), the expression "costs" shall mean reasonable costs relating to-- (i) the fees and expenses of the witnesses incurred; (ii) legal fees and expenses incurred; (iii) any other expenses incurred in connection with the proceedings.
50. (2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party: Provided that the Court may make an order deviating from the general rule for reasons to be recorded in writing. (3) In making an order for the payment of costs, the Court shall have regard to the following circumstances, including-- (a) the conduct of the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; (c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the case; (d) whether any reasonable offer to settle is made by a party and unreasonably refused by the other party; and (e) Rajender Rai vs Ritika Arora Page 23 whether the party had made a frivolous claim and instituted a vexatious proceeding wasting the time of the Court. 4) The orders which the Court may make under this provision include an order that a party must pay-- (a) a proportion of another party's costs;(b) a stated amount in respect of another party's costs; (c) costs from or until a certain date; (d) costs incurred before proceedings have begun; (e) costs relating to particular steps taken in the proceedings; (f) costs relating to a distinct part of the proceedings; and (g) interest on costs from or until a certain date.'.
51. The present suit was instituted on 30.07.2020 . Plaintiff had deposited Court fees of Rs. 36,000/- in this case. Total number of 15 hearings have taken place in this case. Ld. counsel for plaintiff submitted that in the present case, the conduct of the defendant may be noted being one of the factor in the assessment of the costs. On 05.08.2020 ,Defendant gave an undertaking to the Court to clear the electricity and water bills by or before 30.08.2020. On 31.08.2020, plaintiff informed the Court that defendant had handed over the keys of the premises on 29.08. defendant did not comply with her undertaking given on 05.08.2020. defendant expressed financial difficulties and ten days time was granted to her to comply with the undertaking. defendant deposited Rs. 24,817/- towards water charges and Rs. 75,000/- only towards electricity charges. On 16.10.2020, counsel for plaintiff again submitted that defendant had still not complied with her undertaking despite opportunity and lenient view by this Court. Counsel for defendant submitted that balance amount would be deposited by tomorrow i.e. 17.10.2020. till date complete electricity charges have not been deposited by defendant.
52. On 20.10.2020 plaintiff filed an application for summary judgment u/O XIII A and Commercial Court Act and application for contempt of breach of undertaking. Counsel for defendant filed an application for amendment u/o VI Rule 17 CPC which was withdrawn by her .she requested for 60 days time to pay a sum of Rs. 1,31,151/- which according to her was due as on 24.03.2020 . which amount was also not deposited and now, defendant filed a counter claim as regards security of Rs. 4,05,000/- deposited by the defendant with the plaintiff.
Rajender Rai vs Ritika Arora Page 24
53. On considering the totality of aforenoted facts and the conduct of the defendant and the number of hearings , this Court is of the considered view that reasonable costs which can be worked out should be not less than as Rs. 75,000/- at any rate apart from the Court fees of Rs. 36,000/-. Thus, in total plaintiff shall be entitled to costs of Rs. 1,11,000/- .
RELIEF
54. To sum up, having regard to the aforesaid reasons, it is ordered that defendant is liable to pay a sum of Rs. 3,55,680 /- towards arrears of rent ; Rs. 44,155 towards electricity charges and Rs. 1,11,000/- (inclusive of Court fees) as costs. Defendant shall also be liable to pay interest @12% on Rs. 3,99,835/- from the date of filing of suit till its realization and interest @12% on the costs of Rs. 1,11,000/- from the date of this order till its realization. Order accordingly. File be consigned to record room.
VINAY KUMAR Digitally signed by VINAY
KUMAR KHANNA
(dictated and announced
On 15th January 2021
KHANNA Date: 2021.01.15 21:54:07
+05'30'
(VINAY KUMAR KHANNA)
District Judge
(Commercial Court-02)
South Distt., Saket, New Delhi/15.01.2021
Rajender Rai vs Ritika Arora Page 25
Through Video Conferencing via Cisco Webex
Link :https://delhidistrictcourts.webex.com/meet/ddc.vc.south12 CS (Comm) 202/2020 RAJENDER RAI VS RITIKA 15.01.2021 Present: Sh. Shiv Chopra counsel for plaintiff.
Sh. Mayank Kumar with Sh. Shambhu Chaturvedi counsels for defendant.
Vide separate judgment, dictated and announced it is ordered that defendant is liable to pay a sum of Rs. 3,55,680 /- towards arrears of rent ; Rs. 44,155 towards electricity charges and Rs. 1,11,000/- (inclusive of Court fees) as costs. Defendant shall also be liable to pay interest @12% on Rs. 3,99,835/- from the date of filing of suit till its realization and interest @12% on the costs of Rs. 1,11,000/- from the date of this order till its realization. Order accordingly. Suit as well as counter claim stand disposed off accordingly.
File be consigned to record room.
VINAY KUMAR Digitally signed by VINAY
KUMAR KHANNA
KHANNA Date: 2021.01.15 21:54:38
+05'30'
(VINAY KUMAR KHANNA)
District Judge
(Commercial Court-02)
South Distt., Saket, New Delhi/15.01.2021
Rajender Rai vs Ritika Arora Page 26