Delhi District Court
Shri Suraj Bhan vs M/S. Rama Medicares Ltd on 20 August, 2020
THE COURT OF MS. SHIVALI SHARMA
ADDITIONAL DISTRICT JUDGE03: WEST DISTRICT
TIS HAZARI COURT: DELHI
CS No. 611636/2016
In the matter of:
Shri Suraj Bhan,
S/o Shri Ram Swaroop,
R/o 85, (Pole No. 44),
Amber Hai,
New Delhi - 110 045.
.................Plaintiff
Versus
M/s. Rama Medicares Ltd.,
Through its Chairman/ Managing Director/
Authorized Signatory,
56A, IInd Floor, Rama Road,
Kirti Nagar Industrial Area,
New Delhi - 110 015.
Registered office/2nd Address:
117/K/137,
Sarvodaya Nagar,
KANPUR - 208 025.
.............Defendants
Date of Institution : 28.07.2009
Date of Decision : 20.08.2020
SUIT FOR RECOVERY
JUDGMENT
1. This is a suit for recovery of Rs. 12,50,414/ alongwith pendentelite and future interest @ 18% per annum filed by plaintiff Suraj CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 1 Of 33 Bhan against the defendant company M/s. Rama Medicare Ltd. through its Chairman/Managing Director.
Plaintiff's Case
2. The case of the plaintiff as per plaint is that he is the owner of builtup area/land at premises No. 85, (Pole No. 44), Amber Hai, New Delhi 110 045. In the month of September 2008, the defendant company and its officials approached the plaintiff for taking the space of the plaintiff i. e. premises No. 85, (Pole No. 44), Amber Hai, New Delhi 110 045 (hereinafter referred as the suit property) which was situated at main road on rent. At that time, the suit property was in occupation of three tenants namely Sh. Sukhbir Singh, Tek Chand and Raj. The defendant company officials also requested to the plaintiff to make available 700 sq ft area in the front of the suit property as they were intending to open "Rama Medicare Store" in the said area. The defendant company officials showed interest in taking land on a long term lease of 9 years. They also assured that defendant company will be paying the market rent of Rs. 55.00 per sq. feet per month and also assured that the rent will be enhanced after 5 years from the date of the lease deed.
3. On the basis of these promises/assurances, the plaintiff agreed to provide 700 sq ft area/space in the suit premises (hereinafter referred to as the tenanted premises) to the defendant on tenanted basis. The defendant company officials also conveyed that they were requiring a bigger front on the front side and also conveyed that on the opening/front portion two Shutters should be fixed. They also requested the plaintiff to convert the above said area into a big hall. During all these meetings it was conveyed by the plaintiff to the defendant company that for carrying out such changes approximately a sum of Rs. 5.00 lacs will have to be invested as the partition walls were required to be removed and one common roof CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 2 Of 33 was required to be constructed for the said area and some other major changes were also required to be done in the front portion of the area.
4. The plaintiff also conveyed that for getting the premises vacated from the tenants some premium was also required to be paid and some amount was required to be spent for reconstructing the entire space for converting the same into a big hall. Defendant also conveyed that after reconstruction/development of the premises, the defendant company will require 2 months time for carrying out the necessary interiors. It was clearly understood between the plaintiff and defendant that 60 days period from the date of possession will be treated as Fitout period and the lease will come into operation after expiry of the said fitout period. The defendant also requested the plaintiff to make available 10 KW3 Phase Electric connection in the tenanted premises.
5. After discussions and assurances given by the defendant company, the plaintiff agreed to get the premises vacated and also agreed to get the structural changes done in the tenanted premises. The plaintiff also agreed to provide 10 KW3Phase electric connection in the tenanted premises. Plaintiff spent a sum of Rs. 5.00 lacs for carrying out the structural changes i. e. removing of partition wall including reconstruction of roof, improvement of front portion, fixation of shutters etc. The plaintiff also spent approximately a sum of Rs. 25,000/ for getting 10 KW3Phase electric connection in the above said portion. A sum of Rs. 13,500/ was deposited as a Security Amount with BSES Ltd. He also paid a sum of Rs. 1.50 lakh each to his three existing tenants namely Sukhbir Singh, Tek Chand and Raj for getting the premises vacated.
6. The plaintiff spent the following amount at the instance of the defendant company for making the above said space available to the defendant company: CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 3 Of 33
i) For carrying out structural changes : Rs. 5,00,000/
ii) For getting the premises vacated from the tenants; : Rs. 4,50,000/
iii) For getting 10 KW3Phase electric connection : Rs. 25,000/ _________________________________ Total : Rs. 9,75,000/ _________________________________
7. The lease deed/lease agreement dated 13.10.2008 was also duly executed and signed between the plaintiff and Defendant company and on the basis of said lease deed the possession of the tenanted premises was handed over to the defendant company on 04.12.2008. It was assured to the plaintiff that the above said amount spent by the plaintiff for improvement of the above said space and for getting the premises vacated and also for getting 10 KW3Phase electric connection will be refunded to the Plaintiff after the delivery of the possession. The plaintiff carried out the above said changes in the tenanted premises at the instance of Defendant company only. In the month of January February 2009, the plaintiff started demanding the reimbursement of the above said amount of Rs. 9.75 Lacs from the Defendant Company as the amount was spent at the instance of defendant company but the defendant company failed to return the amount.
8. The defendant company became dishonest and was not willing to reimburse the said amount of Rs. 9.75 lacs to the plaintiff and consequently thereof the defendant company wrote a letter dated 05.03.2009 issued in the name of the plaintiff wherein the defendant company showed their intention to terminate the lease deed dated 13.10.2008. In the said letter dated 05.03.2009, the defendant company relied upon Clause 7.1 of the Lease Deed. On the basis of said clause, the defendant company started claiming that they are issuing 3 months notice in advance for terminating the lease agreement/deed dated 13.10.2008.
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9. Letter dated 05.03.2009 was received by the plaintiff on 10.03.2009. As per clause 7.1 of the Lease Deed dated 13.10.2008 and as per Defendant company's letter dated 05.03.2009, three months notice was to expire on 10.06.2009. After 10.06.2009 also the defendant company is liable to pay the rent till the possession was handed over to the plaintiff. After 10.06.2009, defendant company never came forward to hand over the possession of the tenanted premises to the plaintiff. In response to letter dated 05.03.2009, a reply/letter was written to the defendant company on 20.03.2009 followed by the reminder letter dated 30.04.2009. By both of these above said letters, the defendant company was called upon to make the payment of Rs. 9.75 lacs.
10. The defendant company was also called upon to make payment of the lease rentals. Also, in the above said letters, the plaintiff has disputed the termination of lease deed as the premises was given on a long term lease and accordingly, it was unbecoming on the part of the defendant to invoke clause 7.1 and to terminate the lease deed and that too, without making the payment of above said amount of Rs. 9.75 Lacs and without making the payment of the upto date lease rentals. The defendant company wrote a letter dated 29.05.2009 and took a summersault and started alleging that the possession of the tenanted premises was not handed over to the defendant company and this letter was totally in contravention of their earlier letter dated 05.03.2009 as no such averment was ever made in the earlier communication dated 05.03.2009.
11. During the notice period of 3 months from 10.03.2009 to 09.06.2009, plaintiff patiently waited with the hope that if the defendant company was relying upon clause 7.1 then it will come forward and revert/hand over the possession to him. After 09.06.2009 also the plaintiff CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 5 Of 33 bonafidely waited for one month i. e. from 10.06.2009 till 09.07.2009 hoping that the Defendant Company/ their officials will come forward for handing over the possession back to the plaintiff but the defendant company failed to do so. It also did not pay the monthly rent to the plaintiff. Accordingly, plaintiff repossessed the possession of the tenanted premises on 13.07.2009 after giving due intimation to defendant company with the help of the duplicate key in his possession.
12. Defendant company was duly informed in this regard that if they do not come forward to revert back the possession, then the leased premises/area/space will be repossessed by the plaintiff as he cannot be made to suffer endlessly as neither the defendant was paying the lease rental nor was paying the other dues as stated above. The plaintiff was having a duplicate key of the above said area/tenanted space with the help of which he repossessed the tenanted premises on 13.07.2009. The Defendant company is liable to pay the lease rental upto 09.07.2009 as even after the termination notice/letter dated 05.03.2009 the defendant company never came forward to hand over the possession back to the plaintiff.
13. As per the Lease Deed, the agreed amount of rent was Rs. 38,500/ per month for 700 sq. ft area. At the time of handing over the possession on 04.12.2008, the final calculation of the area was made and that came to 740 sq. ft. As monthly rental was Rs. 55/ per sq. ft per month, therefore, the exact amount of rent comes to Rs. 40,700/ per month.
14. The plaintiff is accordingly entitled to the following amounts from the defendant company:
i) Lease Rental from 04.12.2008 to 03.07.2009 CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 6 Of 33 @ Rs. 40,700/ per month Rs. 2,84,900.00
ii) Amount spent to carry out the necessary improvement in the tenanted premises as mentioned in the plaintiff's notice/letter Rs. 9,75,000.00
iii) Rent due for 5 days from 04.07.2009 to 09.07.2009 Rs. 8,139.00
iv) Interest due @ 18% per annum on Rs.
9,75,000/ till filing of the suit Rs. 1,02,375.00 Rs. 13,70,414.00 Less: Rental received for two months , and security 1 month Rs. 1,20,000.00 ___________________________________________________________ Total Amount Rs. 12,50,414.00
15. The above mentioned amount is due from the defendant company which it had failed to pay. Hence, the present suit has been filed by the plaintiff seeking recovery of Rs. 12,50,414/ alongwith pendentelite and future interest @ 18% per annum.
Defendant's Case:
16. In response to the summons of the suit, defendant filed his written statement wherein the suit is preliminarily objected to on the ground of being without any cause of action. It is alleged that plaintiff failed to provide the defendant company with any document to show that tenanted premises could be used for commercial purposes. On merits, the execution of the lease deed dated 13.10.2008 between the parties is admitted.
17. It is averred that at the time of execution of the lease agreement, the plaintiff had undertaken to carry on renovation/ CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 7 Of 33 construction in the premises so as to provide the required area on rent to the defendant. Though the possession letter was signed on 04.12.2009 in the office of the defendant company (Kirti Nagar) by the official of the defendant company but, the plaintiff did not handover keys of the premises and requested some more time for the same as the construction was still continuing. Further, at the time of execution of the agreement, there was domestic power connection in the premises and the plaintiff assured the defendant that he would get a commercial power connection installed in the premises at the earliest. However, the commercial power connection was got installed in the premises by the plaintiff as late as 20.02.2009.
18. The defendant took the possession of the premises but found it difficult to carry on its business from the said premises due to lack of agreed and assured infrastructural facilities. The plaintiff failed to provide a completely viable premises and utterly disregarded the terms and conditions agreed upon and duly recorded in the agreement dated 13.10.2008 despite being requested by the defendant company. As per clause 1.2 of the agreement there was an agreed rent free fit out period from the date of possession.
" 1.2 Effective date: The effective date of this agreement is after 60 days of the fit out period from the date of possession and the rent free fit out period of 60 days will be applicable, irrespective of the starting day of outlet at that location."
19. In such circumstances, as the defendants business suffered because of unfit condition of the premises, the defendant chose to terminate the lease. The defendant issued a letter dated 05.03.2009 to the plaintiff terminating the agreement in strict consonance with clause 7.1 & 7.4 of the agreement. At the time of execution of the agreement, the defendant had paid Rs. 77,000/ to the plaintiff as security deposit. As the CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 8 Of 33 premises was not fit for use and as per the agreement the period of 60 days was provided from the date of handing over of the possession of the premises to the defendant, the effective date of the agreement is to be calculated after 60 days of so called possession.
20. The defendant has in all paid plaintiff an amount of Rs. 1,22,100/ and there is no dispute about the same. In the letter of termination, the defendant requested the plaintiff to adjust the security deposit i. e. Rs. 77,000/ towards the period of notice. Further at the time of the lease agreement, the officials of the defendant asked the plaintiff to provide some documents showing that the tenanted premises can be used for commercial purpose. On this, the plaintiff promised the defendant that he would provide such documents to the defendant. But the plaintiff never supplied any such document to the defendant. With these contentions, the suit has been opposed.
REPLICATION:
21. The plaintiff filed his replication reiterating the averments made in the plaint and denying the contentions made in the written statement except the admissions made. It is specifically denied that possession of the tenanted premises was not handed over to the defendant company or that the defendant company had ever demanded any document from the plaintiff to show that the premises could be used for commercial purposes.
ISSUES
22. After completion of pleadings, vide order dated 25.02.2010, the following issues were framed: CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 9 Of 33
(i) Whether the plaintiff has violated the terms of the lease deed dated 13.10.2008 and had not submitted the documents of the property in question to the plaintiff to show that it could be used for commercial purpose? OPP
(ii) Whether the plaintiff is entitled for an amount of Rs. 12,50,414/ as prayed for?
OPP.
(iii) Whether the plaintiff is entitled for any interest and if so at what rate and for which period? OPP.
(iv) Relief. PLAINTIFF'S EVIDENCE
23. Plaintiff examined himself as PW1, Sh. Sukhbir Singh as PW2, Sh. Tek Chand as PW3 respectively in his evidence. PW1 stated and reiterated on oath the averments made in his plaint in his affidavit. The plaintiff relied upon the following documents (Ex.PW1/1 to Ex.PW1/19) which are as under: (inadvertently no document is exhibited as Ex.PW1/7)
(i) Ex. PW1/1- Letter of Intent dated 13.10.2008.
(ii) Ex. PW1/2: Lease Agreement dated
13.10.2008.
(iii) Ex. PW1/3 - Acknowledgement Slip
regarding handing over of the possession dated 04.12.2008.
(iv) Ex. PW1/4- Notice for termination of Lease dated 05.03.2009.
(v)Ex. PW1/5 & Ex. PW1/6 - Postal Receipts in respect of legal notice dated 20.03.2009.
(vi)Ex. PW1/8 - Legal Notice dated
20.03.2009.
CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 10 Of 33
(viii)Ex. PW1/9 & Ex. PW1/10 - Postal
Receipts in respect of legal notice dated
30.04.2009.
(ix)Ex. PW1/11 - Legal Notice dated
30.04.2009.
(x)Ex. PW1/12 - Letter of the defendant dated
29.05.2009 in respect to legal notice of plaintiff dated 30.04.2009.
(xi)Ex. PW1/13 - Legal Notice dated 09.07.2009.
(xii)Ex. PW1/14 & Ex. PW1/15 - Postal Receipts in respect of legal notice dated 09.07.2009.
(xiii)Ex. PW1/15 - Meter Testing Report bearing no. 113077 dated 21.05.2009.
(xiv) Ex.PW1/16 Demand Note of Meter Testing of BSES dated 12.05.2009.
(xiv)Ex. PW1/17 - Tentative Demand Note No. 09050637 of BSES dated 12.05.2009.
(xv)Ex. PW1/17A - Receipt of Tentative Demand Note No. 09021429 dated 20.02.2009.
(xvi)Ex. PW1/18 - Electricity Bill dated 26.04.2009.
(xvii)Ex. PW1/19 - Letter dated 25.03.009 addressed to DGM, BRPL, Najafgarh.
24. PW1 was cross examined at length on behalf of the defendant company.
25. PW2 Sh. Sukhbir deposed in his affidavit Ex.PW2/A that he CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 11 Of 33 was a tenant of the plaintiff in respect of a shop situated in revenue village Amberhi. Plaintiff entered into a rent agreement with defendant on 13.10.2008 for which plaintiff got the shop in his possession vacated after making him a payment of Rs. 1.50 lacs. Plaintiff also spent Rs. 5 lacs on renovation of the premises and Rs. 3 lacs or getting two other shops vacated from his other two tenants namely Tek Chand @ Tika Ram & Raj. He also spent more than Rs. 25,000/ on getting a 3 phase electricity connection in the premises and handed over the possession of tenanted premises to the defendant on 04.12.2008. Plaintiff also demanded reimbursement of Rs. 9.75 lacs spent by him on the tenanted premises for the defendant company but the defendant company terminated the lease vide notice dated 05.03.2009.
26. PW3 Tek Chand @ Tika Ram is another tenant of the plaintiff and has deposed on similar lines as PW2.
27. Both these witnesses have been duly examined on behalf of the defendant company.
DEFENDANTS'EVIDENCE
28. Initially, Defendant examined Shri Sagar Singhal , Legal Officer of the defendant company as DW1 by way of affidavit Ex. DW1/A who has relied upon the document Ex. DW1/1. However, the testimony of this witness was incomplete and with the permission of the court Sh. Shyamlal Yadav, Adminsitrative Officer of the Defendant was examined as DW1. DW1 stated and reiterated on oath the averments made in the WS in his affidavit Ex.DW1/A and relied on following documents:
(i) Ex.DW1/1: Minutes of Meeting of Board of Directors of CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 12 Of 33 defendant company dated 27.09.2016 authorizing Sh.
Shyamlal Yadav to depose on behalf of the company.
29. Defendant did not examine any other witness. DW1 has been cross examined on behalf of the plaintiff.
30. Final arguments have been heard. Written arguments and record carefully perused.
31. Before I proceed to give my issuewise findings, it would be apposite to highlight certain important facts of the case.
Rent Agreement:
32. The execution of the rent agreement between the parties is admitted. The plaintiff has placed on record the original lease deed dated 13.10.2008 which is Ex.PW1/2. The execution of the said agreement between the parties is not in dispute. Certain important clauses of the lease deed (Ex.PW1/2) are reproduced hereinunder for the sake of clarity:
"..........
And Whereas the LESSEE, is engaged in the business of, inter alia, "hospitals, pharmacy, consultancy, education, communication, entertainment, agro food, general merchandise, manufacturing, trading and related services", and is interested to take on lease the Premises with an intention to use the same for the purpose of operating or carrying out the above mentioned activities.
And Whereas the LESSOR having considered the proposal made by the LESSEE and agreed to Lease out the above mentioned Premises to the LESSEE for the purpose of operating or carrying out round the clock CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 13 Of 33 activity or raising and maintaining of a pharmacy from the Demised Premises, subject to the terms and conditions hereinafter as mentioned.
NOW THIS AGREEMENT OF LEASE WITNESSETH AS FOLLOWS:
.........
4. The LESSOR has confirmed that all requisite permission(s), approval,clearance etc. required under the law in force for use of the said Premises for business or commercial use have been obtained.
AND WHEREAS the LESSEE being fully satisfied with all aspects of the Lease and relying upon the aforesaid and other representations of the LESSOR as herein contained has called upon the LESSOR to execute this Lease Agreement.
.......
1.2 EFFECTIVE DATE:
The Effective Date of this agreement is after 60 days of the fit out period from the date of possession and the rent free fit out period of 60 days will be applicable, irrespective of the starting day of outlet at that location.
1.3 DATE OF POSSESSION:
The LESSORS shall handover the possession of the Leased Premises to the LESSEE on the ........... All electricity, water/other miscellaneous charges till possession is to be borne by LESSORS and it has been decided that the Lessors will provide the separate electricity (11 KW), water meter at the time of handover the possession of the leased premises.
CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 14 Of 33 .......
7. TERMINATION OF LEASE:
7.1 The LESSEE shall be entitled to terminate this agreement of lease by giving the LESSOR three months notice in advance of its intention to do so and in that case this agreement shall automatically stand terminated . In such an event, the LESSOR shall forthwith refund to the LESSEE, security deposit after adjustments, if any, due to the LESSOR under this Agreement.
........
7.4 In addition to the termination of Lease as per above clause, if either party commits breach of any of the terms of this Lease Agreement and also fails to perform his part of the obligation stipulated under this Agreement, then the other party shall be entitled to terminate the LEASE after giving prior notice for three months to the other party irrespective of the period of LEASE;
.............
10. THE LESSOR COVENANTS;
10.3 That the LESSOR covenants that in case the LESSEE unable to enjoy the peaceful use of the demised premises, due to violation of any building byelaws, the LESSEE can terminate the present agreement and the LESSOR will be liable to refund the security deposit to the LESSEE within a period of twenty one days and in that case this Lease Agreement shall be liable to be terminated at the option of the LEESEE irrespective of any lock in period; and all the cost will be paid by the CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 15 Of 33 LESSOR to the LESSEE in this regards.
............
12. SECURITY DEPOSIT:
The LEESEE has already paid a sum of Rs.77000/ (Seventy seven thousand only) which is equal of two months rent to the LESSOR towards to 2 months security deposit. The above security deposit amount shall not carry any interest and the same is refundable immediately to the LEESEE on termination of Lease and delivering vacant possession of the Demised Premises to the LESSOR, after deducting arrears of rent, electricity and water charges."
33. These are the admitted clauses of rent agreement executed between the parties.
Rate of Rent:
34. As per clause 3.1 of the written lease agreement (Ex.PW1/2), the agreed monthly rent of the tenanted premises was Rs. 38,500/. Clause 12 of the agreement (Ex.PW1/2) also records payment of Rs. 77,000/ by the defendant company to the plaintiff towards two months security deposit.
35. As per the case of the plaintiff, the rent was agreed @ Rs. 55 per sq. feet per month for a tentative area of 700 per sq. feet, thus, amounting to Rs. 38,500/ per month. But after final measurement at the time of handing over the possession to the defendant company, the area come to 740 sq. feet as recorded in possession letter (Ex.PW1/3) and accordingly, the defendant company was liable to pay monthly rent of Rs. 40,700/. The averment to this effect is made by the plaintiff in para 7 of CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 16 Of 33 the plaint which is reproduced herein under: "That the Defendant company/its officials also conveyed that the company was interested in taking the land on a long term lease of 9 years. They also assured that the company will be paying the market rent of Rs. 55.00 per sq. feet per month and also assured that the rent will be enhanced after 5 years. "
36. In response to this averment, the defendant did not specifically deny this averment. The corresponding paragraph of the WS is reproduced herein under: "The contents of para 7 of the plaint are not denied in so far as they conform with the letter of intent and the other agreement dated 13.10.2008. However, for the purposes of clarification, it is submitted that the lease was to be for an initial period of 5 years whereafter it was to be renewed for a term of 4 years at the sole discretion/option of the lessee. Similarly the rent was to increased at the rate of 10% every three years."
37. In his affidavit in evidence (Ex. P1) also plaintiff/PW1 has deposed on similar lines in para 8. There is again no specific denial on this aspect in affidavit of DW1. PW1 has also not been cross examined on this aspect. Not even a single suggestion is given to PW1 in this regard. It is a settled law that the facts not specifically denied are presumed to be admitted. Also, it is a general practice that big companies take premises on rent by finalizing the per sq. feet rent amount and tentative area and the rent is finalized after final calculation of the premises while handing over the possession. Thus, the contention of the plaintiff that rent was fixed @ Rs. 55 per sq. feet per month appears to be quite probable and acceptable.
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38. This is moreso as the lease agreement specifies the rent of Rs. 38500/ for an area of 700 sq. feet and not for 740 sq. feet.
Possession of Tenanted Premies:
39. One more important point in controversy between the parties as appears from the pleadings, evidence as well as the arguments addressed is "whether the possession of the tenanted premises was handed over by the plaintiff to the defendant in execution of the lease deed and if so, on which date and till when the possession remained with the defendant company".
40. In this regard, the case of the plaintiff is that the possession was duly handed over to the defendant on 04.12.2008. This is clearly pleaded by the plaintiff in paragraph no. 19 of his plaint. In support of his contention, the plaintiff is relying upon the acknowledgment slip dated 04.12.2008, which is proved as Ex.PW1/3. Ex.PW1/3, is an original document executed on behalf of the defendant company on its letter head, specifically acknowledging taking over of the possession of the tenanted premises on 04.12.2008 in pursuance to the lease deed dated 13.10.2008, executed between the plaintiff and the defendant. It also records the electricity reading as on 04.12.2008 and the fact that as per the final measurement, the exact area of the tenanted premises is 740 square ft. It is also worth mentioning that the signatures on the acknowledgment Ex.PW1/3 on behalf of the defendant company are of the same person who had signed the lease deed Ex.PW1/2.
41. Per contra, the defendant in its written statement in CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 18 Of 33 preliminary submission no.1 on page 2 contended that though the possession letter was signed on 04.12.2008 in the office of the defendant company, the plaintiff did not hand over the keys of the tenanted premises and requested for some more time for the same as the construction was still continuing. Also, at that time there was domestic power connection in the premises, which the plaintiff was required to get converted into a commercial connection and he had assured that the same shall be done at the earliest. In reply to paragraph no. 19 of the plaint, similar submissions have been made. During the course of arguments, it is submitted that the possession of the tenanted premises was never taken over by the defendant company. However, in the preliminary submissions in para 1 page 2 of the WS, the defendant has stated that it took the possession of the premises but found it difficult to carry on the business from the said premises due to lack of agreed and assured infrastructural facilities. It is no where clarified in the entire WS, as to what was the date when the defendant company had taken over the possession of the tenanted premises, if not on 04.12.2008.
42. It is also interesting to note that in the notice of termination of lease dated 05.03.2009, sent by the defendant company to the plaintiff (Ex.PW1/4), which is an admitted document, it is specifically mentioned in para 5 that "as the company no longer wants to continue with the lease of the demised premises, as such the company hereby terminates the lease by giving three months notice. The company shall vacate the demised premises after the expiry of three months from the date of this notice and shall handover the vacant and peaceful possession of the premises to you." This statement is a clear admission of the defendant that defendant company was in possession of the tenanted premises as on the date of notice of CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 19 Of 33 termination of lease deed dated 05.03.2009.
43. Accordingly, the defendant is making contradictory statement at various stages regarding the handing over the possession of the tenanted premises to him by the plaintiff in execution of the lease deed Ex.PW1/2. Since the admitted documents duly signed on behalf of the defendant company i. e. acknowledgment slip(Ex.PW1/3) as well as notice for termination of lease (Ex.PW1/4), clearly mention the fact of possession being with the defendant company, I have no hesitation in holding that the fact that the possession of the tenanted premises was duly handed over to the defendant company by the plaintiff in pursuance of the lease deed Ex.PW1/2 is duly proved on record. Since the defendant has failed to bring on record any other date of possession other than 04.12.2008, as mentioned in the acknowledgement slip Ex.PW1/3, it is held that the possession of 740 sq. feet of tenanted premises was handed over to the defendant company on 04.12.2008.
44. The contention of the defendant that the property was not in a fit condition for use on 04.12.2008, is also not acceptable as neither the acknowledgement slip Ex.PW1/3 mentions any such deficiency nor any such fact is mentioned in the termination notice Ex.PW1/4. Mere averments in this regard in the WS after about 2 years appears to be an afterthought.
45. The next point which is necessary for decision in the present case is the finding on the fact as to when the possession was taken back by the plaintiff from the defendant company. As per the case of the plaintiff, the defendant company did not hand over the possession of the tenanted CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 20 Of 33 premises to him within 3 months in compliance of termination notice dated 05.03.2009 (Ex.PW1/3).It is categorically pleaded in paragraph no.26 of the plaint that defendant company never came forward to hand over the possession of the tenanted premises after three months of receipt of termination notice i.e. after 10.06.2009. Thereafter, it is pleaded in paragraph no. 33 of the plaint that the plaintiff waited till 09.07.2009, for the defendant company to handover the tenanted premises to him but when the possession was not handed over, the plaintiff repossessed the tenanted premises on 13.07.2009, after giving due intimation to the defendant company. Thereafter, the defendant company never came forward to revert back the possession. The duplicate key of the premises lying with the plaintiff was used for repossessing the tenanted premises. PW1 has also deposed on the same lines.
46. In reply to paragraph no. 26 of the plaint, the defendant has stated in its WS that the averments made by the plaintiff are incorrect. It is also stated that the possession of the tenanted premises was handed over to the plaintiff immediately after termination of the lease deed. It is also alleged that the plaintiff got the power load reduced from commercial to domestic on 25.03.2009, which shows that the possession was with the plaintiff. However, the defendant has not clarified any particular date on which the possession was handed over by the defendant company to the plaintiff. The contentions of the plaintiff made in paragraph no. 33 have also been denied without any specific averments regarding the date of handing over of the possession.
47. It is also interesting to note that plaintiff/PW1 has not been cross examined on his averments regarding taking repossession of the CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 21 Of 33 tenanted premises by him on 13.07.2009 with the help of a duplicate key. Nor any suggestion has been given to him regarding the date when the possession was handed over to him as per the defendant company. DW1, who is the witness examined on behalf of the defendant company, has also not controverted the testimony of PW1 in this regard. Nor he has deposed about any date when the possession was handed over back by the defendant company to the plaintiff. Accordingly, from the pleadings and evidence on record, I have no hesitation in holding that the plaintiff has been able to prove on record that he had repossessed the tenanted premises on 13.07.2009 and the possession of the tenanted premises remained with the defendant company from 04.12.008 till 13.07.2009 FINDINGS
48. Now I shall proceed to give my issue wise findings: Issue no. 1:Whether the plaintiff has violated the terms of the lease deed dated 13.10.2008 and had not submitted the documents of the property in question to the plaintiff to show that it could be used for the commercial purpose? OPP
49. The onus of this issue has been placed on the plaintiff but it should actually be on the defendant as it is the contention of the defendant that the plaintiff had not handed over the documents of the tenanted premises to the defendant company to show that it could be used for commercial purposes.
50. It is the case of the defendant company that as per lease deed Ex.PW1/2, the defendant was taking the tenanted premises for being used for commercial purposes which was clearly mentioned in first para as well CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 22 Of 33 as point no. 4 on page 2 of the para of the lease agreement Ex.PW1/2. It is stated that later on the premises was found unsuitable for commercial activity and the plaintiff also failed to provide any document to show that the premises could be used for commercial purposes and accordingly the purpose for which the defendant company was taking the premises on lease could not be fulfilled resulting in failure of lease agreement itself. It is argued on behalf of the defendant that the plaintiff also confirmed at the time of execution of lease deed Ex.PW1/2, that all the permission, approval, clearance etc., required under the law in force for use of the tenanted premises for commercial purposes has been obtained, but he failed to provide any such document to the defendant and accordingly, violated the terms of the lease agreement. It is also submitted that even during cross examination, plaintiff/PW1 had admitted that he did not have any document to show that the tenanted premises was fit for commercial purposes. Accordingly, the plaintiff had violated the terms of lease agreement Ex.PW1/2 and is not entitled for any relief under the said agreement.
51. I have carefully perused the lease agreement Ex.PW1/2. Although it mentions the fact that the tenanted premises was required to be used for commercial purposes by the defendant company and the plaintiff had assured that the tenanted premises can be used for commercial purposes. However, there is no covenant/clause requiring the plaintiff to furnish any document to the defendant to show that the tenanted premises was fit for commercial purposes. The lease agreement is dated 13.10.008 and the possession of the premises had been taken over by the defendant company on 04.12.2008. Even the acknowledgement slip Ex.PW1/3 regarding the taking over the possession does not mention any defect in documents to be provided by the plaintiff in this regard.
CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 23 Of 33 Defendant has not placed on record any letter written to the plaintiff demanding any such document or informing the plaintiff that defendant was having any kind of trouble in carrying on commercial activity from the premises. It is not the case of the defendant that it was restrained by any of the authorities from using the tenanted premises for commercial purposes. The notice for termination of lease Ex.PW1/4 which is dated 05.03.2009 also does not mention that the defendant was terminating the lease as the premises could not be used for commercial purposes.
52. Interestingly as per notice Ex.PW1/4, the lease has been terminated by the defendant company under clause 7.1 of the lease deed Ex.PW1/2 after giving three months advance notice of termination and stating that the company was no longer interested with the lease of the tenanted premises. This is despite the fact that there is specific clause 7.4, under which the lease could be terminated in case either party committed breach of any of the terms of the lease deed which has not been invoked by the defendant company while terminating the lease. The notice of termination Ex.PW1/4 was duly replied to by the plaintiff vide notice dated 20.03.2009 (Ex.PW1/8), wherein the demand of the suit amount was also made. Thereafter, another notice dated 30.04.2009 (Ex.PW1/11), was issued by the plaintiff to the defendant company as a reminder to the defendant company to pay the suit amount. It was only in response to the notice Ex.PW1/11, that the defendant company vide its reply dated 29.05.2009 (Ex.PW1/12) for the first time came up with the case that on the next date of signing the acknowledgment slip dated 04.12.008 (Ex.PW1/3), when the company officials reached to take the possession of the tenanted premises they found that alteration work was still continuing in the premises and was not completed and accordingly, the possession was never taken over by the defendant company. Even in this notice, CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 24 Of 33 there is no mention by the defendant company that the tenanted premises was found to be unsuitable for commercial purposes or that the plaintiff had failed to hand over any documents to the defendant company regarding the suitability of the tenanted premises for commercial purposes despite demand. The defendant company has also failed to establish on record as to what were the documents they were demanding from the plaintiff which the plaintiff had failed to hand over to the defendant company resulting in violation of terms of the lease deed. The question of the document for the very first time has been raised by the defendant company in the WS filed on 08.01.2010 and not at any time prior to the filing of the suit in various admitted communications between the parties. Accordingly, this contention of the defendant clearly appears to be an afterthought.
53. As pointed out above, the lease agreement Ex.PW1/2 nowhere contains a covenant/clause regarding the liability of the plaintiff to provide the defendant company with the documents of the property to show that it could be used for commercial purposes. Accordingly, even if the plaintiff had failed to hand over any document to the defendant company in this regard, he cannot be held to have violated the terms of the lease agreement Ex.PW1/2. This issue is accordingly decided in favour of the plaintiff and against the defendant company.
Issue no. 2: Whether the plaintiff is entitled for an amount of Rs. 12,50,414/ as prayed for? OPP.
54. The onus to prove this issue was on the plaintiff. As per the case of the plaintiff company, this amount of Rs. 12,50,414/ has 3 components i. e. Rent amount @ Rs. 40,700/ per month from 04.12.2008 CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 25 Of 33 to 09.07.2009 total amounting to Rs. 2,93,039/; amount spent by the plaintiff in renovation/necessary improvement in the tenanted premises amounting to Rs. 9,75,000/ (this includes expenses on renovation & structural changes of Rs. 5,00,000/, amount paid to tenants for getting the premises vacated i.e. Rs. 4,50,000/ and amount paid for getting 10KW3 Phase Electric Connection i. e. Rs. 25,000/) and Pre Suit Interest @ 18% p. a. amounting to Rs. 1,02,375/. In the plaint itself, the plaintiff has admitted receipt of the Rs. 1,20,000 for the defendant company which has been reduced from the total of Rs. 13,70,414/ (i.e. Rs. Rs. 2,93,039/ + 19,75,000+ Rs. 1,02,375/) to arrive at the suit amount of Rs. 12,50,000/. I shall be dealing with all these amounts separately.
55. Let me first discuss the pleadings and evidence on the amount already paid by the defendant company to the plaintiff in pursuance of the rent agreement Ex.PW1/2. The lease agreement Ex.PW1/2 records payment of Rs. 77,000/ as security deposit. In para 37 of the plaint while calculating the suit amount, the plaintiff has deducted a sum of Rs. 1,20,000/ as already received from the defendant. The defendant has averred on page 4 of his WS. that a sum of Rs. 1,22,100/ has been payed to the plaintiff. In his replication, plaintiff has denied the said averment. In his evidence affidavit (Ex.PW1/1) in para 38 plaintiff/PW1 has reiterated on oath para 37 of his plaint and in his cross examination concluded on 01.12.2013, PW1 has admitted the suggestion that the defendant company had paid Rs. 1,22,100/ to him. DW1 has also deposed about payment of Rs. 1,22,100/ to the plaintiff. Thus, from the overall evidence on record, it can be safely held that the plaintiff has already been paid a sum of Rs. 1,22,100/ by the defendant company till date in pursuance of the lease agreement Ex.PW1/2.
56. Now, let us consider the outstanding rent amount due from CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 26 Of 33 the defendant company. The plaintiff is praying for outstanding rent @ Rs. 40,700/ w.e.f. 04.12.2008 till 09.07.2009 amounting to Rs. 2,93,039/. As discussed above under the subheading "Rate of Interest", the agreed rate of rent proved on record is Rs. 55/ per sq. feet p.m. X 740 sq. feet i. e. Rs. 40,700/ p.m. Also as per discussion under the heading "Possession of tenanted Premises" above, the defendant has been in possession of the tenanted premises with effect from 04.12.2008 till 13.07.2009.
57. The question that now arises for consideration is as to for what period the rent was payable by the defendant company. In this regard Clause 1.2 on page 3 of Lease Agreement (Ex.PW1/2) is very relevant. Even at the sake of repetition, the same is reproduced herein under for the sake of clarity: "1.2 EFFECTIVE DATE:
The Effective Date of this agreement is after 60 days of the fit out period from the date of possession and the rent free fit out period of 60 days will be applicable, irrespective of the starting day of outlet at that location."
58. This clause clearly specifies that a rent free fit out period of 60 days was agreed between the parties starting from the date of possession. Accordingly, the rent was payable only after expiry of this 60 days period from the date of possession. The date possession in this case is proved to be 04.12.2008. Accordingly, the Defendant company was liable to pay rent to the plaintiff w.e.f. 04.02.2009. As held above, the plaintiff had repossessed the tenanted premises on 13.07.2009. Thus, the defendant company is liable to pay rent to the plaintiff for the period 04.02.2009 till 13.07.2009 @ Rs.40,700/ per month which comes to Rs.
2,15,710/.
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59. The second component of suit amount is Rs.9,75,000/ which include Rs.5,00,000/ spent by plaintiff on structural changes, Rs.4,50,000/ spent by plaintiff in getting three shops vacated from his earlier tenants and Rs.25,000/ spent by him for obtaining the 10 KW 3 phase electricity meter for the tenanted premises. Plaintiff is claiming reimbursement of these expenses made by him on the pretext that they were made for making the tenanted premises fit for the use and occupation of the defendant company as per their requirements and defendant company had assured reimbursement of the same. The defendant, on the other hand, has categorically denied said averments of the plaintiff and had stated that he was not aware of any such expenses being made by the plaintiff and had never assured reimbursement of the same.
60. It is noteworthy that despite there being various written documents between the parties including the lease agreement, possession letter, termination notice etc., none of the same mentions any assurance or undertaking by the defendant company to reimburse the said expenses to the plaintiff. The rent agreement (Ex.PW1/2) does not contain any such covenant of reimbursement or even a clause that for making the premises fit for use by defendant company the plaintiff is required to make some structural changes in it. Except for the notice dated 20.03.2009 (Ex.PW1/7), when the plaintiff demanded reimbursement of the said amount from the defendant company, there is no previous communication between the parties bringing to the knowledge of the defendant company the fact that such huge expenses were being made by the plaintiff on the strength of the lease agreement (Ex.PW1/2). Interestingly, even though the plaintiff was already in knowledge of the fact that he would be required to incur huge expenses to make the premises fit for use of the defendant company, he preferred not to get CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 28 Of 33 these facts included in the lease agreement (Ex.PW1/2). The lease agreement also does not contain any clause/covenant regarding lockin period. Rather, the termination clause 7.1 gives a right to the lessee to terminate the lease at any time by giving a three month advance notice to the lessor. Thus, from the pleadings and evidence on record it is difficult to hold that the defendant company was aware about the expenses being made by the plaintiff on the tenanted premises or had assured the reimbursement of the same, as contended by the plaintiff.
61. Now, let us examine the contention of the plaintiff that since these expenses were made on the strength of the lease agreement, the defendant company is bound to reimburse the same. This requires the examination of the nature of expenses made by the plaintiff.
62. Rs.5,00,000/ are alleged to have been spent by the plaintiff on the structural changes made in the tenanted premises which includes removal of partition walls and construction of one common roof amongst others. First of all, the plaintiff has miserably failed to prove the incurring of such expenses on alleged structural changes. Neither, any construction bills have been proved on record, nor any photographs are placed on record to show any such structural change made in the tenanted premises. Even, if it is assumed that such structural changes were made by the plaintiff in his premises by spending Rs.5,00,000/, it is only an amount spent by him on upgradation of his own property. Unless it is proved on record that such expenses were made to meet the specific requirements of the defendant company, the company cannot be made liable to reimburse the same. As discussed above, the plaintiff has failed to prove that such structural changes were made on CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 29 Of 33 specific demands of the defendant company. It is also not the case of the plaintiff that the property/tenanted premises has been altered in such a manner to meet the requirements of the defendant company that it has become unfit for any other use without incurring of further expenses. In these circumstances, defendant company cannot be made liable to reimburse the plaintiff Rs.5,00,000/ allegedly spent by him on structural changes made in the tenanted premises which amounts to value addition/upgradation of plaintiff's own property and is in fact in the nature of an investment.
63. The plaintiff has further alleged having paid Rs.1,50,000/ each to three tenants (total Rs. 4,50,000/) for getting the three shops let out by him vacated and ensuring that an area 700 square feet was available for being let out to the defendant company. PW1,PW2 & PW3 have proved the factum of plaintiff having made such payments of Rs. 1,50,000/ each to the three tenants. This is again an expense incurred by the plaintiff for obtaining possession of his own premises let out to some tenants.
64. As per the facts of the present case, the defendant company required approx. 700 square feet area on rental basis and was willing to pay market rate of rent i.e. Rs.55/ per square feet and plaintiff agreed for the same. To make available the said area of 700 square feet, plaintiff got three shops vacated from his already existing tenants. It was a decision taken by the plaintiff. It is obvious that since he was getting a better rate of rent, he preferred to get the premises vacated from old tenants by paying them Rs. 1,50,000/ each. It is not the case of plaintiff that defendant company had asked him to get the said three shops vacated from preexisting tenants anyhow and hand over the same to it. By no stretch of CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 30 Of 33 imagination the defendant company can be made liable for such an expense incurred by the plaintiff which is clearly for his own benefit and with a view to earn better rate of rent.
65. The plaintiff has further alleged to have spent Rs. 25,000/ for obtaining 10 KW 3 phase electricity connection as per requirement of the defendant company. Firstly, the plaintiff has not placed on record any document to support his contention in this regard. Secondly, he has not clarified on what account this payment was made. This can be presumed to be refundable security deposit and reasonable charges required for meter installation. Even otherwise as per the case of the plaintiff, his property was commercial, so, even if he spent some amount on installation of a commercial electricity connection in his premises, it was for his own benefit and the defendant company cannot be made liable for the same. The plaintiff can at any time get the electricity connection disconnected or load reduced or converted it into noncommercial connection.
66. Technically, the defendant has not breached any clause of the lease agreement (Ex.PW1/2). He gave proper three months notice of termination of lease in terms of Clause 7.1 of the lease agreement (Ex.PW1/2). There is no lockin period specified in the lease agreement(Ex.PW1/2), so the defendant company was not bound to retain the tenanted premises for any minimum period whatsoever. Having been given an advance notice of three months as agreed, the plaintiff had means of remedying the inconvenience caused to him by the nonperformance of the contract and could have further let out the premises. In these circumstances, the plaintiff is not entitled to recover the amount of Rs. 9,75,000/ or CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 31 Of 33 any other damages from the defendant company.
67. The next ingredient of the suit amount is Rs.1,02,375.00, being the presuit interest @18% per annum. This amount cannot be awarded in favour of the plaintiff as it includes the interest calculated on Rs.9,75,000/ as well. Also the rate of interest of 18% per annum is considered to be excessive.
68. In view of the discussion above, the plaintiff is held entitled to recover Rs.93,610/ from the defendant company being the outstanding rent amount of Rs.2,15,710/ as reduced by amount already received by him i.e. Rs.1,22,100/. This issue is accordingly, decided in favour of the plaintiff and against the defendant.
Issue no. 3: Whether the plaintiff is entitled for any interest and if so at what rate and for which period? OPP.
69. The onus to prove this issue was on the plaintiff. Plaintiff has prayed for pendente lite and future interest @ 18 % p.a. There is no basis for claiming the same. Since, this is a commercial transaction pendente lite and future interest @ 9% p.a. (Simple interest) on decreetal amount of Rs. 93,610/ is awarded in favour of the plaintiff and against the defendant company from the date of filing of the suit i. e. 28.07.2009 till its realization.
Relief:
70. In view of my issue wise findings given above, the suit of the plaintiff is decreed and following reliefs are granted in his CS: 611636/2016 Suraj Bhan Vs. M/s. Rama Medicare Ltd. 32 Of 33 favour and against the defendant company:
1) Decree for recovery of an amount of Rs. 93,610/ (Rupees Ninety Three Thousand Six hundred and Ten only).
2) Pendente lite and future interest @ 9% p.a. (Simple interest on the decreetal amount of Rs. 93,610/ from the date of filing of the suit i. e. 28.07.2009 till its realization.
3) Costs of the suit.
70. Decree sheet be prepared accordingly.
71. File be consigned to record room.
Announced today during Covid 19 Lockdown through WeBex in the Digitally signed presence of Counsels for the plaintiff. SHIVALI by SHIVALI SHARMA SHARMA Date: 2020.08.20 16:09:30 +0530 (SHIVALI SHARMA) ADJ03/WEST/THC/DELHI 20.08.2020.
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