Final Order 16

Order Details: Copy of Judgment
Pdf Text: 1
Presented on : 26.02.2021
Registered on : 25.03.2021
Decided on : 24.12.2025
Duration : Years Month Days
04 09 28
IN THE COURT OF SMALL CAUSES AT MUMBAI
(BANDRA BRANCH)
L.E. & C. SUIT NO.49 OF 2021
(CNR : MHSCA3-000230-2021)
S. A. Developers
A registered partnership firm having
their address at contractor house,
Southolme, 4th Floor, Convent Avenue,
Santacruz (West), Mumbai – 400 054
Email – mail@sadevelopers.com
Mob No.9820481446 … Plaintiff
Versus
1. M/s. K.H.K. Hospitality Services
4, Sai Kripa Housing Society,
LBS Nagar, 90 Feet Road,
Saki Naka, Mumbai – 400 072.
And also having address at
Hotel Mumbai International,
S. A. Chambers, Sahar Road,
Chakala, Andheri (E),
Mumbai – 400 099.
Mob. 912228203344
Email-khkhospitalityservices@gmail.com
2. Mr. Kunhi Mohammed Kalathil
Age – unknown, Occ- Business
4, Sai Kripa Housing Society,
LBS Nagar, 90 Feet Road,
Saki Naka, Mumbai – 400 072.
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And also having address at
Hotel Mumbai International,
S. A. Chambers, Sahar Road,
Chakala, Andheri (E),
Mumbai – 400 099.
Mob 9820640379
Email – not known
3. Mr. Mohammed Kunhi Lainakillath
Age – unknown, Occ – Business
Zeenath Manzil, Thekkepuram,
P.O. Padne, Kasargod – District,
Kerala – 671 312
And also having address at
Hotel Mumbai International
S. A. Chambers, Sahar Road,
Chakala, Andheri (E),
Mumbai – 400 099
Mob-9961511226
Email – not known … Defendants
Advocate for plaintiff : M/s. K. R. Parekh Co. / Mr. M. A. Chandan.
Advocate for defendants : Mr. Pavan Makhija.
Coram : D. P. Kasat,
Judge, C.R.No.32 (B.B.),
Date : 24.12.2025
ORAL JUDGMENT :
This is a suit for recovery of possession and
compensation.
2. The subject matter of the suit is building consisting of
Basement, Ground Floor, First Floor and Second Floor having a total
constructed carpet area of 3900 sq. ft. standing on property bearing
CTS No.216, 216/1 and 216/2 of Village Chakala situated at Sahar
Road, Andheri (East), Mumbai – 400 099, which is more particularly
described in para No.2 of the plaint. (Henceforth, this property is
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called as ‘suit premises’).
3. In the nutshell, the contention of the plaintiff is that
itself and defendant No.1 are the partnership firms. The defendant
Nos.2 and 3 are the partners of defendant No.1 firm. Defendant No.1
is in the business of providing lodging house facilities on commercial
basis. By virtue of registered leave and licence agreement dated
05.05.2017, the plaintiff had given the suit premises on leave and
licence basis for a period of 59 months commencing from 05.05.2017
to 04.04.2022 to the then existing partners of defendant No.1. The
licence fee was agreed at Rs.5,11,000/- per month for first 33 months
after the rent free period of three months i.e. from 05.05.2017 to
04.05.2020. The licence fee was to be paid in advance every month.
Thereafter, the licence fee will increase by 10% after a period of three
years and accordingly, for the remaining period of 23 months i.e.
from 05.05.2020 to 04.04.2022, the defendants were liable to pay a
sum of Rs.5,62,100/- per month. Even it was agreed that the licence
fees alongwith applicable service tax shall be paid in advance by
issuing post dated cheques for 56 months, within a period of three
months from the date of execution of agreement. Apart from this, the
defendants have agreed to pay service tax, GST, MVAT or any other
tax applicable and levied by government or other authorities. Even it
was agreed that in the event if, on or before 5th day of every month,
the licence fee is not paid, it will carry interest at the rate of 18% per
annum. So also, in the event of on account of non payment of licence
fees in advance and failing to rectify said breach within 30 days, the
leave and licence agreement shall come to an end without notice.
Even it was agreed between the parties that upon expiry of licence
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period or earlier determination thereof, if the licensee fails to hand
over possession of suit premises, for every day of such wrongful
occupation, the licensee shall be liable to pay quantified damages of
Rs.25,000/- per day.
4. Accordingly, the defendants initially discharged their
obligations upto the year 2018, though default was made in making
timely payments and also some of the cheques were dishonoured by
the bank of defendants due to insufficiency of funds. However, in mid
2019, there were certain breaches in the terms of agreement by non
payment of TDS and interest. Even these facts were recorded by
plaintiff by letters dated 18.18.2019 and 28.12.2019. From
November 2019, there were breaches committed by defendants in
payment of licence fees alongwith GST. Said breaches continued from
time to time and in February 2020 the defendants were in arrears of
accrued interest on late payments and GST. Even these breaches were
brought to notice of defendants by letters dated 17.02.2020 and
25.02.2020. However, those breaches were never rectified by the
defendants. The cheque for licence fee for the month of April 2020
was deposited on 30.06.2020 as per request of defendants. However,
that cheque was dishonoured for the reason funds insufficient.
Accordingly, on 13.07.2020 by issuing a letter, the defendants were
asked to pay licence fees, failing which the agreement will be liable
for termination. However, defendants failed to pay the compensation
due for the period April 2020 to December 2020. Accordingly, by
virtue of letter dated 12.12.2020, the defendants were called upon to
make payment of said arrears and to issue post dated cheques in
advance for the period from 05.01.2021 to 04.04.2022. However
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defendants went on to asking for time orally without any
commitment in writing. Even the post dated cheques issued to the
defendants towards part payment of their dues came to be
dishonoured for the reason funds insufficient. Once again letter dated
29.01.2021 was issued by the plaintiff and terminated the said
agreement calling upon defendants to hand over possession of suit
premises alongwith payment of arrears of compensation, GST and
interest. However, that letter was returned with remark that the
premises were locked. Again a letter was sent by the advocate of
plaintiff by speed post. However, that letter was returned with remark
unclaimed. Accordingly, again on 09.02.2021 a letter was sent to
defendants, which was delivered to defendants as per tracking report.
Even notice under Section 138 of the Negotiable Instrument Act was
issued to defendants in respect of dishonour of cheques. However,
that was refused by defendants.
5. On the date of filing of suit, the defendants are in arrears
of compensation, GST and interest excluding TDS, amounting to
Rs.72,36,844/-. Even the defendants have not deposited the TDS
amount of Rs.1,53,300/- for the period 01.01.2020 to 31.03.2020
and further sum of Rs.4,72,675/- for the TDS of subsequent period.
As the leave and licence agreement came to be terminated due to
breach committed by defendants, the plaintiff is entitled to recover a
sum of Rs.25,000/- per day towards penalty for remaining in
possession and occupation of suit premises despite termination of
leave and licence. Similarly water and electric charges are also in
arrears. As such, the total claim of plaintiff recoverable from
defendants on the date of filing of suit comes to Rs.78,62,799/-. By
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virtue of letter dated 09.02.2021, the plaintiff had terminated the
leave and licence agreement. However, the defendants refused to
hand over possession of suit premises. Therefore, it is constrained to
file this suit. There is possibility that the defendants may remove the
furniture and fixtures from the suit premises, which will cause
damage. Accordingly, by contending that the plaintiff is entitled for
decree of possession, recovery of arrears of compensation of
Rs.78,62,799/-, compensation of Rs.5,62,100/- alongwith GST from
March 2021 onwards and mesne profits at the rate of Rs.25,000/- per
day from 17.04.2021 till date of recovery of possession, prayed for
decree of suit.
6. The defendants filed their written statement at Exh.18
and resisted the claim of the plaintiff. They have denied all the
adverse allegations of the plaintiff. It is contended that there is no
cause of action to file this suit. The legal relationship of parties is not
mentioned. It is not clarified whether Rahim Suleman Contractor is
the partner of plaintiff. Said Rahim has no locus standie to file this
suit as he is not a partner. Said Rahim was not a party to the
agreement dated 05.05.2017. Said agreement was entered into and
executed by Mr. Adil Akbar Contractor being partner of plaintiff. Said
agreement was executed for a period of 15 years. The defendants
have expended Rs.2,94,78,265.74. They have paid all the licence fees
except mentioned in the suit i.e. Rs.23,60,000/-. They are ready and
willing to pay the same. Except this, other compensations are paid by
them in cash. However, the plaintiff refused to return the cheques.
Even they have paid security deposit of Rs.30,66,000/- at the time of
execution of agreement. So also, they have paid security deposit of
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Rs.5 lakhs at the time of renewal agreement dated 08.05.2021. They
have not committed any breach of terms of leave and licence
agreement. As such, by denying all the allegations of the plaintiff,
they have prayed for dismissal of the suit.
7. From these rival contentions of the parties, my learned
predecessor framed issues at Exh.28, which are reproduced
hereunder and the findings against them are recorded followed by
reasons thereunder :
ISSUES FINDINGS
1. Does the plaintiff prove that the leave
and licence agreement dated
05.05.2017 stands terminated ? Yes.
2. Does the plaintiff prove that the
plaintiff is entitled to recover a sum
of Rs.78,62,799/- towards the arrears
of monthly compensation, GST, etc.
upto the date of filing of the suit ?
Yes.
3. Does the plaintiff prove that it is
entitled to recover a sum of
Rs.25,000/- per day from the date of
termination of the agreement till
possession of the suit premises is
handed over to plaintiff ?
Yes, from 13.03.2021 till
recovery of possession of
suit premises.
4. Do the defendants prove that the suit
is barred by law ? No.
5. Do the defendants prove that they are
entitled to continue as licensee in the
suit premises, under the option
agreement dated 08.05.2017 ?
No.
6. Whether the plaintiff is entitled for
mesne profits and / or an enquiry
under Order XX Rule 12 against the
defendants ?
As the quantified
liquidated damages as per
agreement dated
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05.05.2017 are granted,
there is no necessity to
grant mesne profits
separately.
7. Whether the plaintiff is entitled to
recover the possession of the suit
premises ? Yes.
8. What order and decree ? Suit is decreed as per final
order.
REASONS
8. In support of their claim, the plaintiffs have examined
their partner Mr. Rahim Suleman Contrator as PW1 by way of
affidavit and additional affidavit of examination-in-chief at Exh.29
and 50 and closed their evidence by pursis Exh.58, 60 and 68. Apart
from this oral evidence, the plaintiffs have relied on documents viz.
verified copy of extract of registration of firm at Exh.41, verified true
copy of registered leave and licence agreement dated 05.05.2017 at
Exh.42, original structural stability certificate dated 17.02.2017 at
Exh.43, office copies of letters dated 18.11.2019, 28.12.2019,
17.02.2020, 25.02.2020, 25.02.2020, 12.12.2020, 29.01.2021,
09.02.2021 alongwith acknowledgment sheets at Exh.44 colly.,
Exh.45 colly., Exh.46 colly., 47 colly., 48 colly, reply dated 20.02.2021
at Exh.49, office copy of reply dated 03.03.2021 at Exh.50, digital
letter and plan downloaded from municipal web site at Exh.52, office
copy of letter dated 13.07.2020 at Exh.53, copies of order dated
28.10.2021 and 23.03.2023 at Exh.54 and 55, copy of statement of
account at Exh.56 and statement of compensation at Exh.64, orders
dated 28.10.2021 and 23.03.2023 at Exh.66 and 67.
9. On the contrary, as per order passed in Revision
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Application No.56 of 2023 dated 12.02.2024 and in Writ Petition
No.3628 of 2024 dated 29.07.2024, as the defendants have failed to
comply with the interim order passed below Exh.10, their defence
came to be struck off. Accordingly, the defendants were given
opportunity to cross examine the PW1 on law points and produce
documentary evidence, if any. However, the defendants have merely
produced photocopies of some documents alongwith list Exh.72.
However, being photocopies, those are not admissible in evidence. As
such, the defendants have produced no admissible evidence on
record.
10. Heard learned advocate Mr. M. A. Chandan appearing on
behalf of plaintiff and learned advocate Mr. Pawan Makhija for
defendants. The learned advocate of plaintiff submitted his written
notes of arguments at Exh.69.
11. The sum and substance of arguments of learned
advocate of plaintiff is that the order of striking off defence of
defendants is confirmed upto Hon'ble High Court. As such, the
contentions raised by the plaintiff in plaint and evidence have
remained unchallenged. Accordingly, in terms of leave and licence
agreement dated 05.05.2017, the contentions of the parties are
required to be weighed. The plaintiff has produced the relevant
evidence in order to substantiate its claim. Even the claim of
compensation and mesne profits put forth by the plaintiff is
justifiable. Accordingly, he prayed for decree of suit.
12. The sum and substance of arguments of learned
advocate of defendants is that the claim put forth by plaintiffs is
totally false. The plaintiff has violated the fundamental rights of the
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defendants by installing CCTV camera. The plaintiff has also violated
the rights of the defendants by making complaints against defendants
with the municipal authorities. Therefore, the defendants were
constrained to file Municipal Appeal and get the licence from the
competent authorities. So also, the plaintiff has not considered the
period vanished due to Covid 19 pandemic. Accordingly, he prayed
for dismissal of suit.
AS TO ISSUE NO.1 :-
13. As regards this issue, the plaintiff has contended that by
notices dated 29.01.2021 and 09.02.2021, the leave and licence of
defendants came to be terminated due to breaches committed by the
defendants in payment of licence fee / compensation. In support of
this contention, the plaintiff has placed on record the documents at
Exh.47 colly. and 48 colly. However, the notice dated 29.01.2021
appears to be returned with an endorsement closed, whereas the
notice dated 09.02.2021 (Exh.48 colly.) appears to be delivered to
the defendants on 11.02.2021.
14. It is also pertinent to note that by reply dated
20.02.2021, the defendants have replied the notice dated 09.02.2021
and thereby denied the contentions raised by the plaintiff in his
notice dated 09.02.2021. However, careful perusal of the documents
at Exh.44 colly., 45 colly. and 46 colly. categorically shows that on
various occasions, the plaintiff has demanded outstanding amount of
licence fee alongwith GST, interest, etc.
15. In this background, if the leave and licence agreement
(Exh.42) between the parties is perused, it appears that the
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defendants have agreed to pay licence fee / compensation at the rate
of Rs.5,11,000/- per month for first 33 months after rent free period
of three months and 10% increase i.e. Rs.5,62,100/- per month for
remaining 23 months. So also, the defendants have agreed to pay the
licence fee in advance every month. However, from the above stated
documents and evidence of PW1, it becomes crystal clear that the
defendants have violated these agreed terms of leave and licence
agreement by committing default in payment of licence fee /
compensation as agreed. It is also pertinent to note that the
defendants have not placed on record any iota of evidence in order to
show that they have paid the licence fees and other taxes to the
plaintiff within time agreed by them as per agreement dated
05.05.2017.
16. In such circumstances and in view of the evidence placed
on record, the only inference that can be drawn that due to defaults
committed by the defendants, the plaintiff was constrained to issue
notice of termination dated 09.02.2021 and thereby terminate the
leave and licence agreement dated 05.05.2017. Accordingly, the issue
No.1 under determination is answered in the affirmative.
AS TO ISSUE NO.2 :-
17. As regards this issue, the plaintiff has specifically
contended in the plaint as well as evidence on the date of filing of
suit, the defendants are in arrears of Rs.78,62,799/- towards monthly
compensation, GST, interest, etc. In this regard, during the cross-
examination of PW1, except mere suggestions and their denial,
nothing has been brought on record by the defendants to discard the
contentions of the plaintiff regarding the amount of arrears
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contended by it. More so, though the defendants have tried to
contend that except an amount of Rs.23,60,000/-, they are not liable
to pay anything extra to the plaintiff, no such suggestion was put to
the plaintiff during cross-examination. More so, though the
defendants have tried to contend that during Covid period and
subsequently the amount were paid by them to the plaintiff by cash,
they have produced no iota of evidence in that regard.
18. In such circumstances and in view of unrebutted
evidence of plaintiff, the claim of arrears of Rs.78,62,799/- is
definitely justified and proved by the plaintiff. More so, the
calculations given by the plaintiff in that regard are in accordance
with the agreement dated 05.05.2017. Therefore, there appears
absolutely no reason to discard the claim of plaintiff towards arrears
of monthly compensation and taxes as claimed. Consequently, the
issue No.2 under determination is answered in the affirmative.
AS TO ISSUE NO.3 :-
19. As regards this issue, it is significant to note here that in
the leave and licence agreement dated 05.05.2017 at Exh.42, in
clause No.27, the parties have specifically agreed that in the event of
defendants committing breach of agreement by non payment of
licence fee or otherwise, failing to rectify the non payment within 30
days and other breaches within 60 days of the notice in writing by
the plaintiff, the agreement shall ipso-facto come to an end.
20. So also, in clause No.29 of the said agreement, the
parties and more particularly the defendants have specifically agreed
that in the event if the defendants failed to vacate the licence
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premises on the expiry of licence period or earlier determination
thereof, the licensee i.e. defendants shall be liable to pay a sum of
Rs.25,000/- for every day for such wrongful occupation as quantified
liquidated damages, which will be effective from the date of
termination till the date of handing over possession of licence
premises to the licensor i.e. plaintiff.
21. In view of these clearly admitted terms of agreement
dated 05.05.2017, there appears absolutely no exaggeration in the
claim put forth by the plaintiff. As discussed above, by virtue of notice
dated 09.02.2021, the plaintiff has terminated the leave and licence
agreement dated 05.05.2017 and asked for vacant and peaceful
possession of suit premises from defendants alongwith arrears of
compensation. This notice was received to defendants on 11.02.2021.
However, despite receipt of notice, the defendants have not complied
with it within the period of 30 days as agreed in the leave and licence
agreement. In such circumstances, the claim of quantified liquidated
damages of Rs.25,000/- per day from 13.03.2021 onwards would be
justifiable in terms of leave and licence agreement 05.05.2017.
22. As such, in view of the admitted terms of leave and
licence agreement dated 05.05.2017 (Exh.42), the termination of
leave and licence will come to effect from 13.03.2021 and the
possession of defendants on suit premises would become wrongful
from 13.03.2021 only. In such circumstances, the plaintiff would be
entitled to recover quantified liquidated damages of Rs.25,000/- per
day from defendants from 13.03.2021 till the date of recovery of
possession. Consequently, the issue No.3 under determination is
answered accordingly.
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AS TO ISSUE NOS.4 AND 5 :-
23. At the outset, as the defence of the defendants has been
struck off, these issues casted on the basis of their contentions in
written statement, does not survive anymore. However, even if these
issues are considered on merits, in view of the admitted fact that
defendants are licensee of suit premises on the basis of leave and
licence agreement dated 05.05.2017, there appears absolutely no
substance in the contentions of the defendants regarding denial of
relationship of parties and maintainability of this suit. Therefore,
there is no question of bar of this suit by any law.
24. More so, though the defendants have tried to contend
that they are entitled to continue as licensee in the suit premises as
per option agreement dated 08.05.2017, they have placed no iota of
evidence in order to substantiate this contention. It is also essential to
mention here that in view of above discussion and finding recorded
to issue No.1 above, it has been clarified that the licence of
defendants in respect of suit premises has been validly terminated by
the plaintiff. In such circumstances, the question of coming into force
of option agreement, if any, executed between parties, does not arise.
Accordingly, the issue Nos.4 and 5 under determination are answered
in the negative.
AS TO ISSUE NO.6 :-
25. As regards this issue, the plaintiff has claimed mesne
profits or enquiry under Order 20 Rule 12 of the Code of Civil
Procedure in respect of mesne profits. However, in view of finding
recorded to issue No.3 above, it has been clarified and held that as
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per the agreement dated 05.05.2017, the plaintiff is entitled to claim
quantified liquidated damages in respect of suit premises for the
wrongful occupation of the defendants since the date of termination
of leave and licence. In such circumstances, question of granting
mesne profits separately does not arise nor there appears any
necessity to conduct separate enquiry in that regard. Consequently,
the issue No.6 under determination is answered accordingly.
AS TO ISSUE NOS.7 AND 8 :-
26. In view of the findings recorded to all above issues, it has
been clarified that the leave and licence agreement dated 05.05.2017
has been terminated by the plaintiff. More so, it has also been
clarified that since the date of termination i.e. 13.03.2021, the
defendants are in wrongful occupation of the suit premises, the
plaintiff is definitely entitled for recovery of possession of suit
premises. Consequently, the issue No.7 under determination is
answered in the affirmative and in answer to issue No.8, following
order is passed :
ORDER
1. The suit is hereby decreed with costs.
2. The defendants are hereby directed to
deliver vacant and peaceful possession of the
suit premises to the plaintiff within a period
of two months from the date of this order.
3. The defendants are further directed to pay
an amount of Rs.78,62,799/- to the plaintiff,
towards the arrears of licence fees within a
period of two months from the date of this
order.
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4. The defendants are further directed to pay
compensation / quantified liquidated
damages at the rate of Rs.25,000/- per day
from 13.03.2021 till the date of recovery of
possession of suit premises.
5. Decree be drawn up accordingly.
(Dictated and pronounced in open court.)
(D. P. Kasat)
Judge, C.R.No.32 (B.B.)
24.12.2025
Dictated on : 24.12.2025
Checked & signed on : 24.12.2025
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