Order 2

Order Details: Order on Exhibit
Pdf Text: ..1.. Exh16 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.16)
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: 06.10.2021.
ORDER BELOW APPLICATION ( EXHIBIT NO.16):
1. Defendant Nos.2 and 3 have filed the present application
praying for rejection of the suit under Order VII Rule 11(a) and (d)
r/w Section 151 of the Code of Civil Procedure contending therein
that no cause of action is arose to file the present suit against the
defendants and this suit is barred by law.
2. The defendants have submitted that the defendants were
the licensee of the plaintiffs i.e. S.A. Developer. The plaintiffs have
filed the present suit against the defendant for restoration of
possession of the suit property and claim of sum of Rs.78,62,799/ as
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well as for injunction more particularly mentioned in prayer clause of
the plaint. The present suit is not maintainable against the
defendants on the grounds that the plaint is liable to be rejected in
accordance with the provisions of Order VII Rule 11 r/w Section 151
of the Code of Civil Procedure as the plaint/suit fails 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 plaintiffsfirm or not
submitted that he is the partner, the plaintiffs have deliberately
suppressed the material fact that the plaintiff taken the refundable
security deposit. He has not submitted any document in respect of
the same and, therefore, he has no locusstandi. The suit is
premature suit as the date of notice of termination is 09.02.2021 and
the plaint/suit is filed on 26.02.2021. The claim or prayers are
inconsistent. The plaintiff filed the present suit to take undue
advantage of nonpayment and default of license fees due to the
nationwide lockdown i.e. midnight of 25.03.2020.
3. The defendants have further submitted that the plaint
does not disclose any cause of action for filing the present suit. 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.
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conversion of the industrial Gala to Lodging and boarding. The suit
premises is licensed for the period of 15 years. The Agreement also
contained the clause that the defendant is authorized to remove the
fixture and furniture as para 21 of the Agreement dated 05.05.2017.
The plaintiffs have suppressed this fact to mention in the plaint.
4. The defendants have further submitted that the plaintiff
filed the suit against the defendant on the basis of default in paying
arrears of monthly compensation, G.S.T. and accrued interest,
excluding TDS i.e. sum of Rs.78,62,799/ as per ExhibitI, but failed
to put fact and material that shows that the defendant under
obligation or debt or due to pay sum of Rs.78,62,799/. The
classification and descriptive division of the claim is absent in Exhibit
I, which may cause prejudice to the defendant or parties to the suit.
5. The defendants have further submitted that the plaintiffs
in paragraph No.7 of the plaint relied on ExhibitF and G and claimed
that the defendant not issued the post dated cheque. However, in
paragraph No.8 of the plaint, the plaintiffs have alleged that post
dated cheques issued by the defendant as per clause 4(ii) of the
agreement was dishonoured. Hence, the plaintiffs' approach to this
Court with dishonest and malafide intention and the demands of the
plaintiffs is unreasonable and not payable.
6. 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
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has expired after service of the notice, such suit cannot be instituted.
Hence, this Court has no jurisdiction to entertain the suit as the suit
has been instituted prior to the expiry of the statutory period. The
suit is not defined the relationship between Mr. Rahim Suleman
Contractor and the defendants.
7. The defendants have further submitted that the
defendants are liable to pay the sum of Rs.23,60,000/, moreover
whatever is legitimate payable will/shall be paid by the defendant
and the defendant is ready and willing to pay the same. The
plaintiffs have not disclosed or has suppressed the imperative
material fact that the refundable security deposit of sum of
Rs.30,00,000/ deposited at the time of executing the leave and
license agreement dated 05.05.2017 and Rs.5,00,000/ at renewal of
leave and license agreement, which the plaintiff was dutybound to
disclose the said fact in the plaint. The plaintiff not claimed or prayer
relief in the suit that the agreement dated 05.05.2017 be declared as
cancelled, moreover ipso facto deemed it to be cancelled. Hence, this
application.
8. The plaintiffs have filed reply vide Exhibit No.17 and
combated the application. The plaintiffs have contended that the
application is filed with an ulterior and malafide motives to delay and
avoid making payments of arrears of compensation payable by the
defendant to the plaintiffs as set out in ExhibitI annexed to the
plaint. It is a settled law that the application under Order VII Rule 11
of the C.P.C. has to be decided only and only on the basis of the
averments made by the plaintiffs in the plaint and not on the basis of
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what is contended by the defendant. The plain reading of the plaint
shows that no grounds as contained in Order VII Rule 11 of the
C.P.C. exist which entitles the defendant to ask for the rejection of
the plaint. By filing the written statement to the suit, the defendants
have waived their right to take out application under Order VII Rule
11 of the C.P.C. and now estopped from proceeding with the said
application. The claims of the plaintiffs and contents thereof are
matter of record. The plaintiffs have denied that the suit is not
maintainable against the defendants and the plaint is liable to be
rejected in accordance with provision of Order VII Rule 11 read with
Section 151 of the CPC 1908, in view of the contentions raised in the
application. The Leave and Licence Agreement stood terminated in
view of the breaches of the said agreement committed by the
defendants by nonpayment of the agreed compensation as well as
interest on late payment, nonpayment of TDS and also not issuing
post dated cheques in advance for the licence period from 05.05.2020
to 04.04.2022 and not replying to their letters and notices being
Exhibits C to G respectively to the plaint. The said fact constitutes a
cause of action in favour of the plaintiffs to file the present suit.
9. The plaintiffs have further contended that M/s. S.A.
Developers is a registered partnership firm of which Mr. Rahim
Contractor is one of the partner and continues to be the partner and
his name is being reflected in the extract of Registration of Firm,
issued by the Registrar of Firms Mumbai on the date of filing of the
suit, which shows that the same is a due compliance of Section 69 of
the Indian Partnership Act. The copy of Deed of Partnership of firms
is filed before the Registrar of this Court in view of objection raised
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by the office of this Court and the same is existing in the matter. The
plaintiffs have denied other averments made in the application in to
to.
10. The plaintiffs have further contended that as per Clause
9 of the Agreement, it was for the owners i.e. the plaintiffs to obtain
BMC approval for using the suit premises for lodging house at their
cost and in fact it is the plaintiffs who have spent a huge sum to get
the said approval and discharge their obligation under the said
agreement. There is no question of giving 60 days notice in view of
the simple interpretation of said clause 27. The said Agreement ipso
facto came to be terminated in view of nonpayment of the
compensation even after various correspondence being Exhibits C to
G of the plaint. There is an admission of liability (partly) by the
defendants as per paragraph No.17 of the application. Hence, the
plaintiffs have prayed that the application may kindly be dismissed
with compensatory costs and in view of admission of liability made in
paragraph No.17 of the application by the defendants, their interim
application vide Exhibit No.10 be made absolute.
11. The defendants are 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).
12. The plaintiffs are relying upon documents, copies of
which are annexed along with the reply such as copy of Extract
issued by Registrar of Firms, Mumbai showing the name of Mr.Rahim
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Contractor as partner of plaintifffirm and copies of
acknowledgements of letters (ExhibitB collectively). The plaintiffs
are also relying upon documents, copies of 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 (ExhibitI).
13. The plaintiffs are also relying upon the judgment in the
case of Soumitra Kumar Sen Vs. Shyamal Kumar Sen and others
[(2018) 5 Supreme Court Cases 644). The Court has gone through
the above said judgment. The sum and substance of the judgment is
that, “It must be shown that the suit is barred under any law. Such a
conclusion must be drawn from the averments made in the plaint.
Different clauses in Order 7 Rule 11, in our opinion, should not be
mixed up. Whereas in a given case, an application for rejection of the
plaint may be filed on more than one ground specified in various sub
clauses thereof, a clear finding to that effect must be arrived at. What
would be relevant for invoking clause (d) of Order 7 Rule 11 of the
Code are the averments made in the plaint. For that purpose, there
cannot be any addition or subtraction. Absence of jurisdiction on the
part of a court can be invoked at different stages and under different
provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14
Rule 2 is another.”
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14. Heard both the sides.
15. Considering the application vide Exhibit No.16 filed by
defendant Nos.2 and 3, reply filed by the plaintiffs vide Exhibit
No.17, this Court has gone through the record and proceeding of the
matter and after hearing both the sides, this Court do not found
substance in the application of defendant Nos.2 and 3 because the
plaintiffs have issued them notice of termination on 17.02.2020
which is at ExhibitC from page Nos.30 and 31. The Leave and
Licence Agreement is at ExhibitB from page Nos.4 to 23 and in this
Leave and Licence Agreement there is a clause at paragraph No.27 of
page No.15 which speaks about the termination of Leave and Licence
Agreement. As per this Clause of the Leave and Licence Agreement,
the plaintiffs have issued them above said notice, which is the cause
of action for filing the present suit and thereafter also the defendants
have committed breaches as narrated by the plaintiffs in their plaint.
16. Further, this Court do not found merit in the argument
of the Learned Advocate for the defendants that Mr. Rahim Suleman
Contractor is not having any right to file the present suit. On the
contrary, this Court do found merit in the argument of the Learned
Advocate for the plaintiffs that Mr. Rahim Suleman Contractor is the
partner of the plaintifffirm and this fact is clear from ExhibitA filed
with reply Exhibit No.17. Therefore, this Court do not found merit in
the application of defendant Nos.2 and 3 that no cause of action is
arose to the plaintiffs for filing this suit and the suit is badinlaw.
17. It is important to note that it is a settled law that the
application under Order VII Rule 11 of the C.P.C. has to be decided
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only and only on the basis of the averments made by the plaintiffs in
the plaint and not on the basis of what is contended by the
defendant. In the result, this Court pass the following order:
: ORDER :
1. Application vide Exhibit No.16 is rejected.
2. Both the parties to note the order.
3. Costs in cause.
Bandra Mumbai. ( G. J. Shrisunder )
Date : 06.10.2021 Judge, C. R. No.32
Order dictated on: 06.10.2021
Order typed on: 06.10.2021
Order checked & signed on: 06.10.2021
/home/steno32/Documents/October2021/Exh16 in LE&C Suit No.4921 rejection of plaint.odt
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