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2006 DIGILAW 2363 (DEL)

PVR LTD. v. RIDGE VIEW CONSTRUCTION PVT LTD.

2006-12-19

REKHA SHARMA

body2006
REKHA SHARMA, J. ( 1 ) THE bone of contention is an application moved by the plaintiff under order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for the grant of ad-interim-injunction restraining the defendants from transferring, alienating or parting with possession of the suit premises to any person in any manner whatsoever. The defendants, as expected, have stoutly resisted the same. ( 2 ) BEFORE I deal with the contentions raised a bird eye view of the disputes giving rise to the application is needed, for, it would provide the necessary background. ( 3 ) DEFENDANT No. 1 happened to be the owner of commercial plot No. D-2, situated in District Centre, Saket through perpetual lease deed dated 1. 7. 2004 executed in its favour by Delhi Development Authority. On May 14,2005, it entered into an Agreement to Lease with the plaintiff Company through defendant No. 2 little realising that it would give rise to contentitious litigation. By the said Agreement, the plaintiff Company agreed to take on lease office space ad-measuring super area of 16,417. 91 sq. ft. equivalent to covered area of 11,000 sq. ft. covered area on the second floor of the building which was yet to be constructed, on a monthly lease rent of Rs. 57. 50 per sq. ft. It also, agreed to advance a sum of Rs. 56,64,178/- as interest free security. This amount was to be paid in two equal instalments. The first was to be paid at the time of the execution of the said Agreement and the second at the time of delivery of provisional possession for fit outs and interiors of the lease premises. The lease rent was actually to start from the date of final handing over of the demised premises to the plaintiff. It is the common case of the parties that on April 13, 2005 first instalment towards the security amount was paid by the plaintiff. ( 4 ) SOME of the terms of the Agreement to Lease which are relevant for our purposes, are as under:- "1]. That the Lessor (defendant No. 1) herein agrees to let out the demised premises bearing Private No. SF-01, SF-02, SF-03, SF-09, se-10 including corridor to the Lessee (plaintiff) for the commercial purpose of setting up their corporate office. 2]. That the Lessor (defendant No. 1) herein agrees to let out the demised premises bearing Private No. SF-01, SF-02, SF-03, SF-09, se-10 including corridor to the Lessee (plaintiff) for the commercial purpose of setting up their corporate office. 2]. This agreement shall come into force from the date of signing of this agreement and shall remain valid for a period of three years from the date of commencement of lease rent subject to their earlier determination or any renewal thereof as hereinafter provided. 4]. The Lessor (defendant No. 1) shall handover the demised premises complete in all respect with all amenities and services and ready to occupy by 30th September 2005 or earlier (final handover) however the lessor (defendant No. 1) shall provide the demised 'premises to the lessee (plaintiff) for furnishing and completing the fit out work for a minimum period of two months prior to final handover for occupation, 5]. The lease rent shall start from the date of final handover of the demised premises by the Lessor (Defendant No. 1) to the Lessee (Plaintiff)for occupation or the completion of two months from the date of providing the demised premises by the Lessor (Defendant No. 1) to the lessee (Plaintiff) for furnishing and completing the fit-out works which ever is later (Rent commencement date ). However the following shall be the conditions precedents for starting of lease rent under this agreement. Copy of Completion Certificate to be provided by the Lessor to the. Lessee. All the following amenities shall be provided by the Lessor and shall be operational. (a) Centrally Air-conditioning for the whole building with 100% power backup. This shall include the low-side Air-conditioning in demised premises. (b) All common area with marble/granite flooring with plaster of pans, false ceiling, plastic emulsion paints on walls and ceiling. (c) Fully finished elevation. (d) Fully furnished modern common toilets block sets in the building. (e) Fully furnished mandatory Fire Fighting Systems. (f) Complete Landscaping and hardscaping all around the building within the building setbacks. (g) Lifts as shown in the attached plans, (h) All other high side of services. 7]. The Lessee (Plaintiff) shall pay to the Lessor (Defendant No. 1) an interest free refundable security deposit equivalent to six months lease rent amounting to Rs. (f) Complete Landscaping and hardscaping all around the building within the building setbacks. (g) Lifts as shown in the attached plans, (h) All other high side of services. 7]. The Lessee (Plaintiff) shall pay to the Lessor (Defendant No. 1) an interest free refundable security deposit equivalent to six months lease rent amounting to Rs. 56,64,178/-("security Deposit") which shall be refunded by the Lessor to the Lessee on handing over the peaceful vacant possession of the demised premises by the Lessee to the Lessors on expiry or early determination of the lease. The security deposit shall be paid by the lessee to the Lessor in the following manner: (a) Rs. 28,32,089/- (Rs. Twenty Eight Lacs Thirty Two Thousand and eighty Nine Only) being 50% of the total Security Deposit at the signing of his Agreement to Lease subject to the adjustment of earnest Money Deposit or Rs. 5,00,000/- already paid by the lessee to the Lessor vide cheque No. 809119 dated 13th April 2005 drawn on ICICI Bank, Ne. w Delhi. (b) Rs. 28,32,089/- (Rs. Twenty Eight Lacs Thirty Two Thousand and eighty Nine Only) being balance 50% of the total Security deposit at the time of possession of demised premises for the fit outs and interiors by the Lessor to the Lessee. 14. In case the Demised Premises is sold, transferred, allocated, reallocated in full or in part by the Lessor (hereinafter referred to as "transfer" ). However, in case the Transfer is made in favour of third party, such transfer shall be expressly subject to the terms and conditions of this Agreement to lease and the present lease shall in no way be affected by such transfer. The transferee shall remain bound by the same-terms and conditions of this Agreement to Lease. In the event of such transfer, the lessee shall be deemed to have attorned in favour of such transferee and the Lessee (Plaintiff) shall start paying the rent to such transferee immediately on receipt of an intimation of such transfer from the Lessor (Defendant No. 1)19. The Lessor hereby covenants with the Lessee, paying the rent hereby reserved and observing and performing the covenants, terms and herein contained, shall peaceably hold and enjoy the Demised Premises through out the Term without any interruption, eviction, claim or demand by the Lessor or by any person claiming through, under or in trust for the Lessor. 22. The Lessor hereby covenants with the Lessee, paying the rent hereby reserved and observing and performing the covenants, terms and herein contained, shall peaceably hold and enjoy the Demised Premises through out the Term without any interruption, eviction, claim or demand by the Lessor or by any person claiming through, under or in trust for the Lessor. 22. The Lessee (Plaintiff) shall in no case have the right to terminate the lease during the initial lock in period of 3 years reserved herein. However, during the period the lease renewed/extended in terms of clause 3 above, the Lessee shall have the right to terminate the lease by giving 3 (Three) months advance notice in writing. Lessor (Defendant No. 1) can only terminate the agreement if lessee (Plaintiff) fails to pay monthly lease rentals, maintenance charges, etc. As reserved herein above for a continuous period of 3 months. " ( 5 ) IT so happened that defendants No. 1 and 2 allegedly sold or transferred the premises in question to defendant No. 3 and others. Though it appears that no formal letter was sent to the plaintiff Company informing it about the said transfer/sale, it is the case of the defendants that the plaintiff-Company was all along aware of the same. This, however, is disputed by the plaintiff Company according to which it was only on March 22, 2006 that it came to know for the first time about the said alleged transaction. It is, however, not disputed that no formal letter of attornment was issued. As per the defendants, it was not necessary since, as per clause 14 of the agreement to lease, attornment would be deemed to have taken on the day the transfer/sale took place. It further appears that construction was raised on the plot and as allegedly the plaintiff failed to take possession on or before march 31, 2006 despite notice by defendant No. 3 and other alleged transferees, the Agreement to Lease was terminated by letter dated April 5, 2006. The plaintiff Company, however, feels wronged by the said termination. Hence its suit for specific performance of the Agreement to lease. The plaintiff Company, however, feels wronged by the said termination. Hence its suit for specific performance of the Agreement to lease. ( 6 ) THE main contention of the plaintiff is that defendants No. 3 and 4 were never a party to the Agreement to Lease arid thus being total strangers to the same, had no right to terminate the Agreement or to take any action on its basis, and that, in any case, the Agreement in question could not be terminated by the defendants for a lock-in period of three years from the date of commencement of lease. The defendants, however, have refused to bite this. As per them, the plaintiff Company being all along aware of the transfer/sale to defendant No. 3 and others and it having deemed to have attorned to them it could not be said that they were strangers to the agreement and further that the plaintiff Company having committed default in neither having taken possession nor having made the payment due towards security, the termination of the Agreement was perfectly in order. It is also their stand that suit for specific performance does not lie and that, in any case, no relief can be granted to the plaintiff Company as it has. intentionally suppressed material facts with regard to the locus of defendants No. 3 and 4, They have also sought dismissal of the application on the ground that the plaintiff Company has failed to establish a prima facie case. ( 7 ) HAVING provided the essentials in the preceding paragraphs, it is time to come to the grip of the matter. However, before I do that, I may state that since, at this stage, I am only dealing with the application under Order 39 rules 1 and 2,1 will be avoiding the specifics so as hot to give an opinion on merits either way or which may be taken as a reflection on the merits of the case. ( 8 ) ARE defendant No. 3 and 4 total strangers? Have they no right title or interest in the property? ( 9 ) THE documents placed on record and more particularly Agreement to sell dated January 30, 2006 show, at least, prima facie, that defendant No. 3 and others are the transferees/owners of the premises. ( 8 ) ARE defendant No. 3 and 4 total strangers? Have they no right title or interest in the property? ( 9 ) THE documents placed on record and more particularly Agreement to sell dated January 30, 2006 show, at least, prima facie, that defendant No. 3 and others are the transferees/owners of the premises. This being the position, in terms of clause 14 of the Agreement to lease dated May 14,2005 the plaintiff Company is deemed to have attorned to the said defendants. It cannot thus be said that the said defendants are total strangers or that they derive no right tittle or interest in the suit premises. ( 10 ) IT was contended that, in any case, the plaintiff Company was never made aware of the transfer/sale. True, and as already pointed out by me above, the record does not show issuance of any formal notice to the plaintiff company informing it of the transfer. But then where was the need or x requirement for sending of any such formal notice? The need would have arisen only after the delivery of final possession so that, in terms of clause 14, rent could be paid to the transferees. That situation did not arise as, admittedly, what to take of final possession, even provisional possession was not taken in terms of clause 5. ( 11 ) IT appears from the record that the representatives of the parties were in constant touch with each other. The e-mails placed on the record speak of that, and, so also the letter of March 22, 2006 admittedly received by the plaintiff Company. The e-mail dated December 31, 2005 shows that it was from Arun Gajwani of the defendants to Agneet Kumar Design executive/architect of the plaintiff Company. The said e-mail made reference to the sale agreement between defendant No. 1 and defendant No. 3 and others. The e-mail of January 3,2006 shows that Arun Gajwani of the defendants was in touch, with Agneet Kumar of the plaintiff Company and that the said Agneet Kumar had even visited the site for verifying the measurement. What is more, the Legal Manager of the plaintiff Company vinod Kawatra even sent a draft of substituted lease agreement which was to be executed by the parties. What is more, the Legal Manager of the plaintiff Company vinod Kawatra even sent a draft of substituted lease agreement which was to be executed by the parties. This being the position, the argument that the plaintiff Company never came to know of the transfer/sale seems to be far-fetched and unconvincing, to say the least. By letter of March 22, 2006 the defendant No. 3 along with others claiming themselves to be the transferees, called upon the plaintiff Company to take possession of the premises in question by March 31, 2006. This was clearly in terms of clause 4 of the Agreement in question. By the same letter, the plaintiff Company was also called upon to pay Rs. 28,31,932. 00 towards the balance of the security amount. This too was as per the terms of the Agreement. Significantly, the plaintiff Company just sat over the letter. It neither challenged the right title or interest of the senders of the letter nor offered to take possession. It did not even make the payment. Prima facie, thus, the plaintiff not only violated the terms of the Agreement it was not ready and willing to perform its own part of the Agreement. ( 12 ) IT is true that as per clause 2 the Agreement was to remain valid "for a period of three years". However, those three years were to be reckoned "from the date of commencement of lease rent". If that be so, that situation never arose in this case as there never was "commenqement of lease rent". As per clause 5, the "lease rent" was to start "from the date of final handover of the demised premises". It cannot thus be said that clause 2 came into force. The termination took place much before the stage of "commencement of lease rent". Thus, prima facie, in this case, notice of termination before the commencement of lease rent did not violate any of the terms of the agreement as clause 22 regarding termination was to apply only after "the commencement of lease rent". Assuming that there could be no termination on the ground in question for at least a period of three years, what needs to be noticed is that the plaintiff Company despite having been called upon to take possession, neither took it nor made the payment as required. Assuming that there could be no termination on the ground in question for at least a period of three years, what needs to be noticed is that the plaintiff Company despite having been called upon to take possession, neither took it nor made the payment as required. The reason given by the plaintiff Company that defendant No. 3 and others had no locus stahdi as they were not transferees and/or they had not given notice of transfer, is no reason. As noticed above, it is, prima facie, neither. . . convincing nor acceptable. It appears, and it may be stated even at the risk of repetition that the plaintiff clearly demonstrated its unwillingness to perform its part of the contract. ( 13 ) SHOULD, therefore, under the circumstances, the defendants be injuncted? I think, the answer has to be in the negative. In any case, even if it be taken that the termination was bad in law or contrary to the terms of the Agreement or for any other reason, the remedy of the plaintiff company would be to seek compensation for wrongful termination and not the injunction which it seeks. ( 14 ) THIS, thus, is the answer to the application. It stands dismissed. I wish to say no more except that this order shall not be read as an expression of opinion on the merits of the case.