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2025 Supreme(Online)(DEL) 847
HIGH COURT OF DELHI
Anish Dayal, J
M/S PC JAIN TEXTILE PVT LTD THROUGH ITS AUTHORISED REPRESENTATIVE – Appellant
Versus
SH. SHYAM SUNDER SURI AND ANR – Respondent
CS(COMM)-560/2023
The court established that defendants must deposit outstanding rent to be granted leave to defend, emphasizing that the denial of leave is an exception.
Headnote:
(A) Civil Procedure Code, 1908 - Order XXXVII Rule 3(5) - Application for leave to defend - Plaintiff seeks recovery of contractual amounts under lease deeds dated 6th April 2016 - Defendants allege suit barred by limitation and claim of unregistered lease deed - Court finds defendants admitted execution of lease deed-I, while lease deed-II can be used for collateral purposes - Conditions imposed for leave to defend granted, requiring deposit of outstanding rent. (Paras 1-42)
(B) Limitation Act, 1963 - Section 14 - Previous suit withdrawn and mediation proceedings considered for determining limitation - Court finds defendants' plea regarding limitation as a triable issue. (Paras 37-39)
(C) Registration Act, 1908 - Section 49 - Unregistered documents may be admissible for collateral purposes - Court supports admissibility of lease deed-II for collateral transactions. (Paras 26-27)
JUDGMENT :
ANISH DAYAL, J.
I.A. No. 31874/2024 (under Order XXXVII R 3(5) of CPC seeking leave to defend)
1. This application has been filed under Order XXXVII Rule 3 (5) of the Civil Code of Procedure, 1908 (‘CPC’) seeking leave to defend on behalf of defendants.
2. The suit was filed under Order XXXVII of CPC by plaintiff seeking rendition of accounts with respect to contractual amounts due under lease deed dated 6th April 2016, recovery of money due and interest payable.
3. The defendants were served summons for judgment on 11th May 2024 at their residence and the present application seeking leave to defend is filed within the statutory period of 10 days.
4. Plaintiff claims to be the owner of built-up property bearing number 26/1, 26/17 and 26/18, Najafgarh Road, Shivaji Marg, Moti Nagar, New Delhi-110015 (‘suit property’), consisting of basement with total carpet area of 2,500 square feet approximately, ground floor and first floor with total carpet area of 15,000 square feet; and second floor.
5. In February 2016, defendant Nos. 1 & 2 approached plaintiff for taking the basement, ground floor and first floor on rent for commercial purposes of running a banquet hall or restaurant. Defendants were engaged in the business of hospitality and were running the business under name and style of M/s Krishna Hospitality.
6. A lease deed dated 6th April 2016 was executed between the parties qua ground floor and first floor of the said property; was duly registered in the office of Sub Registrar II, Basai Darapur, New Delhi (‘lease deed-I’). This was for a period of 8 years w.e.f. 01st May 2016 till 01st May 2024, with a lock in period of 5 years, monthly rent of Rs. 5 lacs, inclusive of tax rent to be paid on 10th of each calendar month and 15% escalation after the expiry of first 3 years and thereafter, every two years.
7. Another lease deed dated 6th April 2016 was executed between the parties, leasing out the basement of the property (‘lease deed-II’). This lease deed was not registered and the registration was delayed on one pretext or the other. Lease deed-II stipulated a lock in period of 5 years, monthly rent of Rs. 2 lacs per month inclusive of tax, rent to be paid on 10th of each calendar month, monthly rent with 15% escalation after the expiry of first three years and then then after every two years.
8. After carrying out the fit-out work, defendants commenced a banquet hall in the name ‘Coral Bells’ conjointly on the basement, ground floor and first floor. Plaintiff claims that after the tenancy, defendants started committing default in making payment of monthly rent on time and that some of the cheques issued by defendants towards payment of monthly rent, got dishonoured upon presentation.
9. As per clause 2 of lease deed-I, plaintiff was entitled to recover an amount of Rs. 1,000/- as cheque bouncing charges and subsequent delay charges of Rs. 2,000/- per day, till the amounts were paid up.
10. As per clause 2 of lease deed-II, plaintiff was entitled to recover an amount of Rs.1,000/- as cheque bouncing charges and subsequent delay charges at Rs. 5,000/- per day, till the deficiency was made up.
11. As per clause 8(k) of both the lease deeds, default in payment of rent for more than two consecutive months, would trigger termination.
12. Plaintiff issued legal notice dated 25th April 2018 terminating the lease deeds, calling upon defendants to vacate the property and pay the rent and other charges. A reply was sent by defendants, however, they refused to comply. Plaintiff claims that defendants continued to remain in illegal possession and thereafter, plaintiff sold off the premises on 9th August 2021.
13. It is also noted that defendants have handed over possession in 2021 itself. The claim, therefore, is for rental dues, mesne profits, liquidated damages and calculated damages for the period up till 2021, when plaintiff gave up the ownership.
Submissions by counsel for parties
14. The defendants alleged that the plaint is not maintain
