Interim Order 3

Order Details: Order on Exhibit
Pdf Text: ..1.. Exh10 in LE&C Suit No.49 of 2021
CNR No.MHSCA30002302021
IN THE COURT OF SMALL CAUSES AT MUMBAI
BANDRA BRANCH
ORDER BELOW APPLICATION ( EXHIBIT NO.10)
IN
L.E.&.C. SUIT NO.49 OF 2021
S. A. Developers ...Plaintiffs
Vs.
1. M/s. K.H.K. Hospitality Services
and others ...Defendants
Advocate for the plaintiffs : Adv. K. R. Parekh & Co.
Advocate for the defendants : Adv. Soothe & Associates.
Coram: G. J. Shrisunder, Judge.
C.R.No.32.
Date: 28.10.2021.
ORDER BELOW APPLICATION ( EXHIBIT NO.10):
1. The plaintiffs have filed the present application praying
that pending the hearing and final disposal of the suit, the defendants
may be directed to pay to the plaintiffs Rs.5,62,100/ per month
along with G.S.T. payable on that sum from March 2021 onwards
towards the compensation for use of the suit premises.
The plaintiffs have also prayed that pending the hearing
and final disposal of the suit, the defendants may be directed to pay
to the plaintiffs Rs.25,000/ per day from 17.02.2021 till the date of
handing over quiet, peaceful and vacant possession of the suit
premises as per the Clause 29 of the Agreement dated 05.05.2017.
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The plaintiffs have further prayed that pending the hearing
and final disposal of the suit, the defendants, their agents and
servants and anyone claiming through them be restrained from
assigning, transferring and/or creating any third party rights and/or
part with possession of the suit premises and from removing any
furniture and fixtures from the suit premises viz. all that 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 C.T.S.No.216, 216/1 and 216/2 of Chakala village
situated at Sahar Road, Andheri (East), Mumbai400 099.
(hereinafter referred to as the “suit premises” in short).
2. The plaintiffs' case in brief is as follows:
The plaintiffs have filed the present suit for possession of
the suit premises as more particularly mentioned in the plaint. The
plaintiffs are relying upon the averments made in the plaint. The
plaintiffs and defendant No.1 are Partnership firms and defendant
Nos.2 and 3 are the present partners of defendant No.1firm.
Defendant No.1 are in the business of providing lodging House
facilities on commercial basis. A Leave and Licence Agreement dated
05.05.2017 was duly registered and entered into by and between the
plaintiffs and defendant No.1 (through Defendant No.1's the then
existing partners). Under the said Agreement, the plaintiffs gave the
suit premises on leave and licence basis to the defendants for
conducting their business of providing Lodging house facilities, upon
the terms and conditions and the consideration by way of monthly
compensation for the period of 59 months commencing from
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05.05.2017 to 04.04.2022. The relevant clauses of the Leave and
Licence Agreement are mentioned in paragraph No.3 of the plaint.
The defendants initially discharged their obligations upto the year
2018, though made default in making timely payments of the
monthly compensation as also some of their cheques were
dishonoured by their banks due to insufficient funds in their account.
However, from mid2019 onwards there were certain breaches in the
terms of the Agreement by nonpayment of TDS amount and interest.
The said facts were recorded by the plaintiffs vide their letter dated
18.11.2019 and 28.12.2019.
3. The defendants are in arrears of monthly compensation,
GST and accrued interest, excluding TDS due as per the Agreement
dated 05.05.2017 being ExhibitB to the plaint. The plaintiffs time
and again called upon the defendants to clear the arrears due for the
period from April 2020 to February 2021. However, the defendants
failed and neglected to clear the said dues. The plaintiffs through
their Advocate's notice dated 29.01.2021 terminated the Leave and
Licence Agreement dated 05.05.2017 and called upon the defendants
to handover quiet, peaceful and vacant possession and also pay the
arrears of compensation, GST, interest due thereon. The defendants
were also called upon to pay to the Income Tax Department, the TDS
amount deducted by them but not deposited with the authorities. The
defendants though received the said notice dated 29.01.2021, but
they have failed to comply with the same.
4. Although the Leave and Licence Agreement is
terminated, the defendants have failed to vacate the suit premises
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and clear the legitimate dues due to the plaintiffs. Hence, the
defendants be directed to pay a sum of Rs.5,62,100/ as mentioned in
clause (4) of the said Leave and Licence Agreement to the plaintiffs.
The plaintiffs are also entitled to recover a sum of Rs.25,000/ per
day as a penalty from the defendants for their remaining in
possession and occupation of the suit premises even after termination
of the said Agreement and for withholding and occupying the suit
premises illegally without any justification. The defendants cannot
continue to occupy the suit premises free of charge and get benefits
of the same. Even otherwise the plaintiffs are entitled for such an
interim order under Order XVA of the CPC as applicable in the State
of Maharashtra. Hence, looking to the conduct of the defendants as
stated above and in order to avoid the financial liability which will
fall on the defendants, the plaintiffs apprehend that in order to
overcome the same and invite multiplicity of the proceedings, the
defendants may create any third party right, title or interest or induct
somebody else in the suit premises. The plaintiffs also apprehends
that in fits of anger the defendants may forcibly remove the furniture
and fixtures from the suit premises thereby causing major damage
thereof. The balance of convenience, equity and good conscience are
in favour of the plaintiffs. Hence, this application.
5. The defendants have filed reply vide Exhibit No.19 and
combated the application. The defendants have denied all the
allegations, statements and contention averred in the application.
The defendants have contended that averments mentioned in the
written statement and application vide Exhibit No.16 filed under
Order 7 Rule 11 be treated as part and parcel of this reply to avoid
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repetition. The defendants have contended that the defendants were
the licensee of the plaintiff. The present suit is not maintainable
against the defendants on the grounds that the plaintiffs fail to
disclose the cause of action against the defendants, the suit is barred
by law as Mr. Rahim Contractor is not the partner of the plaintiffs
firm or not submitted that he is the partner, the plaintiffs have
deliberately suppressed the material facts. He has not submitted any
document in respect of the same and, therefore, he has no locus
standi. The suit is premature suit. The claim or prayers are
inconsistent. The defendants have further contended that the
agreement shall ipso facto comes to an end only if the defendants fail
to comply the condition of Para 27 of the Agreement. The
defendants have further contended that the plaintiffs intentionally
need not disclose the fact that the plaintiff withhold the refundable
security deposit Rs.30,66,000/ as per the Agreement dated
05.05.2017 and further Rs.5,00,000/ as per the renewal agreement
dated 08.05.2017. The plaintiffs have further suppressed the fact
that the defendant carried out the alteration and modification work
by due permission of the plaintiff of sum of Rs.2,94,78,265.74. i.e.
conversion of the industrial Gala to Lodging and boarding. The suit
premises is licensed for the period of 15 years. The suit is hit by
Order VII Rule 11 r/w Section 151 of the Code of Civil Procedure. It
is the settled principal of law that institution of the suit is prohibited
for recovery of possession against the tenant/licensee on the ground
of nonpayment of license fee unless the period of 90 days or
prescribed period in the agreement has expired after service of the
notice, such suit cannot be instituted. Hence, this Court has no
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jurisdiction to entertain the suit. The suit is not defined the
relationship between Mr. Rahim Suleman Contractor and the
defendants.
6. The defendants have further contended that they
admitted that they are in arrears, but not since April 2020.
Moreover, whatever is legitimate payable will/shall be paid by them
and they are ready and willing to pay the same. The defendants have
requested the Court that to take into consideration the present
pandemic situation and the reasonable time may or part payment on
installments be provided for the arrears, the sum of Rs.23,60,000/.
The defendants have further contended that they are ready and
willing to pay the sum of Rs.5,62,100/, the license fee and they have
further requested the Court that to take into consideration the
present pandemic situation and part payment with interest be
directed for license fees as per paragraph No.5 of the Agreement
dated 05.05.2017.
7. The defendants have further contended that they will
not create any third party rights and they are not inclined to remove
the furniture and fixture till the Agreement is valid. The Agreement
dated 05.05.2017 itself authorized them to remove the furniture and
fixture as per paragraph No.21 of the said Agreement. If the interim
prayer sought in the application vide Exhibit No.10 is granted, it may
cause irreparable loss to them, which cannot be compensated by any
adequate means. Hence, the defendants have prayed that the
application may kindly be dismissed with compensatory costs.
8. Heard Learned Advocates for both the parties at length.
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9. The points for determination of this Court and findings
thereon with the reasons are as under:
POINTS: FINDINGS:
1. Do the plaintiffs prove that they have
prima facie case in their favour? Yes.
2. Do the plaintiffs prove that balance
of convenience lies in their favour? Yes.
3. Do the plaintiffs prove that irreparable
loss would be caused to them in case
temporary injunction is refused? Yes.
4. Do the plaintiffs prove that under
the facts and circumstances of the case,
the defendants can be directed to pay
to the plaintiffs Rs.5,62,100/ per month
alongwith G.S.T. payable on that sum
from March 2021 onwards towards the
compensation for use of the suit premises? Yes.
5. Whether the defendant can be directed to
pay to the plaintiffs Rs.25,000/ per day
from 17.02.2021 till the date of handing
over quiet, peaceful and vacant possession
of the suit premises as per the Clause 29
of the Agreement dated 05.05.2017? Yes.
6. What order? Application is allowed.
: R E A S O N S :
10. The plaintiffs are relying upon documents, copies of
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which are annexed along with the plaint vide Exhibit No.4, such as
copy of description of the suit premises (ExhibitA), copy of Leave
and License Agreement (ExhibitB), copy of letter dated 17.02.2020
(ExhibitC), copy of letter dated 25.02.2020 (ExhibitD), copy of
letter dated 13.07.2020 (ExhibitE), copy of letter dated 25.02.2020
(ExhibitF)0, copy of letter dated 12.12.2020 (ExhibitG), copy of
letter dated 09.02.2021 (ExhibitH) and particulars of claim (Exhibit
I).
11. The defendants are also relying upon documents, copies
of which are annexed along with the written statement vide Exhibit
No.18, such as copy of the bill of expenses (ExhibitA), copy of
Option Agreement dated 08.05.2017 and copies of Bank Statements
(ExhibitC).
AS TO POINT NOS.1 TO 6:
12. The Court is answering point Nos.1 to 5 together in
order to avoid the repetition of facts as the points are interconnected
with each other.
13. The admitted facts of the suit are that the Leave and
Licence Agreement is registered on 05.05.2017 in between the
plaintiffs and the defendants. The plaintiff is the licensor and the
defendants are the licensees in respect of the suit premises. The
defendants have filed their reply vide Exhibit No.19 and they have
admitted that they are liable to pay arrears of sum of Rs.23,60,000/
(Rupees Twenty Three Lakhs Sixty Thousand only) to the plaintiff.
(As also mentioned in paragraph No.8 of the plaint). They have
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further admitted that they are ready and willing to pay the sum of
Rs.5,62,100/ (Rupees Five Lakhs Sixty Two Thousand and One
Hundred only) as a license fee for use of the suit premises. The
defendants have requested that to take into consideration the present
pandemic situation and reasonable time may be granted to pay part
payment on installments. The disputed fact is that they have
contended that the interim prayer for direction of payment of sum of
Rs.25,000/ per day is badinlaw.
14. Considering the application of the plaintiffs, reply filed
by the defendants, the Court has gone through the record and
proceedings of the matter and after hearing both the sides, the
plaintiffs have prima facie proved that the plaintiff is the licensor and
the defendants are the licensees in respect of the suit premises. The
defendants have admitted the fact that they are liable to pay the sum
of Rs.23,60,000/ as arrears. The defendants have further admitted
the fact that they are liable to pay the sum of Rs.5,62,100/ per
month as a license fee along with GST and this fact is mentioned in
paragraph No.4(ii) of the Leave and Licence Agreement. Paragraph
No.29 of the Leave and Licence Agreement dated 05.05.2017 shows
that in case the licensee fail to vacate the suit premises on expiry of
the licence then the licensee shall be liable to pay to the licensor the
sum of Rs.25,000/ per day for such wrongful occupation as
quantified liquidated damages from the effective date of
expiry/termination of the Agreement till the date of the possession
being handed over to the licensor. The Court do not found merit in
the argument of the Learned Advocate for the defendants that they
may be granted installments or reasonable time for paying the above
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said amounts to the plaintiffs. The above said facts constitute the
position that the balance of convenience lies in favour of the
plaintiffs. This Court do found merit in the argument of the Learned
Advocate for the plaintiffs that there is possibility that the defendants
may create third party rights in the suit premises. Therefore, this
Court think it proper to restrain the defendants from creating third
party rights in the suit premises by passing the order of injunction
against the defendants. If, the application of the plaintiffs is not
allowed, then naturally the plaintiffs will sustain monetary loss. On
the contrary, the defendants are earning money from the suit
premises. The plaintiffs have terminated the Leave and Licence
Agreement by giving the notice to the defendants on 29.01.2021 and
09.02.2021 in respect of the suit premises.
15. In the circumstances, on the basis of above said facts and
reasonings, this Court answer point Nos.1 to 5 in the affirmative. In
answer to point No.6, this Court pass the following order:
: ORDER :
1. Application vide Exhibit10 is allowed.
2. The defendants, their agents and servants and anyone
claiming through them are hereby temporarily
restrained from assigning, transferring and/or creating
any third party rights and/or part with possession of
the suit premises and from removing any furniture and
fixtures from the suit premises viz. all that building
consisting of Basement, Ground Floor, First Floor and
Second Floor having a total constructed carpet area of
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3900 sq.ft. standing on property bearing C.T.S.
No.216, 216/1 and 216/2 of Chakala village situated
at Sahar Road, Andheri (East), Mumbai400 099 till
final disposal of the suit.
3. The defendants are hereby directed that they shall pay
to the plaintiffs Rs.5,62,100/ (Rupees Five Lakhs Sixty
Two Thousand One Hundred only) per month along
with G.S.T. payable on that sum from March 2021
onwards towards the compensation for use of the suit
premises within thirty days from the date of this order.
4. The defendants are hereby further directed that they
shall pay to the plaintiffs Rs.25,000/ (Rupees Twenty
Five Thousand only) per day from 17.02.2021 till the
date of handing over quiet, peaceful and vacant
possession of the suit premises as per the Clause 29 of
the Agreement dated 05.05.2017 within thirty days
from the date of this order.
5. Both parties to note the order.
6. Costs in cause.
Bandra Mumbai. ( G. J. Shrisunder )
Date : 28.10.2021 Judge, C. R. No.32
Order dictated on: 28.10.2021
Order typed on: 28.10.2021
Order checked & signed on: 28.10.2021
/home/steno32/Documents/October2021/Exh10 in LE&C Suit No.4921 to pay compensation and injunction.odt
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