2011 Supreme(Del) 561

IN THE HIGH COURT OF DELHI
V.K. Jain, J.
Silicon Graphics Systems India Private Limited
Vs.
NIDAS Estates Private Limited and Ors.
CS(OS) 1661/2003 and CS(OS) No. 2108/2011
Decided On: 30.08.2011

The court held that the Plaintiff was entitled to recover the balance security deposit of Rs. 13,74,835/- along with interest thereon from the Defendant No. 1. The court also held that the Plaintiff was entitled to recover the amount of Rs. 2,02,100/- being the security deposit paid by it with Karnataka Electricity Board through and on behalf of Defendant No. 1. However, the court held that the Plaintiff was not entitled to recover the amount of Rs. 6,25,000/- which it had deposited with Defendants No. 2 and 3 for the genset and common maintenance services, as there was no proof that the deposit was made on behalf of Defendant No. 1.

Headnote:

LICENCE AGREEMENT - RECOVERY OF SECURITY DEPOSIT - REFUND OF SECURITY DEPOSIT - ADDITIONAL RENT - INTEREST - RENT ARREARS - RESTORATION OF PREMISES - TERMINATION OF LICENCE - ADDITIONAL ELECTRICITY LOAD - ADDITIONAL LICENSE FEE - ADJUSTMENT OF SECURITY DEPOSIT - DAMAGES - NOTICE - POSSESSION OF PREMISES - REASONABLE AMOUNT - RENT - SECURITY - TENANT/LICENSEE - UNPAID AMOUNT - VACANT POSSESSION.

Fact of the Case:

Plaintiff and Defendant No. 1 entered into a license agreement for premises bearing No. 305-A and 305-B, Embassy Square, 148 Infantry Road, Bangalore. The license was renewed for a further period of three years expiring on 31st August 2001. Plaintiff deposited a sum of Rs. 2,02,100/- as security with Karnataka Electricity Board on behalf of Defendant No. 1 and a sum of Rs. 6,25,000/- with Defendants No. 2 and 3 for providing standby generating sets and upkeep and maintenance of the premises. On expiry of the term of the license, Defendant No. 1 requested the Plaintiff not to take refund of the deposits made by it with Karnataka Electricity Board and Defendants No. 2 and 3 since it wanted to retain the benefit of the higher load sanctioned by Karnataka Electricity Board as also the generator sets made available by Defendant No. 2 and 3 and agreed to pay an equivalent amount to the Plaintiff company. Plaintiff called upon Defendant No. 1 to either renew the license or to take back possession of the licensed premises, against refund of security deposits. Defendant No. 1 did not agree to the terms offered by the Plaintiff for renewal of the license and the Plaintiff had to repeatedly call it upon to take possession of the licensed premises against security deposits. This led to a meeting between the officials of the Plaintiff and Defendant No. 1 on 5th October 2001, wherein the possession of the licensed premises was again offered to Defendant No. 1 against refund of security deposits. Defendant No. 1 did not come forward to take possession of the premises and also did not refund the security deposit, despite repeated reminders. It rather sent a notice claiming a sum of Rs. 25,29,582.50 from the Plaintiff towards license fee for the period from September to December, 2001. In a legal notice dated 14th February 2002 Defendant No. 1 also raised a claim of Rs. 9,58,448/- on the Plaintiff company, after adjusting the security amount of Rs. 27,45,000/-. Finally Defendant No. 1 took possession of the premises using a duplicate set of keys and also failed to release the security deposits and other deposits amounting to a total sum of Rs. 35,72,100/-. According to the Plaintiff, Defendants No. 2 and 3 have also failed to refund the amount of Rs. 6,25,000/- which it had deposited with them, in respect of the aforesaid premises, taking the stand that this deposit was made by the Plaintiff on behalf of Defendant No. 1. The Plaintiff has now claimed the aforesaid sum of Rs. 35,72,100/- from all the Defendants along with interest on that amount ' 18 % per annum amounting to Rs. 9,51,314/-, thereby raising a total claim of Rs. 45,23,414/-. Alternatively the Plaintiff has sought Rs. 36,74,647/- comprising security deposit of Rs. 27,45,000/- and a sum of Rs. 2,02,100/- deposited with Karnataka Electricity Board along with interest on that amount ' 18% per annum making a total sum of Rs. 36,74,647/- and a sum of Rs. 8,48,767/- from Defendants No. 2 and 3 which comprises Rs. 6,25,000/- towards security deposit and the balance amount towards interest ' 18% per annum.

Finding of the Court:

The court held that the Plaintiff was entitled to recover the balance security deposit of Rs. 13,74,835/- along with interest thereon from the Defendant No. 1. The court also held that the Plaintiff was entitled to recover the amount of Rs. 2,02,100/- being the security deposit paid by it with Karnataka Electricity Board through and on behalf of Defendant No. 1. However, the court held that the Plaintiff was not entitled to recover the amount of Rs. 6,25,000/- which it had deposited with Defendants No. 2 and 3 for the genset and common maintenance services, as there was no proof that the deposit was made on behalf of Defendant No. 1.

Issues: 1. Has the Plaintiff been always willing to make over possession w.e.f 1.9.01 and accordingly not liable to pay any charges for any period beyond 1.9.01? 2. Has the Defendant been in possession w.e.f. 1.9.01 by virtue of Clause of the Licence Deed? 3. Is the Defendant entitled to adjust the security amount in the manner stated by him in the written statement? 4. Is the Plaintiff entitled to recover the suit amount and if so from whom? 5. Relief.

Ratio Decidendi: The court held that the Plaintiff was entitled to recover the balance security deposit of Rs. 13,74,835/- along with interest thereon from the Defendant No. 1. The court also held that the Plaintiff was entitled to recover the amount of Rs. 2,02,100/- being the security deposit paid by it with Karnataka Electricity Board through and on behalf of Defendant No. 1. However, the court held that the Plaintiff was not entitled to recover the amount of Rs. 6,25,000/- which it had deposited with Defendants No. 2 and 3 for the genset and common maintenance services, as there was no proof that the deposit was made on behalf of Defendant No. 1.

Final Decision: CS(OS) No. 2108/2011 (Suit No. 100/2005/02 of District Court) is hereby dismissed with costs. In Suit No. 1661/2003, a decree for Rs. 20,41,939/- with proportionate cost and pendente lite and future interest ' 6% per annum is passed in favour of the Plaintiff and against Defendant No. 1.