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2025 Supreme(P&H) 388

PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
VIKRAM AGGARWAL, J.
M/s Spazeclub Pvt. Ltd. And Another - Appellant
Vs.
M/s Venus Cotspin Pvt. Ltd. And Another - Respondent
CR-1545-2025 (O&M)
Decided On : 25-09-2025

Advocates:
Advocate Appeared:
For the Appellant :Ms. Mehak Kalra, Advocate, Mr. Nitesh Jhajhria, Advocate, Mr. Vipul Sharma, Advocate and Mr. Bhuvi Khatri, Advocate
For the Respondent:Mr. Ramandeep Singh Gill, Advocate and Mr. Manroop Singh Randhawa, Advocate

Non-compliance with lease payment obligations allows the court to strike off the defense under Order 15 Rule 5 CPC.

Headnote:(A) Code of Civil Procedure, Order 15 Rule 5 - Orders directing payment of rent and striking off defense - Appellant challenged orders from the Commercial Court demanding substantial amounts in lease payments for non-compliance of prior agreements - Court affirmed the orders maintaining the principle of upholding contractual obligations unless proven otherwise through evidence presented in trial - Defendants’ failure to pay admitted rent resulted in lawful striking off of their defense. (Paras 24-28)

(B) Jurisdiction and Conduct - The court reviewed the defendants’ conduct and justified ex parte proceedings due to deliberate attempts to delay. Established that non-compliance of orders leads to forfeiture of legal rights. (Paras 25-28)

Facts of the case:
The plaintiffs initiated legal action for payment in a lease dispute after defendants failed to comply with lease terms and conditions, including payment of substantial lease amounts.

Findings of Court:
The Commercial Court correctly struck off the defendants' defense for failing to adhere to the established payment timeline, remarking on their conduct and legal position regarding established rules managing lease agreements.

Issues: Central issues included the default in payment of lease amounts and whether the court was justified in proceeding ex parte against the defendants.

Ratio Decidendi: The court ruled that non-payment of admitted rent necessitates striking off defenses as per Order 15 Rule 5 CPC, emphasizing that parties must comply with lease terms unless counter-evidence is provided at trial.

Result: The revision petition is dismissed.

Table of Content
1. lease agreement details and variations. (Para 2 , 3 , 4)
2. initiation of action for recovery of rent and its implications. (Para 11 , 12 , 17)
3. court’s authority to strike off defense due to non-payment. (Para 24 , 25 , 26)
4. judicial review of procedural orders. (Para 30 , 31 , 32)

JUDGMENT :

Vikram Aggarwal, J.

The instant revision petition, preferred under Article 227 of the Constitution of India, assails the order dated 07.12.2024 (Annexure P.22) passed by the Commercial Court, Gurugram (hereinafter referred to as 'the Commercial Court'), vide which an application preferred by the respondent-plaintiffs under Order 15 Rule 5 of the Code of Civil Procedure (for short 'the CPC') was disposed of with a direction to the petitioner-defendants to pay a sum of Rs.1,43,21,475/- within a period of one month. Challenge has also been laid to order dated 15.01.2025 (Annexure P.23), vide which the defence of the petitioner-defendants was struck off.

2. The facts, as emanating from the revision petition, are that respondent No.1-M/s Venus Cotspin Pvt. Ltd., is the owner of property bearing plot No. 530, Udyog Vihar Phase-V, Gurugram (hereinafter referred to as 'the suit property'). Respondent No.1 is stated to have raised construction over the suit property consisting of a basement and four floors (ground, first, second and third floors) apart from machine(s) room etc. A lease deed dated 07.03.2018 (Annexure P.2) was executed between the respondent-plaintiffs and the petitioner-defendants vide which the suit property was leased out to the petitioner-defendants for a period of five years i.e., from 07.03.2018 to 06.03.2023. The lease amount was fixed at Rs.8,50,000/- per month and the payment of lease money was to commence on 01.04.2018.

3. An addendum to the lease deed was executed on 11.09.2019 (Annexure P.3) vide which the lease amount was modified to Rs.6,50,000/- from Rs.8,50,000/- per month. A rectification deed dated 26.12.2019 (Annexure P.4) was also executed giving right to the petitioner-defendants to sublet the demised premises.

4. Since the lease period was to end on 06.03.2023, parties are stated to have executed a document (Annexure P.5) with regard to a new lease agreement, which was to commence from 01.04.2023 and was to continue till 31.03.2028. The rent is said to have been fixed at Rs.6,50,000/- per month plus GST. There were other terms and conditions, including a clause that except for air conditioning; carpet and miscellaneous work, the remaining renovation expenses, would be borne by the petitioner-defendants.

5. It appears that certain differences cropped up between the parties, as a result of which, certain communications ensued. The petitioner-defendants claimed that they had spent a huge amount of Rs. One crore on renovation, whereas the respondent-plaintiffs, alleging non-compliance of the terms and conditions of the lease deed, including non-payment of lease amount, did not want to proceed ahead.

6. Legal notice dated 03.04.2023 (Annexure P.8) was issued by the respondent-plaintiffs terminating the lease and calling upon the petitioner-defendants to pay the lease amount and to remove all their belongings from the suit property.

7. Reply dated 08.04.2023 (Annexure P.9) was given in which, the claim of Rs. One crore having been spent on renovation, was raised. Rejoinder dated 12.04.2023 to the reply (Annexure P.10) was issued refuting the aforesaid claim leading to issuance of another reply to the rejoinder (Annexure P.11).

8. Finally, a suit for recovery of Rs.1,17,52,263/- (Annexure P.15) was instituted by the petitioner-defendants against the respondent-plaintiffs.

9. The respondent-plaintiffs instituted a suit for possession and recovery of lease charges; mesne profits and damages as also permanent and mandatory injunction against the petitioner-defendants (Annexure P.17). They sought possession of the suit property along with permanent injunction restraining the petitioner-defendants from creati

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