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2025 Supreme(Mad) 3921

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.VELMURUGAN, J.
The Indian Officers' Association, represented by its General Secretary Mr.R.Murthy - Appellant 
Versus 
M/s.Modfurn Systems India Private Limited - Respondent 
C.S.No.528 of 2019
Decided on : 03-01-2025



Advocates:
Advocate Appeared:
For the Appellant : Mr.AR.L.Sundaresan, Senior Counsel assisted by Ms.M.Meena Rukmani
For the Respondent: Mr.P.J.Rishikesh

The court affirmed that a tenant's agreement to revised rent constitutes acknowledgment of arrears, and failure to provide evidence for a full settlement negates defenses regarding non-payment.

Headnote:(A) Transfer of Property Act, 1882 - Section 106 - Societies Registration Act, 1860 - Recovery of arrears of rent - The plaintiff, a registered association, filed suit against two tenant defendants for arrears of revised rent and maintenance charges from 01.08.2008 to 29.02.2016 totaling Rs.6,22,68,474/-. Despite agreements on revised rents, defendants failed to pay, claiming full settlement with a prior payment of Rs.1 crore. - The Court ruled that the defendants admitted arrears and that the defendants were liable for the full amount, finding no evidence of a full and final settlement. (Paras 60-64)

(B) Burden of Proof - The plaintiff successfully established their claim for rental arrears, while the defendants failed to prove their defense regarding a settlement or discharge of liability. The court clarified the standard of proof required in civil disputes compared to criminal cases. (Paras 70-72)

(C) Suit Maintainability - The court held that efforts to separate the defendants as different entities lacked substantiation given shared business operations and agreed terms, making the suit maintainable against both defendants. (Paras 46-49)

(D) Costs - The defendants were ordered to pay costs as the suit was decreed in favor of the plaintiff. (Paras 61-62)

Table of Content
1. establishment of the plaintiff's societal and ownership status. (Para 2)
2. court's analysis on the entitlement of claim and agreed rents. (Para 3 , 30 , 31)
3. discussions and proposals regarding rental adjustments. (Para 4 , 5 , 6 , 7 , 8 , 9)
4. importance of documented proof in confirming claims of liability. (Para 12)
5. court confirms obligations of tenants for unpaid rent as stated in correspondence. (Para 32 , 33)
6. findings on tenant liabilities and the nature of agreements entered upon. (Para 34 , 35 , 36 , 37)
7. evidence of default and absence of settlement affirming landlord's claim. (Para 38 , 39 , 40)
8. ruling in favor of plaintiff on reclaiming arrears. (Para 61)

JUDGMENT :

The plaint (numbered as C.S.528 of 2019) is filed under Order IV Rule 1 of the Madras High Court Original Side Rules, read with Order VII Rule 1 of the Code of Civil Procedure (for short, CPC), for passing judgment and decree as follows:

(a) directing the 1st defendant to pay a sum of Rs.5,99,37,466/- (Rupees Five Crores Ninety Nine Lakhs Thirty Seven Thousand Four Hundred and Sixty Six only) and also directing the 2nd defendant to pay a sum of Rs.23,31,008/-(Rupees Twenty Three Lakhs Thirty One Thousand and Eight Only) together with interest 12% per annum thereon to the plaintiff from the date of presentation of the plaint till date of realisation in full.

(b) directing the defendants to pay the costs of these proceedings to the plaintiff.

2. The case of the plaintiff in a nut-shell, is as follows:

(a) The plaintiff-Association was established in the year 1907 and registered under the Societies Registration Act, 1860 [Act No.XXI of 1860 – An Act for the Registration of Library, Scientific and Charitable Societies ] and its Registration Number is 2/1909-1910. The bye-laws of the plaintiff-Association is referred to as document No.1. The plaintiff is the owner of the building known as 'Justice Pratap Singh Building' (for short, the said building), which is situated at No.69, Thiru-Vi-Ka High Road, Royapettah, Chennai – 600 014. The said building was constructed as a commercial cum office complex consisting of ground and two upper floors. The land having a total extent of 25 grounds and 797 sq.ft on which the above building stands was acquired by the plaintiff-Association out of the beneficial and liberal contributions made by its members. The entire building has several shop portions. As many as 58 tenants are occupying the said building. The defendants herein are tenants under the plaintiff occupying several shops in the ground, second and third floors of the said building in the I O A complex.

(b) The plaintiff states that from 01.08.2008 it revised the monthly rental and maintenance charges payable by the tenants occupying various shops in the said building in the I O A complex. Majority of the tenants started paying the revised rent and maintenance charges from 01.08.2008 itself. The plaintiff terminated the tenancy of those tenants, including the defendants, who refused to pay the revised rent and maintenance charges and continued to pay the rent and maintenance charges at the old rate, by issuing notice under Section 106 of the Transfer of Property Act and filed suits against them for recovery of possession and for recovery of the difference of the amount being paid by them and the damages for use and occupation fixed and demanded by its. The plaintiff filed the above suit against the defendants and other tenants in its capacity as a Charitable Trust.

(c) Thus, the defendants through their letter dated 03.01.2014, the defendants offered to pay revised rent as demanded by the plaintiff in respect of the shops occupied by them in the ground and first floors and requested the plaintiff to reduce the rent to Rs.20/- per square foot in respect of the second floor occupied by them. The said letter dated 03.01.2014 is filed herewith and is referred to as document No.2. The plaintiff was not agreeable for reducing the rent as requested by

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