THE HON’BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON’BLE SMT. JUSTICE TIRUMALA DEVI EADA CITY CIVIL COURT APPEAL No.29 OF 2011 JUDGMENT: (Per Hon’ble Smt. Justice Tirumala Devi Eada)

This is an appeal filed by the appellants being aggrieved by the judgment and decree, dated 08.09.2010, passed in O.S.No.998 of 2009 by the learned X Additional Senior Civil Judge, Fast Track Court, City Civil Court, Hyderabad (for short “the trial Court”).

2. The appellants herein are the defendants and the respondent herein is the plaintiff before the trial Court and the parties herein are referred to as they were arrayed in the suit before the trial Court for the sake of convenience and clarity.

3. The case of the plaintiff before the trial Court is that it is a reputed Company dealing with the Government and that as per the letter of intent dated 26.08.2008, it has agreed to take a premises at Begumpet with a carpet area of 8,100 sft in the ground and first floor of ARK Heights constructed over the premises bearing No.1-10-74, S.P. Road, Begumpet, Hyderabad and that the term of lease would be 12 years and the lease rent shall be Rs.8,25,000/- per month excluding the service charges and that the rent was prone for escalation @ 15% after every three years. It is their case that the letter of intent also had a clause that plaintiff shall pay a refundable non-interest bearing security deposit of Rs.49,50,000/- which is equivalent to 6 months initial rent and that the defendants should handover the possession for fit out on or before September, 2008. In pursuance of the letter of intent the plaintiff has paid a sum of Rs.10 lakhs as security deposit as under:

a) Defendant No.1 was paid Rs.1,25,000/-, by way of cheque drawn on HDFC Bank, bearing cheque No.002428, dated 22.09.2008.

b) Defendant No.2 was paid Rs.1,25,000/-, by way of cheque drawn on HDFC Bank, bearing cheque No.002429, dated 22.09.2008.

c) Defendant No.3 was paid Rs.1,25,000/-, by way of cheque drawn on HDFC Bank, bearing cheque No.002430, dated 22.09.2008.

d) Defendant No.4 was paid Rs.1,25,000/-, by way of cheque drawn on HDFC Bank, bearing cheque No.002431, dated 22.09.2008.

e) Defendant No.5 was paid Rs.5,00,000/-, by way of cheque drawn on HDFC Bank, bearing cheque No.002432, dated 22.09.2008.

4. That the said cheques were encashed by the defendants. It is their further case that they have taken a legal opinion from its counsel on 08.10.2008 and it is clear from the legal opinion that the defendant No.5 has made an application and obtained sanction for construction of building vide permit No.125/20 and file No.0417/CSC/TP3/2005, dated 10.02.2006 and has also submitted an application on 30.04.2008 bearing No.BPS/4850/SC/N2/GHMC/2008, dated 30.04.2008 seeking regularization of the unauthorized construction made in deviation of the sanction plan. On seeing the legal opinion the plaintiff sought for clarification and the defendants tried to convince the plaintiff that they would obtain regularization for the deviation. The plaintiff has waited for a considerable period of time till February, 2009 and ultimately addressed a termination letter dated 09.03.2009 and that the defendant No.3 met the plaintiff on several occasions and tried to convince the plaintiff that the deviations are very minor and the application for regularization of the deviations will be disposed off by December, 2008. Further, the defendants failed to deliver possession of the premises for fit out as mandated under Clause-20 of the letter of intent on or before 15.09.2008 and they have further failed to obtain the occupancy certificate. Thus, the plaintiff got terminated the letter of intent. This letter of termination dated 09.03.2009 was sent to all the defendants by registered post but they have been returned by postal authorities but the plaintiff is in possession of the postal receipts and it has once again forwarded the letter of termination on 15.04.2009 and has also sent a letter to the defendants 1 and 2