Bangalore District Court
Sri.Santosh U.K vs Sri.Byju Mampalli on 21 April, 2023
IN THE COURT OF THE LXXXIII ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AT BENGALURU CITY [CCH-84]
:Present:
Ravindra Hegde,
M.A., LL.M.,
LXXXIII Addl. City Civil & Sessions Judge,
Bengaluru
Dated on this 21st day of April 2023
COM.O.S.No.973/2022
Plaintiff Sri.Santosh U.K
S/o U.Bhaskaran,
aged about 47 years,
R/at No.D135, CDA Layout,
Kalyana Nagara, 4th Stage,
Chikkamagaluru-577102.
(By Sri.N.L, Advocate)
// versus //
Defendant Sri.Byju Mampalli,
S/o Shashidharan,
aged about 47 years,
No.11/6, Kousthubha,
1st Main Road, 2nd Cross,
Maruthinagara, Madivala,
Bengaluru-560068.
(By Sri.B.M.T, Advocate)
[
Date of Institution of the : 07/07/2022
suit
Nature of the suit : Recovery of Money
Date of commencement of : 03/03/2023
recording of the evidence
2
CT 1390_Com.O.S.973-2022_ Judgment.doc
Date on which the :
Judgment was pronounced. 21/04/2023
: Year Month/ Day/s
Total duration /s s
00 09 14
JUDGMENT
This suit is filed by the plaintiff praying to direct the defendant to pay Rs.6,09,342/- to the plaintiff with interest @18% per annum from the date of suit till realization and for costs.
2. Case of plaintiff in brief is as under:
Plaintiff is a retired Army personnel. Plaintiff was introduced to the defendant. Defendant was running a small Hotel in Maruti Nagar Madiwala and was in search of investor for development of the said Hotel and clearance of certain liabilities. On the assurance of the defendant, plaintiff agreed to invest some amount to get very good returns. The understanding was entered between the parties and at the time of entering into understanding there was arrears of rent payable to the landlord besides other liabilities and the business was totally flop. Owner to the building was also seeking additional advance amount. Plaintiff has paid additional amount of Rs.50,000/- as further advance amount and in all paid a total amount of Rs.2,50,000/-. Plaintiff has also cleared the arrears of rent for the month of September to December amounting to Rs.1,32,000/- to the owner of the building. Added to this, plaintiff has also cleared other liabilities of the defendant and has incurred over and above 3 CT 1390_Com.O.S.973-2022_ Judgment.doc Rs.2 lakhs for this. Considering the huge amounts invested by the plaintiff, understanding between plaintiff and defendant was put in writing as 'Agreement' dated 12/2/2021. As per this understanding, business venture commenced with effect from 9/11/2020. Since amount of Rs.2 lakhs was paid by the plaintiff to clear the liability of the defendant, it was agreed that advance amount of Rs.2 lakhs paid by defendant to the shop premises owner shall be treated as deposit made by the plaintiff and he would be liable to claim refund of the said amount. The parties agreed to enjoy the fruits of the Hotel business equally. Subsequent to entering into business venture, plaintiff has taken all the initiative for improvement of the business and spent most of his time and has taken care of the Hotel business including purchase of groceries and other requisite items as maintaining and supervising. The dedicated involvement and the work of the plaintiff resulted in getting good income and plaintiff has cleared all liabilities of the defendant and cleared the pending dues of the vendors who supplied the materials and also spent huge amount towards purchasing new cooking equipments, utensils in making the Hotel attractable. The plaintiff has not drawn any amount as remuneration. Plaintiff has spent Rs.2 lakhs for clearance of due of the defendant, purchase of equipments etc. When the plaintiff had taken the charge of Hotel it was running under loss and due to his hard and dedicated involvement and labour, it reached to profitable status. As per the chart given in the 4 CT 1390_Com.O.S.973-2022_ Judgment.doc plaint, expenditure incurred by the plaintiff and the income of the Hotel can be ascertained. As per the account details the total income of the Hotel from November 2020 to January 2022 was Rs.52,13,582/- and after deducting commission to food carriers the remaining balance comes to Rs.48,34,467/-. The expenditure made through google pay, in cash etc amounting to Rs.50,06,152/-. In view of this income and the expenditure, there is loss of Rs.1,71,685/- which has to be shared equally between the parties and the share of the plaintiff comes to Rs.85,842.50/-. The plaintiff has invested Rs.5,23,500/- by including loss to be shared by the plaintiff. The total amount due to the plaintiff comes to Rs.6,09,342.50/-. When the Hotel reached to a stable status, plaintiff has decided to draw amounts from the income of the Hotel as he did not draw any remuneration, despite he spending most of his time in taking care of the affairs of the Hotel. But for the fate of the plaintiff the brother of the defendant interfered in the affairs of the Hotel and in collusion with the defendant, he has forcefully taken over the management of the Hotel from the plaintiff. Plaintiff has invested huge amount on the business which is his hard earned money and plaintiff has also not taken any remuneration for his hard labour which even if calculated @ Rs.1,000/- per day since November 2020 to January 2022 comes around Rs.4 lakhs. Since dispute could not be resolved amicably, plaintiff issued notice asking the defendant to pay Rs.6,09,342/- and also demanded remuneration for 5 CT 1390_Com.O.S.973-2022_ Judgment.doc the hard labour, but the defendant inspite of receiving notice has not replied and not complied. Hence for recovery of the amount of Rs.6,09,342/-, plaintiff has filed this suit.
3. Defendant has appeared and filed written statement and stated that the suit is not maintainable. Defendant has admitted that he was running Hotel in Maruti Nagar, Madiwala and denied that the defendant approached the plaintiff and stated that the plaintiff has approached the defendant to become partner in the business. It is stated that the defendant was running Hotel which was very profitable and he was getting 40% of the profit till COVID 19 and this COVID19 has affected the business and there was some set back to the defendant. It is stated that during this time defendant approached plaintiff to join as partner and the parties have entered into agreement for the mutual understanding. It is stated that the parties have entered into fresh lease agreement with the owner of the premises and the plaintiff has made additional deposit of Rs.50,000/- and plaintiff agreed to invest Rs.2 lakhs to the business. It is stated that after getting execution of the agreement colour of the plaintiff has fully changed and he took control of entire Hotel business and considered the defendant only as a labour. It is stated that the plaintiff and his henchmen handled the Hotel business as a sole proprietorship and plaintiff and his friends threatened the defendant and pressurized defendant to work as a labour. It is also stated that the plaintiff and his henchmen are also involved in illegal 6 CT 1390_Com.O.S.973-2022_ Judgment.doc notorious business and his friends were roaming in the Hotel and they used to eat morning to night in the Hotel free of cost. It is stated that the plaintiff has started another Hotel near Gangothri Circle, Madiwala in the same name of the defendant's Hotel and plaintiff used to take cooked food from his Hotel to new Hotel and as per calculation of the defendant, food items costing around Rs.80,000/- is taken from the Hotel by plaintiff to do business in his own Hotel. Defendant has denied that plaintiff has cleared the arrears of rent of Rs.1,32,000/- to the owner of the building as stated. It is stated that if plaintiff paid any amount as arrears of rent as claimed in the plaint, it would have been mentioned in the agreement which was entered subsequently on 12/2/2021. It is also stated that though defendant was having some struggle to run the Hotel business, business had not totally dropped. It is stated that there was only Rs.2 lakhs liability at that time. It is stated that the plaintiff has not put his efforts in the Hotel business as per the spirit of the understanding of the agreement entered between the parties. Defendant has also stated that plaintiff has not paid any amount as arrears of rent and amount of Rs.1,95,000/- is shown as salary paid by the plaintiff to the employees from November 2020 to January 2022 and amount of Rs.45,000/- shown as transport expenditure are not true and correct and are baseless. It is stated that even if such amount is paid, they are expenses of the business and should have been included in the expenditure portion which have to be shared 7 CT 1390_Com.O.S.973-2022_ Judgment.doc by both the parties. Defendant has also denied the correctness of total income and expenditure of the Hotel stated in the plaint. It is stated that the sales shown in the plaint is not correct. It is stated that Hotel was providing mess facility for its regular customers on monthly payment basis and the mess sale itself was Rs.1 lakh per month. It is also stated that there was 3 days Onam Sadhya conducted by the Hotel which fetched daily Rs.75,000/- to Rs.1,00,000/- business. There was also outer catering conducted by the Hotel four times during this period and total business was Rs.75,000/-. These sales and other cash sales also not mentioned by the plaintiff properly in the plaint. It is also stated that the Swiggy and Zomato services are not at all collecting any amount as commission from the suppliers. Therefore, amount claimed to be paid as commission are not correct. The total sales and also expenditure and the loss suffered as stated by the plaintiff in the plaint are not correct. It is stated that the plaintiff himself has stated that the Hotel business was resulted in getting good income and it reached profitable status which show that during this period Hotel was running profitable. Therefore, plaint averments stating that there is loss of Rs.1,71,685/- is not acceptable. It is stated that if the Hotel was running under loss, plaintiff would not have continued the business for more than one year. It is also stated that the calculation made in the plaint is also having arithmetical mistakes and figures shown are not tallying with each other. It is stated that the defendant 8 CT 1390_Com.O.S.973-2022_ Judgment.doc has found the day today account books from the Hotel which is left over by the plaintiff and this show income and expenditure incurred in the Hotel which are handwritten by friends of plaintiff. It is stated that as per this account details, there was surplus amount of Rs.2,23,715.40/- during this period. It is stated that the income by cash was received by the plaintiff and expenditure met by him. The google pay amount as well as Swiggy online sales amount was credited to plaintiff's account and hence defendant is entitle for half of the surplus amount from Hotel business as per the agreement entered between the parties. It is stated that the plaintiff has left huge liability. It is stated that there was a due of water bill of the shop room for Rs.43,000/- to BWSSB and Electricity bill of Rs.3,700/- to BESCOM till January 2022 and there was outstanding of Rs.57,000/- for grocery items and another Rs.23,900/- for purchase of chicken and Rs.36,000/- towards staff salary and Rs.7,000/- to staff's room rent. All these dues are cleared by the defendant as he was the promoter of the Hotel business and all these peoples dealt with the Hotel because of their relationship with the defendant. It is stated that Rs.8 lakhs is transferred to plaintiff's account by members of the mess conducted by the Hotel and there is also some other transfer of amount to the plaintiff's account which are not accounted. It is stated that the plaintiff's friends used to stay and eat in the Hotel free of cost and they used to eat rich and costly food and as per the rough calculation, its cost is more than Rs.10 lakhs.
9CT 1390_Com.O.S.973-2022_ Judgment.doc On all these grounds, it is stated that the plaintiff is not entitle for recovery of any amount as prayed in the suit and suit deserves to be dismissed. With these averments, defendant has prayed to dismiss the suit with exemplary costs.
4. On these pleadings following issues are framed:
1. Whether the plaintiff proves that in respect of the expenses incurred by the plaintiff in running Hotel business along with defendant as per the agreement dated 12/2/2021, Rs.6,09,342/- is payable by the defendant?
2. Whether the plaintiff is entitle for the reliefs prayed in the suit?
3. What decree or order?
5. In support of the plaintiff's case PW.1 is examined. Ex.P.1 to Ex.P.13 documents are marked. For defendant DW.1 is examined. Ex.D.1 and Ex.D.5 documents are marked.
6. Heard arguments. Both the counsels have filed written arguments also. Perused records.
7. My answer to the above issues are :
ISSUE No.1 : Partly in the affirmative.
ISSUE No.2 : Partly in the affirmative.
ISSUE No.3 : As per final order for the following:
REASONS
8. ISSUES No.1 & 2: These two issues are taken together for discussion to avoid repetition.
10CT 1390_Com.O.S.973-2022_ Judgment.doc
9. Plaintiff has filed this suit for recovery of amount alleged to be due from the defendant in respect of the investment made by the plaintiff in the business as per the agreement entered between the parties and also in respect of other expenses incurred by the plaintiff in doing Hotel business. According to the plaintiff, as per the agreement to run the Hotel business, plaintiff has paid certain amount towards arrears of rent, additional advance deposit, salary etc and has also incurred loss in the business for which 50% is to be shared by the plaintiff. By calculating these amount, plaintiff has claimed Rs.6,09,342.50/- in the present suit. Defendant in the written statement has admitted the agreement and running of the Hotel and also admitted that the plaintiff had paid Rs.50,000/- towards additional advance to the landlord, but denied the liability to pay the suit claim amount.
10. Plaintiff has given evidence as PW.1 and has reiterated plaint averments in his chief affidavit. In the cross examination, witness has stated that in February 2021, partnership business with the defendant has started and stated that agreement with the defendant was executed on 12/2/2021. Witness admitted that business along with defendant has started in November 2020 and later agreement was entered on 12/2/2021. Witness has denied that he is equally liable along with defendant for the dues of the business from November 2020. Witness has admitted that in Ex.P.2 and Ex.P.3 there is no reference to the payment of 11 CT 1390_Com.O.S.973-2022_ Judgment.doc arrears of rent of Rs.1,32,000/-. Witness has stated that there were five staffs in the Hotel and admitted that he has mentioned the salary paid to the employees from November 2020 to January 2022 and stated that he has produced bank statements to show that Rs.1,28,000/- was paid to the employees and stated that there was still balance of Rs.66,000/-. He has stated that he has maintained the Register of the employees with details of payment, but he has not produced the same. He has also stated that total transport expenditure of Rs.45,000/- is claimed by him at the rate of Rs.100/- per day for 450 days and regarding this he has maintained Register, but he has not produced the same. Witness has stated that he is entitle for Rs.1,32,000/- towards rent paid to landlord, Rs.50,000/- towards advance, Rs.1,95,000/- towards salary, Rs.45,000/- towards transport expenses, Rs.1,01,500/- towards expenses for furniture etc and total of this amount comes to Rs.5,23,500/-. He has stated that they incurred loss of Rs.1,71,000/- and the defendant have to pay 50% of it is Rs.85,842.50/-. Witness has stated that he has not maintained any account for the sales at the counter and these accounts are available in the account book produced by the defendant. Witness admitted that main business was done through sales at the counter and also admitted that they were offering mess facility also. He has stated that the entry in Ex.D.1 to Ex.D.5 are made by their staff. Witness has stated that in the bank statement produced by him, amount received from Swiggy and Zomato 12 CT 1390_Com.O.S.973-2022_ Judgment.doc is appearing and admitted that in the bank statement, commission paid is not mentioned.
11. Plaintiff has produced Rental agreement dated 12/1/2021 entered by plaintiff and defendant with landlord as Ex.P.1. Agreement dated 12/2/2021 are produced as Ex.P.2 and Ex.P.3. Statement of bank account of the plaintiff is produced as Ex.P.4. Copy of legal notice, postal receipt, postal acknowledgment are produced as Ex.P.5 to 7. Copy of legal notice sent to land lord, postal receipt and acknowledgment are all produced as Ex.P.5 to Ex.P.10. PIM report is marked as Ex.P.11. Certificate under Section 65B of the Indian Evidence Act is produced as Ex.P.12. Photocopy of Registration Certificate issued by FSSAI for the business in the name of defendant is confronted to DW.1 and is marked as Ex.P.13.
12. Defendant has given evidence as DW.1 and has reiterated his contention taken in the written statement. In the cross examination, witness has stated that he is having food license for running the Hotel. He has stated that he is not submitting Income Tax Returns of his Hotel business. Witness has stated that now the Hotel is run by his relative by name Saju and he has stated that rent agreement is also renewed and stated that at present rent is Rs.38,500/- per month. He has stated that earlier he was paying rent of Rs.35,000/- per month. Witness has admitted that plaintiff had paid Rs.1,32,000/- to the landlord towards rent for four months for the period from September 2020 to December 13 CT 1390_Com.O.S.973-2022_ Judgment.doc 2020. Witness admitted that sales of Hotel are made through Counter, Zomato, Swiggy and also through Mess. Witness has admitted that Google pay account of their business is attached to his bank account. He has stated that Swiggy and Zomato accounts are attached to plaintiff's bank account. Witness has admitted that Swiggy and Zomato collects service charges from the Hotel for the food delivered by them, but he do not know what is the service charge and he do not know about GST. Witness has admitted that in Ex.P.D to Ex.D.5 it is mentioned that for head cook Rs.1,000/- is paid every day as salary. According to him out of this Rs.1,000/-, Rs.700/- was his salary and Rs.300/- was towards previous balance. Witness has stated that there are two other workers who were paid Rs.400/- per day and Rs.300/- per day each. Witness has stated that he do not know the plaintiff has paid Rs.1,95,000/- towards salary of the workers for one year except salary of Sunil. Witness stated that he is having two wheeler and plaintiff was bringing goods to the Hotel in his car. DW.1 has admitted that he was collecting petrol charges for his two wheeler from the account of the business and stated that he do not know that plaintiff was not collecting petrol charges for his car from the account of the business and stated that accounts of the business were with the plaintiff and therefore he do not know. Witness has admitted that plaintiff gave notice to the landlord on 18/4/2022 seeking refund of Rs.2,50,000/-. Witness has denied that himself, landlord and her husband have colluded with each 14 CT 1390_Com.O.S.973-2022_ Judgment.doc other and sent the plaintiff out of the Hotel business. Witness has stated that he has not produced any document to show that the plaintiff has started another Hotel in the same name in Gangotri Circle as stated in the written statement. He has stated that he has not given any notice of termination of Ex.P.2 and Ex.P.3, but plaintiff himself has voluntarily left the Hotel.
13. Defendant has produced 5 account books pertaining to day today business of the Hotel, maintained in regular course of business as Ex.D.1 to Ex.D.5.
14. On looking to the evidence, pleadings and also hearing the arguments of both the counsels and perusing the records, there is no dispute between the parties about the business run by plaintiff and defendant in terms of Ex.P.2 and Ex.P.3 agreement. It is also not in dispute that the defendant was running the Hotel and having registration certificate under FSSAI as per Ex.P.13. Therefore, business which was run by the parties was standing in the name of defendant. It is not in dispute that the defendant was running the business earlier and plaintiff has joined this business later by virtue of agreement entered between the parties as per Ex.P.2. Ex.P.2 and Ex.P.3 are same documents. It appears that the document was prepared in two sets and both sets are produced by the plaintiff as Ex.P.2 and Ex.P.3. Ex.P.1 rental agreement entered by plaintiff and defendant together with the landlord show that Rs.2,50,000/- was totally paid as deposit to the landlord and the rent agreed 15 CT 1390_Com.O.S.973-2022_ Judgment.doc was Rs.35,000/- per month. This agreement is dated 12/1/2021. Out of this Rs.2,50,000/-, Rs.2 lakhs appears to have been paid by the defendant earlier and additional Rs.50,000/- was paid at the time of executing Ex.P.1 and this amount was paid by the defendant.
15. Ex.P.2 is the agreement entered between the parties on 12/2/2021. It is clearly mentioned in this agreement that, this agreement shall be deemed to have commenced from 9/11/2020. Even PW.1 has clearly admitted that the agreement came into effect from 9/11/2020. Even plaint averments and evidence of PW.1 also show that though formal agreement between the plaintiff and defendant was entered on 12/2/2021 for running the business jointly, this business started from 9/11/2020 itself. In Ex.P.2, it is clearly mentioned that the defendant has put an amount of Rs.2 lakhs and the plaintiff has put an amount of Rs.50,000/- towards the deposit amount for leasing the premises for business purpose. This is in agreement with Ex.P.1, wherein it is mentioned that totally Rs.2,50,000/- has been paid as advance amount. In Ex.P.2, it is clearly mentioned that plaintiff has advanced amount for procuring the equipment, furniture and utensils and has also agreed to spend the amount required for renovating the building by doing the painting works and make it presentable for the conduct of the business and the defendant has also agreed to clear the prior liabilities of the plaintiff amounting to over Rs.2 lakhs and therefore, amount advanced by the defendant 16 CT 1390_Com.O.S.973-2022_ Judgment.doc to the landlord shall be considered as deposited by plaintiff. It is also mentioned in Ex.P.2 that, plaintiff has agreed that total amount of deposit paid to the owner of the building amounting to Rs.2,50,000/- shall be deemed to be the amount deposited by the plaintiff and it is agreed that upon closure of the business partnership, defendant shall transfer total deposit of Rs.2,50,000/- received from the owner of the building to the plaintiff without any objection whatsoever.
16. On considering these terms of the agreement, it is clear that the plaintiff was required to spend amount for renovation, equipment, furniture and utensils and also to clear the prior liability of the defendant totally amounting to Rs.2 lakhs and in turn the entire deposit paid to the landlord of Rs.2,50,000/- was to be considered as deposited by the plaintiff and on closure of the partnership business between the parties the entire Rs.2,50,000/- deposit is to be received from the landlord and paid to the plaintiff. Therefore, for the investment of Rs.50,000/- as additional advance paid in Ex.P.1 and for investment made by the defendant of Rs.2 lakhs for clearing the earlier liabilities and also for procuring the equipment, furniture and utensils etc., plaintiff was to be paid Rs.2,50,000/- by way of return of the deposit amount paid to the landlord. Hence for whatever the expenses made by the plaintiff in improving the business and to clear the liability, plaintiff was totally entitle for Rs.2,50,000/- which is the amount available with the landlord as advance amount. Though in the plaint, plaintiff has stated about several other 17 CT 1390_Com.O.S.973-2022_ Judgment.doc expenses like salary paid to employees from November 2020 to January 2022 and transport expenses etc and also claimed Rs.1,01,500/- towards amount spent for clearing the dues as mentioned in the notice Ex.P.5, for all these expenses incurred by the plaintiff, defendant is to be paid Rs.2,50,000/- as fixed amount as mentioned in Ex.P.2 agreement. Even if plaintiff made any expenses beyond such amount, without there being any agreement between the parties, plaintiff may not be justified in making claim against the defendant. Ex.P.2 agreement is admitted by both the parties and is marked by consent. As per this agreement for the expenses incurred by the plaintiff towards additional deposit and also to clear the dues and also for making expenses for equipment, furniture and utensils etc totally Rs.2,50,000/- is to be paid by the defendant and this amount is by way of getting return of the advance amount paid to landlord as appearing in Ex.P.1. Since Ex.P.2 agreement was entered on 12/2/2021, whatever the expenses already made by the plaintiff, were already known to the parties. Parties by knowing the expenses incurred have entered into Ex.P.2 agreement and as such, plaintiff cannot claim more than Rs.2,50,000/- towards the expenses made to this Hotel business and to clear earlier dues of business.
17. Plaintiff is not running the business with the defendant at present. DW.1 has stated that now Hotel is run by his relative by name Saju and rent agreement is also now renewed and stated that rate of rent is also increased to 18 CT 1390_Com.O.S.973-2022_ Judgment.doc Rs.38,500/-. Therefore, rent agreement which was entered between plaintiff and defendant with the landlord no longer continue and the same has been renewed and new partner of the defendant appear to be running the business. DW.1 has stated that the plaintiff has voluntarily left the Hotel and plaintiff contends that the defendant and his brother have sent the plaintiff out of the Hotel and even landlord and her husband have colluded with the defendant and sent the plaintiff out of the Hotel business. Whether plaintiff voluntarily left the Hotel business or was sent out by the defendant is not relevant for the case and it is sufficient that plaintiff no longer continuing in this business of the defendant. In terms of Ex.P.2 when business between the parties come to an end, plaintiff is entitle for Rs.2,50,000/- as return of deposit amount. Though defendant has not received back the advance of Rs.2,50,000/- from the landlord, still, as defendant has renewed the rent agreement with the landlord, the defendant have to make payment of Rs.2,50,000/- to the plaintiff and can take return of advance amount from the landlord after termination of the lease. Since these documents in Ex.P.1 and Ex.P.2 are clearly admitted documents and rights and liabilities of the parties are governed by this agreement and as per which the plaintiff is entitle for Rs.2,50,000/- from the defendant as return of deposited amount, defendant is liable to pay this amount without any objection.
19CT 1390_Com.O.S.973-2022_ Judgment.doc
18. Plaintiff has stated about payment of Rs.1,32,000/- towards four months rent for the month of September, October, November and December 2020. In Bank account statement of the plaintiff produced as Ex.P.4, payment of Rs.1,32,000/- by plaintiff on different dates from 4/11/2020 to 20/1/2021 is appearing. This amount paid to the landlord, according to the plaintiff is towards rent of September to December 2020. In the written arguments, plaintiff has given details of these payments towards rent dues. As stated by the plaintiff, these amounts were paid towards rent of September 2020 to December 2020. Payment of Rs.1,32,000/- by the plaintiff to the landlord is clearly admitted by DW.1 in the cross examination. In para 3 of the cross examination DW.1 has stated, "....It is true that plaintiff has paid Rs.1,32,000/- to the landlord, towards rent of 4 months for the period of September to December 2020...." This statement of DW.1 in the cross examination, supported by entries found in the bank statement produced as Ex.P.4, do not require any further corroboration. Hence payment of Rs.1,32,000/- by the plaintiff towards rent of September 2020 to December 2020 is clearly established in this case.
19. As mentioned in Ex.P.2, Business partnership agreement between plaintiff and defendant came into effect from 9/11/2020. Though the agreement was entered on 12/2/2021 business came into effect from 9/11/2020. Therefore, from November 2020, plaintiff has joined the business. Hence, defendant alone cannot be held liable for 20 CT 1390_Com.O.S.973-2022_ Judgment.doc payment of rent for November and December 2020. However, for September 2020 and October 2020, rent in arrears is the rent payable by the defendant to the landlord and the same is paid by the plaintiff. Though in Ex.P.2 there is no reference to payment of arrears of rent of September 2020 and October 2020 by the plaintiff, in Ex.P.2 there is no reference to even any arrears of rent. It only say that the plaintiff has incurred expenses for purchasing utensils and clearing other liabilities etc. Therefore, arrears of rent is not part of Ex.P.2. Since DW.1 has admitted that the plaintiff has paid Rs.1,32,000/- towards arrears of rent for the month of September 2020 to December 2020 and the rent of November 2020 and December 2020 is to be paid from the business which is jointly run by the plaintiff and defendant, for rent arrears of September 2020 and October 2020 which is paid by the plaintiff, defendant is liable to compensate the plaintiff. Therefore, out of Rs.1,32,000/- paid by the plaintiff to the landlord, payment made towards arrears of rent of September 2020 and October 2020 is to be paid by the defendant as during that time, plaintiff had not entered this business. Hence, as against the claim for Rs.1,32,000/-, plaintiff would be entitle for Rs.66,000/- towards payment of arrears of rent kept due by the defendant for the month of September 2020 and October 2020. Though rent of November 2020 and December 2020 is also said to have been paid by the defendant, plaintiff could have adjusted the same in the business income, as plaintiff has also joined the business 21 CT 1390_Com.O.S.973-2022_ Judgment.doc from November 2020. Hence, plaintiff is entitle for Rs.66,000/- from the defendant towards this arrears of rent paid for September 2020 and October 2020.
20. As discussed above Rs.2,50,000/- is payable by the defendant to the plaintiff as per Ex.P.1 which is considered as advance deposit paid to the landlord and on completion of the business the said amount is to be paid by the defendant to the plaintiff. In this case as the lease is renewed as stated by DW.1 and new person is doing business and plaintiff is already out of this business, Rs.2,50,000/- mentioned in Ex.P.2 is payable by the defendant. As discussed above, Rs.66,000/- which is arrears of rent paid by the defendant as seen in the bank statement of the defendant and also as admitted by DW.1, is the rent due for September 2020 and October 2020 during which the plaintiff was not running the business, is also payable by the defendant. Total of this amount of Rs.2,50,000/- and Rs.66,000/- comes to Rs.3,16,000/-.
21. In this suit plaintiff has sought recovery of Rs.6,09,342/-. In this amount plaintiff has included Rs.1,32,000/- towards rent due in which Rs.66,000/- is held to be payable by the defendant. In view of Ex.P.2, for all the expenses incurred including additional advance Rs.2,50,000/- is payable by the defendant. Plaintiff has stated about salary paid by the plaintiff to the employees from November 2020 to January 2022 and the amount is shown as Rs.1,95,000/-, transport expenses of Rs.45,000/- is also 22 CT 1390_Com.O.S.973-2022_ Judgment.doc shown. In the cross examination of DW.1, questions are asked about salary of the employees including the head cook. Witness has stated that he do not know that plaintiff has paid Rs.1,95,000/- towards salary of workers. Regarding Rs.45,000/- claimed, DW.1 has deposed that he has received petrol charges for his two wheeler, but he do not know whether the plaintiff has received amount for petrol charges for his car. In the evidence of PW.1, it is stated that the plaintiff has mentioned this Rs.45,000/- by considering Rs.100/- per day for 450 days as petrol charges. There are absolutely no documents before the court to establish that the plaintiff has incurred such expenses which are to be paid by the defendant. Even regarding the salary paid to the employees, though plaintiff relies on Ex.P.4 bank statement, when business is run by the plaintiff and defendant together and salary paid is in respect of the employees who were employed for running this Hotel, whatever the expenses incurred by the plaintiff or defendant for running the business would be the expenses of the business which may have to be shared equally between the parties. Moreover, except the bank statement in which according to the plaintiff payment made to the employees is seen, there are no document to substantiate this payment of Rs.1,95,000/- to employees and also Rs.45,000/- expenses incurred by the plaintiff towards petrol expenses. Even if such expenses are incurred, plaintiff should consider the same as business expense which could be considered in final settlement.
23CT 1390_Com.O.S.973-2022_ Judgment.doc Present suit is not for accounts. Therefore, this amount cannot be said to be payable by the defendant. Plaintiff has not produced any relevant documents to establish the expenses incurred for transport and expenses incurred towards payment made to the employees. Though PW-1 has stated about, he maintaining Registers, they are not produced before the court.
22. In Ex.P.5 legal notice issued to the defendant, plaintiff has claimed Rs.6,09,342.50. However, one amount that is Rs.1,01,500/- which was mentioned as amount spent for clearing the dues pending to the vendors who supplied provisions, meat, fish etc., as stated in Ex.P.5 notice is missing in the plaint and also in the chief affidavit of PW.1. This claim of Rs.1,01,500/- mentioned in legal notice is not mentioned in the present suit or in chief evidence of PW.1. However PW.1 in the cross examination has denied the suggestion that Rs.1,01,500/- is not claimed. On looking to the plaint averments, Rs.1,01,500/- do not appear in the plaint. When this amount do not find place in the plaint and plaintiff's claim is based on its calculation which are mentioned in para 7 and 8 of the plaint, in which this item is not included, plaintiff's claim would accordingly reduce from Rs.6,09,542.50/- to Rs.5,07,842.50/-.
23. In para 8 of the plaint, plaintiff has stated about the sales through Google pay and cash and also sales through Swiggy and Zomato. In the total sales through Swiggy and Zomato, plaintiff has deducted commission paid and then 24 CT 1390_Com.O.S.973-2022_ Judgment.doc arrived at the figure of Rs.7,41,258/- and towards sale through Google pay and cash Rs.40,93,209/- is stated by the plaintiff and in total, sales is shown as Rs.48,34,467/-. Out of which, expenses of Rs.50,06,152/- is deducted and the loss is stated as Rs.1,71,685/-. Since plaintiff and defendants are doing business together, 50% of this loss which comes to Rs.85,842.50 is also claimed by the plaintiff. To claim 50% of the loss, plaintiff has not produced any document showing that plaintiff and defendant were running this business in partnership in which both were having 50% share. Except Ex.P.2, there are no document to show that the plaintiff and defendant were doing business together. What are the terms and conditions of this joint business cannot be ascertained from Ex.P.2. In Ex.P.2 there is only reference to payment of Rs.2,50,000/- by the defendant to the plaintiff. There are no documents before the court to show that the defendant is required to share 50% loss. In the absence of such document, it cannot held that defendant have to pay Rs.85,842.50 as sharing of loss.
24. Apart from this, except plaint averments and the bank statement in which some entries regarding amount received by the plaintiff and some expenses made by the plaintiff appear, there are no properly maintained accounts placed before the court to show, what is the income received by this Hotel business from November 2020 and what is the expenses incurred for running the business and what is the profit or loss. Though plaintiff has shown Rs.1,71,685/- as 25 CT 1390_Com.O.S.973-2022_ Judgment.doc the loss suffered, plaintiff himself has stated in the plaint in para 6 that he has taken all the initiative for improvement of the business and dedicated involvement and the work of the plaintiff resulted in getting good income from the said Hotel business and that, when plaintiff has taken charge of the Hotel, it was under loss and due to plaintiff's hard work and dedicated involvement and labour, business reached to profitable status. Therefore, as per the plaint averments itself, business reached to profitable status under the plaintiff. These statements in the plaint confirms that business was running in profit under the plaintiff. If according to the plaintiff he has improved the business and business was profitable and it has reached profitable status, plaintiff's claim of loss of Rs.1,71,685/- is not justified. Absolutely no materials are produced by the plaintiff to show such loss suffered in the business. As admitted by DW-1, defendant is not submitting income tax returns on this Hotel business. Plaintiff has not produced any account statement before the court to show the business done and the expenses incurred and the profit and loss in the business. Some account books maintained in the day today running of the Hotel are produced by the defendant as Ex.D.1 to Ex.D.5. These account books only contain rough entries and on the basis of these account books, plaintiff's calculations and the claim mentioned in the plaint cannot be verified and cannot be ascertained. According to the defendant, as per these account books which was kept by the plaintiff when he was 26 CT 1390_Com.O.S.973-2022_ Judgment.doc running this business, business was under profit and there was profit of Rs.2,23,715.40. However on the basis of this Ex.D.1 to Ex.D.5 or on the basis of the bank statement Ex.P.4 or on the basis of any other document produced by the plaintiff, proper accounts of the business cannot be ascertained. It is admitted by DW.1 that Google pay account of the business is attached to defendant's bank account. When it is attached to defendant's bank account, how could the plaintiff show the exact sales through Google pay in the plaint is also not made clear. It is admitted by DW.1 that Swiggy and Zomato Account are attached to plaintiff's bank account. Therefore, only regarding Swiggy and Zomato transaction, plaintiff's statement could help the court in ascertaining the sales. Sales through Google pay and cash mentioned by the plaintiff is not supported by any documents. Apart from this, defendant has specifically stated that Hotel was getting income through transactions through Google pay, Swiggy, Zomato and also cash and also by running mess. Further PW.1 has admitted that through mess also income was coming. However, no income from mess is shown in the plaint and in the evidence.
25. On looking to all these aspects, income and expenditure of the business as stated by the plaintiff in the plaint and also in the chief affidavit are not established to be correct accounts and based on proper accounts maintained in the regular course of business. Therefore, it cannot be ascertained as to whether plaintiff has incurred loss or profit 27 CT 1390_Com.O.S.973-2022_ Judgment.doc in the business. What is the total expenditure made, what is the total income received cannot be made out from the documents produced by either party before the court. Therefore, claim in para 8 of the plaint regarding sales, expenditure and loss in the business is not established in this case. Moreover, as stated above, in calculating expenditure, arrears of rent for November and December 2020, salary paid to employees from November 2020 to January 2022 are all to be included in the accounts of the business which is not shown by the plaintiff. Similarly in Sales, income received from Mess is also to be included. Even calculation of sales through GooglePay is not proved to be correct. Therefore, correctness of the calculation of income and expenditure of business is not established. Therefore, plaintiff is not entitle for any of these amounts like sharing of the loss of Rs.85,842.50/-, transport expenditure or salary paid to employees or arrears of rent of two months i.e. November 2020 and December 2020. In total by considering Ex.P.1, Ex.P.2 and also admission of DW.1 and the entry in Ex.P.4 bank statement, plaintiff would be entitle for Rs.2,50,000/- towards return of advance amount as mentioned in Ex.P.2 and is also entitle for Rs.66,000/- towards rent arrears paid for the month of September 2020 and October 2020. In total plaintiff is entitle for Rs.3,16,000/- from the defendant. Other expenses stated to have been incurred by the plaintiff are either not supported by evidence or they are part of the account of the business or they are not established before the 28 CT 1390_Com.O.S.973-2022_ Judgment.doc court. Moreover, claim of Rs.6,09,342/- made in the plaint, itself is wrong as Rs.1,01,500/- mentioned in Ex.P.5 notice is not included in the plaint.
26. For all these reasons, as plaintiff is not running the business, he is entitle for return of the advance amount and he is entitle for reimbursement of arrears of rent paid for the period during which he was not part with the business. Hence plaintiff is entitle for recovery of Rs.3,16,000/- from the defendant. Plaintiff has claimed interest @18% per annum from the date of suit till realization. However, by considering the interest prevailing, it is proper to award interest @9% per annum from the date of suit till realization. Accordingly these issues are answered.
27. ISSUE No.3 : For the discussion made on above issues, following order is passed:
ORDER Suit of the plaintiff is partly decree with costs.
The defendant is liable and is directed to pay Rs.3,16,000/- to the plaintiff with interest @9% per annum from the date of suit till realization.
Draw decree accordingly.
[Dictated to the Judgment Writer; transcript thereof corrected and then pronounced by me in the Open Court, on this the 21st day of April 2023] [Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.29
CT 1390_Com.O.S.973-2022_ Judgment.doc ANNEXURE
1. List of witnesses examined on behalf of Plaintiff:
PW.1 : Santhosh V.K
2. List of witnesses examined on behalf of Defendant:
DW.1 : Byju Mampalli.
3. List of documents marked on behalf of Plaintiff:
Ex.P.1 : Rental Agreement dt.12/1/2021.
Ex.P.2 : Agreement dt.12/2/2021.
Ex.P.3 : Agreement dt.12/2/2021.
Ex.P.4 : 7 statement of account
Ex.P.5 : Copy of Legal Notice.
Ex.P.6 : Postal Receipt.
Ex.P.7 : Postal Acknowledgment.
Ex.P.8 : Copy of another notice dt.18/4/2022.
Ex.P.9 : Postal Receipt.
Ex.P.10 : Postal Acknowledgment.
Ex.P.11 : PIM Report.
Ex.P.12 : Certificate U/S.65B of the Indian Evidence Act.
Ex.P.13 : Photo copy of Registration Certificate.
4. List of documents marked on behalf of Defendant:
Ex.D.1toD.5: Five Account books pertaining to day today business of the Hotel.
[Ravindra Hegde] LXXXIII Additional City Civil Judge.
BENGALURU.
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