Research › Search › Judgment

Karnataka High Court · body

2021 DIGILAW 979 (KAR)

Prabhudev v. Kadamba Credit Co-Operative Ltd.

2021-12-01

JYOTI MULIMANI

body2021
JUDGMENT : 1. Sri.S.G.Kadadakatti, learned counsel for appellant and Sri.Vishwanath Hegde, learned counsel for respondent, have appeared in-person. 2. The parties are referred to as per their ranking before the trial Court. 3. The facts are simply stated as under :- It is stated that the plaintiff is a Co-Operative Society registered under Souharda Act. The defendant had leased his premises to the Society on a monthly rent of Rs.2000.00 per month (Rupees Two Thousand only). The Lease Agreement was entered in to on 1/2/2001. Plaintiff-Society deposited a sum of Rs.25,000.00 (Rupees Twenty-Five Thousand only) as security deposit. The said amount was repayable to the plaintiff at the time of vacating the leased premises. The lease agreement dtd. 1/2/2001 was initially for a period of 11 months. Plaintiff- Society used to deposit the monthly rent to the savings account of the defendant in the plaintiff -Society. Subsequent to the expiry of the lease, the lease between the parties nevertheless continued and was orally renewed. The deposit of Rs.25,000.00 (Rupees TwentyFive Thousand only) was treated as security deposit after the expiry of initial lease. Under the renewed lease, the rent was fixed at Rs.2,000.00 (Rupees Two Thousand only) till 31/1/2003. Subsequent to the expiry of oral lease on 1/2/2003 fresh oral lease was created between the parties. The deposit of Rs.25,000.00 (Rupees Twenty Five Thousand only) was treated as deposit for the fresh oral lease as well. Under the renewed lease the rent was fixed at Rs.2,300.00 (Rupees Two Thousand Three Hundred only) with effect from 1/2/2003 till 31/3/2007. Again, with effect from 1/4/2007 the oral lease was renewed orally and Rs.25,000.00 deposit made earlier was treated as security deposit by plaintiff repayable to the plaintiff at the time of vacating the premises. The said agreement continued till 31/1/2009. Again on 31/1/2009 lease was orally renewed and oral arrangement with respect to security deposit continued with an understanding that the same shall be repayable to the plaintiff at the time of vacating the premises. Rent was fixed at Rs.3,000.00 (Rupees Three Thousand only) per month. It is averred that the plaintiff credited the rent to the account of defendant in terms of written lease agreement and oral lease. The rent for the month of November was not deposited as defendant made untenable demand in respect of arrears rent. The plaintiff on 30/11/2011 issued reply to the defendant to his letter dtd. It is averred that the plaintiff credited the rent to the account of defendant in terms of written lease agreement and oral lease. The rent for the month of November was not deposited as defendant made untenable demand in respect of arrears rent. The plaintiff on 30/11/2011 issued reply to the defendant to his letter dtd. 21/11/2011. It is said that plaintiff shifted its office to new building in Hospet road and made a request to the defendant to accept the possession of the lease premises. The defendant did not accept the possession and refused to issue possession receipt. Hence, plaintiff was constrained to intimate the factum of handing over the possession, vacating the premises to the defendant vide letter dtd. 7/12/2011. The letter was served on the defendant. The defendant issued a legal notice dtd. 5/12/2011. The notice was served on the plaintiff on 8/12/2011. To the said notice, plaintiff replied vide notice dtd. 14/12/2011 and the same was served on the advocate for defendant. It is also averred that the plaintiff - Society already vacated the premises in the month of December 2011 and plaintiff is not liable to pay any rent for the month of December 2011. The plaintiff occupied the premises till November 2011. Thus, plaintiff is liable to pay Rs.3,000.00 (Rupees Three Thousand only) towards rent. Deducting Rs.3,000.00, the defendant is liable to refund Rs.22,000.00 to the plaintiff. Accordingly, plaintiff-initiated action for recovery of money. After the issuance of the summons, the defendant appeared through his counsel and filed written statement. He admitted certain plaint averments and denied other averments made in the plaint. The defendant contended that former Chairman of plaintiff- Society requested him to give the premises for rent purpose. The defendant agreed for the same and the premises was given on lease on 1/2/2001. It is contended that the then Chairman of the Society repeatedly requested the defendant to give some time to vacate the premises. The plaintiff- Society has used the premises from 1/2/2001 to 7/12/2012. The defendant wrote a letter to the plaintiff-Society on 21/4/2011 and made a request to increase the rent and a deposit of Rs.2,00,000.00 (Rupees Two Lakhs only) or in the alternative, to give Rs.10,000,00.00 (Rupees Ten Lakhs only) for 10 years on lease. The plaintiff did not answer to the letter. The defendant wrote a letter to the plaintiff-Society on 21/4/2011 and made a request to increase the rent and a deposit of Rs.2,00,000.00 (Rupees Two Lakhs only) or in the alternative, to give Rs.10,000,00.00 (Rupees Ten Lakhs only) for 10 years on lease. The plaintiff did not answer to the letter. Thereafter, in the month of November 2011, the plaintiff-Society orally agreed to vacate the premises in the month of December 2011. The defendant specifically contended that as per clause 3 of the Agreement dtd. 1/2/2001, the plaintiff agreed for 15% increase in the rent for every 11 months. As per the agreement, the plaintiff is liable to pay arrears of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-Three only) to the defendant. The defendant specifically contended that he is entitled for arrears of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty- Three only) in the event of holding that the lease agreement is valid. It is also said that he is ready to pay the Court fee. Among other grounds, he prayed for the dismissal of the suit. Based on the pleading, the trial Court framed the following points for consideration:- 1. Whether the plaintiff proves that Lease Agreement dtd. 1/2/2001 entered into between it and defendant, has been continued and it was orally renewed from time to time till 31/1/2009 and finally monthly rent was fixed to Rs.3000.00 towards the premises of the defendants? 2. Whether plaintiff proves that defendant is liable to pay suit claim of Rs.22,000.00 to it towards refund of security deposit with interest at 12% p.a. from the date of suit till realization? 3. Whether the defendant proves that suit is barred by limitation? 4. What decree or order?" The C.E.O. of the Plaintiff-Society was examined as PW-1 and produced four documents which were marked as Exs.P-1 to P-4. Defendant got examined himself as DW-1 and produced five documents which were marked as Exs.D-1 to D-5. On summary trial, the suit came to be decreed. Hence, this revision petition is filed under Sec. 18 of the Karnataka Small Causes Court Act. 4. Sri.Kadadakatti, learned counsel for petitioner submits that the judgment is illegal, perverse, arbitrary and is opposed to the facts and law. On summary trial, the suit came to be decreed. Hence, this revision petition is filed under Sec. 18 of the Karnataka Small Causes Court Act. 4. Sri.Kadadakatti, learned counsel for petitioner submits that the judgment is illegal, perverse, arbitrary and is opposed to the facts and law. Next, he submitted that clause 5 of the lease agreement indicates that the plaintiff agreed to pay 15% enhancement of rent for the renewal period. Hence, plaintiff was liable to pay the enhanced rent. It is submitted that the plaint averments and the evidence on record would establish that plaintiff has not paid the enhanced rent. A further submission was made that plaintiff witness has admitted that the defendant has written letter demanding arrears of rent in terms of the lease agreement and that plaintiff is liable to pay a sum of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-Three only) . Counsel vehemently urged that the defendant in the written statement has pleaded that he is ready to pay the Court fee on counter claim after setting off on the claim of the plaintiff. However, the trial Judge without examining the claim of the defendant has decreed the suit which is totally unsustainable in law. It is also submitted that plaintiff filed the suit for recovery of security deposit but the defendant disputed the said claim. Hence, the trial Court ought to have converted and tried it as a regular suit. Hence, the findings recorded by the trial Court are not tenable. Lastly, he contended that the judgment lacks judicial reasoning hence, the same is liable to be set-aside and the petition may be allowed. 5. Sri.Vishwanath Hegde, learned counsel for respondent justified the judgment and decree of the trial Court. Next, he submitted that the defendant wrote two letters one on 21/4/2011 and another on 21/11/2011 (Exs.D-1 and D-2) to which the plaintiff-Society replied on 30/11/2011 (Ex.D-5). A further submission was made that the defendant issued a legal notice on 5/12/2011 and the plaintiff replied on 14/12/2011. Learned counsel vehemently urged that plaintiff-Society admitted the execution of the lease deed dtd. 1/2/2001. However, the plaintiff - Society requested the defendant to take possession of the premises on 30/11/2011 but the defendant did not accept the possession. The defendant has accepted the possession on 7/12/2011. Learned counsel vehemently urged that plaintiff-Society admitted the execution of the lease deed dtd. 1/2/2001. However, the plaintiff - Society requested the defendant to take possession of the premises on 30/11/2011 but the defendant did not accept the possession. The defendant has accepted the possession on 7/12/2011. It was requested to deduct the monthly rent of Rs.3000.00 (Rupees Three Thousand only) for the month of November and repay the balance amount of Rs.22,000.00 (Rupees Twenty Two Thousand only). It is submitted that since there was no reply from the defendant hence, plaintiff was constrained to initiate action. Lastly, he submitted that the defendant has not pleaded set off. Hence, the said contention may be rejected. Accordingly, he submitted that the trial Court referred to the oral and documentary evidence on record and decreed the suit. The petitioner has not made out any good grounds to interfere with the judgment and decree of the trial Court and hence, prayed for the dismissal of the petition. 6. Heard the contentions urged on behalf of respective parties and perused the records with care. 7. The case really falls within a small compass. The plaintiff brought an action for recovery of money. The defendant leased his premises to the plaintiff-Society on a monthly rent of Rs.2,000.00 (Rupees Two Thousand only) under a lease agreement dtd. 1/2/2001. The plaintiff- Society deposited a sum of Rs.25,000.00 (Rupees Twenty-Five Thousand only) as security deposit. The lease was for a period of 11 months. Ex P-2 is the lease agreement. After the expiry of period of lease both plaintiff and defendant orally agreed to renew the lease. The deposit of Rs.25,000.00 (Rupees Twenty-Five Thousand only) treated as security deposit. The period of lease was orally extended from time to time. As on 2011, the rate of rent was Rs.3,000.00 (Rupees Three Thousand only). As things stood thus, the defendant intimated the plaintiff-Society to pay the arrears of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-Three only). Exs-D1 and D2 are the letters dtd. 21/4/2011 and 21/11/2011. It is noticed that the plaintiff-Society replied on 30/11/2011. The reply is at Ex.D5. I have perused the reply letter. The plaintiff-Society intimated the defendant that the Society has shifted the office to new building and also requested the defendant to accept the vacant possession of the premises. Exs-D1 and D2 are the letters dtd. 21/4/2011 and 21/11/2011. It is noticed that the plaintiff-Society replied on 30/11/2011. The reply is at Ex.D5. I have perused the reply letter. The plaintiff-Society intimated the defendant that the Society has shifted the office to new building and also requested the defendant to accept the vacant possession of the premises. But the defendant instead of accepting the possession, issued legal notice on 5/12/2011 and made a demand that as per the clause 5 of the lease agreement the plaintiff-Society is required to pay enhanced rent at 15% and hence claimed arrears of rents. The plaintiff - Society replied on 14/12/2011 and denied that the arrears of rent. It is significant to note that the plaintiff also intimated the defendant that it has already vacated the premises and that the defendant has accepted the vacant possession on 7/12/2011. While arguing the matter, Sri.Kadadakatti, counsel for petitioner strenuously urged that the defendant pleaded set off. Hence, the trial Court ought to have treated the suit into one of regular suit. In reply, Sri.Vishwanath Hegde submits that in the written statement there is no pleading with regard to set off. I have heard the rival contentions with care. It is necessary to refer to Order VIII Rule 6 of CPC which reads as under:- 6. PARTICULARS OF SET-OFF TO BE GIVEN IN WRITTEN STATEMENT. (1) Where in a suit for the recovery of money the defendant claims to set-off against the plaintiff's demand any ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court, and both parties fill the same character as they fill in the plaintiff's suit, the defendant may, at the first hearing of the suit, but not afterwards unless permitted by the Court, presents a written statement containing the particulars of the debt sought to be set-off. (2) Effect of set-off- The written statement shall have the same effect as a plaint in a crosssuit so as to enable the Court to pronounce a final judgment in respect both of the original claim and of the set-off: but this shall not affect the lien, upon the amount decreed, of any pleader in respect of the costs payable to him under the decree. (3) The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off." As could be seen from Order 8 Rule 6 a set off is a demand which a defendant makes against the plaintiff for the purpose of liquidating the whole or a part of his claim. This rule deals with legal set-off as it is restricted only to "ascertained sum". Conditions that must exist for the applicability of the rule are: - A. Suit must be for recovery of money. B. The claim demanded to be set-off must be an ascertained sum of money. C. It must be legally recoverable from the plaintiff. D. It must not exceed the pecuniary jurisdiction. E. Both parties must fill the same character as they fill in the plaintiff's suit. F. The claim must be made at the first hearing unless permitted by the court to do so afterwards. It is significant to note that a set-off is a ground of defence, and if established it affords an answer to plaintiff's claim wholly or pro tanto. The question as to what is set-off is to be determined as a matter of law and is not in any way governed by the language used by the parties in their pleadings. Set-off can only be claimed in a suit for recovery of money. A plea of payment means that the debt claimed has ceased to be due or paid off pro tanto. A plea of set-off is a request that the debt to be found due to plaintiff shall be treated as extinguished or reduced pro tanto by being set- off against the debt to the defendant. Bearing these principles in mind let me consider whether the defendant has pleaded set-off. I have carefully perused the pleadings. The claim of set-off is not raised in the written statement. A vague statement is made in paragraphs 11 and 12 of the written statement that as per the agreement dtd. 1/2/2001, the plaintiff is liable to pay the arrears of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-Three only) and the defendant is ready to pay the Court fee. In my considered view, this claim is not a claim of set -off. 1/2/2001, the plaintiff is liable to pay the arrears of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-Three only) and the defendant is ready to pay the Court fee. In my considered view, this claim is not a claim of set -off. I may venture to say that assuming for a while that the statement is to be considered as claim of set-off, the trial Court could not have entertained the same since the amount claimed exceeds the pecuniary jurisdiction. The suit is filed for recovery of money. The trial Court in extenso referred to the oral and documentary evidence on record and rightly concluded that the plaintiff has established its claim and is entitled for the sum claimed. I think there is no justification to interfere with judgment and decree of the trial Court. It is perhaps well to observe that the scope of jurisdiction of the High Court under Sec. 18 of the Karnataka small Cause Courts Act, 1964 is limited to the question whether the decision is according to law. The scope of the jurisdiction under Sec. 18 is not for rehearing as it would be done in appeals. The Sec. does not entitle the Court to interfere with a finding of fact simply on the ground that the Court can take a different view of the matter on materials on record. In my considered view, learned Judge has exercised the material evidence on record and rightly decreed the suit. 8. I see no reason to interfere with the Judge's order. Accordingly, the revision petition is dismissed. Parties to bear their own costs.