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2015 Supreme(Del) 208
High Court of Delhi
SANJEEV SACHDEVA, J.
M/s. Shahirealtech Private Limited – Petitioner
Versus
M/s. Celebration City Projects P. Ltd. – Respondent
Co. Pet. No. 148 of 2014
Decided On : 13-01-2015
For the Petitioner:Balbir Singh, Advocate.
For the Respondent:Sacchin Puri, Hrishika Pandit, Advocates.
The main legal point established is that the determination of liquidated damages and the crystallization of debt depend on whether the damages represent a genuine pre-estimate and the claimant proves the legal injury and loss suffered.
Headnote:
Winding Up - Joint Development Agreement - Liquidated Damages - Tower Vision India (SUPRA)
Fact of the Case:
The Petitioner filed a petition seeking winding up of the Respondent for failure to pay a sum of Rs.17,26,41,591/–, alleging breach of a Joint Development Agreement (JDA) and Collaboration Agreement for a project.
Finding of the Court:
The court found that the issue of damages is yet to be determined by a court of law, and the matter required evidence and disputes required adjudication before the Civil Court.
Issues: The main issue was whether the debt had crystallized or the matter required evidence and disputes required adjudication before the Civil Court.
Ratio Decidendi: The court held that even if there is a clause of liquidated damages, it is for the Court to determine whether it represents a genuine pre-estimate of damages, and the person claiming the damages must prove the legal injury resulted from the breach and that they suffered some loss.
Final Decision: The court granted the Respondent three weeks to file a parawise reply to the petition, with a rejoinder, if any, within four weeks thereafter.
Sanjeev Sachdeva, J.
1. The present petition has been filed by the Petitioner seeking winding up of the Respondent for the alleged failure to pay a sum of Rs.17,26,41,591/–.
2. As per the Petitioner, the Respondent entered into a Joint Development Agreement (JDA) with the Petitioner for development of a Shopping Mall cum Multiplex. On the same day, in order to implement the JDA, a Collaboration Agreement was entered into between the parties for joint development of the project.
3. The contention of the Petitioner is that as per the agreement between the parties the Petitioner had to contribute Rs.20,61,71,015/– towards the cost of the project. The balance cost was to be contributed by the Respondent. As per the JDA the Petitioner was entitled to a specified area in the project.
4. The contention of the Petitioner is that clause 2 of the agreement stipulates that the Respondent would procure a minimum specified rental for the area falling to the Petitioners' allocation. The area has been divided into 2 categories “Regular Area” and “Additional Area”.
5. As per the Petitioner, the Respondent had undertaken to lease out both the Regular as well as the Additional area on the ground floor at Rs.90 per square foot per month on the super area on or before 01st April 2010. The Respondent had also undertaken to rent out the Regular and the Additional area on the first floor at the rate of Rs.70 per square foot per month. The same has been specified as the minimum rental.
6. As per the Petitioner, the agreement stipulates that in the event Respondent is unable to rent out any part of the said space at the minimum rental agreed upon, the Respondent shall pay to the Petitioner the minimum rental as monthly return till such time the space is rented out.
7. The agreement further stipulates that in case the space is rented out at a rate higher than the minimum rental then the Petitioner shall pay to the Respondent additional cost per square foot on the super area towards its contribution for the space stipulated under the agreement.
8. The contention of the Petitioner is that the Respondent under the agreement is responsible for finding the tenants and for renting out the space allocated to the Petitioner. The Collaboration Agreement stipulates that the Respondent has represented that space in the project has already been committed by the renowned companies as lessees as mentioned in the annexure annexed to the Collaboration Agreement. The agreement further stipulates that the sum that the Respondent is obliged to pay to the Petitioner shall be deemed to be a liquidated sum.
9. As per the Petitioner, the Petitioner has already paid to the Respondent the entire amount that the Petitioner had agreed to contribute towards the project. The Petitioner has paid to the Respondent the sum of Rs.20,42,18,913/–. As per the Petitioner there was no other obligation on Petitioner under the Joint Development Agreement and the Collaboration Agreement.
10. As per the Petitioner, the Respondent was to rent out the space falling to the allocation of the Petitioner on or before 01st October 2010 and in case the Respondent was not able to lease out the same, the Respondent was liable to pay the estimated monies to the Petitioner on account of loss of rental income that the Petitioner would have derived from the said space.
11. The contention of the Petitioner is that as per the Agreements, the project was to be ready for fit outs by 01st June 2010 and the project was to be operational by 30th September 2010. As per the Petitioner, the Respondent did not have sufficient money to complete the project and as such the project has not been completed.
12. The Petitioner in the circumstances contends that the Respondent is liable to pay to the Petitioner the minimum rental that the Petitioner was promised for the space falling to the allocation of the Petitioner in terms of the agreement between the parties.
13. As per the Petitioner, the Respondent is liable to pay to
