Lessee cannot withhold possession post-termination for non-refund of security deposit; COVID-19 pandemic effects justify suspension of rent obligations for specified duration.

JUDGMENT :

VIBHU BAKHRU, C. J.

1. For the reasons stated in the application―I.A.No.1/2025, the same is allowed. The delay of twenty five days in filing the appeal is condoned.

2. The appellants have filed the present appeal under Section 13 (1A) of the Commercial Courts Act, 2015, impugning a judgment and decree dated 16.11.2024 [impugned order delivered by the Court of LXXXVII Additional City Civil and Sessions Judge, Bengaluru [Commercial Court] in Com.O.S.No.124/2023.

3. The appellants [hereafter also referred to as plaintiffs] had filed the said suit, inter alia, seeking a decree for eviction and for recovery of a sum of `1,76,20,040.25/- (Rupees one crore seventy six lacs twenty thousand forty and twenty five paisa only). The said amount comprised of: (i) `69,75,900/- as arrears of rent for the period from 01.04.2000 to 30.11.2021; (ii) `53,58,937.50/- towards damages for holding over from 01.02.2021 till the date of filing of the suit that is, 21.01.2023; (iii) Interest on arrears of rent quantified at `30,64,932/- till 16.01.2023; and (iv) a sum of `22,20,270.75/- towards service tax. Additionally, the plaintiffs also sought further damages from the date of termination of the lease in question, that is from 16.11.2021, till delivery of vacant possession of the demised premises along with interest at the rate of 18% per annum. The plaintiffs also sought a decree for recovery of water and electricity charges.

4. The learned Commercial Court passed the impugned judgment partially decreeing the suit and directed that the possession of the scheduled property be handed over to the plaintiffs against receipt of security deposit amount paid by the defendant. The other prayers were rejected.

Factual Context & The Dispute

5. The plaintiffs are the owners of the commercial property along with the building constructed thereon bearing Municipal No.433/30/1, 28^th "A" Cross, 10^th Main, 4^th Block, Jayanagar, Bengaluru-560011. The parties have entered into a registered lease agreement dated 01.12.2019 in respect to the demised premises, which is described as northern portion of the ground floor of the premises bearing Municipal No.433/30/1, 28^th "A" Cross, 10^th Main, 4^th Block, Jayanagar, Bengaluru-560011 [the demised premises] for a term of nine years commencing from 01.12.2019 and expiring on 30.11.2028. The said lease agreement [the lease agreement] was registered with the concerned Sub-Registrar on 17.12.2019.

6. The parties had agreed that the monthly rent for the demised premises would be `3,50,000/- per month (Rupees three lacs fifty thousand only) for the initial period of 12 months. Thereafter, the same would be increased by 5% successively for every 12 months. The lease agreement sets out a tabular statement clarifying the monthly rental for each of the nine years. The said tabular statement is reproduced below:

7. The parties agreed that the said rent would be paid after deducting the applicable Tax Deducted at Source [TDS] and the defendant would also pay the Goods and Services Tax [GST] on the proportionate share of rents. It was ag