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2023 Supreme(Kar) 1381

IN THE HIGH COURT OF KARNATAKA
P.S. Dinesh Kumar, C.M. Poonacha , JJ.
M/s Hercules Sports International Regd. and ors. - Appellants
Versus
Mrs. T. Amudha and ors. – Respondents
R.F.A. No. 831 of 2018 (EJE)
Decided On : 21-07-2023

Advocates:
Advocate Appeared:
For the Appellant :Shri. D.R. Ravishankar, Senior Advocate For Shri. Ajit Kalyan, Advocate
For the Respondent:Shri. A. Ravishankar, Advocate

Headnote:(A) Code of Civil Procedure, 1908 - Section 96(1) - Tenancy and Lease Agreements - Ejectment suit filed for recovery of possession and arrears of rent - Defendants' liability for rent at Rs. 1,90,000/- recognized; insufficient evidence for rent reduction claims - Legal notice served for termination of tenancy, followed by suit - Court found Defendants liable for damages due to illegal occupation - Judgment partly allowed. (Paras 1, 6, 12, 22, 24)

(B) Landlord-Tenant Relationship - Terms of the lease are binding unless validly modified by mutual consent - Appellants failed to prove conditions justifying reduction in rental payments or agreement for changes to terms of lease. (Paras 3, 20, 21)

Facts of the case:
Plaintiffs leased premises to Defendants at Rs. 1,90,000/- p.m. with a deposit of Rs. 19 lakhs; dispute arose over rent payments and termination of tenancy. (Paras 3, 4)

Findings of Court:
Plaintiffs entitled to recover arrears of rent and damages for illegal occupation, with amounts calculated and owed determined to be Rs. 70,28,572/-. (Paras 22, 24)

Issues: Main issues included the validity of rent reduction claims by Defendants and the legality of the termination of their tenancy. (Paras 7, 12, 20)

Ratio Decidendi: The lease agreement remains enforceable barring proof of modification; failure of Defendants to provide necessary evidence resulted in upholding of the Trial Court's order. (Paras 20, 21)

Result: Appeal partly allowed, and decree modified directing Defendants to pay outstanding sums.

Table of Content
1. appeal against trial court judgment (Para 1 , 2)
2. details of lease agreement and rent disputes (Para 3 , 4)
3. trial court proceedings and issues framed (Para 5 , 6)
4. arguments from both parties (Para 7 , 8)
5. citations supporting plaintiffs' contentions (Para 9)
6. assessment of arrears of rent (Para 10 , 18 , 20)
7. court's findings on appeal (Para 11 , 12 , 21 , 23)
8. conclusion and order of the court (Para 24)

JUDGMENT :

P.S. Dinesh Kumar, J.

The above first appeal is filed by the Defendants under section 96(1) of the Code of Civil Procedure, 1908 (hereinafter referred to as the 'CPC') challenging the judgment and decree dated 31.1.2018 passed in OS No.7642/2014, whereunder the suit of the Plaintiffs for ejectment has been decreed.

2. For the sake of convenience, the parties herein are referred as per their rank before the Trial Court.

3. It is the case of the Plaintiffs that they let out the suit premises to the Defendants under certain terms and conditions vide Lease Agreement dated 1.2.2011, whereunder the monthly rent agreed to be paid was Rs. 1,90,000/- p.m., and the refundable deposit was Rs. 19.00 lakhs. The said Agreement also contemplated escalation of rent of 15% every three years. It is the further case of the Plaintiffs that the Defendants having become irregular in the matter of payment of rent and the Plaintiffs got issued a legal notice dated 25.6.2014 terminating the tenancy of the Defendants, requested them to vacate and handover vacant possession of the suit premises and to pay the outstanding rent. The Defendants received the said legal notice and responded to the same vide reply notice dated 26.7.2014. That since the Defendants did not comply with the demands made in the legal notice, the Plaintiffs filed a suit seeking a direction to the Defendants to vacate and handover vacant possession of the suit premises and to pay the arrears of rent from November 2013 till July 2014 in a sum of Rs. 20,49,444/- as also damages for illegal occupation from August 2014.

4. The Defendants entered appearance and filed their written statement. The relationship between the parties and the execution of the Lease Agreement dated 1.2.2011 is admitted. However, it was contended by the Defendants that the suit premises consisted of basement and ground floor, each measuring 1500 sq.ft., and the first floor measuring 1600 sq.ft., totally measuring 4600 sq.ft. That they used only the ground floor portion measuring 1500 sq.ft., and they were unable to use the basement and first floor portions, totally measuring 3100 sq.ft. It is the contention of the Defendants that during the rainy season there was no provision for removal of the rain water and there was no proper drainage and hence they were unable to use the basement portion. That the height of the first floor is very low and measures only 7'.5" and the Defendants were unable to store, carry and handle the equipments since the staircase was very narrow. That as per the Structural Engineer's opinion, the structural design of the building was not suitable to keep heavy equipments in the first floor and hence were unable to use the first floor portion.

4.1. That they paid the monthly rent at the rate of Rs. 1.90 lakhs p.m., up to October 2013 and an assurance was given that they will be given deduction for not having used the basement and the first floor portion. That the Plaintiffs have agreed to receive rent at the rate of Rs.96,000/- p.m., since the beginning of the lease i.e., from 1.4.2011. Hence, the Defendants are liable to pay the monthly rent to Plaintiffs only at the rate of Rs.96,000/- p.m. That the Plaintiffs have also put a "To-let" board displaying that the basement and the first floor are available for rent. The Defendants have further contended that they have spent huge amounts for interiors and other fittings and fixtures and they have incurred huge loss in their business. The Defendants also alleged that the termination of tenancy was not proper and

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