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High Court Of Delhi
BHAWANI INVESTMENTS PRIVATE LIMITED - Appellant
Versus
PROPERTIES - Respondent
Interim Application 5466 of 1985
Decided On : 05/27/1987
LEASE AGREEMENT - BREACH OF CONTRACT - POSSESSION OF PREMISES - INJUNCTION - SPECIFIC PERFORMANCE - INTERPRETATION OF LEASE AGREEMENT - TIME OF THE ESSENCE - DAMAGES.
Fact of the Case:
Plaintiff and Defendant entered into a lease agreement for the first floor of a building to be constructed by the Defendant. The agreement specified a completion date and possession date, and the Plaintiff was to pay the remaining balance of the lease money upon taking possession. The Defendant failed to complete the construction by the agreed date and sought an extension, which the Plaintiff granted. However, the Defendant still failed to complete the construction and obtain an occupancy certificate by the new deadline. The Plaintiff took possession of the premises and demanded that the Defendant complete the construction and obtain the occupancy certificate. The Defendant terminated the agreement and returned the initial payment made by the Plaintiff.
Finding of the Court:
The court found that the Plaintiff was in possession of the premises and that the Defendant had breached the lease agreement by failing to complete the construction and obtain the occupancy certificate by the agreed date. The court also found that the Plaintiff was likely to suffer irreparable injury and substantial loss if forcibly dispossessed.
Issues: 1. Whether the Plaintiff was in possession of the premises. 2. Whether the Defendant breached the lease agreement. 3. Whether the Plaintiff was entitled to an injunction restraining the Defendant from dispossessing the Plaintiff. 4. Whether the Plaintiff was entitled to specific performance of the lease agreement.
Ratio Decidendi: 1. The court held that the Plaintiff was in possession of the premises based on the evidence of a letter to the police station, a certificate from a notary public, and a certificate from security guards. 2. The court held that the Defendant breached the lease agreement by failing to complete the construction and obtain the occupancy certificate by the agreed date. 3. The court held that the Plaintiff was entitled to an injunction restraining the Defendant from dispossessing the Plaintiff because the Plaintiff was in possession of the premises and would suffer irreparable injury and substantial loss if forcibly dispossessed. 4. The court did not decide whether the Plaintiff was entitled to specific performance of the lease agreement because the issue was not relevant to the application for an injunction.
Final Decision: The court granted the Plaintiff's application for an injunction restraining the Defendant from dispossessing the Plaintiff from the premises except in due course of law till the decision of the suit, subject to the condition that the Plaintiff deposit Rs. 2,50,000.00 in the Court by July 15, 1987.
( 1 ) THE plaintiff has filed this suit for the reliefs ofperpetual injunction and mandatory injunction. The allegations disclosed inthe plaint are that the defendants were constructing a building on plot No. 7,masjid Moiii Community Centre, New Delhi, which was under progress. By anagreement of lease dated 22. 4. 1985 the plaintiff agreed to take on lease theentire first floor of the building No. 7, Masjid Moth Community Centre, Newdelhi on the terms and conditions incorporation in the agreement. Theagreement was subsequently got registered. The relevant terms of tagreement are that the defendants would lease out the entire first floor of thesaid building comprising of an area of 200 sq. mtrs, to the plaintiff and thatthe defendants would obtain occupancy certificate on or before 30. 7. 1985 toenable the plaintiff to take possession of the premises. The lease money wasagreed at Rs. 5,000. 00 per month and the possession of the premises was to behanded over by the defendant to the plaintiff with complete electrical and waterconnections and complete in all respects on or before 30. 7. 1985. It was furtherprovided in the agreement that the defendants would allow the plaintiff to workfor the interior decoration, partition etc. and in the event the defendants failedto complete the construction in all respects and hand over the possession ofthe premises to the plaintiff on or before 30. 7. 1985 the plaintiff would havethe option to take possession of the said premises and/or sue the defendantsfor damages, if the plaintiff so desires. It is further staled that on 2. 7. 1985the plaintiff approached the defendant No 1 and visited the said premises toascertain the progress of the construction, and it was found that the progressof the construction was not satisfactory. The defendant failed to completethe building by 30/07/1985 as provided in the agreement. The defendantsought time upto 15. 9. 1985 to complete the premises and hand over its possession to the plaintiff. The reason expressed for extension of time was dueto certain unavoidable circumstances and labour problems. The plaintiffagreed to this extension of time without prejudice to its rights. Thereaftera notice was given on behalf of the plaintiff on 3. 9. 1985 calling upon thedefendants to complete the said premises by 15. 9. 1985. It is stated that thedefendant failed to complete the building premises by 15. 9. 1985. It is claimedthat the plaintiff in exercise of its right under the agreement and particularlyclause (16) took possession of the said premises on 16. 9. 1985, and thereaftercalled upon the defendant to complete the said premises in all respects to makeit usable. The short-comings have been mentioned in para No 11 of the petition. Those are to the effect "the grinding and polishing of the floors, electricalwiring to be laid, window frames and panes to be installed, sanitary fittingsto be installed. It is stated that the defendants did not deliberately complete thepremises and did not obtain the occupancy certificate. By a registered noticethe defendants were called upon to complete the premises. It is stated that byletter dated 16. 9. 1985 the defendant terminated the agreement on the groundsthat the construction was likely to be delayed considerably and the defendantsforwarded the draft of Rs. 50,000. 00 given by the plaintiff to the defendants. The plaintiff alleges that the termination of the agreement by the defendant isillegal, unlawful and malafide and the plaintiff apprehends and has reason tobelieve that the defendant No 1 would try to forcibly dispossess the plaintifffrom the said premises.
( 2 ) ALONGWITH the suit an application, which is under disposal, has beenfiled under Order 39 Rules 1and2 read with Section 151 Civil Procedure Code seeking to restrainthe defendants from dispossessing the plaintiff during the pendency of the suit. The defendant are contesting the claim of the plaintiff. The written statementand reply to this applicat
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