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2014 DIGILAW 813 (KAR)

Yashodhara Doddakalegowda v. State of Karnataka

2014-09-15

B.S.PATIL

body2014
JUDGMENT B.S. Patil, J. 1. This regular first appeal is directed against the judgment and decree dated 14.07.2010 passed by the learned XVI Additional City Civil Judge, Bangalore City, decreeing the suit filed by the respondents herein for a sum of Rs. 2,17,425/- along with costs and future interest at 6% per annum on the principal amount of Rs. 2,11,438/- from the date of suit till realization. For the sake of convenience, parties are referred by their rank assigned to them before the Trial Court. 2. Plaintiffs - State of Karnataka and Registrar General, High Court of Karnataka, filed suit O.S. No. 5575/1998 for recovery of an amount of Rs. 2,71,601/- together with future interest at 30% per annum. 3. The case of the plaintiffs was that defendant being the owner of premises bearing No. 214 situated in 2nd Block, 3rd Stage, 3rd Phase, Banashankari, Bangalore, expressed her willingness to let out the schedule premises for accommodation to the Hon'ble Judge of the High Court on a monthly rent of Rs. 25,000/- by receiving advance of Rs. 2,50,000/-. This was agreed to by the Registrar of the High Court and an agreement of lease was entered into on 21.08.1996. The duration of the lease was 11 months or till the determination of the lease on the lessee vacating the premises, whichever was earlier. The lease commenced from 01.09.1996. The advance amount of Rs. 2,50,000/- was paid on the date of the agreement to the defendant. 4. Clause 4 of the lease agreement Ex. P3 states that 'advance amount shall carry no interest and the lessor shall refund the said amount to the lessee at the termination or earlier determination of the lease on the lessee handing over vacant possession of the Schedule Property to the lessor'. 5. The Hon'ble Judge who occupied the residential building, vacated the same on 02.06.1997. According to the plaintiffs, the vacant possession of the premises was offered for being handed over to the landlady on the same day through her representative as she was not availably in the country and as the representative of the landlady was looking after the affairs connected with the premises. 6. Plaintiffs contended that lease in favour of the defendant was cancelled with effect from 02.06.1997; the same was intimated to the landlady and demand for refund of the advance amount was made on the same day. 6. Plaintiffs contended that lease in favour of the defendant was cancelled with effect from 02.06.1997; the same was intimated to the landlady and demand for refund of the advance amount was made on the same day. On 25.06.1997, a letter (Ex. P6) was written to Mr. Srikantaiah - representative of the defendant informing cancellation of the lease agreement dated 21.08.1996 and calling upon him to make suitable arrangement to refund the advance amount of Rs. 2,50,000/- to the High Court immediately and to take possession of the premises from the High Court. This was followed by another letter dated 21.07.1997 again addressed to Mr. Srikantaiah -representative of the defendant, making it clear that though the receipt of the previous letter dated 25.06.1997 had been acknowledged, advance amount had not been refunded and therefore, suitable arrangement to refund the advance amount be made, failing which the High Court would be constrained to charge interest for the advance amount at the rate chargeable by Nationalized Banks on loans. 7. It is relevant to notice here that Exs. P6 & P7 - notices dated 25.06.1997 and 21. 07.1997 was served on Mr. Srikantaiah on 10.07.1997 and 24.07.1997, respectively. When there was no response to both the notices, again another letter was addressed on 08.10.1997 (Ex. P8), this time to the defendant herself, again requesting for refund of the advance amount informing the factum of vacation of the building by the occupant on 02.06.1997. Again there was no response. Hence, Ex. P9 - letter dated 28.10.1997 was written reiterating the request followed by one more letter - Ex. P10 dated 12.11.1997. It is thereafter that a legal notice came to be issued on 24.02.1998 adverting to the several notices issued and making it clear that despite such repeated communications from the High Court, the defendant did not refund the advance amount and therefore, the defendant was called upon to take immediate steps to repay the advance amount along with interest at 24% per annum from 02.06.1997 till the date of payment within seven days from the date of receipt of the notice, failing which it was notified that the High Court would be constrained to initiate proceedings for recovery of the amount. 8. The legal notice was replied on 18.03.1998 (Ex. P12). 8. The legal notice was replied on 18.03.1998 (Ex. P12). The defendant contended that the premises was leased for the occupation of the Hon'ble Judge of the High Court after incurring substantial expenditure and investing about Rs. 40,000/- on the repairs, paintings and furnishing. The said expenses were incurred on the assurance given that the occupant would stay in the premises till his retirement. However, the Hon'ble Judge vacated the premises on his own and the said fact was intimated only on 25.06.1997 by the Registrar. The defendant further stated that though she had made a request to deliver the keys of the said premises so as to enable the defendant to refund the advance amount after deducting the damages caused to the building and charges towards water and electricity supply, the plaintiffs did not deliver the keys, but the keys were delivered on much persuasions only on 19.01.1998. As the keys of the premises were in the custody of the Registrar till January 1998, the defendant urged that she was entitled to claim rent till 19.01.1998 and hence, cheque for a sum of Rs. 58,020/- dated 18.03.1998 was enclosed towards the refund of advance after adjusting the same towards arrears of rent, damages, water bill and other expenses. Consistent with the stand taken in the legal notice, the defendant took the stand in the written statement and denied the averments made in the plaint and sought for dismissal of the suit. 9. The Trial Court framed the following issues: "(i) Whether the plaintiffs prove that the defendant is liable to pay the suit claim amount of Rs. 2,71,601/- with future interest at 30% per month from the date of the suit till the complete realization of the same? (ii) Whether the defendant proves that the alleged interest claimed by the plaintiffs at the rate of 30% per annum is highly excessive and more than the banking rates prescribed by the Reserve Bank of India? (iii) Whether the plaintiffs are entitled to the suit reliefs sought? (iv) What order/decree?" 10. In support of the case of the plaintiffs, one R. Rangaswamy, Assistant Registrar of the High Court was examined as PW-1. Exs. P1 to P14 were produced and marked. Defendant examined herself as D.W. -1 and no documents were marked in her evidence. 11. (iii) Whether the plaintiffs are entitled to the suit reliefs sought? (iv) What order/decree?" 10. In support of the case of the plaintiffs, one R. Rangaswamy, Assistant Registrar of the High Court was examined as PW-1. Exs. P1 to P14 were produced and marked. Defendant examined herself as D.W. -1 and no documents were marked in her evidence. 11. On appreciation of the oral and documentary evidence, the Trial Court has recorded its findings holding that the plaintiffs were able to establish that defendant was liable to pay the suit claim of Rs. 2,71,601/- with future interest at the rate of 6% per annum. The suit was thus decreed for a sum of Rs. 2,71,425/- with proportionate costs and interest on the principal amount of Rs. 2,11,438/- at 6% per annum. Aggrieved by the said judgment and decree, the present appeal is filed. 12. Mr. Shanmukhappa, learned Counsel for the appellant contends that having regard to Clause 4 of the lease agreement which provides for refund of the advance amount on termination or earlier determination of the lease upon the lessee handing over vacant possession of the premises to the lessor, it was incumbent upon the plaintiffs to establish that the keys of the premises was handed over and thereafter advance amount paid was demanded. It is urged by him that all the correspondences addressed by the High Court to the representative of the defendant, only called upon the defendant to hand over the keys disclosing thereby that handing over keys of the premises was a condition precedent for refund of the amount. This according to the learned Counsel is against Clause 4 of the lease agreement. Therefore, the Trial Court committed a serious error in not appreciating the condition enumerated in Clause 4 of the lease deed. In support of this contention, he has placed reliance on the judgment of the High Court of Delhi in the case of Narendra Gupta v. M/s. Vigneshwara Developers Pvt. Ltd., & others in C.S.(OS) No. 14/2010 decided on 13.08.2012. Therefore, the Trial Court committed a serious error in not appreciating the condition enumerated in Clause 4 of the lease deed. In support of this contention, he has placed reliance on the judgment of the High Court of Delhi in the case of Narendra Gupta v. M/s. Vigneshwara Developers Pvt. Ltd., & others in C.S.(OS) No. 14/2010 decided on 13.08.2012. He, therefore, contends that in the facts and circumstances of the case, as the defendant had carried out major repairs and leased the premises in favour of the plaintiffs for the occupation of the Hon'ble Judge of the High Court, the plaintiffs were required to reimburse the amounts spent towards repairs including for furnishing as the premises was vacated contrary to the assurance made to the landlady that the same would be occupied till the retirement of the Hon'ble Judge. 13. Learned High Court Government Pleader Vasanth V. Fernandes strongly refutes the contentions urged by the learned Counsel for the appellant and urges that on several occasions, letters were addressed to the representative of the defendant calling upon him to take the keys by paying the advance amount but, there was absolutely no response from the defendant. He further points out that even the defendant was notified of the same with a request to receive the keys and refund the advance amount, but there was no response to the request and therefore, he strongly defends the judgment of the Trial Court and urges that no interference is called for with the findings recorded by the Trial Court. 14. Having heard the learned Counsel for both parties, the points that arises for my consideration in this appeal are, "(i) whether the findings recorded by the Trial Court holding that the defendant despite being called upon to make arrangement for taking possession of the schedule premises, failed to take possession of the same and defaulted in refunding the advance amount, suffers from any illegality or perversity? (ii) whether the judgment and decree passed by the Trial Court suffers from any illegality calling for interference?" 15. Ex. P3 is the lease agreement. The duration of the agreement is 11 months. Clause 4 of the agreement reads as under: "4. The lessee shall pay a sum of Rs. (ii) whether the judgment and decree passed by the Trial Court suffers from any illegality calling for interference?" 15. Ex. P3 is the lease agreement. The duration of the agreement is 11 months. Clause 4 of the agreement reads as under: "4. The lessee shall pay a sum of Rs. 2,50,000/- (Rupees two lakhs fifty thousand only) as advance to the lessor which shall carry no interest and the lessor shall refund the said amount to the lessee at the termination or earlier determination of the lease on the lessee handing over vacant possession of the schedule property to the lessor." 16. The condition agreed upon as per the aforementioned clause would clearly indicate that the lessor has an obligation to refund the amount to the lessee at the termination or determination of the lease on the lessee handing over vacant possession of the property to the lessor. Ex. P5 is the order dated 25.06.1997 passed by the Registrar General of the High Court, wherein it is recorded that the premises taken on lease from the defendant was vacated by the Hon'ble Judge who had occupied the same as tenant. Consequently, the lease agreement dated 21.08.1996 was cancelled with effect from 02.06.1997. Based on the said proceedings dated 25.06.1997, a letter was addressed to the landlady on 25.06.1997 vide Ex. P6. After narrating the vacation of the premises by the occupant in the final portion of the communication, it is stated as under: "I am, therefore, to request you to make suitable arrangement to refund the advance amount of Rs. 2,50,000/- to the High Court, immediately and to take the possession of the said premises from the High Court." 17. This letter was received by the representative of the defendant on 10.07.1997. There is no reply either by the representative or by the defendant. It is not in dispute that Mr. Srikantaiah was looking after the affairs pertaining to the premises and he was the representative of the defendant. In fact, this aspect has been admitted by the defendant in the cross-examination. Therefore, the correspondence addressed to Mr. Srikantaiah has to be regarded as the correspondence made with the defendant. It has to be also regarded that defendant did have the knowledge of the correspondence. Indeed, Ex. P6 correspondence was followed by Ex. P7 again addressed to Mr. Srikantaiah. Exs. Therefore, the correspondence addressed to Mr. Srikantaiah has to be regarded as the correspondence made with the defendant. It has to be also regarded that defendant did have the knowledge of the correspondence. Indeed, Ex. P6 correspondence was followed by Ex. P7 again addressed to Mr. Srikantaiah. Exs. P8 to P10 are the correspondences addressed to the defendant herself. There is no reply to any of these communications sent by the Registrar General. It is thus clear that the defendant has not taken up any stand till she replied to the legal notice. Neither the defendant nor her representative have stated that they were willing to refund the advance amount if vacant possession of the premises was handed over by the Registrar General and that they did not refund the amount because the Registrar General did not come forward with the delivery of vacant possession of the premises. 18. For the first time, after receiving the legal notice, the defendant, by way of reply to the legal notice has come up with the defence that possession of the premises was not handed over to her so as to enable her to refund the advance amount. She has further contended that on much persuasion the keys were handed over only on 19.01.1998 and therefore, till the date the keys were handed over, she was entitled to claim the rent and to refund only the remaining amount. This defence taken has been rightly rejected by the Trial Court holding that the defendant never showed any inclination to refund the amount by receiving the keys. This finding recorded by the Trial Court is based on the evidence on record. The correspondences vide Exs. P6 to P10 read together make it very clear that the Registrar General informed the defendant to take possession of the premises and refund the amount. These communications cannot be understood as the Registrar calling upon the defendant to first refund the amount and then take the vacant possession of the premises. Such an intention was not there when the said correspondences were addressed. If that was so, nothing prevented the defendant to inform the plaintiffs/Registrar of the High Court to hand over possession of the premises and thereafter receive the advance amount. No such effort has been made by the defendant. Therefore, such a defence is not available for the defendant. 19. If that was so, nothing prevented the defendant to inform the plaintiffs/Registrar of the High Court to hand over possession of the premises and thereafter receive the advance amount. No such effort has been made by the defendant. Therefore, such a defence is not available for the defendant. 19. There is yet another aspect of the matter which requires to be adverted to in the facts and circumstances of this case. The landlady is the wife of the Hon'ble Judge of this Court, who is now no more. Even at the time when the lease was entered into, the Hon'ble Judge/husband of the landlady was no more. Having regard to the status and position of the landlady who had offered the premises owned by her by carrying out repairs and by furnishing the same for the occupation of the Judge of the High Court on lease, it was expected of the plaintiffs to contact the landlady and hand over the keys and then receive the amount given as advance. But, written correspondences have been made strictly in legal terms calling upon the landlady to refund the amount. It gives an impression to the Court that things were not handled keeping in mind the respect that is expected in matters of such nature, having regard to the status of the defendant. But, that does not in any manner come in the way of sustaining the findings recorded by the Trial Court with regard to the entitlement of the plaintiffs for the amount in question. 20. The landlady has paid a sum of Rs. 58,020/- deducting the rentals till the date the keys were actually handed over. This also reflects that the defendant did not keep the money with her, but refunded the same by making her own calculation soon after she received the keys. In such background, having regard to the conduct of the defendant, I find that it is not a fit case where the plaintiffs can be held entitled for interest on the balance advance amount with effect from the date of termination of the lease till the date of refund. Ends of justice and the facts and circumstances of the case require interference by this Court only to the said extent and therefore, levy of interest on the balance amount of Rs. 1,91,980/- is vacated. Ends of justice and the facts and circumstances of the case require interference by this Court only to the said extent and therefore, levy of interest on the balance amount of Rs. 1,91,980/- is vacated. In all other respects, the judgment and decree passed by the Trial Court is confirmed. Accordingly, the appeal is allowed in part. The judgment and decree of the Trial Court is modified. The suit is decreed for a sum of Rs. 1,91,980/-. The said sum shall be paid by the defendant within a period of one month from the date of receipt of a copy of this judgment. In the facts and circumstances parties shall bear their respective costs.