Interim Order 8

Order Details: Order on Exhibit
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CNR No. MHSCA-3000103-2024
IN THE COURT OF SMALL CAUSES, AT MUMBAI.
(BANDRA BRANCH)
Order Below Exhibit 14
In
L.E. & C. Suit No. 8 of 2024
M/s. Hotel Imperial Palace (I) ….... Plaintiff.
V/s.
Finefoods Hospitality Private Limited …... Defendant.
Advocate for the plaintiff : Mr. O. A. Pandey
Advocate for the defendant : Mr. M. A. Chandan
Coram : P. K. Kharate,
Judge, C.R. No. 38 (B.B.)
Date : 13.03.2025
Oral Order :
1. The present application is filed by the plaintiff as per Order
XV-A of the Code of Civil Procedure, 1908.
Facts of the present application are as under:-
2. The plaintiff is a registered partnership firm in the
hospitality business. The defendant is a company incorporated under
the Companies Act, 2013 and has its registered office address as
mentioned in the Cause title. The plaintiff permitted defendant to use
and occupy the portion of the suit building viz. Ground floor consisting
of Restaurant, 3rd floor and 4th floor consisting of rooms for lodging
purpose alongwith rooftop premises of the suit building known as
Imperial Palace, Telly Park Road, Near Criticare Asia, Andheri (East),
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Mumbai 400 069 (hereinafter referred to as the suit premises), on
leave and license basis alongwith the furniture, fittings and fixtures for
the purpose of carrying out its business on leave and license agreement
dated 04/09/2023 for a period of 60 months commencing from
01/08/2023 to 31/07/2028 for the purpose of carrying on defendant’s
business of operating and managing a Restaurant and Lodging business.
3. The plaintiff averred that the defendant is agreed to
deposit security amount of Rs. 84,00,000/- (Rs. Eighty Four Lakhs only)
but the defendant has paid only Rs. 50,00,000/- (Rs. Fifty Lakhs only)
as a security deposit. The defendant has failed to pay the monthly
license fees to the plaintiff. Hence, the plaintiff has issued notice on
17/11/2023 for payment of arrears amount. But the defendant has
replied the notice on 22/11/2023 and irrelevant contentions were
raised by the defendant. The defendant on account of continuous and
multiple breaches and violation of terms and condition of the
agreement, the plaintiff has issued notice on 09/12/2023 to cure the
breached within 10 days from receipt of termination notice. But the
defendant failed and neglected to rectify the breaches. Hence, the
agreement stood terminated on 21/12/2023.
4. The plaintiff further averred that the cheque amount of the
license fees for December, 2023 is also dishonoured. The bank has
stated that there is insufficient funds in the account of defendant. As
per the clause 4.2 of the agreement, the defendant should pay the
license fees till 10th day of each month by way of cheque. Moreover, as
per clause 4.5 the defendant should pay the liquidated damages if the
cheque is dishonoured. Hence, the plaintiff is entitled for recovery of
Rs. 12,63,85,965/- with liquidated damages Rs.1,00,000/- per day. The
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rejoinder filed by the plaintiff vide Exh. 43 and denied the contents of
reply of the defendant.
5. The say filed by the defendant vide Exh. 35 stating that the
defendant has spent large amount for repairs, renovation, interiors and
furnishing of the suit premises. The structures of the suit premises are
not as per the sanctioned plan. The plaintiff did not handed over
license permission, NOCs to the defendant for obtaining the license. The
defendant issued letter on 26/03/2024. The plaintiff was holding FL3
liquor license which was agreed to be handed over to the defendant for
its restaurant and bar business. The balance amount of Rs. 34,00,000/-
(Rs. Thirty Four Lakhs only) was to be paid at the time when the said
liquor license is to be renewed and handed over to the defendant. The
plaintiff failed to handover the said license, hence balance of security
deposit was not paid by the defendant. The defendant has already sent
the reply on 22/11/2023 to the plaintiff.
6. The defendant further averred vide Exh. 40 that the BMC
has taken action against the defendant on 03/07/2024. The BMC has
seized the articles and machinery used in business at rooftop. The
plaintiff has filed similar eviction suit against the previous licensor.
There is heavy leakage and seepage in the suit premises. The plaintiff is
intentionally not doing anything about said leakage and seepage.
Hence, the defendant prayed to reject the application of the plaintiff.
7. Heard both sides at length. Perused record and proceedings
of the suit.
8. The following points arise for my determination. I have
given my findings thereon for the reasons stated as follows :-
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Sr.
Nos.
Points Findings
1) Whether the plaintiff is entitled to claim
the amount mentioned in the
application ? ….. Partly affirmative.
2) What order ? As per final order.
:: R E A S O N S ::
As to Points No. 1 & 2:-
9. In the present case, the plaintiff has filed the application
stating that the defendants be ordered to pay the various amounts as
per prayer clause and calculation amount as per Exh. 3/16. I perused
the Exh. 3/16. The plaintiff has claimed various amount alongwith
liquidated damages. The total amount claimed by the plaintiff is
nearabout Rs. 12,63,85,965/- (Rs. Twelve Crore Sixty Three Lakhs
Eighty Five Thousand Nine Hundred and Sixty Five only)
10. In the present case, it is necessary to see the relevant
provisions i.e. Order XV-A of C.P.C. which states as below:-
“XV-A- Striking off Defence in a Suit by a Lessor [1] In any
suit by a lessor or a licensor against a lessee or a license, as
the case may be, for his eviction with or without the arrears
of rent or license fee and future mesne profits from him,
the defendant shall deposit such amount as the Court may
direct on account of arrears up to the date of the order
(within such time as the Court may fix) and thereafter
continue to deposit in each succeeding month the rent or
license fee claimed in the suit as the Court may direct. The
defendant shall unless otherwise directed continue to
deposit such amount till the decision of the suit”.
11. On perusal of Order XV-A, it appears that the licensor
should file the suit for eviction against the licensee. In the present case,
the plaintiff has filed suit for eviction along with license fees. Hence,
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above provision is applicable in the present case.
12. In the present case, the plaintiff has filed on record registered
leave and licence agreement dated 04/09/2023 between plaintiff and
defendant. On perusal of leave and licence agreement dated
04/09/2023, it appears that there is relation of Licensor and Licensee
between both the parties. On perusal of the agreement, it is for the
period from 01/08/2023 to 31/07/2028. On perusal of clause 4.1, the
following license fees is to be fixed between both parties.
Sr.
No.
Duratoin of the License Period License Fees payable
per month.
(a) 1st Month (only for Rooms) :
1st August 2023 to 31st August, 2023
Rs. 8,50,000/- +
GST as applicable.
(b) 2nd Month (only for Rooms) :
1st September 2023 to 31st October, 2023
Rs. 10,50,000/- +
GST as applicable.
(c) 3rd Month to 12th Month (for entire
Licensed Premises) :
1st November 2023 to 31st July, 2024
Rs. 14,00,000/- +
GST as applicable.
(d) 13rd Month to 24th Month (for entire
Licensed Premises) :
1st August, 2024 to to 31st July, 2025
Rs. 14,70,000/- +
GST as applicable.
(e) 25th Month to 36th Month (for entire
Licensed Premises) :
1st August, 2025 to to 31st July, 2026
Rs. 15,43,500/- +
GST as applicable.
(f) 37th Month to 48th Month (for entire
Licensed Premises) :
1st August, 2026 to 31st July, 2027
Rs. 16,20,675/- +
GST as applicable.
(g) 49th Month to 60th Month (for entire
Licensed Premises) :
1st August, 2027 to 31st July, 2028
Rs. 17,01,709/- +
GST as applicable.
13. In the present case, on perusal of the defence of the
defendant and specifically the reply notice of the defendant dated
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26/12/2023, it appears that the defendant is claiming that they have
spent money for repairs and they suffered expense and loss of Rs.
7,14,91,286/-. Hence, they mentioned in the reply notice that plaintiff
is liable for the said amount. The defendant has filed rejoinder Exh. 45
about calculation in respect of Rs. 7,14,91,286/- (Rs. Seven Crore
Fourteen Lakhs Ninety One Thousand Two Hundred and Eighty Six
only). The learned advocate for the defendant has mentioned various
expenses of day to day life including fixtures and furniture like
renovation, cleaning charges, kitchen charges and fittings, fabrication
work, painting, furniture, labour charges, kitchen materials, lights,
flooring, sound system, polycarbonate sheet, AC, decoration expenses,
camera, cutlery etc. But these are used by the defendant for running
Restaurant business and most of these expenses are required for daily
business of the defendant. Moreover, these are removable articles and
for decoration of restaurant. Hence, plaintiff is not concerned with
these expenses. The prime duty of the defendant to pay the license fees
as per leave and license agreement. Moreover, the defendant has ample
chance to claim the said expenses by filing separate suit. But, at this
juncture, it is necessary to pay the license fees.
14. The plaintiff has filed pursis Exh. 44 about only claiming
the license fees alongwith CGST and SGST. On perusal of the said
calculation, it appears that the plaintiff is claiming license fees
alongwith security of Rs. 34,00,000/-. But at this juncture, the plaintiff
is not entitled for the security deposit and liquidated damages. Hence,
the plaintiff is entitled for only Rs. 2,76,96,605/- from August, 2023 till
March, 2025 as only compensation amount as per clause 4.1 of the
agreement.
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15. In the present case, it is one of the most important fact that
the defendant is neither paying the compensation and also not vacating
the suit premises despite of termination of notice. It is atleast the duty
of the defendant to pay the monthly compensation to the plaintiff as per
leave and license agreement. The defendant has ample chance to claim
their losses and expenses by filing separate suit. But at this juncture,
the plaintiff is entitled for only Rs. 2,76,96,605/- from August, 2023 till
March, 2025 as compensation amount after deducting Rs. 45,29,195/-
as per Table-1 annexed with Exh. 44. Hence, I have recorded my
findings as to Point No. 1 in the partly affirmative and for Point No. 2, I
proceed to pass the following order :-
:: O R D E R ::
1) Application Exh. 14 is partly allowed.
2) The defendant is directed to deposit arrears
of license fees from August 2023 till March,
2025 amounting to Rs. 2,76,96,605/- (Rs.
Two Crore Seventy Six Lakhs Ninety Six
Thousand Six Hundred and Five only)
alongwith 14% interest in the Court within
one month from the date of this order.
3) The defendant is also directed to continue
to deposit license fees as per clause No. 4.1
of the leave and license agreement from
April, 2025, on or before 10th day of each
month, till disposal of the suit.
(Dictated and pronounced in the open court.)
(P. K. Kharate)
Date : 13.03.2025 Judge, C.R. No. 38 (B.B.)
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