Order 8

Order Details: Order on Exhibit
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CNR NO.MHSCA30002302021
IN THE COURT OF SMALL CAUSES AT MUMBAI
(BANDRA BRANCH)
ORDER BELOW EXHIBIT NO.21
IN
L.E. & C. SUIT NO. 49 OF 2021
S.A. Developers . . Plaintiffs.
Versus
1. M/s. K.H.K. Hospitality Services
and ors. . . Defendants.
Advocate for Plaintiffs : Adv. K. R. Parekh Co.
Advocate for Defendants : Adv. M.A. Sothe
Coram : S.V.Deshmukh, Judge
C.R.No.32
Date : 22/12/2022.
ORAL ORDER :
1. This is an application filed by the plaintiff under Order
XVA(1) of the Code of Civil Procedure, 1908, for striking off
defence.
2. Reply is filed by defendant at Exh.22 and application is
resisted.
3. Perused the proceedings and provision of law. Heard
Ld. Advocate for plaintiffs and defendant Inperson.
4. This is a suit filed by licensor against the licensee for
eviction, recovery of compensation and mesne profits. Application
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was preferred by plaintiff at Exh.10 for interim compensation. My
Ld. Predecessor by order dated 28/10/2021 has been pleased to
allow the same. Defendant is directed to pay Rs.5,62,100/ per
month alongwith GST from March 2021 onwards. The defendant is
also further directed to pay the plaintiffs Rs.25,000/ per day until
handing over the possession.
5. Admittedly, an appeal was preferred and it was
dismissed. The defendant has thereafter filed a Writ Petition before
the Hon'ble Bombay High Court which is pending.
6. Ld. Advocate for plaintiff submits that the interim
compensation as awarded is just and proper and therefore confirmed
by the Appellate Court. There is no stay to the order granted by the
High Court. The defendant is prolonging the proceedings. The
plaintiffs are suffering great loss as they are not getting income from
the suit premises. The leave and license agreement with the
defendant is terminated and now it has come to an end by efflux of
time. The defendant is not obeying the orders and therefore, his
defence is liable to be struck off. According to defendant, he has
always honoured the agreement. His business had to be shut down
during the covid times and therefore, there is a default. He has
invested huge amount into the suit premises. The leave and license
period is not over and it has been renewed. The plaintiff has agreed
to reduce the monthly rent during covid times. According to
defendant, reasonable time is required to bring his financial position
to meet the claims of the plaintiff.
7. Considering the nature of controversy, following points
arise for my determination and my findings thereon alongwith the
reasons are as under :
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Points : Findings :
1. Whether the defence is liable to be . . No.
struck off ?
2. What order ? . . As per final order.
: R E A S O N S :
As to Point No.1 and 2 :
8. In order to appreciate the rival contentions, it is
necessary to go through the relevant provisions of Order XVA of The
Code of Civil Procedure,1908. It reads as under :
"XVA1. (1) In any suit by a lessor or a licensor against a
lessee or licensee, as the case may be, for his eviction with or without
the arrears of rent or the 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 licence 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.
In the event of any default in making the deposits, as
aforesaid, the Court may subject to the provisions of subrule (2)
strike off the defence. ......................"
9. On perusal of above provision, it appears that the words
used by the legislation is' the Court may strike of the defence.' Thus,
it is clear that a discretion is vested in the Court. The defence cannot
be struck off merely if there is a default in compliance with the order
passed. A plaintiff has to make out a strong case to show that
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default is attributable to defendant alone and is deliberate, and
defence is liable to be struck off.
10. I have gone through the pleadings of both the parties. I
have also gone through the documents filed on record.
11. Admittedly, there is a default in payment of agreed
compensation after the emergence of covid pandemic. The defendant
has paid the compensation of the previous period promptly. It cannot
be denied that almost all the business through out India had suffered
in pandemic times. It cannot be ruled out that even defendant who
run the hotel at the suit premises had to bear the financial losses.
Thus at the outset the default do not appear to be deliberate. So far
as plaintiffs are concerned, it also cannot be denied that income from
suit premises to the plaintiffs in nature of compensation also
stopped.
12. The agreement reveals that licence was for the initial
period upto 4/4/2022, which has got expired. It is the case of
defendant that there is a renewal of agreement. The initial
agreement reveals that there is a renewal clause. A document of
option agreement is also filed on record which show that the
defendant was entitled to option to renew. Defendant has filed
documents which prima facie show that he has spent considerable
amount on the suit premises to convert it into hotel business place.
Thus, a triable case is made out by the defendant that the leave and
license agreement has not come to an end and there is renewal. The
documents and pleadings also reveal that the plaintiff at inception
were given Rs.30,66,000/ towards security deposit. It is further
averred that further Rs.5,00,000/ are paid as security at the time of
renewal agreement. The defendant has nowhere denied his liability,
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but merely is seeking concession and some time.
13. As on today, the impugned order is admittedly
challenged before the Hon'ble High Court and is subjudice. As per
orders passed by this Court, the defendant has also deposited a part
amount of Rs.20 Lacs. Towards interim compensation. It show the
bonafides to pay. Considering all the above facts and circumstances
and the conduct of defendant. It do not appear to be that of a
dishonest litigant. The default is not deliberate but due to pandemic
financial crisis. There are triable issues, if defence is struck off it is
possible that justice may not prevail. The defendant would suffer
grave hardship.
14. On the contrary the plaintiff will not suffer any instant
injury and irreparable loss, if the application is rejected. Amount of
security deposit is retained by plaintiff and a further part amount is
deposited. The plaintiff always have a remedy of filing execution
petition to recover the interim amount as per interim order, which
would be finally adjudicated by the Hon'ble High Court. The
plaintiffs have failed to make out a case for striking off defence.
Therefore, I answer point No.1 in the negative and in answer to
point No.2, I pass the following order.
ORDER
1. Application is rejected.
2. Matter be listed for framing of issues and
further trial.
Bandra Mumbai. ( S.V.Deshmukh )
Date : 22/12/2022. Judge, C. R. No.32.
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Order dictated & typed on : 22/12/2022.
Order checked & signed on : 22/12/2022.
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