Delhi District Court
Mr. Amit Gupta vs M/S Bma Wealth Creators Ltd on 26 September, 2018
IN THE COURT OF Ms. MANJUSHA WADHWA
ADJ04, (WEST), TIS HAZARI COURTS, DELHI.
Civ DJ No. 612601/16
Mr. Amit Gupta
R/o B1/146,
Paschim Vihar,
New Delhi110063 ... Plaintiff
versus
M/s BMA Wealth Creators Ltd
14/T, Paul Mansion, 1st floor,
6Bishop Lefroy Road,
Kolkatta700020 ... Defendant
Date of Filing Suit : 09.10.2014
Date of transfer to this court : 14.03.2016
Date of Reserving Judgment : 23.07.2018
Date of Judgment : 26.09.2018
J U D G M E N T
1.This is suit for recovery of an amount of Rs. 57,51,166/ filed by the plaintiff against the defendant.
2. Brief facts of the case as per the plaintiff are that the plaintiff is owner of built up property bearing No. A2/9, built on plot no. 9 in A2 Block, situated at Ware Housing Scheme, Marble Market, Kirti Nagar, New Delhi110015 (hereinafter referred to as aforesaid Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.1 of 35 property). The plaintiff pleaded that he had given a part of the aforesaid property on lease to the defendant company as:
(a) Entire second floor having a carpet area of 5710 Sq. Ft and a portion of terrace of aforesaid property(alongwith furniture & fittings, fixtures and other equipments on 'as is where is' basis), vide registered lease deed dated 23.05.2011; and
(b) Entire Third floor having a carpet area of 5710 Sq.Ft (alongwith furniture & fittings, fixtures and other equipments on 'as is where is' basis) of the aforesaid property vide registered lease deed dated 28.09.2011.
3. The plaintiff further pleaded that as per lease deed dated 23.05.2011, lease rent for the second floor was Rs. 3,60,000/ per month subject to TDS exclusive of electricity, water charges and service tax on lease rent, which was liable to be enhanced @ 12% over and above the last paid lease rent amount upon expiry of each year during the lease period i.e Rs. 4,03,200/ per month w.e.f 01.06.2012 upto 31.05.2013 and Rs. 4,51,584/ per month w.e.f 01.06.2013 upto 31.05.2014.
4. The plaintiff further pleaded that as per lease deed dated 28.09.2011, lease rent for the 3rd floor was Rs. 3,40,000/ per month, subject to TDS, exclusive of electricity, water charges and service tax on lease rent, which was liable to be enhanced @ 12% over and above the last paid rent upon expiry of each year during the lease period i.e Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.2 of 35 Rs.3,80,000/ per month w.e.f 01.09.2012 upto 31.08.2013 and Rs. 4,26,496/ per month w.e.f 01.09.2013 upto 31.08.2014. The plaintiff claimed that at the request of the defendant company, the lease rent amount was reduced by the plaintiff w.e.f August 2013 to Rs. 4,09,384/ in respect of the 2 nd floor premises and to Rs. 3,43,000/ in respect of 3rd floor premises.
5. The plaintiff further pleaded that the defendant company served termination notice dated 25.11.2013 regarding lease deed dated 28.09.2011 with respect to the 3rd floor premises, as per which, defendant Company was under an obligation to handover possession of the 3rd floor premises in 3 months, which expired on 28.02.2014, however, the defendant handed over the possession of the said premises on 07.03.2014. The plaintiff further averred that the defendant did not pay lease rent for the period from November, 2013 to March 2014 & also did not clear electricity bill of Rs. 24,570/. It is also the case of the plaintiff that on receipt of possession of 3 rd floor, it was discovered that certain equipments were damaged and certain equipments were missing, which was informed to the defendant company vide email dated 24.03.2014. The plaintiff quantified the cost of damaged/missing equipments at Rs. 7,00,000/ and given details of damaged and missing equipment in para 8 of the plaint as under: a. 139 Work Station Chairs were found to be damaged/broken and not fit for use;
b. Out of the 5 Officer Chairs provided at the time of lease, Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.3 of 35 only 1 was found in a badly damaged condition and the other 4 were missing;
c. 36 tubelights were found to be not working;
d. 1 Split A/C was found to be not in working condition. e. UPS & UPS Batteries were found to be not in working condition;
f. The wiring provided in the Sever room was found to be badly damaged;
g. The glass door at the back of the premises was found to be broken;
h. 1 washbasin was found to be broken in the bathrooom; i. Keyboard stands of all workstations were found to be broken;
j. Glass partitions on 160 workstations were found to be broken;
k. 11 door handle and locks were found to be broken and not in a working condition.
l. 1 window glass was found to be broken; and m. 1 workstation table written statement found to be completely broken.
6. The plaintiff further pleaded that vide email dated 28.12.2013, the defendant company sent termination notice for the 2 nd floor premises under the Lease Deed dated 23.05.2011 stating that the termination notice period of 3 months as envisaged in the said lease deed had to commence from 01.01.2014 and expire on 31.03.2014. The plaintiff pleaded that the defendant company failed to handover the possession of the 2nd floor of the aforesaid property on the stipulated date. The plaintiff further contended that on 07.04.2014, Mr. Pawan Aggarwal on behalf of the plaintiff had visited the 2 nd floor and found that the employees of the defendant company were removing the equipments, provided by the plaintiff at the time of leasing the Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.4 of 35 said premises to the defendant company, in violation of terms of the lease deed. The plaintiff stated to have locked the said premises with due intimation to the defendant company vide email dated 07.04.2014, with request to arrange meeting with the plaintiff in this regard, but to no avail. The plaintiff further claimed that the defendant has not paid lease rent for the period from December, 2013 till April 2014 and also omitted to clear the electricity bills amounting to Rs. 93,745/.
7. The plaintiff also claimed that after inspection of 2nd floor premises, certain equipments were damaged and certain equipments were found to be missing and the cost of damaged and missing equipments was quantified at Rs. 5,00,000/. The plaintiff has given details of damaged and missing equipments in para 11 of the plaint as: a. 45 chairs are broken/missing b. 2 officer chairs are broken c. 33 tubelights damaged.
d. 7 pieces of floor tiles are broken.
e. 5 handle & locks are broken of doors.
f. Exhaust fan of bathroom is damaged.
g. AC water pipe is leaking.
h. One blinds curtain of conference room is damaged. i. Keyboard stands of 183 work stations are missing. j. UPS & UPS Batteries are not working.
k. Wiring of server room is totally damage.
l. Partition by glass on table of 100 work stations are broken.
8. The plaintiff has calculated the dues recoverable from the defendant Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.5 of 35 company in para 12 & 13 of the plaint as: 3rd floor November December January February March Total 2013 2013 2014 2014 2014 Lease 3,43,000 3,43,000 3,43,000 3,43,000 3,43,000 17,15,000 Rent Service 42,395 42,395 42,395 42,395 42,395 2,11,975 Tax Total 3,85,395 3,85,395 3,85,395 3,85,395 3,85,395 19,26,975 Less: 34,300 34,300 34,300 34,300 1,37,200 TDS Total 3,51,095 3,51,095 3,51,095 3,51,095 3,85,395 17,89,775 Receiv 17,89,775 able 2nd Dec. January February March April Total floor 2013 2014 2014 2014 2014 Lease 4,09,384 4,09,384 4,09,384 4,09,384 4,09,384 20,46,920 Rent Service 50,600 50,600 50,600 50,600 50,600 2,53,000 Tax Total 4,59,984 4,59,984 4,59,984 4,59,984 4,59,984 22,99,920 Less: 40,938 40,938 40,938 40,938 1,63,752 TDS Receiv 4,19,046 4,19,046 4,19,046 4,19,046 4,59,984 21,36,168 able Receiv 17,89,775 able Grand 39,25,943 Total Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.6 of 35 a. Electricity Bill of 3rd floor Rs. 24,570/ b. Electricity Bill of 2nd floor Rs. 93,745/ c. Cost of damage & missing equipments of 3rd floor Rs. 7,00,000/ d. Cost of damage & missing equipment of 2nd floor Rs. 5,00,000/
9. The plaintiff further pleaded that the defendant had deposited security deposit of Rs. 10,20,000/ in terms of lease deed of 3 rd floor and Rs. 19,52,820/ in terms of lease deed of 2 nd floor of the aforesaid property. It is the case of the plaintiff that as per terms of the lease deed, in case the defendant company fails to pay the lease rent for more than two consecutive months, the lessor had right to forfeit the security deposit. The plaintiff claimed to have forfeited security deposit of the defendant on account of nonpayment of lease rent for more than 2 consecutive months. The plaintiff also averred that he had sent legal notice dated 25.04.2014 to the defendant to pay the outstanding amount but to no avail. Hence, the plaintiff filed the present suit for recovery of an amount of Rs.57,51,166/ (Principal amount of Rs.52,44,258/ alongwith interest of Rs.5,06,908/ i.e. Rs.2,50,568/ for 3rd floor plus Rs. 2,56,340/ for 2nd floor @ 24% per annum from the date of respective accrual till the filing of present suit) alongwith pendente lite and future interest @ 24% p.a. Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.7 of 35
10. The defendant has filed written statement wherein the defendant pleaded that the plaintiff had never provided furniture & fixtures in the demised premises. According to the defendant, the plaintiff had agreed to and was supposed to provide furniture, fixture and equipments in the demised premises, on the basis of which the quantum of the monthly rent was mutually fixed between the parties but the plaintiff failed and/or neglected to provide the same. The defendant further averred that most of the furniture, fixtures and IT assets were put in place in the two floors by the defendant itself at its own cost & expenses. The defendant further averred that when the defendant tried to pick up its own goods after vacating the leased premises, the plaintiff prevented the defendant and in turn forcefully locked the premises, as a result of which, goods belonging to the defendant could not be recovered. The defendant further claims that the goods which are still lying inside the premises and are yet to be recovered includes: a. Epabx Panasonic TDS 600 worth Rs. 4 lacs.
b. 3 HP ML 10 server & PICA card worth Rs. 6.80 lacs c. 9 desktops worth Rs. 1.80 lac.
11.Regarding lease rent, the defendant averred that as far as the second floor is concerned; the plaintiff has falsely claimed rent for the month of March and April, 2014 since the defendant had vacated the said 2nd floor premises and delivered the vacant possession thereof to the plaintiff before 28th February, 2014. According to the defendant, Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.8 of 35 it was only liable to pay the monthly rent from 01.12.2013 till 28.02.2014, which was adjustable against the security deposit amounting to Rs. 19,52,820/ and after deducting due rent from security deposit, an amount of Rs.6,95,685/ is still payable by the plaintiff to the defendant company.
12. The defendant admitted to have given termination notice dated 25.11.2013 regarding lease deed dated 28.09.2011 with respect to 3 rd floor premises, however, pleaded that it had handed over the vacant & peaceful possession of the 3rd floor of the aforesaid property to the plaintiff before 28th February, 2014. According to the defendant, it was liable to pay rent for the month of November, 2013 to 28.02.2014 with respect to the third floor and the said rent was liable to be adjusted by the plaintiff against the security deposit of Rs.10,20,000/ deposited by the defendant and after the said adjustment, an amount of Rs. 3,84,380/ was liable to be paid to the plaintiff by the defendant. The defendant thus pleaded that in view of the amount payable to the plaintiff in respect of third floor and the amount receivable by the defendant in respect of the 2 nd floor, net amount of Rs. 3,11,305/ is payable by the plaintiff to the defendant alongwith interest @ 24% per annum.
13. According to the defendant, furniture, equipments, fixtures and fittings were supposed to be provided by the plaintiff in the tenanted premises whereas, the same were not provided as per lease deed, as Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.9 of 35 such, the defendant is entitled to get refund of part of the rent in respect of the third floor to the minimum extent of Rs. 17,000/(5% of the rent) from 01.09.2011 to 28.02.2014 for 30 months, amounting to Rs. 5,10,000/ and a part of the rent in respect of the second floor to the minimum extent of Rs. 18,000/(5% of the rent) from 01.06.2011 to 28.02.2014 for 33months amounting to Rs. 5,94,000/ on account of furniture, fixture and equipments charges aggregating to Rs. 11,04,000/.
14.The defendant further pleaded that the defendant is also entitled to get back the property worth Rs. 12.60 lacs which the plaintiff had illegally locked inside the said premises, whereby depriving the defendant of the same. The defendant thus prayed that the plaintiff be directed to pay an amount of Rs.26,75,305/ as pleaded in para 21, 22 & 23 of preliminary objections of the written statement alongwith pendente lite and future interest @ 24% per annum to the defendant and prayed for release of illegally locked goods in the leased premises.
15.The plaintiff filed the replication, wherein the plaintiff reiterated the contents of the plaint as true and correct and denied the contrary averments made in the written statement.
16. Vide order dated 01.06.2016, following issues were framed by the learned predecessor of this court as :
1. Whether the plaintiff is entitled to forfeit the security Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.10 of 35 amount deposited by the defendant ? OPP
2. Whether the plaintiff did not provide furniture and fittings, fixture and other equipment "as is where is"
basis in the premises as per lease deeds ? If so, to what effect ? OPD
3. Whether the plaintiff is entitled to recover an amount of Rs. 52,44,258/ as prayed for from the defendant ? If so, at what rate of interest ? OPP
4. Relief
17.In order to prove the case, the plaintiff has examined himself as PW1 and Sh. Hardaman Singh, Assistant Manager, Rajouri Garden, IDBI Bank Ltd as PW2 and has relied upon the following documents as: S.No. Particular of documents Exhibition of documents 1 Certificate U/s 65B of Indian ExPW1/1 Evidence Act 2 Electricity Bill dated 11.05.2014 ExPW1/2 3 Payment receipt dated 22.05.2014 ExPW1/3 4 Details of defendant company Mark A(colly) received from Registrar of Companies 5 Registered Lease deed dated ExP1 also 28.09.2011 for 3rd floor. Ex.P6 6 Registered Lease deed dated ExP2 also 23.05.2011 for 2nd floor. Ex.P7 7 Print of email exchanged between ExP3 the parties.
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.11 of 35 8 Termination notice dated ExP4 25.11.2013 qua 3rd floor
9. Legal Notice dated 25.04.2014 ExP5
18. In order to prove the defence, the defendant has examined Sh. Ajay Singh, Authorized Representative of the defendant as DW1, who has relied upon the Board Resolution, Ex.DW1/1.
Issue no. 2. Whether the plaintiff did not provide furniture and fittings, fixture and other equipment "as is where is" basis in the premises as per lease deeds ? If so, to what effect ? OPD
19. The onus to prove issue no. 2 was on the defendant. It was for the defendant to establish that the plaintiff did not provide furniture, fittings, fixtures and other equipments on "as is where is" basis in the 2nd & 3rd floor of the aforesaid property as per the lease deeds. According to the defendant, the plaintiff did not provide the furniture, fittings, fixtures and equipments, which was agreed to as well as supposed to be provided by the plaintiff, and on the basis of which the quantum of monthly rent was mutually fixed between the parties. On the other side, it is the case of the plaintiff that he had provided the furniture, fittings, fixtures and equipments on "as is where is" basis as per terms of lease deed(s).
20. Heard Ld. Counsels for the parties and perused the record.
21. In this regard, one may peruse the relevant recital clause of the lease Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.12 of 35 deed dated 28.09.2011 with respect to third floor, ExP1, which is similarly incorporated in the lease deed dated 23.05.2011 with respect to second floor, Ex.P2 as: "AND WHEREAS the Lessor is desirous of leasing and the lessee has agreed to take on lease part of the said property comprising Entire Third Floor having a carpet area of 5710 Sq. ft.(alongwith furniture & fittings, fixtures and other equipments on "as is where is" basis of Industrial Property bearing No.A2/9, situated at Ware Housing Scheme, Marble Market, Kirti Nagar, New Delhi110015, hereinafter referred to as the "demised premises", subject to and on the terms and conditions contained hereinafter."
22. Perusal of the aforesaid recital clause of lease deed makes it apparent that the 2nd as well as 3rd floor of the aforesaid property was let out to the defendant alongwith furniture, fittings, fixtures and other equipments on "as is where is" basis. Although, no details have been provided in the lease deed regarding description of the furniture, fixtures, fittings and equipments installed in the premises, it would not infer that the aforesaid installations were not existing therein. Further, the defendant has not filed anything on record to show that the defendant had ever intimated the plaintiff that furniture, fixtures, fittings and other equipments were not existing in the tenanted premises, as per terms of the lease deed. The use of specific words i.e. "as is where is" basis implies that it was for the defendant company to inspect the premises and peruse the then existing furniture, fixtures, fittings and equipments. In the considered opinion of this court, an inventory was required to be Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.13 of 35 prepared of the then existing furniture, fittings, fixtures and equipments to avoid any future controversy, which has not been prepared in the instant case. Be that as it may, the incorporation of specific words "as is where is" basis in the aforesaid recital clause envisage that the furniture, fixtures, fittings and equipments, which were existing at the time of leasing of 2 nd floor & 3rd floor of the aforesaid property, remained as it is therein. Accordingly, this issue is decided in favour of the plaintiff and against the defendant company.
ISSUE No. 3: Whether the plaintiff is entitled to recover an amount of Rs. 52,44,258/ as prayed for from the defendant ? If so, at what rate of interest ? OPP
23. The onus to prove this issue was on the plaintiff. The plaintiff has claimed the aforesaid amount on three heads, first on account of unpaid rent, second on account of electricity dues, thirdly on account of cost of damage and missing equipments. It is apposite to deal headwise claim of the plaintiff hereinafter.
(a)CLAIM OF RENT ALONGWITH SERVICE TAX AND TDS.
24. The plaintiff has given the details of the amount claimed headwise in para 8 of the plaint which has already been reproduced herein above. Regarding the due amount of rent, TDS and service tax, the plaintiff claimed that the defendant had given termination notice of Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.14 of 35 second floor vide email dated 28.12.2013 and three months envisaged in the said lease deed was to begin from 01.01.2014 and expire on 31.03.2014. It is his submission that the defendant failed to handover the possession of the 2nd floor of the aforesaid property on 31.03.2014. He further contended that on 07.04.2014, Mr. Pawan Aggarwal on behalf of the plaintiff had visited the 2 nd floor and found that the employees of the defendant company were removing the equipment provided by the plaintiff at the time of leasing the said premises to the defendant. He further submitted that in order to protect and preserve his property, he locked the premises with due intimation to the defendant company vide email dated 07.04.2014 and requested the defendant to arrange a meeting in this regard. He urged that it is clear from email dated 07.04.2014 that the defendant was in possession of second floor of the aforesaid property till 07.04.2014.
25. On the other side, ld. Counsel for the defendant submitted that the defendant had vacated the second floor of the aforesaid property and delivered the possession thereof to the plaintiff before 28.02.2014. He submitted that the defendant was liable to pay monthly rent from 01.12.2013 till 28.02.2014 which was adjustable against the security deposit amounting to Rs. 19,52,820/ and the plaintiff was liable to refund the balance amount of Rs. 6,95,685/ after adjusting the due rent from the security deposit.
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.15 of 35
26. It is relevant to mention herein that the defendant has also stated in para 8 of the preliminary objections of the written statement that when the defendant tried to pick up its own goods after vacating the leased premises, the plaintiff prevented the defendant and in turn forcefully locked the premises, as a result of which, goods belonging to the defendant could not be yet recovered. In fact, the defendant has given description of the goods, which are still lying in the premises and are yet to be recovered, in para 9 of the preliminary objections of the written statement.
27. Further, para 9 of the plaint has not been specifically denied by the defendant wherein, it is averred that on 07.04.2014, Mr. Pawan Aggarwal had visited and locked the second floor of the aforesaid property. The defendant has also not filed any letter showing that the defendant had handed over the vacant and peaceful possession of the 2nd floor of the aforesaid property to the plaintiff on or before 28.02.2014. Bald averment by the defendant that it had handed over the possession of the second floor before 28.02.2014 is not suffice in the eyes of law.
28.The fact cannot be overlooked that it is the case of the defendant in the written statement that its goods are still lying in the second floor of the aforesaid property as the premises had been locked by the plaintiff, which according to the plaintiff was locked on 07.04.2014. Therefore, it is apparent that the defendant did not hand over Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.16 of 35 possession of the second floor of the aforesaid property to the plaintiff before 28.02.2014, but the plaintiff received the possession of the second floor of the aforesaid property on 07.04.2014.
29. It is also the submission of ld. Counsel for the defendant that as per terms of the lease agreements, Ex.P1 & Ex.P2, the defendant could remove all its belongings from the leased premises within 7 working days upon expiry of the lease deed without paying rent for the said grace period. In this regard, one may refer to clause 3 of "lessee and lessor covenant" of the lease deed, which is reproduced hereunder as: "3. The Lessee shall vacate the said premises and remove all its belongings from the demised premises within 7 (seven working days) upon expiry of the terms of the lease (hereinafter called the grace period), without demur, paying the proportionate normal payable rent at that time for the said grace period. However, the Lessee shall be liable to pay liquidated damages @ Rs.20,000/ (Rs.Twenty Thousand Only) per day apart from the normal lease rent for each day the Lessee overstays the said grace period."
30. As per the aforesaid clause, the lessee had to vacate the demised premises and remove all its belongings from the demised premises within 7 working days upon expiry of the term of lease. However, if the lessee overstays in the premises, the lessee is liable to pay liquidated damages @ Rs. 20,000/ per day apart from the normal lease rent. In view thereof, lessee is entitled to benefit of 7 days grace period as stipulated in the aforesaid clause of the lease deed.
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.17 of 35 Hence, the defendant company is liable to pay rent till 31.03.2014.
31. Now, coming to third floor of the aforesaid property, ld. Counsel for the plaintiff submitted that vide letter dated 25.11.2013, the defendant company had given termination notice of tenancy of third floor of the aforesaid property and was under an obligation to handover the possession of the third floor of the aforesaid property on or before 28.02.2014, however, the defendant handed over the possession of the third floor on 07.03.2014. It is the submission of ld. Counsel for the plaintiff that email dated 08.03.2014 makes it evident that the defendant company was in possession of the third floor till 07.03.2014. In this regard, one may refer to the email dated 08.03.2014, Ex.P3, relevant portion of which is reproduced as under: "Dear Mr Pawan Aggarwal, As per your mail we have vacated the third floor of A2/9 Kirti Nagar yesterday and handed over the keys of the same to your Mr. Rajesh, as per telephonic discussion with you & Amitji."
32. Vide aforesaid email, Sh. Rajender Balwani, Admin officer of the defendant wrote email to Sh. Pawan Aggarwal that after vacating the 3rd floor, the keys had been handed over to Mr. Rajesh and vide another email dated 03.03.2014, Sh. Pawan Aggarwal wrote to Sh. Rajender Balwani that the defendant had not handed over keys of the third floor though lease deed had expired on 28.02.2014.
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.18 of 35
33. The conjoint reading of email dated 03.03.2014 and email dated 08.03.2014 makes it evident that the defendant company had handed over the possession of the 3rd floor of the aforesaid property to the plaintiff only on 07.03.2014, though the notice period had expired on 28.02.2014.
34. Be that as it may, aforesaid clause 3 of the "lessee and lessor covenant" of the lease deed provides 7 days grace period to the defendant company to vacate the demised premises and remove all its belongings from the demised premises. Hence, the defendant is entitled to benefit of 7 days grace period as per aforesaid Clause 3 of the "lessee and lessor covenant" of lease deed. Accordingly, the defendant is liable to pay rent till 28th February, 2014.
35. In view of the above, the defendant is liable to pay rent for the period from 01.12.2013 to 31.03.2014 for the second floor and is liable to pay rent for the period from 01.11.2013 to 28.02.2014 for the third floor of the aforesaid property. The rent for the aforesaid period is payable along with the service tax as claimed by the plaintiff. Meaning thereby, the defendant is liable to pay rent for 2nd floor of the aforesaid property from 01.12.2013 to 31.03.2014, which as per para 12 of the plaint is Rs.4,59,984/ per month X 4 months = Rs.18,39,936/ and for 3rd floor of the aforesaid property from November, 2013 to February, 2014 which as per para 12 of the plaint as Rs.3,85,395 per month X 4 months = Rs.15,41,580/. The Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.19 of 35 aforesaid rent is subject to deduction of TDS.
36.The plaintiff has also claimed electricity bill of the second floor and third floor in para 13 of the plaint. The plaintiff has averred in para 7 of the plaint that the defendant has not cleared the electricity bill of Rs. 24,570/ for the third floor though the said electricity bill was duly handed over to Sh.Rajender Balwani, employee of the defendant company. In reply to the same, the defendant has not specifically denied about the pending electricity bills. With respect to the second floor, the plaintiff has averred in para 10 of the plaint that the defendant company has not cleared the electricity bill for an amount of Rs. 93,745/, which the plaintiff is entitled to recover from the defendant. Pertinently, the defendant has not specifically denied its liability towards the payment of electricity bill in reply on merits in the written statement.
37. The plaintiff has also filed payment receipt dated 22.05.2014, Ex.PW1/3 to restore order of disconnection, whereby the plaintiff had paid an amount of Rs. 88,490/. The plaintiff has also filed bill dated 11.05.2014, ExPW1/2 for the period from 09.04.2014 to 07.05.2014 for an amount of Rs.12,550.66 with respect to the second floor of the aforesaid property. It is pertinent to note that the amount payable as the bill dated 11.05.2014 is 1,01,600/. It is also apparent from the consumption history shown on bill dated 11.05.2014 that the total bill payable for the period from 13.01.2014 to 06.02.2014 was Rs. 92,900/ and bill payable from 07.02.2014 to 10.03.2014 Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.20 of 35 was Rs. 57,090/, and thereafter, bill payable from 11.03.2014 to 08.04.2014 was Rs. 88,490/. Apparently, the defendant has not specifically denied the due amount of electricity bill. DW1 during his crossexamination dated 11.07.2018 deposed that he cannot tell whether the last payment towards the arrears of electricity charges was paid to the plaintiff.
38. In view of the above, the plaintiff has been able to establish that the defendant did not pay the outstanding electricity dues of the second and third floor of the aforesaid property. Accordingly, the plaintiff is entitled to the amount of Rs. 93,745/ towards the electricity bill of second floor of the aforesaid property and Rs. 24,570/ towards the electricity bill of third floor of the aforesaid property.
(c) Cost of damage and missing equipment of second floor and third floor.
39.According to the plaintiff, the defendant company served termination notice dated 25.11.2013 regarding lease deed dated 28.09.2011 with respect to the 3rd floor premises, as per which, the defendant Company had to handover its possession in 3 months which expired on 28.02.2014, whereas, the defendant company had handed over possession of the said premises on 07.03.2014. The plaintiff claims that on receipt of possession of 3 rd floor, it was discovered that certain equipments were damaged as well as missing, which was informed to the defendant company vide email Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.21 of 35 dated 24.03.2014. The plaintiff quantified the cost of damaged and missing equipments as Rs. 7,00,000/ and given details of damaged and missing equipment in para 8 of the plaint as under: a. 139 Work Station Chairs were found to be damaged/broken and not fit for use;
b. Out of the 5 Officer Chairs provided at the time of lease, only 1 was found in a badly damaged condition and the other 4 were missing;
c. 36 tubelights were found to be not working;
d. 1 Split A/C was found to be not in working condition. e. UPS & UPS Batteries were found to be not in working condition;
f. The wiring provided in the Sever room was found to be badly damaged;
g. The glass door at the back of the premises was found to be broken;
h. 1 washbasin was found to be broken in the bathrooom; i. Keyboard stands of all workstations were found to be broken;
j. Glass partitions on 160 workstations were found to be broken;
k. 11 door handle and locks were found to be broken and not in a working condition.
l. 1 window glass was found to be broken; and m. 1 workstation table written statement found to be completely broken.
40. According to the plaintiff, the defendant company in terms of email dated 28.12.2013, had to handover the possession of the second floor premises after completion of 3 months notice period on 31.03.2014, which defendant company failed to handover on the stipulated date. The plaintiff further contended that on 07.04.2014, Mr. Pawan Aggarwal on behalf of the plaintiff had visited the 2 nd floor premises Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.22 of 35 and found the employees of the defendant company removing the equipments, which were provided by the plaintiff at the time of leasing the said premises to the defendant company, in violation of terms of the lease deed. The plaintiff stated to have locked the said premises with due intimation to the defendant company vide email dated 07.04.2014, with request to arrange meeting with the plaintiff in this regard. The plaintiff also claimed that after inspection of 2 nd floor premises, certain equipments were damaged as well as missing & the cost of damaged and missing equipments was quantified at Rs. 5,00,000/. The plaintiff sent legal notice dated 25.04.2014, Ex.P5 regarding outstanding amount to the defendant. The plaintiff has given details of damaged and missing equipments in para 11 of the plaint as: a. 45 chairs are broken/missing b. 2 officer chairs are broken c. 33 tubelights damaged.
d. 7 pieces of floor tiles are broken.
e. 5 handle & locks are broken of doors.
f. Exhaust fan of bathroom is damaged.
g. AC water pipe is leaking.
h. One blinds curtain of conference room is damaged. i. Keyboard stands of 183 work stations are missing. j. UPS & UPS Batteries are not working.
k. Wiring of server room is totally damage.
l. Partition by glass on table of 100 work stations is broken.
41.On the other side, the defendant claims that pursuant to delivery of possession, the defendant had carried out certain interior work including installation of its own furniture and equipments therein at Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.23 of 35 its own cost and expenses, which were removed by the defendant after vacation of the demised premises. According to the defendant, no furniture or fixture was ever provided by the plaintiff to the defendant. It is also the case of the defendant that as per clause 3 of the lease deed, the plaintiff had been regularly inspecting and assessing the condition of the leased premises. According to defendant, the plaintiff never found any deterioration in the leased premises since it was well maintained by the defendant and no damage was ever reported by the plaintiff to the defendant during continuation of the lease. The defendant further contended that claim of damages was made by the plaintiff only after the premises was handed over by the defendant to the plaintiff, which shows that the allegation of damages made by the plaintiff is an afterthought and has been made with malafide intention to harm the defendant. The defendant further contended that had there been any damage to the leased premises, the plaintiff would have lodged FIR to the concerned Police Station.
42. Heard ld. counsel for the parties and perused the record.
43. According to the plaintiff, the plaintiff had provided furniture, fixtures, fittings and other equipments on 'as it where is basis' in the premises as per lease deed. The lease deed dated 28.09.2011 for the 3rd floor, Ex.P1 and lease deed dated 23.05.2011 for the 2 nd floor, Ex.P2 are admitted documents. Further, the defendant has not Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.24 of 35 agitated after execution of the lease deed that furniture, fittings, fixtures and equipment are not existing in the aforesaid property. This court has already held issue no. 2 in favour of the plaintiff, whereby, it is observed that the second and third floor of the aforesaid property were let out to the defendant alongwith furniture, fixtures, fittings and equipments on 'as is where is basis'. Be that as it may, it was for the plaintiff to establish the description as well as cost of the furniture, fixtures, fittings, equipments, which were existing at the time of letting out the second and third floor of the aforesaid property.
44. Admittedly, no inventory has been prepared and annexed with the lease deeds, Ex.P1 and Ex.P2. In the absence of any material on record, it is not clear as to the quality & quantity of the furniture, fittings, fixtures and equipments existing in the second and third floor of the aforesaid property at the time of letting out the same to the defendant. The onus was on the plaintiff to establish as to what infrastructure was provided in the tenanted premises to the defendant and what was damaged or removed by the defendant at the time of vacating the said second and third floor of the aforesaid property.
45. It is relevant to mention herein that the plaintiff did not inform the defendant immediately, at the time of vacation of the aforesaid second and third floor, regarding the damage caused to the furniture, fixtures, fittings and equipments or extent of removal of the same by Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.25 of 35 the defendant. Admittedly, the plaintiff had locked second floor of the aforesaid property on 07.04.2014, and therefore, it was incumbent on the part of the plaintiff to find out on the same date or within reasonable time thereafter, as to the extent of damage to the existing condition of infrastructure provided at the second floor or the extent of removal of the goods / fittings, equipments by the defendant.
46. In fact, plaintiff appears to have informed the defendant about the cost of damaged and missing equipments vide legal notice dated 25.04.2014, Ex.P5 after a delay of 18 days which infers about the hollowness in the claim of the plaintiff. Further, it was necessary for the plaintiff to aver as to what kind of furniture & equipments were installed in the 2nd floor of the aforesaid property at the time of letting out the said premises to the defendant company. Self serving statement of the plaintiff in para 11 of the plaint regarding the details of the damaged and missing equipments on the second floor of the aforesaid property will not be sufficient in the eyes of law. Further, no basis has been given by the plaintiff as to how the plaintiff has quantified the cost of damaged and missing equipments at Rs.5,00,000/ regarding the second floor in para 11 of the plaint. No estimate / inspection report has been filed in this regard. Even, there is no averment by the plaintiff as to whether the plaintiff had got the damages repaired or missing equipments replaced in the said floor. The description given in clause (a) of para 11 of the plaint as " 45 Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.26 of 35 chair are broken / missing" indicates that the plaintiff is not sure about the exact number of broken chairs and exact number of missing chairs.
47. In so far as third floor of the aforesaid property is concerned, the plaintiff has averred that on getting the possession of the said floor on 07.03.2014, the plaintiff found certain equipments damaged as well as missing, which the plaintiff had informed vide email dated 24.03.2014. There is no explanation as to why the plaintiff had taken possession of the demised premises from the defendant company without inspecting the premises. Further, the plaintiff had taken almost 17 days in writing email to the defendant company. There is no explanation coming forth from the plaintiff as to why the plaintiff had taken 17 days in inspecting the premises. Again, the plaintiff has not given any details as to how the plaintiff has calculated the cost of damages and missing equipments as Rs.7 lac.
48. During cross examination dated 09.10.2016, PW1 deposed that he is not aware that the furniture and equipment were provided under which clause of the agreement. He also did not recall whether any receipt was given by anyone from the defendant company as proof of having provided the furniture and equipment. PW1 could not recall the make of alleged equipment and articles. PW1 also could not recall as to whether any bill has been filed pertaining to alleged furniture and equipment provided by him to show that the same Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.27 of 35 belong to him. PW1 also deposed that he did not file any police complaint for the loss caused to furniture and equipment. He further deposed that loss was calculated as per market rate of the equipment and furniture. He deposed that he does not remember whether any proof has been provided to show the market rate of equipment and furniture. He admitted that as per lease agreement, defendant was empowered to bring its installation and equipment inside the rented premises.
49. The testimony of PW1 read in conjunction with the record shows that the plaintiff has not filed any material to prove the cost of purchase / market rate of furniture and equipment installed in the demised premises. Further, PW1 admitted the existence of Clause in the lease deed as per which, the defendant was empowered to carry out interior works or install equipment inside the demised premises. Relevant clause 4 of 'The Lessee & Lessor Covenant' of lease deed(s), Ex.P1 and Ex.P2 is reproduced as : " 4. The Lessee can carry out interior works or installation of any equipment for running the building and / or for using the said premises for commercial and office purposes. However, any such work done and material so procured will be at the cost of the Lessee and will be its sole responsibility. However, Lessee may erect cabins/cubicles/partition/shelves/racks/cabling and any other work pertaining to the interiors to make the premises suitable for its use subject to the condition that the same does not affect the structure and do comply with the law/ byelaws/rules and regulation of the relevant statutory Government bodies. "
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.28 of 35
50. Further, no estimate about the quantification of the damaged and missing equipments has been filed on record. The plaintiff has also not stated as to whether the plaintiff had got the damaged and missing equipments repaired/replaced and if so, cost involved in the same. In the absence of any evidence led by the plaintiff in this regard, it is not established that the plaintiff had suffered loss of Rs.7 lac with respect to cost of damaged and missing equipments of third floor and Rs.5 lac with respect to the cost of damaged and missing equipments of second floor of the aforesaid property. In view of above, the plaintiff is not entitled to claim any amount on account of cost of damaged and missing equipment of 2 nd floor and 3rd floor of the aforesaid property.
Issue No. 1: Whether the plaintiff is entitled to forfeit the security amount deposited by the defendant? OPP
51. The onus to prove this issue was on the plaintiff. Ld. Counsel for the plaintiff submitted that the defendant had deposited the security amount of Rs. 10,20,000/ in terms of lease deed of 3 rd floor and Rs.19,52,820/ in terms of lease deed of 2nd floor of the aforesaid property. It is the submission of ld. Counsel for the plaintiff that since the defendant company failed to pay the lease rent for two consecutive months, the said security deposit was forfeited by the plaintiff. On the other side, ld. Counsel for the defendant submitted that security amount was to be refunded to the defendant on the Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.29 of 35 vacation of the tenanted premises and the plaintiff could not have forfeited the security amount.
52. Heard ld. Counsels for the parties and perused the record.
53. Before dwelling further on this issue, it is necessary to peruse the relevant clauses of lease deed dated 28.09.2011, Ex.P1 relied upon by the plaintiff hereunder as: "4. The lessee has deposited a sum of Rs. 10,20,000/ (Rupees Ten Lacs Twenty Thousand only), equivalent to three months initial lease rent, as refundable interestfree security deposit with the lessor prior to signing this lease deed, the receipt of which the lessor admits at the time of presentation of this Lease Deed before Sub Registrar II, New Delhi. The above security shall be refunded in full without any interest at the time of termination of this lease after the lessee clears all dues."
THE LESSEE COVENANTS WITH THE LESSOR AS UNDER:
"1. To pay the monthly lease rent hereby reserved in advance on or before 7th of each English Calender Month in accordance with the provision hereof. Further, in case of delay,the Lessee shall be liable to pay interest @ 24% p.a., for the delayed period. The Lessor reserves the right to terminate this Lease and forfeit the security deposit, if the Lessee fails to pay the monthly lease consequently for two months."
54. It is the contention of ld counsel for the plaintiff that as per the aforesaid clause of the lease deed, if the lessee fails to pay the Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.30 of 35 monthly rent consecutively for two months, the lessor reserves the right to terminate the lease and forfeit the security deposit. He contended that the plaintiff accordingly forfeited the security deposit.
55. Admittedly, the defendant had terminated the registered lease deed for the second floor by sending email dated 28.12.2013 and terminated the registered lease deed for the third floor by sending termination notice dated 25.11.2013. According to the defendant, it had vacated the 2nd floor as well as well third floor before 28.02.2014 and was liable to pay rent for the period from 01.12.2013 till 28.02.2014 for the second floor and from November 2013 to 28.02.2014 for the 3rd floor. On the other side, the plaintiff claimed that the defendant was liable to pay rent from December, 2013 to April 2014 for the second floor and from November 2013 to March 2014 for the 3rd floor. No doubt, there is dispute about due rent for the period as described herein above, the fact cannot be overlooked that the defendant had admittedly not paid rent for two months consecutively.
56. In view of the above, the plaintiff was entitled to forfeit the security deposit, which was refundable at the time of handing over of possession of leased premises by the defendant. At the same time, the fact cannot be overlooked that as per the clause 4 of the lease deeds, Ex.P1 and Ex.P2, the plaintiff had to refund the security Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.31 of 35 deposit in full without any interest at the time of termination of the lease after the lessee clear all dues. The said clause reads with clause of forfeiture of the security deposit envisage that the plaintiff was entitled to forfeit the security deposit, but at the same time, had to adjust the recoverable dues from the said security deposit.
57. In other words, the plaintiff is not right in forfeiting security deposit on account of nonpayment of rent for two consecutive months and at the same time, claiming rent for the said two months in addition to forfeiture of security deposit. Further, in the considered opinion of this court, the plaintiff is required to adjust the extra amount of security deposit, if any, left after adjusting rent for two consecutive months, towards other pending dues. Reference in this regard is made to the judgment of the Hon'ble Apex Court in Kailash Nath Associates vs. Delhi Development Authority, (2015) 4 SCC 136 wherein, it is held that unless on account of breach of contract, loss has been caused to a party, damages cannot be awarded for mere breach of contract unless actual damages or loss are proved and in cases, where it is possible to prove the damages or loss, such proof is not dispensed with under Section 74 of the Contract Act.
58. Similar view has been taken by the Hon'ble High Court of Delhi in the judgment reported as 223 (2015) DLT 334 titled as Sunil Sehgal vs. Chander Batra & ors. Relevant para no.8 & 9 of the aforesaid judgment are reproduced as under : Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.32 of 35 "8. In the present case, the nature of contract is such that losses could have been proved by the defendants by proving the falling of prices of the subject property, and only if the prices of the property had fallen and breach was committed by the plaintiff/buyer, the defendants could have only then been entitled to forfeit the amount paid by the plaintiff as damages on account of loss caused. Para 43.4 of the judg ment of the Supreme Court in the case of Kailash Nath As sociates (supra) reproduced above shows that the provi sions of Sections 73 and 74 of the Indian Contract Act ap plies whether a person is plaintiff or a defendant in the suit i.e. a defendant who is a seller cannot forfeit any moneys unless loss is proved to be caused by fall in the price of the property.
9. In the present case, defendants have led no evidence of any loss caused to them, and therefore, assuming that plaintiff is guilty of breach of contract, yet, the defendants cannot forfeit the amount of Rs.15 lacs lying with them. A huge amount of Rs.15 lacs out of the total sale consideration of Rs.79,50,000/ cannot in law be called earnest money. By giving a stamp of 'earnest money' to advance price, the lat ter cannot become the former. What is to be seen is the sub stance and not the label. Only a nominal amount can be said to be earnest money and not an amount of Rs.15 lacs out of Rs.79.50 lacs, by noting that if suppose an amount of Rs. 30 lacs or 40 lacs would be called as earnest money by the parties, that would not take away the fact that such amount cannot be earnest money but would in fact be part of the price to be paid for sale".
59. Adverting to the facts of the instant case, the defendants had paid Rs. 19,52,820/ as security deposit with respect to lease of second floor of aforesaid property and Rs.10,20,000/ as security deposit with respect to lease of 3rd floor of aforesaid property. The said Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.33 of 35 security deposit is required to be adjusted by the plaintiff towards recoverable dues from the defendant. It is already held that the plaintiff is entitled to Rs.18,39,936/ as rent and Rs.93,745/ as pending electricity dues for 2 nd floor of aforesaid property. Similarly, the plaintiff is held entitled to Rs.15,41,580/ as rent & Rs.24,750/ as pending dues electricity dues with respect to the 3 rd floor of aforesaid property. After adjusting the recoverable dues of Rs.19,33,681/ (Rs.18,39,936/ + Rs.93,745/) qua 2nd floor from security deposit of Rs.19,52,820/; Rs.19,139/ is still outstanding towards the defendant. Further, the recoverable dues of 3 rd floor of aforesaid property is Rs. 15,66,330/ (Rs.15,41,580/ + Rs.24,750/) and after adjusting the same from the security deposit of Rs.10,20,000/, the defendant is liable to pay an amount of Rs.5,46,330/( Rs.15,66,330 - Rs.10,20,000) to the plaintiff. After adjusting an outstanding amount of Rs.19,139/ from Rs.5,46,330/, the defendant is liable to pay an amount of Rs.5,27,191/ to the plaintiff.
60. It is not out of place to mention herein that the defendant has claimed an amount of Rs. 26,75,305/ as per para 21, 22 & 23 of preliminary objections of the written statement. Suffice is to state that in the absence of any counter claim, the said averments for recovery of amount from the plaintiff are not tenable.
Civ DJ No. 612610/16 Sh. Amit Gupta Vs. M/s BMA Wealth Creators Ltd. Page No.34 of 35 Relief.
61. In view of above, suit is decreed against the defendant for an amount of Rs.5,27,191/, which shall be payable after deduction of TDS alongwith pendente lite and future simple interest @ 6% per annum. Cost of suit is also awarded in favour of the plaintiff. Decree sheet be prepared accordingly. File be consigned to Record Room.
Announced in the open court on (Manjusha Wadhwa) this 26th September, 2018. Addl. District Judge04 (West) Tis Hazari Courts, Delhi Digitally signed by MANJUSHA MANJUSHA WADHWA WADHWA Date:
2018.09.27 15:42:16 -0500
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