Delhi District Court
Bimla Rani Juneja vs Nathus Sweets Pvt Ltd on 14 October, 2024
IN THE COURT OF DR. NEERA BHARIHOKE
DISTRICT JUDGE (COMMERCIAL COURT)-06
SOUTH EAST, SAKET COURTS,
NEW DELHI
CNR No. DLSE01-007068-2023
CS (Comm) 637/2023
1. Smt. Bimla Rani Juneja
Wd/o Late Shri Jagdish Kumar Juneja
2. Shri Jitender Kumar Juneja
S/o Late Shri Jagdish Kumar Juneja
3. Smt. Sanjana Juneja
Wd/o Late Shri Mukesh Kumar Juneja
4. Smt. Mansi Juneja
D/o Late Shri Mukesh Kumar Juneja
All at : K-37, Kailash Colony,
New Delhi - 110048
...Plaintiffs
VERSUS
Nathu's Sweets Pvt. Ltd.
A Pvt. Limited Company
Having its Regd. Office at:
2, Sunder Nagar Market,
New Delhi
....Defendant
Digitally
signed by
NEERA
NEERA BHARIHOKE
BHARIHOKE Date:
2024.10.14
14:29:32
+0530
CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 1 of 51
Date of institution of the suit : 10.07.2023
Date on which judgment was reserved : 28.09.2024
Date of pronouncement of Judgment : 14.10.2024
JUDGMENT
SUIT FOR RECOVERY
1. By way of this judgment, I shall decide the suit of the Plaintiff filed for recovery of Rs.17,19,394/- alongwith interest.
CASE OF THE PLAINTIFF AS SET UP IN THE PLAINT
2. Brief facts of the case as stated by the Plaintiff in the plaint are that :-
i. The Defendant had taken on lease premises No.20, Ground Floor, Community Center, East of Kailash, New Delhi (hereinafter referred to as 'tenanted premises') for a period of 9 years commencing from 01.03.2019 from Shri Jagdish Kumar Juneja, Shri Mukesh Kumar Juneja and Shri Jitender Kumar Juneja vide Lease Deed dated 05.03.2019 (hereinafter referred to as 'Lease Deed') for the purpose of running commercial establishment therein. The monthly rent payable for the period from 01.03.2019 to 28.02.2022 was Rs.2,21,000/- per month Digitally NEERA signed by NEERA BHARIHOKE plus GST as applicable.
BHARIHOKE Date:
2024.10.14 14:29:39 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 2 of 51 ii. The Defendant paid rent for the abovesaid tenanted premises for the period up to 31.03.2020 and failed to pay any rent towards the said tenanted premises thereafter. Defendant sent a notice dated 26.05.2020 to recipients namely Shri Jagdish Kumar Juneja, Shri Mukesh Kumar Juneja and Shri Jitender Kumar Juneja stating that tenanted premises had been rendered inaccessible and unfit for the operation of Sweets, Pastry Shop and Restaurant on account of outbreak of COVID-19 and stated therein that in terms of Clause 13 of the Lease Deed, the Defendant terminated the lease.
iii. The said notice was replied by the said recipients by way of reply dated 30.05.2010 and it was averred that tenanted premises had not been rendered inaccessible and unfit for the operation of sweets, pastry shop and restaurant. In the reply, it was also stated that the Defendant was not entitled to invoke the provisions of Clause 13 of the Lease Deed and could have terminated the lease only under Clause 6 of the said Lease Deed after giving three months' notice or by giving three months' rent in lieu thereof to the lessors. The Defendant got served a rejoinder dated 15.06.2020 which was duly replied vide reply dated 15.06.2020 by the recipients thereof. iv. The Defendant handed over the possession of the aforesaid tenanted premises on 19.06.2020 but Defendant failed to clear the outstanding amount and Defendant was liable to pay the NEERA rent for the period till 31.08.2020. Defendant was liable to pay BHARIHOKE Digitally signed by rent to the landlords @ Rs.2,21,000/- per month besides GST NEERA BHARIHOKE Date: 2024.10.14 14:29:45 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 3 of 51 for the period from 01.04.2020 to 31.08.2020. The Defendant was liable to pay interest @ 18% per annum on the delayed payment. The Defendant had illegally removed all the electrical fittings including MCB's from the tenanted premises which the Defendant could not have removed since the same were the property of landlords. The Defendant had also damaged the staircase of the tenanted premises at the back and front. Defendant was liable to pay a sum of Rs.1,50,000/- to the landlords for the removal of the fittings and damage caused to tenanted premises by the Defendant. Therefore, lessors adjusted the said amount of Rs.1,50,000/- from the security deposited by the Defendant with the lessors. v. The Defendant had not cleared the outstanding water bill dues as on 19.06.2020 despite undertaking and assurance given. The Defendant sent an e-mail dated 19.06.2020 to lessors by acknowledging that the water charges till 17.06.2020 from the tenanted premises will be paid by the Defendant directly to the authorities concerned. Therefore, Defendant was liable to pay an amount of Rs.34,269/- on account of outstanding water dues.
vi. Shri Jagdish Kumar Juneja expired on 01.12.2020 leaving behind the Plaintiff No.1 being his widow and two sons namely Shri Mukesh Kumar Juneja and the Plaintiff No.2 as his only legal heirs. Shri Mukesh Kumar Juneja expired on 05.11.2022 Digitally leaving behind his widow i.e. the Plaintiff No.3 and his mother signed by NEERA NEERA BHARIHOKE BHARIHOKE Date:
2024.10.14 i.e. Plaintiff No.1 and daughter i.e. Plaintiff No.4 as his only 14:29:50 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 4 of 51 legal heirs.
vii. The Defendant was liable to pay Rs.11,05,000/- besides GST on account of rent for the period from 01.04.2020 to 31.08.2020 @ Rs.2,21,000/- and a sum of Rs.34,269/- on account of outstanding water dues. Thus, a total amount of Rs.11,39,269/- was payable by the Defendant to the Plaintiffs.
viii.The Defendant was thus liable to pay an amount of Rs.5,80,125/- on account of interest @ 18% per annum on the abovesaid amount of Rs.11,05,000/- for the period from 20.06.2020 to 20.05.2023.
ix. The Plaintiffs preferred a Pre-litigation/Pre-Institution Mediation before the Competent Authority, i.e. SEDLSA, on 27.03.2023, however Defendants did not appear before the Competent Authority. Furthermore, the Non-Starter Report for the Pre-Institution Mediation was issued by the Competent Authority, SEDLSA, dated 06.05.2023.
3. Hence the present suit has been filed.
CASE OF THE DEFENDANT
4. Written Statement was filed by the Defendant. Defendant has submitted that it was not liable to pay Rs.17,19,394/- to the NEERA Plaintiffs as the alleged Lease Agreement dated 05.09.2019 was BHARIHOKE entered between the Defendant and Late Shri Jagdish Kumar Digitally signed by NEERA Juneja, Shri Mukesh Kumar and Shri Jitender Kumar Juneja and BHARIHOKE Date: 2024.10.14 14:29:55 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 5 of 51 the legal heirs cannot be the party to the present suit as no contract was executed between them.
5. It has been stated by the Defendant that there was no privity of contract between the parties. It was also stated that the present case is not maintainable and barred by the limitation as the Plaintiffs tried to extort the money by filing a false and frivolous case against the Defendant. Defendant terminated the Lease Deed by sending legal notice on 26.05.2020 by invoking Clause 13 " Force Majeure". Defendant had asked for the return of the security money which the Plaintiff denied.
6. It has been stated by the Defendant that it legally terminated the Lease Deed by invoking Clause 13 of the lease as it did not have any other power to terminate the lease except under this clause.
7. It has also been submitted by the Defendant that whole world was suffering from an outbreak of COVID-19 and lock down of different phases was imposed by the Government of India and due to these unforeseen circumstances, Clause 13 ( Force Majeure) in the Lease Deed was invoked.
8. Defendant has submitted that the suit is not maintainable as the NEERA BHARIHOKE matter has been settled between the parties and vacant, actual Digitally signed by NEERA possession of the tenanted premises was handed over by the BHARIHOKE Date: 2024.10.14 14:30:01 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 6 of 51 Defendant on 19.06.2020 to Shri Jitender Kumar Juneja and there were no arrears of money by the Defendant towards the Plaintiffs.
9. It was also stated by the Defendant that the Security Money was adjusted by the Defendant with the Plaintiffs for dues and the present suit has been filed to extort money from the Defendant and it was submitted by the Defendant that the present suit is liable to be dismissed with exemplary costs.
10. Replication was filed by the Plaintiffs, wherein Plaintiffs denied the contents of the Written Statement filed by the Defendant and they reiterated the contents of their Plaint.
11. Based on the pleadings of the parties, following issues were framed by my learned Predecessor:-
i. Whether the defendant rightly terminated the lease by invoking Clause 13 of the lease deed and whether the defendant was not liable to give the three months notice or the rent in lieu thereof under clause 6 of the lease deed? OPD.
ii. Whether all dues had been settled between the parties at the time of vacation of the property? OPD.
iii. Whether the plaintiffs are entitled to the sum of ₹11,05,000/-
plus GST on account of rent for the period 01.04.2020 to NEERA BHARIHOKE 31.08.2020? OPP.Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:06 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 7 of 51
iv. Whether the defendant caused damage to the property and whether the plaintiffs are entitled to adjust an amount of ₹1.50 Lac on this account from the security deposit as stated in para 5 of the plaint? OPP.
v. Whether the plaintiffs are entitled to a sum of ₹34,269/-
towards arrears of water bill as claimed?OPP.
vi. The amount of the security deposit which is available for adjustment against the dues of the plaintiffs? OP Parties.
vii. Whether the plaintiffs are entitled to a sum of ₹5,80,125/-
towards interest at the rate of 18% per annum on the amount of ₹11,05,000/- for the period 20.06.2020 to 20.05.2023 as claimed? OPP.
viii. Whether the plaintiffs are entitled to pendente lite and future interest if yes, on what amount and at what rate? OPP.
ix. Whether the plaintiffs are entitled to cost of the suit? If yes, the quantum? OPP.
x. Whether the defendants are entitled to any cost of the suit? If yes, the quantum/ OPD.
xi. Relief.
Digitally
signed by
PLAINTIFF'S EVIDENCE
NEERA
NEERA BHARIHOKE
BHARIHOKE Date:
2024.10.14
14:30:11
+0530
12. Plaintiffs examined two witnesses one being Shri Jitender Kumar Juneja as PW-1. He presented his evidence by way of CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 8 of 51 affidavit vide Ex. PW-1/A. He reiterated the contents of the plaint in his affidavit and relied upon the following documents: -
a) Original lease Deed dated 05.03.2019 is Ex. PW-1/1.
b) Board Resolution dated 05.03.2019 is Ex. PW-1/2.
c) Legal notice dated 26.05.2020 issued by the Counsel of Defendant is Ex. PW-1/3.
d) Reply of notice dated 26.05.2020 is Ex. PW-1/4.
e) Rejoinder to the reply is Ex. PW-1/5.
f) Reply to the rejoinder is Ex. PW-1/6.
g) The receipt of the handing over the possession dated
19.06.2020 is Ex. PW-1/7.
h) Copy of e-mail dated 19.06.2020 is Ex. PW-1/8.
i) Certificate under Section 65-B of Indian Evidence Act is Ex.
PW-1/9.
j) Non-Starter Report dated 06.05.2023 is Ex. PW-1/10.
PW-1 was examined, cross examined by learned Counsel for Defendant and discharged on 29.05.2024.
13. PW-2 Shri Rajeev Kumar Sakhuja, ASO, Delhi Jal Board, Greater Kailash-I, New Delhi - 110048 brought the summoned NEERA BHARIHOKE record i.e. Bill dated 10.01.2020, 09.06.2022, 06.04.2024 with Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:15 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 9 of 51 respect to K. No.3979009766 and billing summary for the said connection vide Ex. PW-2/1 to Ex. PW-2/4 respectively and tendered the summoned record in his examination in chief. He was cross examined by learned Counsel for Defendant and was discharged on 05.06.2024.
14. Thereafter, evidence of Plaintiffs was closed vide separate statement given by learned Counsel for Plaintiffs on 05.06.2024.
DEFENDANT'S EVIDENCE
15. Defendant has examined Shri Mohit Gupta as DW-1. presented his evidence by way of affidavit vide Ex. DW-1/A. He reiterated the contents of the Written Statement and relied upon the following documents: -
a) Board Resolution dated 06.10.2023 is Ex. DW-1/1.
b) Government notices dated 24.04.2020, 17.05.2020 and 30.05.2020 are Ex.DW-1/2 (Collectively)
c) Original Lease Deed already exhibited as Ex.PW-1/1.
d) Copy of legal notice dated 26.05.2020 already exhibited as Ex.PW-1/3.
e) Reply to legal notice by the Plaintiff already exhibited as Ex.PW-1/4.
f) Rejoinder to the reply of the legal notice already exhibited as Ex.PW-1/5.
NEERA BHARIHOKE
g) Reply to rejoinder dated 15.06.2020 already exhibited as Ex.PW-1/6.
Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:20 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 10 of 51h) Letter dated 19.06.2020 already exhibited as Ex.PW-1/7.
DW-1 was cross examined by learned Counsel for Plaintiff and discharged on 06.07.2024. Thereafter, Defendant Evidence was closed vide separate statement given by Shri Mohit Gupta on 06.07.2024.
FINAL ARGUMENTS
16. Learned Counsel for Plaintiffs submitted that the Lease Deed was executed between the parties on 05.03.2019 for a period of nine years and that the Defendant had paid rent till 31.03.2020. He argued that, however, the tenancy had been wrongfully terminated by the tenant, i.e. the Defendant, without giving three months' notice to the lessors. He also argued that besides the rent due under the agreement, the Defendant is also liable to pay the unpaid water bill of Rs.34,269/- which it had undertaken to pay in its mail written to the Plaintiffs that water bills will be paid by the Defendant directly to the authorities.
17. Learned Counsel for Plaintiffs argued that the Defendants had wrongly invoked Clause 13 of the Lease Deed for termination of the Lease Deed dated 05.03.2019 and the Lease Deed could have only been terminated under clause 6 of the said Lease Deed after giving 3 months' notice or by giving three months' rent in lieu NEERA thereof by the Defendant to the lessors. BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:25 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 11 of 51
18. Learned Counsel for Plaintiffs made reference to the various orders issued by National Disaster Management Authority (NDMA) during the period from 24.03.2020 to 30.05.2020 and argued that in view of these orders, the Defendant was not entitled to invoke clause 13 of the Lease Deed 'Force Majeure'. He prayed that the suit of the Plaintiff be decreed.
19. Learned Counsel for Defendant argued that because of the imposition of lockdown in view of COVID-19, the termination notice was given by the Defendant to the lessors by invoking Clause 13 of the Lease Deed. He also argued that it is the Defendant who has to recover money from the Plaintiffs as complete security money was not returned by the lessors at the time of handing over the possession of the tenanted premises and lessors had wrongfully adjusted the amount of Rs.1,50,000/- deposited by Defendant towards cost of repair/restoration without the lessors' proving damages. The testimony of witness from Delhi Jal Board, PW-2 was referred to and it was argued that the same only shows that no arrears were outstanding against the water bills and that all the claims raised by the Plaintiffs are devoid of merits. Learned Counsel for Defendant prayed for dismissal of the present suit.
20. In rebuttal, learned Counsel for Plaintiffs reiterated its submissions.
Digitally
signed by
NEERA
NEERA BHARIHOKE
BHARIHOKE Date:
2024.10.14
14:30:29
+0530
CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 12 of 51
21. I have heard the rival submissions of learned Counsel for the parties and have carefully gone through the record. There is no dispute between the parties about the execution of Lease Deed dated 31.03.2020 or the rent payable under the same or in regard to other terms and conditions of the Lease Deed. The controversy between the Plaintiff and Defendant hinges upon the issue whether termination of the tenancy by the Defendant by invoking Clause 13 of the Lease Deed was valid or not in the facts of the case or whether the Defendant could have terminated the tenancy only under Clause 6 of the Lease Deed in the facts of the case.
22. My issue-wise findings are as under:-
Issue No.1 :Whether the defendant rightly terminated the lease by invoking Clause 13 of the lease deed and whether the defendant was not liable to give the three months notice or the rent in lieu thereof under clause 6 of the lease deed?
The onus to prove this issue was on the Defendant. It is an admitted case that the till 2020, Defendant had been paying the rent regularly to the lessors till March 2020 and that Defendant terminated the Lease Deed by sending legal notice on 26.05.2020 by invoking Clause 13 " Force Majeure" of the Lease Deed. By the same legal notice, the Defendant had called upon the lessors for taking over the peaceful, vacant, physical possession of NEERA the tenanted premises after termination of the tenancy i.e. 15 days BHARIHOKE Digitally signed by after the date of receipt of the legal notice dated 26.05.2020 and for NEERA BHARIHOKE Date: 2024.10.14 14:30:34 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 13 of 51 the return of the entire security deposit of Rs.6,53,000/- as well as the refund of the rent already paid by it to lessors for the period 25.03.2020 till 31.03. 2020.
23. The reason for termination of tenancy was cited by the Defendant that the tenanted premises had been rendered inaccessible and unfit for the operation of Sweets, Pastry Shop and Restaurant on account of outbreak of COVID-19 and therefore, the Defendant terminated the lease in terms of Clause 13 of the Lease Deed.
24. On the other hand, the lessors in their reply dated 30.05.2010 averred that tenanted premises had not been rendered inaccessible and unfit for the operation of sweets, pastry shop and restaurant and that the Defendant was not entitled to invoke the provisions of Clause 13 of the Lease Deed and could have terminated the lease only under Clause 6 of the said Lease Deed after giving three months' notice or by giving three months' rent in lieu thereof to the lessors.
25. The said reply was rebutted by way of rejoinder dated 15.06.2020 which was replied vide reply dated 15.06.2020 by the lessors.
NEERA BHARIHOKE
26. Learned Counsel for Plaintiffs relied upon observations Hon'ble High Court of Delhi in the matter of Hotel Leela Venture Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:39 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 14 of 51 Ltd. vs. Airport Authority of India, neutral citation 2016:DHC:7361-DB, where it was held that:
"If it was the claim by the lessee that the consideration for the lease failed or became oppressed, the claim would fail because neither the doctrine of frustration applies to a lease nor broad principles thereof to a lease. The reason being that executory contracts alone are capable of being frustrated and not executed contracts."
"35. A contract for lease whereunder the lessee obtains possession from the lessor is an executed contract and during the duration of the lease, since it is a term of the agreement that consideration shall be rendered periodically, the agreed consideration has to be paid and it hardly matters that rents have fallen in the meanwhile. The result of a lease is the creation of a privity of estate inasmuch as lease is the transfer of an interest in immovable property within the meaning of Section 5 of the Transfer of Property Act, 1882, as was held in para 20 of the decision reported as 2003 (5) SCC 150 T.Lakshmipathi & Ors. Vs. P.Nithyananda Reddy & Ors. That apart, as held in the decisions reported as (1960) 2 SCR 793 Alopi Prashad Vs. UOI and (1975) 2 SCC 633 Panna Lal Vs. State of Rajasthan a contract is not discharged merely because it turns out to be difficult or onerous for one party to perform and none can resile from a contract for said reason."
27. Learned Counsel for Plaintiffs thus argued that COVID-19 situation could only be categorized as onerous and it could not be NEERA equated to be force majeure and that therefore Defendant could not BHARIHOKE have invoked Clause 13 of the Lease Deed to terminate the Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:45 +0530 tenancy.
CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 15 of 5128. For deciding the contentions of the parties, it is relevant to refer to the relevant Clauses of the Lease Deed as well as the purpose for which the tenanted premises were leased out.
29. Clause 5 (There are two Clauses referred to as Clause 5 on internal page no. 2 of the Lease Deed. The one being referred herein is in the lower portion of internal page no. 2) reads as follows:
"5) Relying upon the representations made by the LESSORS set out in recitals of aforesaid and on believing the same to be true, the LESSEE has approached the LESSORS with the request to allow the LESSEE to use, occupy and possess on lease basis, the said premises and LESSORS have agreed to give on lease to the LESSEE the said premises for the purpose of setting up, managing and running a Sweets, Pastry Shop and Restaurant by the LESSEE under its brand and trade name 'Nathus" and/or "Nathu's Sweets Pastry Shop & Restaurant" on the terms and conditions herein contained."
30. Thus, it can be noticed that the property was let out to the Defendant to use, occupy and possess for the purpose of setting up, managing and running a Sweets, Pastry Shop and Restaurant.
31. Similarly, Clause 4(b) and clause 4 (d) reiterate that the lease NEERA is for the purpose of operating and managing a Sweets, Pastry Shop BHARIHOKE and Restaurant by the LESSEE.
Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:30:51 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 16 of 5132. The Plaintiffs have submitted that the termination of the Lease by the Defendant in the prevailing circumstances of that time could only be under the provisions of Clause 6 and not under Clause 13.
33. The relevant part of Clause 6 (a) provides that Lessee shall be entitled to terminate the Lease Deed without assigning any reason thereof by giving 3 (Three) months' notice to the Lessors of its intention to do so or by giving to the lessors three months' lease rent in lieu thereof. ...
34. Therefore, under Clause 6(a), the Defendant could terminate the Lease Deed without assigning any reason but subject to three months' notice as stated above.
35. However, the Defendant had relied on/resorted to Clause 13 of the Lease Deed for termination of the lease.
36. The Clause 13 of the Lease Deed reads as follows: -
"13. FORCE MAJEURE If all or any part of the premises shall be destroyed or damaged due to fire, storm, flood, tempest, Act of God, act of terrorism, war or any other irresistible force or the premises are rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant by the LESSEE under its brand and trade name "Nathus" and/or "Nathus' Sweets NEERA BHARIHOKE Pastry Shop & Restaurant" for any of the foregoing reasons, Digitally signed then the obligation to make payment of rent or a fair by NEERA BHARIHOKE proportion thereof shall be suspended till such time the Date: 2024.10.14 14:30:55 +0530 premises have been repaired and rendered fit for the CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 17 of 51 purposes contemplated under this Lease Deed. In such an eventuality, the LESSEE shall have the right to terminate the Lease Deed by giving 15 (fifteen) days' notice. Nothing in this clause shall prejudice the right of the LESSEE contained elsewhere in this Lease Deed."
37. The Defendant had stated in the notice of termination dated 26.05.2020 that in terms of Clause 13 of the Lease Deed, in view of the outbreak of COVID-19 disease and the nationwide lockdown imposed by the government to prevent the spread of Corona Pandemic, Defendant had not been able to access and use the tenanted premises for the purpose of running it's Sweet, Pastry Shop and Restaurant at least since 25.03.2020 and that Defendant is therefore, not liable to pay rent for the period April 2020 onwards. By the same notice the Defendant had also asked for a refund of the rent already paid by the Defendant to the lessors for the period 25.03.2020 till 31.03.2020.
38. On close analysis of Clause 13, it is noticed that it will apply only:
"If all or any part of the premises shall be destroyed or damaged due to fire, storm, flood, tempest, Act of God, act of terrorism, war or any other irresistible force Or the premises are rendered inaccessible or unfit for the NEERA operation of Sweets, Pastry Shop and Restaurant by the BHARIHOKE LESSEE under its brand and trade name "Nathus" and/or Digitally signed by "Nathus' Sweets Pastry Shop & Restaurant for any of the NEERA BHARIHOKE Date: 2024.10.14 foregoing reasons."14:30:59 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 18 of 51
The two eventualities mentioned in Clause 13 are mutually exclusive in view of the expression 'Or' between the two eventualities.
39. What is required to be seen is whether in view of the outbreak of COVID-19, the tenanted premises were rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant by the Lessee under its brand and trade name "Nathus" and/or "Nathus' Sweets Pastry Shop & Restaurant.
40. As noticed earlier, the property was let out to the Defendant to use, occupy and possess for the purpose of setting up, managing and running a Sweets, Pastry Shop and Restaurant.
41. The COVID-19 notifications/Orders issued at the relevant time by the Home Ministry have been filed by the Defendant along with its written statement. The first lockdown Phase Order was issued on 24.03.2020 which was to stay in operation for a period of 21 days with effect from 25.03.2020. It specifically provided that the National Disaster Management Authority (NDMA) is satisfied the country is threatened with the spread of COVID-19 epidemic which has already been declared as a pandemic by the World Health Organization.
42. The Annexure to this Order provided the guidelines for NEERA BHARIHOKE containment of COVID-19 epidemic in the country. Clause 4 of the Digitally signed guidelines reads as:
by NEERA BHARIHOKE Date: 2024.10.14 14:31:04 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 19 of 51"4. Commercial and private establishments shall be closed down.
Exceptions:
a) shops, including ration shops (under PDS), dealing with food, groceries, fruits and vegetables, dairy and milk booths, meat and fish, animal fodder. However, district authorities may encourage and facilitate home delivery to minimize the movement of individuals outside their homes."
43. By relying on this exception, learned Counsel for Plaintiffs had argued that tenanted premises were thus not rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant by the Lessee under its brand and trade name "Nathus" and/or "Nathus' Sweets Pastry Shop & Restaurant. However, the contention of learned Counsel for Plaintiffs is not tenable as the exception referred above only provided for ensuring the availability of daily needs/foods like ration, milk, meat etc. and not with the intent or purpose of running a restaurant. The business of the Defendant cannot be equated or compared to be a shop dealing with food and what was applicable was Clause 4 of the Guidelines i.e. Commercial and private establishments shall be closed down. Clause 17 of these guidelines provided that any person violating these containment measures will be liable to be proceeded against as per the provisions of Section 51 to 60 of the Disaster Management Act, 2005 besides legal action under Section 188 of NEERA the IPC, thus making the violations of the guidelines punishable. BHARIHOKE Therefore, by virtue of these guidelines contained in Clause 4 read with Clause 17 for containment of COVID-19 epidemic in the Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:31:08 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 20 of 51 country, the tenanted premises were rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant for the Defendant.
44. These guidelines were to remain in force in all parts of the country for a period of 21 days with effect from 25.03.2020 i.e. till 14.04.2020.
45. Similarly, the second lockdown Phase Order was imposed from 15.04.2020 to 03.05.2020(14 days). The third lockdown Phase Order was imposed from 04.05.2020 to 17.05.2020(14 days) and the fourth lockdown Phase Order was imposed from 18.05.2020 to 31.05.2020 (14 days). The Defendant had issued notice of termination by invoking clause 13 of the Lease Deed on 26.05.2020 i.e. in the period of the fourth lockdown phase.
46. Learned Counsel for Plaintiffs had argued that in the 4 th lockdown case which was imposed on 17.05.2020, the lockdown was extended till 31.05.2020, however by Clause 2(iv) of the guidelines, restaurants were permitted to operate kitchens for home delivery of food items and therefore it cannot be said that the tenanted premises were rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant for the Defendant and that the Defendant could have started its kitchen. NEERA BHARIHOKE Digitally signed
47. The relevant portion of second guideline of the fourth Phase by NEERA i.e. 2(iv) is reproduced herein below:
BHARIHOKE Date:
2024.10.14 14:31:17 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 21 of 51 "2. The following activities shall continue to remain prohibited throughout the country.
(iv) Hotels, Restaurants and other hospitality services, except those meant for housing health/police/government officials/healthcare workers/stranded persons including tourists and for quarantine facilities; and running of canteens at bus depots, railway stations and airports. Restaurants shall be permitted to operate kitchens for home delivery of food items."
48. The portion relied upon by the Plaintiffs cannot be read in isolation and whole clause 2 (iv) must be read. As per the terms of the Lease Deed, tenanted premises were let out to the Defendant for the operation of Sweets, Pastry Shop and Restaurant. Hotels, restaurants and other hospitality services continued to remain prohibited during the fourth phase. The provision must be read and appreciated in the background of the situation prevalent in the country at relevant time due to outbreak of COVID.
49. To permit the restaurants to operate kitchen for home delivery of food items does not and cannot amount to the tenanted premises having been rendered accessible or fit for the operation of Sweets, Pastry Shop and Restaurant. The Defendant is not covered by this partial relaxation nor is there any provision in the Lease Deed that the Defendant was operating from the tenanted premises for home delivery of food items.
NEERA BHARIHOKE 50. There is no force in submission of the Plaintiffs that the Digitally signed by NEERA Defendant had given a false or frivolous notice dated 26.05.2020 or BHARIHOKE Date: 2024.10.14 14:31:21 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 22 of 51 that in the said notice it was falsely alleged by the Defendant that the tenanted premises had been rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant.
51. During his cross-examination, PW-1 stated that he had not read the guidelines and notification dated 25.03.2020 issued by Government of India (under National Disaster Management Authority) copy of which was shown to him from the court file. He also said that he was not aware that all restaurants were ordered to close w.e.f 24.03.2020. PW-1 also stated that he was not aware of the date from which the Union Government/Govt. of UT of Delhi permitted the re-opening of the restaurants. He also said that as per the reports, many people died due to COVID-19.
52. The statements of PW-1 evidence that Plaintiffs were not aware of the relevant notifications/ government orders issued at the time of COVID-19 pandemic and considered notice of termination of Defendant to be false or frivolous and also considered invocation of Clause 13 by the Defendant to be wrong because of ignorance of Plaintiffs about these notifications/ government orders issued at the time of COVID-19 pandemic.
53. On the other hand, in his examination in chief, DW-1, the authorized representative of the Defendant tendered and relied upon COVID-19 notifications/Orders dated 24.04.2020, 17.05.2020 and 30.05.2020 as Ex. DW-1/2. No suggestions were CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 23 of 51 given to him as to how or why these notifications/orders were not applicable to the fact situation at that time.
54. DW-1 in his examination in chief has rightly deposed that every person was confined in their houses and only essential activities were carried out. Defendant, being a company involved in sweet and pastry shops, was not under the purview of essential activities permitted to be carried out as per the direction of Government of India.
55. Plaintiffs have submitted that the Defendant could have terminated the lease under Clause 6 and not under Clause 13 of the Lease Deed. Clause 6 (a) provides that LESSEE shall be entitled to terminate the Lease Deed without assigning any reason thereof by giving 3 (Three) months' notice to the LESSORS of its intention to do so or by giving to the LESSORS three months' lease rent in lieu thereof. Learned Counsel for Plaintiffs relied on Observations of Hon'ble Supreme Court in the matter of Dhruv Dev Chand vs. Harmohinder Singh & Ors., AIR 1968 SC1024, where it was held that:
"By its express terms s. 56 of the Contract Act does not apply to cases in which there is a completed transfer. The second paragraph of s. 56 which is the only paragraph material to cases of this nature has a limited application to covenants under a lease. A covenant under a lease to do an act which NEERA BHARIHOKE after the contract is made becomes impossible or by reason of Digitally signed some event which the promisor could not prevent unlawful, by NEERA BHARIHOKE becomes void when the act becomes impossible or unlawful. Date: 2024.10.14 14:31:26 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 24 of 51 But on that account the transfer of property resulting from the lease granted by the lessor to the lessee is not declared void."
56. The law relied upon by the Plaintiffs is not applicable to the present case in view of the lessor and lessee, the Defendant, having mutually agreed upon incorporating clause 13 of the Lease Deed to deal with the specific situations mentioned therein and applicability of its consequences is defined in Clause 13 itself. The fact solution in this case is rather covered by the observations made in the matter of Isherdas Sahni & Bros. vs. Impressario Entertainment and Hospitality Pvt. Ltd., 2024 SCC OnLine Del 1833.
57. The facts of the present case are similar to the facts of the matter of Isherdas Sahni & Bros. vs. Impressario Entertainment and Hospitality Pvt. Ltd., (Supra) , wherein Hon'ble High Court of Delhi referred to notifications issued by GNCT of Delhi as:
"The Government of NCT of Delhi vide its Notification dated 19.03.2020 directed that "All restaurants in NCT of Delhi shall discontinue seating arrangements in their premises till 31.03.2020. However, the operations of Home Delivery and Take Away from the Restaurants would be continued".
Similar Notification was released by Government of NCT of Delhi on 20.03.2020. Another Order dated 14.04.2020 was issued by Government of NCT of Delhi stating that Delhi Disaster Management Authority (DDMA) notified lockdown in the territory of NCT of Delhi w.e.f. 25.03.2020 till the mid NEERA BHARIHOKE night of 14.04.2020 and various subsequent directions have been issued by DDMA. The lockdown period had been further Digitally signed by NEERA BHARIHOKE extended till 03.05.2020."
Date: 2024.10.14 14:31:30 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 25 of 51The Hon'ble High Court of Delhi proceeded to observe that:
"46. The Lease provided for running a Bar to serve alcoholic beverages. It is a known fact that the major business of any Restaurant is Dining and Drinks. On the imposition of the complete Lockdown w.e.f. 20.03.2020 none could get out of their houses; the activities of the business of Defendant came to a complete naught. There is nothing on record to suggest that during this period of April-May 2020, any business was carried out by the Defendant. The Lockdown brought with it a situation where the working staff also were unable to step out of their place of abode. Essentially, all the activities of the Restaurant got completely stalled.
47. This was just the onset of COVID wherein its effects and the future was a complete mystery, with none aware of what would happen in the following days. The Lock Down was extended vide Govt. Notifications from time to time because of the uncertainty that prevailed. This was a situation when circumstances radically changed in so much as the people were locked in their homes struggling with this mysterious disease with a looming fear of being alive on the next day. Many were left with no means of sustenance in this altered situation which prevented people from stepping out. In this struggle for life and survival where was the occasion for them to visit the Restaurant.
48. With no customers and no staff available, it was a radically a changed situation. Even the premises also got shut NEERA because of the Govt impositions. For no fault of any, there BHARIHOKE was neither any premises (in practical sense) nor any customers nor any workers. Though the Govt. Notification Digitally signed by NEERA BHARIHOKE permitted Home Delivery/ Take Away Services but such was Date: 2024.10.14 14:31:34 +0530 the extent of contagiousness of this mystery disease that the CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 26 of 51 people were advised to observe complete segregation and no items or deliveries were being accepted from outside. The essentials were being left at the doorsteps, to be brought inside after proper sanitization. There is no suggestion, what to talk of evidence if there was the Take Away business especially when no workers were available to cook or deliver, either inside or outside the restaurant. As held in the case of Alopi Parshad and Sons Ltd. (supra), it was not a case where the business became onerous. Rather, as explained in the case of Energy Watchdog (supra),the fundamental basis of the performance of Contract altered and was practically completed prevented/hindered and it was impossible to continue with the activities of the Restaurant.
49. This Court in the case of M/s Halliburton Offshore Services Inc. Vs. Vedanta Limited & Anr. in OMP (I) (COMM) decided on 20.04.2020 observed that the countrywide lockdown, which got imposed on 20th March 2020 was not only unprecedented but was also incapable of being predicted by either of the parties, and was in the nature of force majeure.
50. The Coordinate Bench of this Court in the case of Mehra Jewel Palace vs. Miniso Lifestyle Pvt. Ltd. and Anr. bearing no. CS(COMM) 376/2020 dated 25.05.2022 in the similar factual situation observed that the benefit of Force majeure would enure to the Defendant/ tenant for the month of April,2020 and May, 2020 and the contention of the Plaintiff that as per the Clause the payment of rent could only be NEERA BHARIHOKE delayed or postponed but not waived, was rejected.Digitally signed by NEERA
BHARIHOKE 51. Applying the aforesaid principles to the business of the Defendant, it has to be necessarily concluded that it was a case Date: 2024.10.14 14:31:38 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 27 of 51 wherein the performance was completely frustrated by Force Majeure situation from 20th March,2020 till May, 2020."
58. In the present case also COVID-19 notifications/Orders did not permit the Defendant to run the tenanted premises for the operation of Sweets, Pastry Shop and Restaurant rather it specifically prohibited running of hotels, restaurants and hospitality services. Similar have been the observations of Hon'ble High Court of Delhi in Isherdas Sahni & Bros. vs. Impressario Entertainment and Hospitality Pvt. Ltd.(Supra) cited above. Therefore, the case law relied upon by the Plaintiffs is not applicable to the facts of the case.
59. Defendant discharged its onus and proved that the tenanted premises were rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant for the Defendant due to COVID-19 pandemic. Clause 13 provides that in such an eventuality, the LESSEE shall have the right to terminate the Lease Deed by giving 15 (fifteen) days' notice. In the present case also, the Defendant gave 15 days' notice to the lessors.
60. The Defendant had not given notice of termination dated 26.05.2020 without assigning any reason. Rather the reason is NEERA BHARIHOKE squarely covered under Clause 13 of the Lease Deed as observed in Digitally signed the preceding paragraphs. Since the notice of termination dated by NEERA BHARIHOKE Date: 2024.10.14 26.05.2020 was not given under Clause 6 of the Lease Deed, 14:31:43 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 28 of 51 Defendant was not liable to give the three months' notice or the rent in lieu thereof.
61. In view of the observations made above, the Defendant has proved that it rightly terminated the lease by invoking Clause 13 of the Lease Deed and Defendant was not liable to give the three months' notice or the rent in lieu thereof under clause 6 of the Lease Deed. Therefore issue no. 1 is decided in favour of the Defendant and against the Plaintiffs and it is held that the Defendant rightly terminated the lease by invoking Clause 13 of the Lease Deed and the Defendant was not liable to give the three months' notice or the rent in lieu thereof under Clause 6 of the Lease Deed.
Issue No.2 :Whether all dues had been settled between the parties at the time of vacation of the property?
The onus to prove this issue was on the Defendant. PW-1 has deposed in his examination in chief that the Defendant handed over the possession of the tenanted premises on 19.06.2020 and exhibited the handing over/taking over certificate as Ex. PW-1/7. He had further deposed that the Defendant failed to clear the outstanding amount payable to the landlords. The NEERA BHARIHOKE deposition of PW-1 is in line with submissions of Plaintiffs made Digitally signed by NEERA in the plaint.
BHARIHOKE Date: 2024.10.14 14:31:47 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 29 of 5162. DW-1 has deposed in his examination in chief that the present suit is not maintainable as the suit was settled between both the parties whereby the vacant actual possession was handed over to the Plaintiff by the Defendant on 19.06.2020 to one of the lessors. He has also deposed that the settlement took place between both the parties on 19.06.2020 and the Plaintiffs never protested regarding any arrears of money to Defendant. He also deposed that the present suit has been filed by the Plaintiffs with malafide intentions to extort money from the Defendant. During this cross- examination, DW-1 stated that the settlement referred to in his affidavit of evidence took place between Jagdish Kumar Juneja and Anand Gupta on 19.06.2020. On being asked what the settlement was, DW-1 replied that it was decided that the Defendant would vacate the premises in full and final settlement of the dealings between the parties. He denied the suggestion that no such settlement ever took place. He also denied the suggestion that lessors took possession of the premises of the tenancy of the Defendant without prejudice to their right to recover the dues payable by the Defendant under the lease. DW-1 also denied the suggestion that Jagdish Kumar Juneja was not present at the time of possession of the handing over of the tenanted property.
63. The handing over/taking over Certificate, Ex. PW-1/7, is NEERA perused. It records the confirmation of fact of handing over of the BHARIHOKE actual, peaceful, physical and vacant possession of the tenanted Digitally signed by NEERA BHARIHOKE property by the Defendant to the lessors and records that- "This is Date: 2024.10.14 14:31:52 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 30 of 51 without prejudice to all the rights of both parties." Mr. Anand Gupta signed on behalf of Defendant.
64. It proceeds to record the confirmation of fact of taking over of the actual, peaceful, physical and vacant possession of the tenanted property by the lessors from Defendant and records that- "This is without prejudice to all the rights of both parties." Jitender Kumar Juneja, son of Jagdish Kumar Juneja, had signed on behalf of lessors.
65. The contents of Ex. PW-1/7 clearly shows that at the time of the handing over and taking over of the tenanted property, the Defendant and the lessors had not settled their dues since the same was done without prejudice to the respective rights of the parties. Examination in chief as well as cross examination of DW-1 is contradictory to the contents of Ex- PW-1/7. It is also correct that it was not Jagdish Kumar Juneja who signed the handing over/ taking over certificate on behalf of the lessors. Therefore, Defendant failed to prove that all the dues had been settled between the parties at the time of vacation of the tenanted property.
NEERA BHARIHOKE 66. Issue no.2 is therefore decided against the Defendant and in Digitally signed favor of the Plaintiffs and it is held that all dues had not been by NEERA BHARIHOKE Date: 2024.10.14 settled between the parties at the time of vacation of the property. 14:31:56 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 31 of 51 Issue No.3: Whether the plaintiffs are entitled to the sum of ₹11,05,000/- plus GST on account of rent for the period 01.04.2020 to 31.08.2020?
Issue No.7 : Whether the plaintiffs are entitled to a sum of ₹5,80,125/- towards interest at the rate of 18% per annum on the amount of ₹11,05,000/- for the period 20.06.2020 to 20.05.2023 as claimed?
Issue No.8 :Whether the plaintiffs are entitled to pendente lite and future interest if yes, on what amount and at what rate?
Issue no. 3, 7 and 8 are interconnected and are thus being taken up together.
The onus to prove each of this issue was on the Plaintiffs.
67. PW-1 deposed that the Defendant failed to clear the outstanding amount payable to the landlords and that as per terms of the Lease Deed, the lessee could have terminated lease by giving three months' notice or by giving the lessor 3 months' lease rent in lieu thereof and that therefore Defendant was liable to pay Rs. 2,21,000/- per month besides GST for the period 01.04.2020 to 31.08.2020 along with interest @18% per annum on the delayed payment. The Plaintiffs claimed the sum of ₹11,05,000/- plus GST on account of rent for the period 01.04.2020 to 31.08.2020 in NEERA BHARIHOKE view of their submissions that tenancy has been wrongfully Digitally signed terminated by invoking Clause 13 and that as per Clause 6 of the by NEERA Lease Deed, the Defendant was liable to give three months' rent in BHARIHOKE Date:
2024.10.14 14:32:01 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 32 of 51 lieu of vacating the tenanted property having given only 15 days' notice in place of three months' notice.
68. However, issue no. 1 has already been decided in favor of the Defendant and against the Plaintiffs and it has been held that the termination of the tenancy by the Defendant by invoking Clause 13 of the Lease Deed was valid and Defendant was not liable to give the three months' notice or the rent in lieu thereof under clause 6 of the Lease Deed. Accordingly, the Defendant was not liable to give three months' rent in lieu of vacating the tenanted property or rent in lieu thereof as per Clause 6 of the Lease Deed.
69. The Clause 13 of the Lease Deed provides the resultant consequences in case the premises are rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant by the LESSEE under its brand and trade name "Nathus" and/or "Nathus' Sweets Pastry Shop & Restaurant".
70. Clause 13 is again reproduced as follows: -
"13. FORCE MAJEURE If all or any part of the premises shall be destroyed or damaged due to fire, storm, flood, tempest, Act of God, act of terrorism, war or any other irresistible force or the premises NEERA BHARIHOKE are rendered inaccessible or unfit for the operation of Sweets, Digitally signed by Pastry Shop and Restaurant by the LESSEE under its brand NEERA BHARIHOKE and trade name "Nathus" and/or "Nathus' Sweets Pastry Shop & Restaurant" for any of the foregoing reasons, then the Date: 2024.10.14 14:32:06 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 33 of 51 obligation to make payment of rent or a fair proportion thereof shall be suspended till such time the premises have been repaired and rendered fit for the purposes contemplated under this Lease Deed. In such an eventuality, the LESSEE shall have the right to terminate the Lease Deed by giving 15 (fifteen) days' notice. Nothing in this clause shall prejudice the right of the LESSEE contained elsewhere in this Lease Deed."
71. The consequences to follow are that when the premises are rendered inaccessible or unfit for the operation of Sweets, Pastry Shop and Restaurant by the LESSEE under its brand and trade name "Nathus" and/or "Nathus' Sweets Pastry Shop & Restaurant, the obligation to make payment of rent or a fair proportion thereof shall be suspended till such time the premises have been repaired and rendered fit for the purposes contemplated under this Lease Deed.
72. Since the premises had not become fit for the purposes contemplated under this Lease Deed, the obligation of the Defendant to make payment of rent or a fair proportion thereof remained suspended even till date of giving notice. The reply of the lessors or the subsequent correspondence between the parties till date of handing over/taking the possession of the premises does not NEERA affect the operation of this consequence. The tenancy of the BHARIHOKE Defendant stood validly terminated by notice dated 26.05.2020 after 15 days of the notice of termination dated 26.05.2020. No Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:32:10 +0530 subsequent notification could affect the operation of the CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 34 of 51 consequences to follow on account of termination of the tenancy invoked by the Defendant under Clause 13 of the Lease Deed.
73. The Defendant had stated in the notice of termination dated 26.05.2020 that in terms of Clause 13 of the Lease Deed, in view of the outbreak of COVID-19 disease and the nationwide lockdown imposed by the government to prevent the spread of Corona Pandemic, Defendant had not been able to access and use the tenanted premises for the purpose of running it's Sweet, Pastry Shop and Restaurant at least since 25.03.2020 and that Defendant is therefore not liable to pay rent for the period April 2020 onwards. By the same notice the Defendant had also asked for a refund of the rent already paid by the Defendant to the lessors for the period 25.03.2020 till 31.03.2020.
74. The Defendant had called upon the lessors to take over the peaceful, vacant physical possession of the tenanted premises after termination of the tenancy i.e. after 15 days from the date of receipt of the notice feeling which the Defendant would initiate appropriate legal proceedings against the lessors for handing over the possession of the tenanted premises making the lessors further liable for the compensation on account of holding and maintaining the premises on behalf of lessors after termination of tenancy @ NEERA BHARIHOKE Rs. 7,500/ per day. Whatever delay occurred/period elapsed in Digitally signed between the date of termination of tenancy and the day of handing by NEERA BHARIHOKE Date: 2024.10.14 over/taking of the possession of the tenanted enterprises, the 14:32:14 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 35 of 51 Defendant has not raised any claim in regard to the Amount mentioned in the notice and therefore, the payment of compensation is non-issue in the present matter.
75. Whether the Defendant is entitled to a refund of the rent already paid by the Defendant to the lessors for the period 25.03.2020 till 31.03.2020 is again not framed as an issue in the present matter. However, in view of Clause 13 of the Lease Deed, Defendant is not liable to pay any rent for the period following 24.03.2020.
76. Therefore issue no. 3 is decided against the Plaintiffs and in favour of the Defendants. It is held that the Plaintiffs are not entitled to the sum of ₹11,05,000/- plus GST on account of rent for the period 01.04.2020 to 31.08.2020.
77. Issue no. 7 is whether the Plaintiffs are entitled to a sum of ₹5,80,125/- towards interest at the rate of 18% per annum on the amount of ₹11,05,000/- for the period 20.06.2020 to 20.05.2023. Since the Plaintiffs have been held to be not entitled to the sum of ₹11,05,000/- plus GST on account of rent for the period 01.04.2020 to 31.08.2020, there is no amount on which the interest NEERA BHARIHOKE is to be calculated and the Plaintiffs are held to be not entitled to interest at the said amount of ₹11,05,000/-. Therefore issue no.7 is Digitally signed by NEERA BHARIHOKE Date: decided against the Plaintiffs and in favour of Defendant.
2024.10.14 14:32:19 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 36 of 5178. For the same reasons issue no. 8 in respect of pendente lite and future interest is also decided against the Plaintiffs and in favour of the Defendant.
Issue No.4 : Whether the defendant caused damage to the property and whether the plaintiffs are entitled to adjust an amount of ₹1.50 Lac on this account from the security deposit as stated in para 5 of the plaint?
The onus to prove this issue was on the Plaintiffs. Plaintiffs have submitted that the Defendant had illegally removed all the electrical fittings including MCB's from the tenanted premises which the Defendant could not have removed since the same were the property of landlords. The Defendant had also damaged the staircase of the tenanted premises at the back and front. Plaintiffs have further submitted that Defendant was liable to pay a sum of Rs.1,50,000/- to the landlords for the removal of the fittings and damage caused to tenanted premises by the Defendant and that therefore, lessors adjusted the said amount of Rs.1,50,000/- from the security deposited by the Defendant with the lessors. The depositions in this regard have been made by PW- 1 in Para 5 of his affidavit of evidence.
79. Per contra, the Defendants have submitted that because of the imposition of lockdown in view of COVID, the termination notice NEERA BHARIHOKE was given by the Defendant to the lessors and it is the Defendant Digitally signed by NEERA who has to recover money from the Plaintiffs as complete security BHARIHOKE Date: 2024.10.14 14:32:23 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 37 of 51 money was not returned by the lessors at the time of handing over the possession of the tenanted premises and lessors had wrongfully adjusted the amount of Rs. 1,50,000/- deposited by Defendant towards cost of repair/restoration without the lessors' proving damages.
80. In para 9 of affidavit of evidence, DW-1 has deposed that Defendant had to recover money from the Plaintiffs as security money of Rs.6,63,000/-which was mentioned in the legal notice dated 26.05.2020 sent by the Defendant to the Plaintiff and that the Defendant had demanded the refund of the security deposit as monthly payment was done by them.
81. PW-1 was cross examined by learned Counsel for Defendant on aspect of the damages in lieu of which the lessors had deducted Rs.1,50,000/- from the security deposit.
82. PW1 admitted that in the possession receipt, there was no mention of any damage to the property. He volunteered that the Defendant had orally stated that they would pay for the damage to the property, and it was mentioned that the possession was taken without prejudice to rights.
NEERA BHARIHOKE
83. The testimony of PW-1 is correct as regards the contents of the Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 possession receipt, Ex. PW-1/7. As regards the volunteered part 14:32:28 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 38 of 51 made by PW-1, it needs to be seen as to how the Plaintiffs have proved/justified the claim of damages for the relevant time.
84. PW-1 deposed that photographs of the premises were taken at the time of taking the possession. He stated that those photographs have not been placed on record as the mobile phone by which the photographs were taken got damaged. He denied the suggestion that there was no damage to the property and therefore there was no mention of any damage in the possession receipt. He admitted that in the present suit he did not disclose that he had the photographs which were stored in the mobile phone which got damaged.
85. PW-1 further stated that they had taken oral estimates from the architect for restoration of the premises due to the damage caused by the Defendant. He admitted that they did not file any photograph or report of the architect. He denied the suggestion that the lessors or Plaintiffs did not take any oral estimate from the architect. He denied the suggestion that the photographs and the report of the architect have not been filed as there was no damage to the premises.
86. PW-1 admitted that the Plaintiffs had not returned the security NEERA amount of Rs.6,63,000/- and volunteered that there was no BHARIHOKE communication regarding the security amount. However, in the Digitally signed by NEERA BHARIHOKE same breath he admitted that by the legal notice dated 26.05.2020, Date: 2024.10.14 14:32:32 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 39 of 51 the Defendant had also asked for the return of the security deposit and that the Plaintiff had replied to them.
87. DW1, in his cross examination, denied the suggestion that the Defendant is not entitled to recover any money as claimed in para 9 of his affidavit (whereby he had made a submission regarding non- refund of security deposit).
88. The testimony of PW-1 clearly establishes that Plaintiffs have not filed anything on record to show that any damage to the tenanted property was caused by the Defendant at the time of handing over/taking of the possession of the tenanted premises. Therefore, the Plaintiffs have failed to prove that the Defendant caused damage to the property. The Plaintiffs have therefore failed to prove that they are entitled to adjust an amount of ₹1.50 Lac on this account from the security deposit as stated in para 5 of the plaint.
89. The issue no. 4 is therefore decided against the Plaintiffs and in favour of the Defendant and it is held that Plaintiffs are not entitled to adjust an amount of ₹1.50 Lac on this account from the security deposit as stated in para 5 of the plaint.
Issue No.5 : Whether the plaintiffs are entitled to a sum of NEERA BHARIHOKE ₹34,269/- towards arrears of water bill as claimed?
Digitally signed by NEERABHARIHOKE The onus to prove this issue was on the Plaintiffs.
Date: 2024.10.14 14:32:35 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 40 of 51Plaintiffs have submitted that the Defendant had not cleared the outstanding water bill dues as on 19.06.2020 despite undertaking and assurance given. PW-1 has deposed in his examination in chief that Defendant sent an e-mail from its email ID [email protected] to the lessors acknowledging therein that the water charges till 17.06.2020 from the tenanted premises will be paid by the Defendant directly to the authorities concerned. The copy of the said e-mail dated 19.06.2020 is Ex. PW-1/8. Plaintiffs have submitted that therefore Defendant was liable to pay an amount of Rs.34,269/- on account of outstanding water dues.
90. Defendant has admitted to the fact of sending of the said mail dated 19.06.2020 to the lessors and submitted that the Defendant has already cleared all the dues and there is no due left upon the Defendant.
91. To prove its claim, Plaintiffs examined ASO of Delhi Jal Board as PW-2, who brought the summoned record i.e. Bill dated 10.01.2020, 09.06.2022, 06.04.2024 with respect to K. No.3979009766 and billing summary for the said connection vide NEERA Ex. PW-2/1 to Ex. PW-2/4 respectively.
BHARIHOKE Digitally signed by NEERA 92. He was cross examined by learned Counsel for Defendant.
BHARIHOKE Date: 2024.10.14 14:32:40 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 41 of 5193. PW-2 was shown Ex. PW-2/1, Bill dated 10.01.2020 and asked as to why the bill from 31.12.2018 to 15.11.2019 was issued for 319 days to which PW-2 stated that he had no knowledge about the same. No suggestion was put to him regarding the same. It is noticed that Ex. PW-2/1 was raised at the time when the tenancy of the Defendant was alive. Bill amount payable was Rs. 34,270/- out of which arrears were of the amount of Rs. 33671/-, the difference of the two amounts being Rs. 599/-. Thus Ex. PW-2/1 shows that water bill for the period 16th November 2019 to 10th January 2020 was Rs.599/-. The tenancy of the Defendant commenced on 1 st March 2019 as per clause 3 at internal page 3 of Lease Deed. Bill history and payment history on Ex. PW-2/1 shows arrears of Water Bill running in thousands for a period much prior to that, commencing from May 2018. No explanation has been given as to how much water Bill arrears was attributable to Defendant, nor can it be made out by perusing Ex. PW-2/1.
94. Rather Ex. PW-2/1 shows that the average bill per month was Rs.200/- which does not justify the claim of the Plaintiff that Defendant was liable to pay an amount of Rs.34,269/- on account of outstanding water dues since the Defendant availed the tenancy period only for 13 months i.e. from March 2019 to April 2020 minus 6 days.
NEERA BHARIHOKE 95. PW-2 also stated that late payment penalty of the bill is Digitally signed equal to surcharge i.e. 5% of the total bill after due date.
by NEERA BHARIHOKE Date: 2024.10.14 14:32:45 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 42 of 5196. The Billing period under Ex. PW-2/2 is from 11.01.2020 to 21.04.2022(because of COVID, physical Bills were raised late) and the payment due is reflected as Rs.53,330/-. The billing from 11.01.2020 to 21.08. 2020 is reflected in Ex. PW-2/2 to be Rs. 1381.69. On account of COVID-19, it is deemed that the tenanted property was lying vacant after the possession was handed over to lessors by tenants on 17.06.2020, again monthly consumption of consumer comes to about Rs. 300/- per month and the arrears reflected in the Bill is Rs.48,196.59/-.
97. On being shown, Ex.PW-2/3, Bill dated 9.06.2022, PW-2 stated that it was showing minus bill and by minus bill it means Jal Board has to pay back to the consumer. This statement by PW-2 shows that nothing remained due by the consumer under Ex. PW- 2/3. The perusal of payment history of Ex.PW-2/3 reveals that an amount of Rs. 53,329.79 was paid on 22.06.2022 but it does not show by whom was the payment made.
98. The water bills produced by PW-2 mention a phone number 9958948111 on all the bills produced by him. During his cross examination, PW-2 stated that he did not know as to who was using this mobile number mentioned in the bill dated 10.01.2020. NEERA BHARIHOKE Some bills pertain to the period after the handing over of the possession of the tenanted premises to the lessors and some are of Digitally signed by NEERA BHARIHOKE the period prior to or during the period of tenancy. Plaintiffs have Date: 2024.10.14 14:32:49 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 43 of 51 not brought anything on record to establish as to who was the user or subscriber of phone number 9958948111.
99. During cross-examination, PW-2 stated that the bill for every floor of any building is separate. Plaintiffs have even failed to establish that the bills produced by PW-2 are of tenanted premises since the Bills do not mention that it is of ground floor (the tenanted premises were ground floor).
100. PW-2 also said that by looking at the bills he could not tell as to who had paid the bill amount or as to how the same was paid i.e. (online or cash). He also said that he could not tell by seeing Ex. PW-2/1 if March 2019 Bill was paid or not and said that he could only tell by seeing the bill payment history that it was paid on 26.06.2019.
101. Therefore, it is noticed that the testimony of PW-2 does not help the case of the Plaintiffs. Ex. PW2/1 to Ex. PW-2/4 mention the address of the consumer as 20, Community Center, East of Kailash but not its floor whereas the tenanted premises was the ground floor of the said property. Further (xix) of Clause 7 at internal page of the Lease Deed provides that half of the portion of the open space at the backside of the said premises i.e. Ground NEERA Floor, 20, Community Center, East of Kailash Is being used by the BHARIHOKE Digitally signed by LESSORS and which it shall continue to use without causing any NEERA BHARIHOKE Date: 2024.10.14 obstruction to the LESSEE. Therefore, Plaintiffs failed to establish 14:32:55 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 44 of 51 that the water Bills produced by PW 2 pertained to the tenanted premises.
102. Further Ex.PW-2/1 is for the period under the tenancy of the Defendant but by its perusal, it cannot be made out as to what is the outstanding against the Defendant beginning from 01.03.2019 to 10.01.2020 and how much are the arrears prior to that. Similarly, from perusal of Ex.PW-2/2, it cannot be made out as to how much is the amount to be paid by the Defendant and how much by the lessors since Ex.PW2/2 pertains even to period after termination of tenancy or handing over of possession of the property by Defendant to lessors.
103. In view of Plaintiff failing to bring anything on record to prove that how much arrears were due against the lessors on the day of letting out the tenanted premises to the Defendant or on the day of handing over possession of the tenanted premises to the lessors, Plaintiff has failed to establish/prove the quantum of outstanding against the Defendant towards arrears of water bill.
104. The Plaintiff did not produce any bank statement to show that arrears pertaining to the consumption of water by the Defendant from 01.03.2019 to 17.06.2020 were paid by the lessors NEERA BHARIHOKE and not by Defendant and thus failed to produce the best evidence Digitally signed in support of its claim. Plaintiffs failed to prove as to who made by NEERA BHARIHOKE Date: 2024.10.14 14:32:59 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 45 of 51 payment of the pending water bills of the period of tenancy of the Defendant and when.
105. In view of these observations, issue no. 5 is decided against the Plaintiffs and in favour of Defendants and it is held that the Plaintiffs are not entitled to a sum of ₹34,269/- towards arrears of water bill as claimed.
Issue No.6 : The amount of the security deposit which is available for adjustment against the dues of the plaintiffs? OP Parties.
The onus to prove this issue was on the parties. During his cross-examination, DW-1 admitted that Defendant had not filed any suit, counterclaim, set off in respect of the security money mentioned in para 9 of his affidavit.
106. Plaintiffs have relied on the observations of the Hon'ble High Court of Delhi in The Bank of Rajasthan Ltd. vs. Pala Ram Gupta and others, AIR 2000 Delhi 58 where it was held that the plea of set-off must be raised specifically in written statement and the Plaintiff is expected to file written statement thereto. Learned Counsel for Plaintiffs argued that neither the plea of set-off had been raised by the Defendant in written statement nor has it paid court-fee thereon.
NEERA BHARIHOKE
107. It is correct that the Defendant in this case has not claimed Digitally signed by NEERA BHARIHOKE any set off or counterclaim. A set-off comes into picture when any Date: 2024.10.14 14:33:04 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 46 of 51 debts or monies which Plaintiff claims to be due from the Defendant, can be adjusted and settled against debts owed to the Defendant by the Plaintiff but the Defendant has not claimed so in the present case.
108. As regards the counter-claim, at the stage of framing of issues, Plaintiffs had been asked whether the security deposit of the rent of three months was adjusted to, which learned Counsel for Plaintiffs had replied that there was no counter claim by the Defendant in this regard and my learned predecessor had observed that there was no need for the Defendant to file the counter claim as the security deposit had to be adjusted against the dues of the Plaintiff under the Lease Deed itself. It was also observed that the Plaintiffs had adjusted Rs.1,50,000/- towards the damages to the property and the remaining security amount was still lying with them. It was then that this issue and issue no. 4 were framed on the same day vide order dated 01.03.2024. The issues framed vide the said order as well as observations made in the order dated 01.03.2024 have not been challenged and have attained finality.
109. It has already been held while deciding issue no.3, 7 and 8 that Plaintiff is not entitled to recovery of any amount towards arrears of rent from the Defendant as claimed. While deciding issue NEERA BHARIHOKE no. 4, it has already been held that Plaintiffs are not entitled to adjust an amount of ₹1.50 Lac on this account from the security Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:33:08 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 47 of 51 deposit as stated in para 5 of the plaint. Therefore, Defendants are entitled to a refund of the complete security deposit.
110. Clause 5 at internal page 6 of the Lease Deed provides that the whole amount of interest free refundable security deposit shall be refunded by the Lessors, individually as well as collectively to the Lessee at the time of expiration of the Lease Deed or sooner thereof simultaneously with the handing over of the vacant possession of the tenanted premises to the Lessors. Admittedly, complete security amount is lying with the Plaintiffs and in terms of the cited Clause 5, the security deposit should have been refunded by the lessors to the lessee at the time of expiration of the Lease Deed or sooner thereof simultaneously with the handing over of the vacant possession of the tenanted premises to the lessors i.e. latest by 17.06.2020. But the lessors and after their death, the Plaintiffs have been retaining the whole security amount In place of refunding to the lessees. The liability of all the lessors to refund the security amount is individual as well as collective as per cited Clause 5.
111. Though the security amount was interest free, in my considered opinion, it was only if the security deposit would have been returned to the Defendant in terms of Clause 5 that the security amount would be interest free but not for the period after the due date of refund under the Lease Deed and therefore charging NEERA BHARIHOKE of the simple interest @ 6% p.a. on the security amount, from the Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:33:14 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 48 of 51 date of handing over of the tenanted possession of the tenanted premises by the Defendant to the lessors till the date on which security amount is refunded/paid to the Defendant will serve the ends of justice.
112. Since the Defendant has been able to prove it's entitlement for the refund of whole security amount, issue no. 8 is decided in favor of the Defendant and against the Plaintiffs and it is held that there is no amount of security deposit for adjustment since the Plaintiff has no dues against the same and that the Defendant is entitled to refund of complete/ whole amount of security deposit along with simple interest @ 6% p.a. on the security amount, from the date of handing over of the tenanted possession of the tenanted premises by the Defendant to the lessors till the date on which security amount is refunded/paid to the Defendant.
Issue No.9 : Whether the plaintiffs are entitled to cost of the suit? If yes, the quantum?
The onus to prove this issue was on the Plaintiffs. The Plaintiffs have filed a frivolous claim against the Defendant for recovery of by relying on Clause 6 of the Lease Deed and has unjustifiably retained the whole security deposit of the Defendant for more than four years. Even if it be deemed that NEERA the Plaintiff deemed the deduction of Rs.1,50,000/-was justified, BHARIHOKE there was no reason for the Plaintiff to not to refund the remaining Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:33:18 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 49 of 51 security amount to the Defendant. Therefore, the cost of Rs.20,000/- is imposed on the Plaintiffs to be paid to the Defendant jointly and severally within 15 days from today.
Issue No.10 :Whether the defendants are entitled to any cost of the suit? If yes, the quantum?
The onus to prove this issue was on the Defendant. The Defendant had invoked Clause 13 of the Lease Deed in view of the outbreak of COVID-19 and made all the efforts to settle all the claims between the Defendant and lessors amicably. Further the Defendant had been deprived of its security deposit for no justifiable reasons. Besides that, the Defendant has been forced into this litigation and had to bear the legal and other expenses to contest the present and therefore cost of the suit to the extent of legal expenses including the professional fee of the counsel is awarded in favor of the Defendant to be paid by the Plaintiffs jointly and severally within 15 days from today.
Issue No.11 : Relief
113. The Defendant is entitled to refund of complete/ whole amount of security deposit of Rs.6,63,000/- alongwith simple interest @ 6% p.a. on the security deposit, from the date of handing over of the tenanted possession of the tenanted premises by the NEERA BHARIHOKE Defendant to the lessors till the date on which security amount is refunded/paid to the Defendant.
Digitally signed by NEERA BHARIHOKE Date: 2024.10.14 14:33:25 +0530 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 50 of 51114. The cost of Rs.20,000/- is imposed on the Plaintiffs to be paid to the Defendant jointly and severally within 15 days from today.
115. The cost of the suit to the extent of legal expenses including the professional fee of the counsel is awarded in favour of the Defendant to be paid by the Plaintiffs jointly and severally within 15 days from today.
116. The present suit is disposed of in these terms.
117. Decree sheet be prepared accordingly.
File be consigned to record room after necessary compliance.
Announced in the open Court on 14.10.2024 (Dr. Neera Bharihoke) Digitally signed by NEERA District Judge (Commercial Court)-06 NEERA BHARIHOKE BHARIHOKE Date:
2024.10.14 South East, Saket Courts Delhi 14:33:31 +0530 14.10.2024 Certified that this judgment contains 51 pages and each page bears my signatures.
(Dr. Neera Bharihoke) Digitally signed by NEERA District Judge (Commercial Court)-06 NEERA BHARIHOKE BHARIHOKE Date: South East, Saket Courts Delhi 2024.10.14 14:33:35 +0530 14.10.2024 CS (Comm) 637/23 Bimla Rani Juneja Vs. Nathus Sweets Pvt. Ltd. Page 51 of 51