Delhi District Court
Agamjiv Singh vs M/S Midas Infratrade Limited on 16 January, 2021
Through Video Conferencing via Cisco Webex
Link : https://delhidistrictcourts.webex.com/meet/ddc.vc.south12
IN THE COURT OF DISTRICT JUDGE (COMMERCIAL COURT-02)
SOUTH DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) NO. 276 of 2019
Agamjiv Singh,
S/o Late S. Manmeet Singh,
R/o C-150, Defence Colony,
New Delhi-110024
E-mail : [email protected] ..... PLAINTIFF
Versus
M/s Midas Infratrade Limited,
Through Its Managing Diretor,
Regd. Office at 301, 2633-34,
Bank Street, Karol Bagh,
New Delhi-110005
Also at :
D-10, NDSE-II, New Delhi-110049
Also Through E-mail
[email protected] ..... DEFENDANT
Date of Institution: 19.09.2019
Arguments concluded on :11.01.2021
Date of Judgment: 16.01.2021
JUDGEMENT
1. If the objectives of the Commercial Courts Act are to be really achieved, then the stakeholders will have to adopt a 'Commercial' approach. Not only, they will have to shed traditional adversarial mindsets but also will have to look for innovative ways in amicably resolving and increasing the speed of adjudicating commercial disputes by making the process of finding facts and seeking truth proportionate to the nature of disputes and complexities of the facts- in- issues, otherwise the ultimate results achieved will not be fair & just.
2. No litigant should have the misimpression that one can make any averment, conceal any fact, raise any plea, deny any genuine document or file Agamjiv Singh v Midas Infratrade Ltd. Page 1 of 32 any frivolous application to abuse or stall the legal process and delay the matter endlessly and court would be a passive spectator.
BACKGROUND FACTS
3. Plaintiff being the co-owner and landlord filed this suit for possession, recovery of arrears of rent, mesne profit and TDS amount with interest in respect of shop/premises bearing no. D-10, Ground Floor, New Delhi South Extension Part-II, New Delhi admeasuring 1350 Sq. ft on ground floor and 500 Sq. ft on first floor let out to defendant for commercial use w.e.f. 1 st April, 2018 at a monthly rent of Rs.8,10,000/- plus GST @ 18% per month on the rent and deduction of TDS. Relationship between the parties is governed by a registered lease deed dated 20 th September, 2018 ,after the previous franchise agreement dated 3rd July, 2017 between plaintiff and HDC Pvt. Ltd. had been determined and terminated. Admittedly, defendant has handed over possession of tenanted premises to plaintiff on 2nd feb 2020 during the pendency of this suit.
4. Earlier, the company HDC Pvt. Ltd. was taken over by the defendant in terms of agreement dated 10 th January, 2018 by virtue of which all assets and liabilities of HDC Pvt. LLtd.were taken over by the defendant company and after reconciliation, two cheques in the sum of Rs.8,29,800/- each were given towards arrears of minimum guaranteed commission.It is also a matter of record that at the time of entering into franchise agreement, a refundable security of Rs.32,40,000/- was paid by the said company besides advance deposit of two months in lump sum of Rs.16,20,000/- which was to be adjusted in 18 instalments from commission @ Rs.90,000/- per month in succeeding 18 months commencing from November, 2017. The aforesaid minimum guaranteed amount of Rs.8,10,000/- was paid till December, 2018 and thereafter no payment was made for the month of January, 2018 to March, 2018.
5. The premises in question was let out for commercial use to the defendant company in terms of the registered lease deed dated 20 th September, 2018, lease commencing According to plaintiff, the net amount payable by defendant to the plaintiff towards rent was Rs.8,74,800/- per month. It is stated that there was default in payment of rent by the defendant for the month of Agamjiv Singh v Midas Infratrade Ltd. Page 2 of 32 November, December, 2018 and January, 2019 leading to issuance of legal notice dated 16th January, 2019 whereby the defendant was called to pay the outstanding amount and in default, the tenancy was to be terminated w.e.f. 28 th February, 2019.
6. It is further the case of the plaintiff that defendant did not pay the outstanding amount nor any reply to the notice and further did not pay the rent from February, 2019 onwards. As a result of which, another reminder legal notice dated 7th June, 2019 was given whereby the defendant was again called upon to vacate the premises and was duly intimated that the plaintiff will be left with no option but to adjust the security amount of Rs.32,40,000/- against the total outstanding of Rs.43,74,000/- as due and payable up to June, 2019 and takes necessary legal action. A reply dated NIL was given by the defendant by e-mail as well as by e-post on 26 th June, 2019, acknowledging that the rent from February, 2019 to June, 2019 is outstanding and the defendant showed its intention to retain the premises and not to vacate the same. It is submitted that defendant paid an amount of Rs.8,74,800/- with the said reply through RTGS.
7. Since the defendant did not deposit the arrears of rent and the plaintiff also found that despite deduction of TDS @ 10% as per Income Tax Rules, the same has not been deposited with the statutory body by the defendant for the financial year 2018-19, plaintiff filed the present suit, claiming arrears of rent after all adjustments of payment made up to June, 2019 to the tune of Rs.2,59,200/- and mesne profit/rent w.e.f. 1st July, 2019 to 15th September, 2019 (without deducting TDS) @ Rs.9,55,800/- per month and total amounting to Rs.24,21,360/- as well as damages at the said rate from the date of filing of the suit i.e. 18th September, 2019 till the date of delivery of possession, alongwith interest @ 18% per monthpendi-lite and till its realization. The plaintiff also claimed TDS amount of Rs.13,04,550/- for the months 1 st April, 2018 to 30 th June, 2019.
Relevant dates, events
8. It is relevant to note relevant dates and events to appreciate the conduct of the defendant, the manner in which the civil litigation proceeds and Agamjiv Singh v Midas Infratrade Ltd. Page 3 of 32 adversarial mindset .
9. On 18th September, 2019 this suit was filed by the plaintiff. Defendant was served with the summons on 19.10.2019. On 25th November, 2019, Shri Deepak Sharma, counsel for defendant had filed his appearance on which date it was ordered that written statement be filed within stipulated period with advance copy to counsel for plaintiff. However, written statement was not filed within 30 days. This suit was received by way of transfer in this court on 27th January, 2020 on which date counsel for plaintiff pointed out that written statement was not filed by the defendant and his defence may be struck off but this court kept the matter for 30 th January, 2020 for further order/case management hearing. Then written statement was filed by the defendant on 30th January, 2020. There was delay of 73 days in filing the written statement. In view of the reasons explained, written statement was taken on record subject to costs of Rs.25,000/-. Since the written statement was not accompanied by requisite verification/statement of truth and affidavit of admission/denial of documents, one week time was granted to the defendant to file the same with advance copy to counsel for plaintiff.
10. Shri Deepak Sharma, Counsel for the defendant submitted that defendant was ready and undertaken to hand over the vacant possession of the premises to the plaintiff within three days i.e. by 2 nd February, 2020. As this court found that there was element of settlement, therefore, the matter was referred to mediation center to explore the possibility of settlement for 3 rd February, 2020 at 11.00 am and the matter was fixed for 28 th February, 2020 for report of mediator and alternatively for case management hearing.
11. It is not disputed by the parties that vacant possession of the tenanted premises was handed over to the plaintiff on 2nd February, 2020 and in view of that the relief of possession sought by the plaintiff stood satisfied and thus has become infructuous. On 28th February, 2020, one another counsel, Shri Varun Gupta filed his memo of appearance on behalf of the defendant and submitted that Shri Deepak Sharma, counsel was busy in the High Court and AR of the defendant was also not present due to her personal difficulties. The Agamjiv Singh v Midas Infratrade Ltd. Page 4 of 32 previous costs which was imposed for taking written statement on record and as well as affidavit/statement of truth was not filed. In view of this, a further cost of Rs.5,000/- was imposed upon the defendant. It was ordered that AR shall appear in person and file proper affidavit of admission/denial of documents within two weeks and in case, defendant fails to pay the cost imposed, the written statement shall be taken off the record and the defence shall be struck off and the case was fixed for first case management hearing again for 19.03.2020. It is a matter of record that defendant neither paid the costs nor filed affidavit of admission/denial and statement of truth within two weeks or even up to 19.03.2020. Thereafter Lockdown period started.
12. Then on 9th September, 2020 counsel for the plaintiff had appeared but none appeared on behalf of the defendant. On that day counsel for the plaintiff had pointed out that costs imposed had still not been paid by the defendant. Thereafter on 26 th September, 2020, counsel for plaintiff had appeared and submitted that no cost was deposited by the defendant despite giving bank account details by him. Three days' time was again given for deposit of costs for taking written statement on record. On 26th September, 2020, counsel for the plaintiff filed an application for summary judgment titled as U/o VIII-A Rule 6(1)(b) & 7 of Commercial Courts Act, 2015 supported by an affidavit of the plaintiff. The application was actually U/o XIII-A and due to clerical error, the title of application was mentioned as Order VIII and this fact was clarified by counsel for the plaintiff vide his statement on 19 th November, 2020. Plaintiff prayed that the defendant be directed to deposit a sum of Rs. One Crore in the court or be directed to provide a surety/bank guarantee in order to safeguard his claim and towards satisfaction of decree likely to be passed in his favour and for passing such other or further order it deemed fit and proper in facts and circumstances of the case. The case was listed for reply, if any, and disposal of application U/o VIII-A Rule 6(1)(b) & 7 of Commercial Courts Act, 2015 filed by counsel for plaintiff as well as for completion of pleadings, admission/denial of documents and case management hearing. 30 days notice was granted to the defendant to file reply to the said application as per the procedure provided in Rule 4 of Order Agamjiv Singh v Midas Infratrade Ltd. Page 5 of 32 XIII-A.
13. On 26th October, 2020, no one had appeared for the defendant. Counsel for the plaintiff submitted that he had received an e-mail from the defendant about the demise of his relative and that he had received the cost on 25th October, 2020. No reply to the application was filed by the defendant and it was ordered that reply, if any, by filed within 7 days with copy to plaintiff and the matter was again listed for reply, if any, and completion of pleadings, admission/denial of documents and case management hearing.
14. On 19th November, 2020, counsel for plaintiff submitted that title of application which was titled as U/o VIII-A was filed U/o XIII-A. No reply was filed by the defendant even on 19 th November, 2020. The ground assigned for adjournment was demise of his close relative. Three days' time was again granted to the defendant to file reply and both the parties were directed to file written submissions not more than 3 pages. Case listed for hearing for disposal of the application U/o XIII-A (Order VIIIA as well as for case management hearing. It was clarified by the court that no further adjournment shall be granted to either party.
15. On 26th November, 2020, counsel for the plaintiff submitted that he had e-filed written submissions but defendant sought time to file written submissions. It was ordered by the court that whatever is to be filed may be filed by both the parties by or before 28 th November, 2020 and it was made clear that no further opportunity shall be granted to either party for filing any material after 28th November, 2020 and the case was listed for arguments on the application for summary judgment for 3rd December, 2020.
16. On 3rd December, 2020, a new advocate, Shri Naveen Sharma appeared for the defendant and instead of filing reply to the application for summary judgment and arguing on the same, e-filed an application U/o VI Rule 17 CPC for amendment of the written statement. Previous counsel for the defendant Shri Deepak Sharma neither appeared nor had writhdrawn his vakalatnama and he was stated to be busy in a marriage function. Counsel for the plaintiff drew attention of the court towards the previous orders and had Agamjiv Singh v Midas Infratrade Ltd. Page 6 of 32 strongly opposed the adjournment. In view of that the matter was passed over for hearing at 2.15 pm on the request of Shri Naveen Sharma, counsel for defendant. At 2.15 pm, counsel for the defendant e-filed now, an application U/s 151 CPC for adjournment. Adjournment was sought on the ground that he could not contact, take instructions and prepared the arguments and thus, he was not in a position to argue. Although the ground assigned by the counsel for defendant was not satisfactory, yet in the interest of justice, as prayed, three days time was granted. However, submissions heard on behalf of counsel for plaintiff to understand the nature of controversy and on the application of summary judgment. The case was then fixed for conclusions of arguments by the parties on the pending applications.
17. On 9th December, 2020, neither Shri Naveen Sharma nor Shri Deepak Sharma, counsels appeared. On that day, Shri Rajnish Chopra, Director of defendant appeared and submitted that his counsel Shri Naveen Sharma could not come as he was suffering with high fever and that he had filed an application before the Ld. District & Sessions Judge, South for transfer of this case. Counsel for plaintiff submitted that defendant was delaying the matter on one pretext or the other and this tactics was adopted by the defendant to avoid passing of the order on the application by the court. In the circumstances and interest of justice, one week's time was granted to the defendant to conclude his submissions and matter was listed for 17th December, 2020 for arguments, if any, on behalf of the defendant and disposal of the application U/o XIIIA CPC.
18. On 17th December, 2020, one Shri Ashok Jain, associate counsel for Shri Naveen Shama appeared and submitted that main counsel Shri Naveen Sharma could not join the proceedings due to his family difficulty. It was further submitted that defendant has filed an application for transfer of this case before the Ld. District & Sessions Judge, South, Saket and same was listed for 21 st December, 2020. Counsel for plaintiff submitted that there was no stay of proceedings and application for summary judgment was listed on 25 th September, 2020 and defendant has taken more than five adjournments and was delaying the matter and further court should proceed further on merit. After hearing both the Agamjiv Singh v Midas Infratrade Ltd. Page 7 of 32 parties and having regard to previous orders, defendant was given one more opportunity to conclude his submissions, in the interest of justice. It was clarified that in the absence of any stay of proceedings, the court would hear the matter on merits, in accordance with law and case was listed for 22 nd December, 2020 for further proceedings alternatively for conclusion of arguments on behalf of the defendant.
19. On 22nd December, 2020, counsel for plaintiff informed the court that Transfer Petition (CIS - T.P.C.-9/2020) filed on behalf of the defendant has been dismissed by the Ld. District & Sessions Judge, SD, Saket Court, New Delhi and parties have been directed to appear before this court on 23 rd December, 2020 at 10.00 am. Case was then listed for 23rd December, 2020 for hearing.
20. On 23rd December, 2020, arguments were heard at length on all aspects of the matter including the amendment application. Thereafter the courts were closed for winter vacations till 3 rd January, 2021. On 6th January, 2021 certain clarifications were sought. Counsel for the defendant again sought adjournment in connection with the admission of his son in the college. Matter was listed for 7th January, 2021 on the request of counsel for defendant. On 7 th January, 2021, counsel for defendant again sought adjournment on the ground of his difficulty. Court gave final opportunity to counsel for defendant to respond/make submissions on the point of clarifications on 8 thJanuary, 2021 and it was clarified that no further opportunity shall be granted on any ground whatsoever and the matter would be listed for orders on 11 th January, 2021.To satisfy itself, the court on 11th January, 2021 directed both the parties to file their bank account statements with respect to amount paid as rent by the defendant and received by the plaintiff w.e.f. 1 st October, 2018 till 28th February, 2020, supported by an affidavit within three days. Plaintiff complied with the said order. However, defendant failed to comply with the same. It is interesting to note that instead of complying with the same, defendant filed two applications U/s 151 CPC and again sought adjournment on the ground that accountant of defendant was unwell and shall not be available for 4-5 days and also prayed that application U/o VI Rule 17 CPC be decided before deciding this application U/o Agamjiv Singh v Midas Infratrade Ltd. Page 8 of 32 XIII-A CPC. This court was not inclined to grant further adjournment for the disposal of application for summary judgment and application U/o VI Rule 17 CPC has been firstly dismissed vide separate order of even date. Submissions advanced by Ld. counsel for plaintiff
21. Shri Amit Sethi, Ld. Counsel for the plaintiff submits that defendant has made bald denial of each and every fact including the fact of giving the reply dated NIL and making the payment of Rs.8,74,800/-. It is submitted that defendant while giving reply on merits has more or less reproduced the contents of the plaint and then denied the same. It is further submitted that defendant has gone to the extent of denying pre-litigation mediation or its dis-interest in mediation in para 16 of the written statement. In para 17 of the written statement, the defendant has also denied that TDS has not been deposited. However, alongwith the written statement, no statement of account or proof of deposit of TDS or any other document relating to allegation of seepage and vibration in the property were filed or even referred to.
22. It is further submitted by Ld. Counsel for plaintiff that detailed replication was filed to the written statement inter alia stating that provisions of Order 8 Rule 5 CPC are required to be invoked as the bald denials without supporting documents tentamounts to admission. Thereafter an application U/o XIII-A CPC, ( nomenclature U/o VIII-A CPC due to typographical mistake) as applicable to Commercial Court highlighting the admissions of the defendant, applicability of Order 8 Rule 5 CPC as well as the total outstanding amount payable by the defendant under various heads amounting to Rs.82,54,350/-. The plaintiff also sought in the alternative conditional order for deposit of Rs. One Crore as security in the name of this court in the form of FDR or a bank guarantee of the said amount to safeguard the interest of the plaintiff as provided U/o XIII-A Rule 6(1)(b) & 7 of CPC as applicable. It is submitted that reply of the said application was e-filed on 25th November, 2020.
23. Ld. Counsel for the plaintiff submits that there is no dispute between the parties as regards to the relationship of landlord and tenant, the factum of existence of earlier franchise agreement dated 3 rd July, 2017 with HDC Pvt. Ltd.
Agamjiv Singh v Midas Infratrade Ltd. Page 9 of 32HDC Pvt. Ltd. has been taken over by the defendant in terms of agreement dated 10th January, 2018. Lease Deed dated 20 th September, 2018, rate of rent mentioned therein has also been admitted. Paragraph nos. 1, 2, 4, 5, 6 and 8 of plaint have also been admitted by the defendant. It is also admitted by the parties that the possession of the suit premises was delivered by the defendant to the plaintiff on 2nd February, 2020.
24. Ld. Counsel for the plaintiff submits that in view of the above provisions of law and the material fact that there is no document filed by the defendant to show or to counter the document of the plaintiff or submissions of the plaintiff, the plaintiff is entitled for summary judgment as there are no issues which require trial. There are no reasonable prospects of the defendant succeeding in its defence and on the contrary the case of the plaintiff is based on documentary evidence and cogent facts which have only been baldly denied. It is submitted by the learned counsel for plaintiff that in the alternative, the provisions of Order XIII-A including Rule 6 & 7 also empowers the court to direct defendant to deposit the security amount in the court, in case the court considers that the defendant may have some defence. Such conditional order is meant for safeguarding the interest of the plaintiff in a money suit against the defendant which is a company.
25. Ld. Counsel for the plaintiff submits that in replication, plaintiff has stated that had there been any iota of truth in the allegations made by defendant regarding tremor and vibration, seepage etc the same premises which was earlier being occupied under Franchise Agreement dated 03.07.2017 would not have taken on lease vide registered lease deed dated 20.09.2018. It is submitted that since the defendant found the said place appropriate, fit and conducive for its business, the defendant continued to hold the said premises by entering into registered lease deed with the plaintiff. It is stated that the defendant later on having failed to command business from the market is now bent upon giving lame excuses including the false excuse of alleged tremor and vibration in the building to mislead this court and above all to falsely make the plaintiff liable for such alleged losses. It is stated that there is nothing on record to substantiate such Agamjiv Singh v Midas Infratrade Ltd. Page 10 of 32 contentions.
26. Ld. counsel for the plaintiff submits that contention of the defendant to the effect that the notice dated 16 th January, 2019 never issued is incorrect as the said notice along with original postal receipt are on record. In terms of said notice, defendant was given an opportunity to make good payment for the month of November, December, 2018 and January, 2019 within 30 days failing which the effect of determination of tenancy will arise from 28.02.2019. It is further submitted that yet another notice dated 7.6.2019 was given by the plaintiff to the defendant whereby the plaintiff informed the defendant that since the compliance of notice dated 16th January, 2019 has not been done and the outstanding payments have not been made within the period of 30 days and further more the rental up to June, 2019 has not been paid the total amount comes to Rs.43,74,000/- as arrears and after adjustment of security amount of Rs.32,40,000/- still an amount of Rs.11,34,000/- was due and payable besides delivery of possession.
27. It is further submitted that reply to the notice dated 07.06.2019 was given by the defendant whereby the defendant acknowledged that there is outstanding of rent from February, 2019 to June, 2019. It is further submitted that defendant also submitted in the reply that it has no intention to vacate the premises and will continue to use for long time. It is further submitted that in the said reply, there is no contention of any seepage or vibrations in the premises or intention of the defendant to close business from July, 2019. It is further submitted that the defendant in the said reply submitted that after adjustment of security Rs.11,34,000/- is due at its end and give the rental payment of Rs.8,74,800/- also alongwith the said reply.
28. Ld. counsel for the plaintiff has further submitted that in view of such categorical admission by the defendant, the defendant now at this juncture cannot seek any amendment to displace and regal out of the admission by putting blame on the counsel. It is further submitted that in fact the written statement and all the applications with affidavits have been signed by the same AR/Director of the defendant who had issued the reply. It is further submitted that Agamjiv Singh v Midas Infratrade Ltd. Page 11 of 32 the details of the rentals as and when received have been duly mentioned in para 9 of the plaint. It is further submitted that the fact of adjustment of security deposit, issuance of notices, reply by defendant and the outstanding amount after all adjustment have been clearly mentioned in para 12 to 14 of the plaint.
29. Ld. counsel further submitted that the defendant despite being afforded numerous opportunities to place on record any document or their statement and have not even abided by the orders of the court. It is further submitted that even the figure of Rs.14,90,400/- so mentioned in the amendment application do not make any sense as the rent for two months comes to Rs.16,20,000/- plus GST minus TDS. It is further submitted that in fact the amendment application cannot circumvent Order 11 Rule 1(7) of CPC. Even otherwise under the garb of Order 6 Rule 17 CPC, new documents cannot be introduced especially when they are in contravention of the admission made in the document issued by the defendant earlier. It is further submitted that the lawyer cannot be made escape goat to circumvent the provisions of Commercial Courts Act and introduced new facts especially Order VIII Rule 3A and 5 of CPC as applicable. It is further submitted that if the defendant has filed any case on account of any losses or damages that is a separate cause of action. However, no summons of any such like case has ever been received by the plaintiff till date. It is further submitted that even as per clause 4 of the lease agreement, the defendant was not entitled to retain the premises as after adjustment of security deposit, no amount was due and payable by the plaintiff. Rather an amount of Rs.11,34,000/- was due and payable by the defendant as on 07.06.2019 and when the defendant made payment of Rs.8,74,800/- along with reply, the same stood reduced to Rs.2,59,200/- towards arrears of rent/damages up to June, 2019. It is further submitted that since the defendant has retained the possession even after the notice dated 7 th June, 2019, the plaintiff has claimed mesne profit/damages/use and occupation equivalent to the rent w.e.f. 01.07.2019 till delivery of possession i.e. 02.02.2020.
30. Ld. counsel has further submitted that the defendant as and when paid the rent also deducted TDS but never deposited the same with Income Tax Agamjiv Singh v Midas Infratrade Ltd. Page 12 of 32 Department. It is further submitted that the plaintiff while filing his return, obtained TDS traces in form of Form 26 AS from official website of Income Tax Department in which no such like deposit of TDS by defendant has been reflected. It is further submitted that defendant till date has not placed on record any document to substantiate the TDS so deducted was ever deposited by the defendant. Thus, the plaintiff has claimed the amount of such TDS amount from 01.04.2018 till June, 2019 with interest.
31. Ld. counsel has further submitted that the amendment application moved by the defendant is contrary to the settled proposition of law and tenta- mounts to withdrawal of admission .
32. It is submitted that the possession of the suit premises bearing No. D-10, South Extension-II, New Delhi-110049 has been surrendered by defendant- tenant on 02.02.2020. However, the arrears, as detailed above, have not yet been paid. Averments of the Plaint relating to details of outstanding rentals, arrears and outstanding TDS amounts have only been baldly denied by defendant in the Written Statement. There is no specific denial or assertion as to how much amount was paid or proof of deposit of TDS. It is submitted that there is no documentary evidence or even statement of Accounts filed by defendant to dispute the correctness of Statement of Accounts filed by the plaintiff, which is supported by affidavit U/s 65-B of the Indian Evidence Act. Unspecific denials of facts tantamount to admission under Order 8 Rule 5 of CPC. Defendant being in arrears from February 2019 to June 2019 has admitted said fact in its reply given in response to Legal Notice dated 07.06.2019 of plaintiff, wherein the defendant has stated "We fully agree that there is an outstanding towards rent from the month of February, 2019 to June 2019." It is submitted that plaintiff is entitled for summary judgment and the same is fully maintainable in view of the fact that Issues have not yet been framed in the suit and defendant has no real prospects of defending and succeeding in its claim/defence as the plaintiff has only claimed the rent/ Mesne profits at the lastly agreed rate which has not been paid by the defendant.
Agamjiv Singh v Midas Infratrade Ltd. Page 13 of 32Submissions advanced by Ld. counsel for defendant
33. On the other hand ,Shri Naveen Sharma, Ld. Counsel appearing for defendant submitted that the premises was taken over by the defendant at the rate of Rs.8,10,000/- per month excluding water and electricity charges for running a jewellery showroom vide lease deed dated 20.09.2018. It is further submitted that at the time of taking possession, it was a jewellery showroom and defendant spent lot of money, time and efforts to beautify the façade outside entry and interiors. It is submitted that when the defendant started operation there were issues of seepage of wall, water logging and vibration in the building. It is further submitted that the construction of the premises was too old and the building even had no pillars/columns. It is stated that since the beginning of tenancy, a gymnasium of the relatives of the plaintiff was being run at the first floor because of which tremors were regularly felt, however, despite repeated request, the plaintiff did not rectify the defects.
34. Ld. counsel for the defendant further submits that a chandelier which was fixed on roof of the showroom also collapsed on account of vibrations caused by the gym. It is further submitted that it was also observed that cracks also develop on the wall on account of vibrations. The showroom used to remain closed, the defects which were to be repaired by the plaintiff.
35. It is further submitted that as per clause 4 of the lease agreement, a sum of Rs.32,40,000/- was deposited by the defendant to the plaintiff as interest free rent security deposit which was to be refunded by the plaintiff to the defendant after deducting the outstanding claim, if any. It is further stated that it was also agreed by the plaintiff/lessor does not referred the security deposit after deducting the outstanding amount. Ld. Counsel has further submitted that the defendant/lessee shall contribute to occupy the leased premises without payment of rent till the time security deposit is refunded by the lessor/plaintiff.
36. Ld. counsel for the defendant further submits that as per clause 9.1 of the lease agreement, in case of failure of payment of rent for a period of 30 days, the plaintiff was required to serve a notice upon the defendant asking it to pay the outstanding rent. It is further argued that it was the condition for Agamjiv Singh v Midas Infratrade Ltd. Page 14 of 32 determining the lease. It is submitted that a cheque bearing no. 000609 dated 5 th of December, 2018 was given by the defendant towards rent for the month of November, 2018. It is stated that the said cheque was dishonoured vide returning memo of 11th December, 2018. Admittedly, the plaintiff did not issue mandatory notice within 30 days of said default. It is further stated that it was the obligation of the plaintiff to refund to the defendant a sum of Rs.14,90,400/- from the interest free security deposit after determining the lease post default in payment of rent for the month of November, 2018.
37. Ld. Counsel for the defendant has submitted that as per clause 4 of the agreement, the defendant was entitled to occupy the suit property without payment of rent till the time the security deposit was refunded by the plaintiff. It is further submitted that the defendant had issued 25 post dated cheques and used to return the same when the rent was paid through RTGS. However, despite receipt of rent through RTGS, the post dated cheques were not returned by the plaintiff. It is stated that notice dated 16.01.2019 is arbitral and bad in law and that the demand raised in the said notice is contrary to the terms and conditions set out in the lease agreement dated 20.09.2018.
38. Ld. counsel for the defendant further submits that the plaintiff has concealed true and material facts from this court with an intend to secure an order of advantage in his favour. It is further submitted that plaintiff is also not entitled to the claims set out in the suit being arbitrary and based on vexatious ground and calculation. It is submitted that plaintiff is not entitled to recovery/mesne profit/damages set out in the suit.
39. It is further submitted that the defendant filed an application U/o 6 Rule 17 r/w Section 151 CPC on 02.12.2020 and as per the application, that while preparing the written statement though the defendant handed over all the documents to his earlier counsel, Shri Deepak Sharma, advocate and told all facts to him. However, on account of bonafide and inadvertent error, said facts skipped his mind and have not been pleaded in the written statement. Ld. Counsel has submitted that litigant should not suffer because of bonafide and inadvertent error caused by the counsel in drafting the written statement. He has Agamjiv Singh v Midas Infratrade Ltd. Page 15 of 32 further submitted that the amendments need to be incorporated in the written statement and that the said amendments are necessary to adjudicate the real controversy in the suit which are in consonance with the principles of natural justice, good conscience and equity. Ld. Counsel has submitted that the said amendments shall not change the nature of suit and shall neither prejudice the plaintiff.
40. Ld. counsel for the defendant has submitted that para 7 of the written statement needs to be amended and para 8A to 8F are to be added. It is submitted that amendments are in connection with the facts that in pursuance of the lease agreement, post dated cheques qua rent were given and as and when the rent was tendered through RTGS simultaneously on payment the post dated cheques were returned back to the defendant by the plaintiff and it was further orally agreed by the plaintiff that till the time the aforesaid defects are not rectified the plaintiff will not present the said post dated cheques. However, contrary the cheque was presented and bounced. In pursuance of default of payment of rent, the plaintiff was to issue 30 days' notice for termination as contractually agreed leased deed dated 20.09.2018 and was to refund the balance sum of out of Rs.32,40,000/- (interest free rent security deposit) as mandated in Clause 4 of the lease agreement. And in case the security deposit is not refunded after deduction of outstanding amount the lessee was entitled to occupy the demised premises without payment of rent till the security deposit is refunded.
41. Ld. counsel has further submitted that the defendant committed default in payment of rent in the month of November, 2018 for which cheque no. 000609 dated 5th December, 2018 was dishonoured. It is further submitted that plaintiff was liable to refund Rs.14,90,400/- after adjusting rent for the month of December, 2018 and January, 2019 out of Rs.32,40,000/- to the defendant. The possession was handed over to the plaintiff on 02.02.2020. It is submitted that the said amount was neither refunded nor the plaintiff ever offered to refund the said amount and hence the defendant was entitled to occupy the tenanted premises without payment of rent. It is submitted that there was no occasion for the plaintiff to pay rent thereafter.
Agamjiv Singh v Midas Infratrade Ltd. Page 16 of 3242. Ld. Counsel for the defendant has submitted that a civil suit titled Midhas Infratrade Ltd. Vs. Agamjiv Singh is pending adjudication before the court of Shri Vipin Kumar Rai, Ld. ADJ, Saket Court, New Delhi for damages against the plaintiff in lieu of the lease agreement dated 20.09.2018.
43. Ld. counsel for the defendant has submitted that in terms of clause 9.1 of the lease agreement, the rent was required to be paid in advance and 30 days default notice was to be issued which was never issued by the plaintiff. It is further submitted that the notice was never issued by the plaintiff. Legal standard
44. The Commercial Courts Act is aimed at speedier disputes resolution mechanisms. Order XIII-A CPC is an instrument to allows faster resolution of commercial disputes when it is brought to the court's attention that the trial is unnecessary, it may not undertake the trial. Three conditions for passing summary judgment are (a) that there is no real prospect of a party succeeding in a claim; (b) that no oral evidence would be required to adjudicate the matter; and
(c) there is a compelling reason for allowing or disallowing the claim without oral evidence.(Rockwool International A/s vs. Thermocare Rockwool (India) Pvt. Ltd., Del HC Judgment dated October 16, 2018 in CS (Comm) 884/2017).
45. The Purpose of Order XIII-A CPC is that as most of the contemporary business transactions are carried out in writing, so the courts do not have to rely on oral testimony about intention behind a contract and transactions. Therefore, unless adducing of oral evidence is found necessary, courts can summarily decide claims based on documentary evidence.(Jindal Saw Ltd. v. Aperam Stainless Services and Solutions Precision SAS, Del HC Judgment dated July 16, 2019 in CS (Comm) 1314/2016).
46. The scope for summary judgment in contractual disputes was explained by our High Court in Su-Kam Power Systems Ltd. v. Mr. Kunwer Sachdev & Anr. (CS (Comm) No. 1155/218 decided on 30 th October, 2019.After analysing at some length similar provisions in the UK, US and Canada, the Hon'ble Court held that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would Agamjiv Singh v Midas Infratrade Ltd. Page 17 of 32 generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute...Consequently, there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result.
47. Legislative intention in providing the mechanism of case management hearing and passing summary judgment in commercial disputes is to facilitate quicker decision through the process. On reading the provisions contained in order X111-A CPC as a whole, if the court finds that defence is moonshine or Smokescreen and defendant has no reasonable prospects of succeeding, then it has to dispose of the matter by passing a summary judgment.
48. The options which court can exercise while disposing of application U/o XIII-A CPC are (i) If the success of the other party's claim is possible and probable, then the application deserves to be dismissed; (ii) If such success is possible, but not probable, then a Rule 7 conditional order will have to follow and
(iii)If such success is not possible, and there is no other good reason for its rejection, then, the application will have to be accepted, and a summary judgment passed.
Order VIII Rule 3-A reads as under :-
"3A. Denial by the defendant in suits before the Commercial Division of the High Court or the Commercial Court--
(1) Denial shall be in the manner provided in sub-rules (2), (3), (4) and (5) of this Rule. (2) The defendant in his written statement shall state which of the allegations in the particulars of plaint he denies, which allegations he is unable to admit or deny, but which he requires the plaintiff to prove, and which allegations Agamjiv Singh v Midas Infratrade Ltd. Page 18 of 32 he admits. (3) Where the defendant denies an allegation of fact in a plaint, he must state his reasons for doing so and if he intends to put forward a different version of events from that given by the plaintiff, he must state his own version. (4) If the defendant disputes the jurisdiction of the Court he must state the reasons for doing so, and if he is able, give his own statement as to which Court ought to have jurisdiction. (5) If the defendant disputes the plaintiff's valuation of the suit, he must state his reasons for doing so, and if he is able, give his own statement of the value of the suit.
49. Order 8 Rule 5 CPC reads as under :-
"Every allegation of fact in the plaint, if not denied specifically or by necessary implications, or stated to be not admitted in the pleading of the defendant, can be taken to be admitted except as against a person under disability. Provided that the court may in its discretion require any fact so admitted to be proved otherwise than by such admission."Provided further that every allegation of fact in the plaint, if not denied in the manner provided under Rule 3-A of this order shall be taken to be admitted except as against a person under disability."
50. It is relevant to note the observations of Hon'ble supreme court in Maria Margarida Sequeria Fernandes and Others Versus Erasmo Jack de Sequeria (Dead) through L.Rs. [CIVIL APPEAL NO. 2968 OF 2012: Arising out of SLP (C) No. 15382 of 2009, decided on March 21, 2012). Few relevant paragraphs are reproduced:-
"32.Truth alone has to be the foundation of justice. The entire judicial system has been created only to discern and find out the real truth. Judges at all levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty.
33.Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth ..........
37. What people expect is that the Court should discharge its obligation to find out where in fact the truth lies. Right from inception of the judicial system it has been accepted that Agamjiv Singh v Midas Infratrade Ltd. Page 19 of 32 discovery, vindication and establishment of truth are the main purposes underlying the existence of the courts of justice ..........
45 In Chandra Shashi vs Anil Kumar Verma (Supreme court in1995 SCC (1) 421) to enable the courts to ward off unjustified interference in their working, those who indulge in immoral acts like perjury, prevarication and motivated falsehoods have to be appropriately dealt with, without which it would not be possible for any court to administer justice in the true sense and to the satisfaction of those who approach it in the hope that truth would ultimately prevail. People would have faith in courts when they would find that (truth alone triumphs) is an achievable aim there; or (it is virtue which ends in victory) is not only inscribed in emblem but really happens in the portals of courts. ............
51. In the administration of justice, judges and lawyers play equal roles. Like judges, lawyers also must ensure that truth triumphs in the administration of justice.
52. Truth is the foundation of justice. It must be the endeavour of all the judicial officers and judges to ascertain truth in every matter and no stone should be left unturned in achieving this object. Courts must give greater emphasis on the veracity of pleadings and documents in order to ascertain the truth.
53 .Pleadings are the foundation of litigation. In pleadings, only the necessary and relevant material must be included and unnecessary and irrelevant material must be excluded.
..........
69. The person asserting a right to continue in possession shall, as far as possible and if possession as a tenant is admitted, must give a detailed particularized specific pleading along with documentary proof, if any to support his defence that he has discharged his liability or had paid rent or any other alleged assertion and details of subsequent conduct. If any, having the bearing on the issue. The Court examines the pleadings for specificity as also the supporting material for sufficiency and then passes appropriate orders. If the pleadings do not give sufficient details, they will not raise an issue, and the Court can reject the claim or pass a decree on admission.
..............
75.On vague pleadings, no issue arises. Only when a party so establishes, does the question of framing an issue arise. Framing of issues is an extremely important stage in a civil trial. Judges are expected to carefully examine the pleadings and documents before framing of issues in a given case.
.............
81.Due process of law means nobody ought to be condemned Agamjiv Singh v Midas Infratrade Ltd. Page 20 of 32 unheard. It means an opportunity for the defendant to file pleadings including written statement and documents before the Court of law. It does not mean the whole trial. Due process of law is satisfied the moment rights of the parties are adjudicated by a competent Court.
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84. False claims & defences are really serious problems and litigation pertaining to valuable real estate properties is dragged on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them This happens because of the enormous delay in adjudication of cases in our Courts. If pragmatic approach is adopted, then this problem can be minimized to a large extent.
51. RELEVANT TERMS OF LEASE DEED 2.1 The Lease Deed shall be valid for a period of non extendable Eight (8) years and 6 Months, commencing from 01.04.2018 and expiring on 30.09.2026. This deed will come to an end with efflux of time on 20.09.2026 and there shall be no renewal of this deed thereof. Any overstay by the Lessee shall be deemed illegal and Lessee shall be liable to pay the pre-determined liquidation damages as contemplated n clause 10.2.
3.1 That the LESSEE has agreed to pay to the LESSOR, a sum of Rs.8,10,000/- (Rupees Eight Lakhs Ten Thousand Only) per month as rent for the Demised Premises (hereinafter referred to as "Rent") exclusive of water and electricity charges. The rent shall be increased by 15% on the last paid Rent after a period of as described below :
a) Rent for the period of first Thirty months will be 01.04.2018 till 30.09.2020 will be Rs.8,10,000/- per month (Rupees Eight Lakhs Ten Thousand only).
3.2 That the LESSEE shall pay to the LESSOR, monthly rent in advance on or before the 7th day of each month after deducting applicable TDS. The TDS certificates will be provided by the LESSEE to the LESSOR.
4. Security Deposit That the Lessee agrees to pay a sum of Rs.32,40,000/- (Rs. Thirty Two Lakhs Forty Thousand Only) as interest free refundable security deposit (hereinafter referred to as "Security Deposit"), which would be refunded to the LESSEE by the LESSOR after deducting outstanding claims, if any, simultaneously with the handing over of the physical vacant possession of the Demised Premises. In the event the LESSOR does not refund the Security Deposit after deducting outstanding amount, if any, the LESSEE shall continue to occupy the Demised Premises without payment of Rent till the time the Security Deposit is refunded by the LESSOR.
10. CONSEQUENCES OF TERMINATION/EXPIRY OF THE LEASE DEED 10.1 In the event of expiry or earlier termination of this Lease Deed for any reason whatsoever, the LESSEE shall forthwith remove its goods kept in the Demised Premises and the fixtures and furniture installed by the LESSEE at the Agamjiv Singh v Midas Infratrade Ltd. Page 21 of 32 Demised Premises, subject to payment of all upto date dues of rent and other charges, levies, statutory or other dues, electricity and water dues, breakage and damages to the Demised Premises other than normal wear and tear, if any. 10.2 Pursuant to expiry or termination of the Lease Deed, as the case may be , and removal of its goods, fixtures and furniture from the Demised Premises, the LESSEE can still keep the keys of the Demised Premises and retain its possession in the event of failure of the LE3SSOR to refund the security deposit to the LESSEE in terms of Clause 4 above after adjusting the unpaid rent, statutory or other dues, electricity and water dues, breakage and damages to the Demised Premises other than normal wear and tear, if any. In case, upon refund of the Security Deposit, the LESSEE does not hand over the possession of the Demised Premises to the LESSOR, the LESSEE shall be liable to pay predetermined liquidated damages @ Rs.1,00,000/- (Rupees One Lac only) per day for each day of default.
11. Notices Any notice or demand which under the terms of this deed must or may be made or given shall be in legible form and shall be given or made by registered mail addressed to the respective parties as follows :
Attn: Mr. Agamjiv Singh (Lessor) C-150 Defence Colony, New Delhi-110024.
Attn : Director M/s Midas Infra Trade Limited (Lessee) 2633-34, Bank Street, Karol Bagh, New Delhi-110005. And D-10, South Ex-II, New Delhi-110049.
Such notice or demand shall be deemed to have been given by registered post on the seventh day after the same is put in the post postage prepaid and in proving such service it shall be sufficient to prove that the same was properly addressed and sent by registered post. Any party may change its address for service by giving written notice to the other.
Analysis and conclusions
52. After hearing the submissions advanced at Bar and perusal of material on record, this court is of the considered view that Facts- in -issue are totally based on documentary evidence and there is neither any scope of oral evidence nor further trial is required to adjudicate the real controversy. In the present case, this court is of the considered view that summary trial judgment is appropriate, having regard to the legal position noted above as well as factual situation obtaining on record, admission of para 1, 2, 4, 5, 6 and 8 of the plaint as well as evasive denials which are not in accordance with Order VIII Rule 3-A CPC and documentary evidence on record and that defendant has no real Agamjiv Singh v Midas Infratrade Ltd. Page 22 of 32 prospect of success and there is no other compelling reason why the case should not be disposed of.
53. Admittedly, defendant has already handed over the possession of the tenanted premises to the plaintiff on 2 nd February, 2020, therefore, no dispute regarding recovery of possession is to be adjudicated by this court. The only dispute/facts in issue are whether plaintiff is entitled to the recovery of rent during the period defendant remained the tenant and/or in occupation of the tenanted premises and TDS which has been deducted by the defendant from the rent but not deposited. Counsel for the plaintiff had stated that he is claiming mesne profit at the rate of agreed rent only up to 31 st January, 2020.
54. The written statement filed by the defendant is dated 25 th January, 2020. Defendant stated that para 1, 2, 4, 5, 6 and 8 of the plaint were matter of record and thereby admitted the same. Thus, defendant has admitted that plaintiff is owner and landlord of the property in question. He admitted that earlier a franchise agreement dated 3rd July, 2017 was entered into between plaintiff and M/s HDC Pvt Ltd and the said company had assured to pay a minimum guaranteed amount/commission of Rs.8,10,000/- per month or more based on the business, conducted from the suit premises alongwith service tax/GST, after TDS to the plaintiff. Defendant admitted that in compliance of the terms of franchise agreement dated 3rd July, 2017, M/s HDC Pvt Ltd started paying the minimum guaranteed amount/commission of Rs.8,10,000/- per month alongwith service tax/GST, subject to deduction of TDS to the plaintiff.
55. In para 2 of written statement, defendant admitted para 2 of plaint to the effect that at the time of entering into franchise agreement, refundable security of Rs.32,40,000/- was paid by the HDC and that minimum guaranteed amount was paid by the said company to the plaintiff till December, 2017 and defendant admitted the averment made by the plaintiff that no payment was made for the month of January, 2018 to March, 2018.
56. Defendant admitted in para 4 of written statement the averment made by the plaintiff that after terminating/determining the franchise agreement with HDC Pvt Ltd, the plaintiff leased out the premises to the defendant at a Agamjiv Singh v Midas Infratrade Ltd. Page 23 of 32 monthly rent of Rs.8,10,000/- plus service tax by executing a registered lease deed dated 20th September, 2018 duly registered with the Sub-Registrar, Hauzkhas, New Delhi on 22nd September, 2018 effective from 1st April, 2018.
57. In para 5 which is stated to be matter of record, the averments are that in terms of registered lease deed, the suit premises was leased out for a period of 8 years commencing from 1 st April, 2018. The clause 3.1 (a), (b), (c) were reproduced. As per clause 3.1 (a), the rent for the period of first Thirty months will be 01.04.2018 till 30 th September, 2020 will be Rs.8,10,000/- per month (Rupees Eight Lakhs Ten Thousand only). The clause 3.1 (b) and (c) are not relevant. Clause 6.4 of the lease deed, it was agreed that GST payable on the rental amount was the liability of the defendant.
58. Para 6 of the plaint was also stated to be matter of record, according to which as per Clause 4 of the lease deed, interest free security deposit of Rs.32,40,000/- paid by the defendant to the plaintiff was to be refunded at the time of delivery of vacant and peaceful possession of the suit premises but subject to all adjustment towards arrears of rent, GST and dues of electricity, water etc.
59. Similarly para 8 of the plaint pertaining to termination of lease deed in terms of clause 9.1 as well as locking period in clause 9.2 and total tenure of lease was also not disputed by the defendant. The said clauses read as under :-
9.1 If the LESSEE fails to pay the rent for a period of 30 days, provided however that, the LESSOR shall give the LESSEE, notice of such default, which the LESSEE shall rectify within Thirty (30) days of receiving the notice (the "Default Cure Period") by paying entire remaining amount along with 18% PA interest. Along with this the LESSEE shall pay to LESSOR any other charges or penalties levied on the LESSOR by the concerned authorities for delay in payment. That upon failure of the LESSEE to rectify such default during the default Cure Period, the LESSOR can terminate this Lease Deed forthwith and take back the possession of the Demised Premises. 9.2 The Lease Deed may be terminated by the LESSEE by giving a written notice of three (3) months. However, there would be a lock-in-period of 30 months, i.e. from 01.04.2018 till 30.09.2020, during which the LESSEE cannot terminate the Lease Deed. In case the LESSEE terminates the Lease Deed Agamjiv Singh v Midas Infratrade Ltd. Page 24 of 32 and vacates the Demised Premises before the expiry of the lock-in-period, then the LESSEE shall be liable to pay the Rent for the unexpired period of the lock-in-period, as well.
However, the Lessor will not terminate the Lease during the entire period as long as Lessee is meeting its all Financial obligations and any not adhering to the Material terms and conditions stipulated in this lease deed.
60. The written statement had not been verified properly as per the Order VI Rule 15-A and the denials by the defendant are not in the manner prescribed in Order VIII Rule 3-A CPC r/w schedule Section 16 Commercial Courts Act.In the written statement apart from the aforenoted averment which are stated to be matter of record, as regards all other averments, there is vague denial and the denial is not as per the Order VIII Rule 3-A amended CPC r/w Schedule U/o 16 of Commercial Courts Act, 2015. As per Order VIII Rule 5(1) proviso every allegation of the facts in the plaint, if not denied, in the manner provided under Rule 3-A of Order VIII, shall be taken to be admitted except as against a person under disability. It has already been noted that defendant has not disputed para nos. 1, 2, 4, 5, 6 and 8 and has stated those paragraphs to be matter of record. In response to other paragraphs and the averments made in the plaint, defendant has merely denied the averments. Apart from the bald denial, he has not stated any fact. He has not neither specified regarding the factum of deposit of TDS nor has filed any document on record to substantiate the alleged denial.
61. In Preliminary Objections, defendant has vaguely submitted that the petition is in fructuous and not maintainable as the plaintiff has suppressed the material fact from this court and wants to misguide this court. It has not been submitted how the present suit is misuse of process of law and has been filed just to harass the defendant or that the present suit is without any merits and has been filed with malafide intentions to create nuisance. There is nothing on record to indicate how the present suit is filed on the basis of false contentions just to escape from its own wrongs or manipulated totally false and fabricated story. It is wrongly submitted by the defendant that the forge and fabricated character of the Agamjiv Singh v Midas Infratrade Ltd. Page 25 of 32 allegations are apparently clear on the face of the pleadings of the plaintiff as well as on the face of the manner in which the present plaint has been preferred. Defendant has failed to substantiate his allegations that plaintiff has not been approached this court with clean hands or that the suit is based upon the false contentions and without any proof. There is nothing on record to establish that the present suit is liable to be dismissed at the first instance being barred by provision of Specific Relief Act or under the provisions of Order VII Rule 11 CPC as stated by the defendant. This court is satisfied that plaintiff is entitled to relief sought by him.
62. Contention of Defendant, in preliminary objections to the effect that at the time of taking possession of the said property, defendant spent a lot of time, money and efforts to beautify the façade/outside/entry/interiors including the parking area in front of the premises or when the defendant began the operation there were issues that creped in like seepage on the walls/water logging/vibrations etc which the defendant tried to manage at our own end by doing various efforts repairs and maintenance or issues still persist due to which defendant was not able to operate showroom properly with their fixed business hours as the defendant had to close his showroom on frequently basis for the repairing of the showroom is neither here nor there and there are no reasonable prospects of defending the suit by the defendant on the basis of these unspecific averments without any basis or proof. This submission of the defendant has no substance that the construction is too old which defendant came to know, built without pillars/columns' etc, and that defendant's fear came true when they got tremors and a shaky feeling or chandelier fell down due to the vibrations near to their customer, or later defendant realized that there were cracks that had developed on the walls due to all these vibrations or that that there were times when defendant's customers got frightened by the vibrations at the time they were shopping and left the showroom just because of mere scare created, resulted in loss of business and the defendant tried many times to convince them to stay and ignore the vibrations but all the efforts of defendant failed and finally in July, 2019, defendant decided to stop the operations and closed the location at Agamjiv Singh v Midas Infratrade Ltd. Page 26 of 32 plaintiff premises for public taking into account the safest of its customers and employees and started vacating the premises making sure that no damage is made to the building or its structure due to this shabby and damp building structure the goods of the defendant are damaged and in this regard the defendant many times requested the plaintiff to repair the same but the plaintiff does not give any response in satisfactory manner and in this regard, the defendant many times closed its shop and due to this only the business got affected and the goodwill was badly hit by the act of the plaintiff. There is no proof or document or any notice served by defendant in this regard to the plaintiff at any point of time. These vague and bald averments are not specific and are rather falsified by the response of defendant himself while replying to letter dated 7.06.2019 of plaintiff while acknowledging liability and expressing intention to continue as tenant.
63. Plaintiff has deposited appropriate court fee of Rs 145,580.This contention of learned counsel that present suit filed by the plaintiff is without any cause of action or is barred by any law or plaint is liable to be rejected is without any merits and is rejected.
64. Plaintiff has claimed arrears of rent w.e.f. 01 st July, 2019 till 02 nd February, 2020 @ Rs.8,10,000/- per month plus GST @ 18%. There is no dispute that during the previous month i.e. up to January, 2019 rent in the sum of Rs.8,74,800/- was being paid by the defendant after deduction of the TDS @ Rs.81,000/-. According to plaintiff, now, for the months since February, 2019 to June, 2019, a sum of Rs.43,74,000/- had become due and after deduction of the security amount of Rs.32,40,000/- (which had been deposited by the defendant as per the lease deed), defendant was liable to pay a sum of Rs.11,34,000/- up to 30th June, 2019. As per the documents on record, this court is satisfied that defendant had acknowledged the receipt of the notice dated 07 th June, 2019 in which the aforenoted facts were stated. Defendant deposited a sum of Rs.8,74,800/- on 10th June, 2019 and thus, a sum of Rs.2,59,200/- was left to be payable by the defendant till 30 th June, 2019.
65. The relevant portion of the response/e-mail written by the defendant Agamjiv Singh v Midas Infratrade Ltd. Page 27 of 32 in reply to the notice dated 07.06.2019 acknowledging the liability for the outstanding rent reads as under :-
"Dear Agamjiv Greetings from Midas We acknowledge the receipt of the notice sent by you dated 7 th June, 2019 were in you thru your council have desired to get the said premises vacated after paying of the due arrears i.e. Rs.11,34,000/- after adjusting the security amount and any payment done by us from January, 2019 towards the said rent of Rs.8,74,800/- including of GST. We fully agree that there is an outstanding towards the rent from the month of February, 2019 to June, 2019...............
We are remitting part of the outstanding rent on Monday i.e. 10 th June 2019 and are trying to bring this matter to close by paying the balance shortly.
We have no intention to vacate the said premises and continued to be a bonafide tenant of yours for a long period of time to come. Hope you would cooperate with us and help us in these tough times.
Yours truly, For Midas Infratrad ltd.
Rajnish Chopra, Managing Director"
66. Then, on 26th June, 2019, plaintiff had sent his reply to the defendant stating that he was accepting RTGS of Rs. 8,74,800/- dated 10 th June, 2019 without prejudice to his legal rights and such amount would not amount to waiver of notice of termination dated 16 th January, 2019 nor will change his status in the premises as that of unauthorized occupant.
67. Perusal of the aforesaid correspondence shows that defendant had acknowledged his liability and the outstanding rent from the month of February, 2019 to June, 2019. It was stated that the defendant desired to vacate the premises after paying the due arrears of rent of Rs.11,34,000/- after adjusting the security amount. Since, plaintiff had already received the vacant possession of premises on 02nd Feb., 2020 during the pendency of this suit, therefore, counsel for the plaintiff submitted that he was only claiming the rent up to the period defendant remained in the premises. There can be no dispute that defendant is Agamjiv Singh v Midas Infratrade Ltd. Page 28 of 32 liable to pay the rent for the period remained in the premises. It has already come on record and is clear that defendant admitted his outstanding liability towards rent from the month of February 2019 till June 2019 in the aforenoted letter and that an arrears of Rs.11,34,000/- was due after adjustment of security amount. In the entire Written Statement, defendant has simply and baldly denied the factum of non-payment of lastly agreed rate of rent, however, no counter facts as to how and when the payment was made has been specifically mentioned or reflected anywhere. There is no document filed by defendant to substantiate its assertion of having paid the amount/s, as claimed by plaintiff in the suit and Purpose of Order XIII-A CPC is to prevent frivolous trials and to provide speedy justice to a party having a good case.
68. It has already been noted that previous balance, arrears of rent due upto 30th June, 2019 was Rs.43,74,000/-and after subtraction security amount of Rs.32,40,000/, a sum of Rs. 11,34,000 was due and a sum of Rs.8,74,800/- was paid by the defendant on 10 th June, 2019 alongwith email while acknowledging the liability. Thus, sum of Rs.2,59,200/- was left to be paid by the defendant to the plaintiff towards arrears of rent till 30.06.2019 and in this sum would be added the sum of Rs.66,90,600/-, the rent for the period w.e. f 01.07.2019 till 31.01.2020 (i.e. Rs.8,10,000/- plus 18% = Rs.9,55,800/- and Rs.9,55,800/- x 7 months = Rs.66,90,600/-) and thus, this court finds that defendant is liable to pay Rs.69,49,800/- towards arrears of rent to the plaintiff.
TDS
69. Now it is to be seen as to how much amount on account of TDS which had been deducted by the plaintiff but had not been deposited with the Income Tax Authorities. Plaintiff had averred in para 17 and 18 regarding the TDS and categorically stated that no such TDS had been deposited with the Income Tax Authorities since 1st April, 2018 till 31st March, 2019 and up to June, 2019 stated that on the advice of chartered accountant, he was constrained to deposit a sum of Rs.8,91,000/- towards TDS under self assessment at a sum of Rs.89,550/- towards penalty to the Income Tax Department which is recoverable Agamjiv Singh v Midas Infratrade Ltd. Page 29 of 32 by the plaintiff from the defendant and in para 18 it was mentioned that a sum of Rs.3,24,000/- at the rate of Rs.81,000/- X 4 i.e. for the period of March, 2019 till June, 2019. In the written statement, there is a vague denial and the denial is not as per the Order VIII Rule 3-A amended CPC r/w Schedule U/o 16 of Commercial Courts Act, 2015. As per Order VIII Rule 5(1) proviso every allegation of the facts in the plaint, if not denied, in the manner provided under Rule 3-A of Order VIII, shall be taken to be admitted except as against a person under disability. He has not neither specified regarding the factum of deposit of TDS nor has filed any document on record to substantiate the alleged denial. Thus, this court finds that the defendant is liable to pay the TDS which has been deducted by him for 15 months during the period between 1 st April, 2018 till 23rd June, 2019 and the said TDS was not paid to the plaintiff or deposited with the Income Tax Authorities. The said amount works out to be Rs.12,15,000/- for the period of 15 months i.e. 1st April, 2018 to 28 th February, 2019 (11 months) and 1 st March, 2019 to 30th June, 2019 (4 months) @ Rs.81,000/-. It is ordered that plaintiff is entitled to recover Rs.12,15000/- from the defendant on account of TDS which had been deducted by him but not deposited.
Interest
70. Now, it has to be considered as to whether plaintiff is entitled to any interest and if so, what would be the appropriate rate. As per Section 34 CPC, Wherein and in so far as a decree is for payment of money, the court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% pa at Court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the Court deems thinks. As per proviso to sec 34 CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of Agamjiv Singh v Midas Infratrade Ltd. Page 30 of 32 interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I.-In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970).Explanation II.-For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
71. Although, plaintiff has claimed interest @18 % per annum but having regard to the lending rate of the bank for the commercial transactions , this Court is of the view that grant of 12% interest would serve the ends of restitutive justice. Suit was instituted on 19th September, 2019. Plaintiff is thus, entitled to the interest from the date of filing of present suit till the realization of the entire amount.
Costs
72. As per section 35 A (1) In relation to any commercial dispute, the Court, notwithstanding anything contained in any other law for the time being in force or Rule, has the discretion to determine: (a) whether costs are payable by one party to another; (b) the quantum of those costs; and (c) when they are to be paid. Explanation.--For the purpose of clause (a), the expression "costs" shall mean reasonable costs relating to-- (i) the fees and expenses of the witnesses incurred; (ii) legal fees and expenses incurred; (iii) any other expenses incurred in connection with the proceedings.
73. (2) If the Court decides to make an order for payment of costs, the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party: Provided that the Court may make an order deviating from the general rule for reasons to be recorded in writing. (3) In making an order for the payment of costs, the Court shall have regard to the following circumstances, including-- (a) the conduct of the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; (c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the case; (d) whether any reasonable offer to settle is made by a party and Agamjiv Singh v Midas Infratrade Ltd. Page 31 of 32 unreasonably refused by the other party; and (e) whether the party had made a frivolous claim and instituted a vexatious proceeding wasting the time of the Court. 4) The orders which the Court may make under this provision include an order that a party must pay-- (a) a proportion of another party's costs;(b) a stated amount in respect of another party's costs; (c) costs from or until a certain date;
(d) costs incurred before proceedings have begun; (e) costs relating to particular steps taken in the proceedings; (f) costs relating to a distinct part of the proceedings; and (g) interest on costs from or until a certain date.'.
74. On considering the totality of aforenoted facts and the conduct of the defendant noted above in para 9 to 20 and the number of hearings , the applications filed by the defendant, time consumed, and the litigation costs this court is of the considered view that assessment of reasonable costs should not be less than as Rs.2,20,000/- apart from the Court fees of Rs.1,45,580/- deposited by the plaintiff. Thus, in total plaintiff shall be entitled to costs of Rs.1,11,000/- .
RELIEF
75. In view of the aforesaid discussions and findings, it is ordered that defendant is liable to pay a total sum of Rs.85,30,380/- which includes Rs.69,49,800/- towards arrears of rent; a sum of Rs.12,15,000/- towards TDS which had been deducted from the rent but not deposited with the Authorities and costs in the sum of Rs.3,65,580/- (inclusive of court fees of Rs.1,45,580/-). Plaintiff shall also be entitled interest @ 12% per annum on all the aforesaid amount from the date of filing of the suit till its realization. Decree sheet be prepared accordingly. File be consigned to record room.
(dictated and announced on 16th January 2021 (VINAY KUMAR KHANNA) District Judge Commercial Court-02) South Distt., Saket, New Delhi/16.01.2021 Agamjiv Singh v Midas Infratrade Ltd. Page 32 of 32