Bombay High Court
Lord Sai Maa Pvt Ltd Thr Director ... vs Hotel Goradias Pvt. Ltd Thr Its ... on 7 May, 2021
Bench: S.V. Gangapurwala, Shrikant Dattatray Kulkarni
1
Comm.Apeal 1 & 2 - 2021
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
COMMERCIAL APPEAL NO. 1 OF 2021
WITH
CIVIL APPLICATION NO. 237 OF 2021
1. Lord Sai Ma Pvt. Ltd.,
CIN-U55101 MH2009PTC191094,
A-1, Manish Kaveri building No.18,
Manishnagar, J.P. Road, Andheri (W),
Mumbai 400 053
(Registered Office)
AND
At Goradia's Lords Inn,
Office : Pimpalwadi road,
Behind Sai Udyan, Opp. Saibaba Temple,
Gat No.2, at post Shirdi, Ahmednagar,
Maharashtra 423 109
Through Director
Shrirang Pandurang Jadhav,
Age 55 years, Occu. Business,
Director (DIN02509863)
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708
2. Shirirang Pandurang Jadhav,
Age 55 years, Occu. Business,
Director (DIN 02509863),
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708
3. Ajaykumar Bhagirath Sahoo,
Age 56 years, Occu. Business,
Director (DIN 07941683),
C/o Lords Sai Maa Pvt. Ltd.,
Manishnagar, J.P. road, Andheri (W),
Mumbai 400 053
Through
Shirirang Pandurang Jadhav,
Age 54 years, Occu. Business,
Director (DIN02509863)
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708 ..APPELLANTS
(Orig. Defendants)
VERSUS
Hotel Goaradias Pvt. Ltd.,
CIN U55101MH1987PTC054025,
Having office at 601, Mnaju Apartment,
Dadabahi Road, Vileparle (W),
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2
Comm.Apeal 1 & 2 - 2021
Mumbai 400 056,
AND
At Office : Pimpalwadi Road,
Behind Sai Udyan, Opp. Saibaba Temple,
Gate No.2, at post Shirdi, Ahmednagar,
Maharashtra 423 109,
Through its Director Priti Rajendra Chand,
(DIN 00578134),
Age 52 years, Occu. Business,
Address - 302, Manju Castle,
Church Road, Vileparle (W),
Mumbai 400 056 ..RESPONDENTS
( Orig. Plaintiffs )
- WITH -
COMMERCIAL APPEAL NO. 2 OF 2021
WITH
CIVIL APPLICATION NO. 239 OF 2021
AND
CIVIL APPLICATION NO. 2741 OF 2021
Lord Sai Maa Pvt. Ltd.,
CIN-U55101 MH2009PTC191094,
A-1, Manish Kaveri building No.18,
Manishnagar, J.P. Road, Andheri (W),
Mumbai 400 053
(Registered Office)
AND
At Goradia's Lords Inn,
Office : Pimpalwadi road,
Behind Sai Udyan, Opp. Saibaba Temple,
Gate No.2, at post Shirdi, Ahmednagar,
Maharashtra 423 109
Through Director
Shrirang Pandurang Jadhav,
Age 55 years, Occu. Business,
Director (DIN02509863)
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708
2. Shirirang Pandurang Jadhav,
Age 55 years, Occu. Business,
Director (DIN 02509863),
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708
3. Ajaykumar Bhagirath Sahoo,
Age 56 years, Occu. Business,
Director (DIN 07941683),
C/o Lords Sai Maa Pvt. Ltd.,
Manishnagar, J.P. road, Andheri (W),
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Comm.Apeal 1 & 2 - 2021
Mumbai 400 053
Through
Shirirang Pandurang Jadhav,
Age 54 years, Occu. Business,
Director (DIN02509863)
B-304, Plot No.1, Gurukul CHS,
Sector - 8A, Airoli,
Mumbai 400 708 ..APPELLANTS
(Orig. Defendants)
VERSUS
Hotel Goradias Pvt. Ltd.,
CIN U55101MH1987PTC054025,
Having office at 601, Mnaju Apartment,
Dadabahi Road, Vileparle (W),
Mumbai 400 056,
AND
At Office : Pimpalwadi Road,
Behind Sai Udyan, Opp. Saibaba Temple,
Gate No.2, at post Shirdi, Ahmednagar,
Maharashtra 423 109,
Through its Director Priti Rajendra Chand,
(DIN 00578134),
Age 52 years, Occu. Business,
Address - 302, Manju Castle,
Church Road, Vileparle (W),
Mumbai 400 056 ..RESPONDENTS
( Orig. Plaintiffs )
Mr Sanket S. Kulkarni, Advocate for appellants
Mr V.D. Salunke, Advocate h/f Mr V.S. Bedre, Advocate for respondent
(sole)
CORAM : S.V. GANGAPURWALA AND
SHRIKANT D. KULKARNI, JJ.
JUDGMENT RESERVED ON: 20.04.2021
JUDGMENT PRONOUNCED ON: 07.05.2021
JUDGMENT (Per Shrikant D. Kulkarni, J.)
1. Feeling aggrieved by the impugned order passed below Exh.77 dated
8.12.2020 and below Exh.57 dated 5.12.2020 in Commercial Suit
No.02/2019, by the Commercial Court/District Judge, Kopargaon, whereby
the Commercial Court has rejected the application for temporary injunction
and allowed application for interim mandatory injunction and directed the
Comm.Apeal 1 & 2 - 2021
appellant/defendant to handover the possession of the suit property to the
respondent/original plaintiff upon deposit of Rs.2 Crore by the
respondent/original plaintiff, the appellant/original defendant has preferred
these appeals by invoking the Section 13 of the Commercial Courts Act,
2015 on various grounds.
FACTUAL MATRIX
2. The respondent/original plaintiff is an owner of the suit premises/hotel
situated at Shirdi. The respondent/original plaintiff has given its hotel to the
appellant/original defendant on leave and licence agreement dated
30.12.2015.
3. The important conditions of the agreement of leave and licence are
reproduced hereunder :
"(i) The defendant has to pay an security deposits of Rs.2
Cr.
(ii) The defendant has spent an amount of Rs.4.70 Cr.
towards renovation of suit hotel.
(iii) The monthly rent decided was Rs.14,25,000/- inclusive
of service tax with increase of 6% every year.
(iv) The defendant had spent an amount of Rs.4,70,00,000/-
as renovation expenses.
(v) The licence fees shall be paid every month on or before
7th day of each month.
(vi) The licensee has paid an amount of Rs.2 Cr. as
refundable security deposit without interest.
(vii) The plaintiff has to pay service tax and property tax.
Comm.Apeal 1 & 2 - 2021
(viii) The licensor shall refund the security deposit of Rs.2 Cr.
on expiry of leave and license agreement and licensee shall be
entitled possession till return of security deposit & balance of
3.92 Crores which is balance unadjusted amount of renovation.
(ix) The licensee if fails to hand over the possession upon
refund of security deposit license fee shall be double the rate of
decided license fee.
(x) All property taxes are to be paid by licensor.
(xi) If licensee wants to terminate the agreement prematurely
then licensee shall give 9 months' notice and pay Rs.50 lakhs
as liquidate damages."
4. There were notices and reply between the parties on termination of
leave and licence.
5. Ultimately, the dispute between the parties reached to the Court of
Civil Judge, Senior Division at Rahata. The respondent/original plaintiff filed
Special Civil Suit No.126/2019 against the appellant/original defendant for
possession of the suit premises, settlement of accounts, compensation,
mesne profit and recovery of an amount of Rs.16,09,11,584/-. The
respondent had sought various interim reliefs in the said suit including
appointment of receiver.
6. The appellant raised legal objection about maintainability of the suit by
filing an application vide Exh.23 before the Civil Court. The contention of the
appellant was that, in view of nature of dispute between the parties, the suit
lies before the Commercial Court under the Commercial Courts Act, 2015.
The learned Civil Judge, after hearing both the sides and after taking into
consideration the legal position was pleased to allow the said application
Exh.23 on 22.10.2019 and suit came to be transferred to the Commercial
Comm.Apeal 1 & 2 - 2021
Court/District Judge at Kopargaon, which has jurisdiction to decide the suit
under the Commercial Courts Act, 2015.
7. In Commercial Suit No.02/2019, respondent/original plaintiff moved
an application for interim mandatory injunction vide Exh.77. It was resisted
by the appellant/original defendant. The Commercial Court was pleased to
allow the prayer of the respondent/original plaintiff and directed the appellant/
defendant to handover the possession of the suit premises to
respondent/original plaintiff in terms of leave and licence agreement, within
one month from the date of deposit of Rs.2 Crore in the Court by the
appellant/original defendant.
8. We have perused the impugned orders passed below Exh.77 and
Exh.57 by the Commercial Court dated 8.12.2020 and 5.12.2020,
respectively, copy of leave and licence agreement and other documents and
papers relied upon by both the sides.
9. We have heard Mr Sanket Kulkarni, learned Advocate for the
appellant/original plaintiff and Mr V.D. Salunke, learned Advocate for the
respondent/original defendant at length. We have also perused the written
notes of arguments submitted by both the learned Advocates.
10. In Commercial Appeal No.1 of 2021, the appellant/original defendant
is challenging the order of rejection of temporary injunction, passed below
Exh.57 dated 5.12.2020, whereas in Commercial Appeal No.2 of 2021,
appellant/defendant is challenging the order of interim mandatory injunction
passed below Exh.77, by the Commercial Court in Commercial Suit
No.02/2019 vide order dated 8.12.2020.
Comm.Apeal 1 & 2 - 2021
11. In the above background, the appellant/original defendant is before us
who seeks relief of setting aside the above referred both the orders passed
by the Commercial Court.
12. Before going into the arena of dispute, let us have a glance on the
admitted factual scenario.
FACTUAL SCENARIO
13. The respondent/original plaintiff is an owner of the suit premises,
wherein hotel is being run by the appellant/original defendant. The
respondent/original plaintiff has given its suit premises/hotel premises to the
present appellant/defendant by way of registered leave and licence
agreement dated 30.12.2015. The conditions incorporated in the leave and
licence agreement are admitted. It is not in dispute that the defendant has
spent an amount of Rs.4.7 Crore towards renovation of suit premises. The
monthly rent of the suit premises was fixed at Rs.14,25,000/- inclusive of
service tax with increase of 6% per year.
14. It is not in dispute that leave and licence period was from 30.12.2015
to 31.12.2019 (49) months.
SUBMISSIONS OF ADVOCATE FOR APPELLANT
15. Mr Sanket Kulkarni, learned Advocate for the appellant/original
defendant vehemently submitted that the issue of jurisdiction raised before
the trial Court plays important role. He submitted that in view of nature of
dispute between the parties, which is of commercial nature, the suit lies
before the Commercial Court and accordingly, the appellant/original
defendant has raised objection and the civil Court has transferred the suit to
Commercial Court for its adjudication.
Comm.Apeal 1 & 2 - 2021
16. Mr Kulkarni, learned Advocate for the appellant/original defendant
invited our attention to Section 11 of the Commercial Courts Act, 2015. The
Commercial Court has no jurisdiction to decide any suit, application or
proceedings relating to any commercial dispute in respect of which the
jurisdiction of the civil court is either expressly or impliedly barred under any
other law for the time being in force. He submitted that in view of Section 47
of the Maharashtra Rent Control Act, 1999, the Civil court has no jurisdiction.
No injunction can be granted by any Court or authority. He submitted that
the competent authority under Section 49 of the Maharashtra Rent Control
Act, 1999 appointed under the Act shall be deemed to be public servant and
under Section 51 of the Act, it is deemed to be a civil Court. In view of
Section 47 and 33 of the Maharashtra Rent Control Act, 1999, the jurisdiction
of Civil Court is barred. The Commercial Court even does not get any
jurisdiction in the matter. The orders passed by the Commercial Court below
Exh.77 and 57 are bad in law and liable to be quashed and set aside. Mr
Kulkarni, learned Advocate for the appellant has placed his reliance in case
of Royal Orchid Hotels Ltd. Vs. Rock Realty Pvt. Ltd., Civil Revision
Application (Stamp) No.15282 of 2019, decided on 25.6.2019 by the
learned Single Judge at principal seat and Mahadev P Kambekar (D) TR.
LRs., Vs. Shree Krishna Woolen Mills Pvt. Ltd., Civil Appeal Nos. 5753-
5754 of 2011 decided on 31.1.2019 by the Apex Court.
17. Mr Kulkarni submitted that cause of action arose for the suit when the
original defendant alleged to have made default in payment of licence fees.
The cause of action had arisen in April 2016 and the plaintiff filed suit in the
year 2019, almost after three years and, therefore, the original plaintiff is not
entitled to get the equitable relief of injunction in view of Section 41 of the
Specific Relief Act, 1963.
Comm.Apeal 1 & 2 - 2021
18. Mr Kulkarni invited our attention to the impugned order at Exh.77 and
submitted that the learned Commercial Court was pleased to grant interim
mandatory injunction. The relief granted by the trial Court is nothing but
granting final relief. What is remained for final adjudication of the suit.
According to Mr Kulkarni, the interim mandatory injunction is to be granted
only to restore the status quo. Mr Kulkarni has placed his reliance in case of
Dorab Cawasji Warden vs. Coomi Sorab Warden & Ors. reported in AIR
1990 867 and Kishore Kumar and Ors., vs. Parveen Kumar Singh,
reported in AIR 2006 SC 1474.
19. Mr Kulkarni submitted that if there are any triable issues, then relief of
interim mandatory injunction is not permissible. He submitted that there are
number of triable issues involved in the suit, which require leading of
evidence, cross-examination. The issue of settlement of accounts is also
involved.
20. Mr Kulkarni submitted that the trial Court has committed an error in
granting final relief of possession at interim stage when the issues are yet to
be framed and the evidence is yet to be adduced. He submitted that the
impugned order of interim mandatory injunction is bad in law and to support
his argument, relied upon the decision in case of Metro Marins & Anr. Vs.
Bonus Watch Co. Pvt. Ltd. & Ors., reported in (2004) 7 SCC 478.
21. According to Mr Kulkarni, Section 12-A of the Commercial Courts Act,
2015 is mandatory which provides pre-institution mediation. In the present
case, no exercise was made to refer the dispute to the mediation before filing
of suit and it is breach of Section 12-A of the Commercial Act, 2015. The suit
is defective.
Comm.Apeal 1 & 2 - 2021
22. In conclusion, Mr Kulkarni, learned Advocate for the appellant/original
defendant strenuously argued that the impugned orders passed by the
Commercial Court are bad in law and liable to be quashed and set aside.
SUBMISSIONS OF ADVOCATE FOR RESPONDENT
23. On the other hand, Mr V.D. Salunke, learned Advocate for the
respondent/original plaintiff submitted that appellant/original defendant had
raised objection about maintainability of the suit before the Civil Court and at
the instance of appellant, the suit came to be transferred to the Commercial
Court and converted the suit into Commercial suit. Both the parties have
accepted the order passed on merits and appeared before the Commercial
Court and contested the suit. Now, the appellant cannot raise any kind of
objection regarding jurisdiction of the Commercial Court.
24. Mr Salunke, learned Advocate for respondent/original plaintiff
submitted that the Commercial Suit is very much maintainable in view of
nature of dispute between the parties. The objection is without any merit.
25. Mr Salunke further submitted that second ground regarding
maintainability of the suit for non-compliance of Section 12-A of the
Commercial Act, 2015 is raised for the first time before this Court. The
objection is unsustainable in law, particularly, at this stage in appeal when it
was not raised before the trial Court. He submitted that the said ground
deemed to have been waived by the appellant/original defendant and as
such, cannot be raised at appellate stage. He submitted that provisions of
Section 12-A of the Commercial Act, 2015 are not mandatory, however,
those are directory. Mr Salunke placed reliance in support of his submissions
on the following citations :
Comm.Apeal 1 & 2 - 2021
i) Ganga Taro Vazirani Vs. Deepak Raheja (Summons
for Judgment No.45 of 2019 in Comm. Summary Suit
No.972 of 2019 decided on 16.2.2021) at principal seat at
Bombay;
ii) Sathyam Wood Industries Vs. Adoniss (P) Ltd., and
anr. (C.R.P. (MD) No.804 of 2019 decided on 10.6.2019) of
Madras High Court; and
iii) GSD Constructions Pvt. Ltd., Vs. Balaji Febtech
Engineering Pvt. Ltd.,( M.A. No.4081/2019 decided on
7.8.2019) of High Court of Madhya Pradesh at Indore.
26. According to Mr Salunke, the objection regarding jurisdiction of the
Commercial Court raised by the appellant is concerned, the same is
untenable since it was not raised before the trial Court. He submitted that
admittedly, the appellant is a private limited company having share capital of
more than Rs.2 Crore and as such, the objection is devoid of merits.
27. So far as relief of granting interim mandatory injunction is concerned,
Mr Salunke vehemently submitted that leave and licence agreement period is
expired long back. The appellant is in occupation of suit premises illegally
and earning huge money. Out of sixty months, the appellant has paid rent
hardly for three to four months and Rs.16 Crore are due. In such
circumstances, the Commercial Court has rightly granted the relief of interim
mandatory injunction against the appellant.
28. To buttress the argument, Mr Salunke has placed his reliance on the
following citations :
i) Deoraj Vs. State of Maharashtra and ors.,
reported in (2004) 4 SCC 697;
Comm.Apeal 1 & 2 - 2021
ii) Sanjeev Pillai Vs. Venu Kunnapalli (FAQ
No.191/2019 decided on 11.12.2019) of Kerala High
Court;
iii) Saregama India Limited Vs. Balaji Motion
Pictures Limited & Ors., (CS (COM) 492/2019 decided
on 13.9.2019) of Delhi High Court
iv) Kirtibhai Vs. Raghuram (Appeal from Order
no.262 of 2007 decided on 20.1.2010) of Gujarat High
Court
29. So far as ground of limitation is concerned, according to Mr Salunke,
the objection is misconstrued. The suit is not for mandatory injunction to
calculate point of limitation. As such, suit is very well within the limitation and
not barred by law of limitation. He submitted that equity also lies in favour of
respondent/original plaintiff in view of facts of the case on hand.
30. We have considered the arguments advanced by the learned
Advocates for the respective parties.
GROUNDS OF APPEAL
i) Maintainability of suit;
ii) Jurisdiction;
iii) Non-compliance of Section 12-A of the Commercial Courts Act;
iv) Grant of interim mandatory injunction at interim stage;
v) Relief of mandatory injunction barred by limitation
31. First we shall deal with the issue of jurisdiction of the Commercial
Court. It is an admitted position that respondent/original plaintiff has initially
filed the suit against the appellant/defendant before the Civil Judge, Senior
Division at Rahata. The appellant/defendant raised objection about
maintainability of the suit before the Civil Court in view of nature of dispute
between the parties. The appellant/original defendant moved an application
Comm.Apeal 1 & 2 - 2021
raising the issue of maintainability of the suit and after hearing both the sides
and on merits, the Civil Court has recorded finding that the lis between the
parties must be entertained by the Commercial Court and not by the Civil
Court. At the instance of appellant, the suit came to be transferred to
Commercial Court. The order passed by the Civil Court about non-
maintainability of the suit before it was accepted by both the sides and
reached finality. None of the parties challenged that order before the
appropriate Court.
32. Again, the appellant/original defendant is raising objection about
jurisdiction of the Commercial Court contending that competent authority
under the Maharashtra Rent Control Act, 1999 alone has jurisdiction to
entertain the dispute. The Commercial Court has no jurisdiction to entertain
the dispute on hand. We do not find any merit in the argument and point of
objection raised by the appellant's side.
33. Admittedly, the appellant/original defendant is a private limited
company having share capital of more than Rs.2 Crore. In view of Section 3
of the Maharashtra Rent Control Act, 1999, when the share capital of a
company exceeds Rs.1 Crore or more, the provisions of the Maharashtra
Rent Control Act, 1999 would not come in picture, meaning thereby the
dispute may not be governed by the Maharashtra Rent Control Act, 1999 as
argued by Mr Sanket Kulkarni, learned Advocate for the appellant, through
competent authority in view of Section 49 of the Maharashtra Rent Control
Act, 1999. The nature of dispute between the parties, as discussed
hereinbefore and in view of terms and conditions incorporated in the leave
and licence agreement, it is very much clear that it is a commercial dispute
between the parties, as defined under Section 2 (c) (i) & (vii) of the
Commercial Court, 2015.
Comm.Apeal 1 & 2 - 2021
34. Having regard to the above reasons and in view of legal position
discussed in earlier paras, we do not find any merit on the point of
maintainability of the suit as well as jurisdiction. The suit is rightly
maintainable before the Commercial Court. The Commercial Court is
empowered to adjudicate the lis between the parties when the Court under
the Maharashtra Rent Control Act, 1999 has no jurisdiction to entertain the
suit. We are unable to accept the argument advanced by Mr Sanket
Kulkarni, learned Advocate for the appellant/original defendant.
35. Now coming to the point of non-compliance of Section 12-A of the
Commercial Courts Act, 2015. Section 12-A of the Commercial Courts Act
2015 provides that when a suit which does not contemplate any urgent
interim relief under the Commercial Courts Act, shall not be instituted unless
the plaintiff exhausts the remedy of pre-institution mediation in accordance
with such manner and procedure as may be prescribed by rules made by the
Central Government. Meaning thereby, the dispute must be referred to the
pre-institution mediation center for settlement before knocking the doors of
the Commercial Court. First of all, the ground of non-compliance of Section
12-A of the Commercial Courts Act was not raised before the trial Court.
Moreover, in view of recent decision of this Court in Summons for Judgment
No.45 of 2019 in Commercial Summary Suit No. 972 of 2019, decided by the
Single Judge at principal seat on 16.2.2021, it is ruled that provisions of
Section 12-A of the Commercial Courts Act, 2015 are directory and not
mandatory. Same view has been taken in case of Sathyam Wood
Industries Vs. Adoniss (P) Ltd., and anr. by the Madras High Court as well
as GSD Constructions Pvt. Ltd., Vs. Balaji Febtech Engineering Pvt.
Ltd. (supra) by the Madhya Pradesh High Court. The Culcutta High Court in
case of Terai Overseas Private Limited & Ors. Vs. Kejriwal Sugar
Comm.Apeal 1 & 2 - 2021
Agencies Private Limited & Ors. in C.S. No.78 of 2020 decided on
3.9.2020 and in case of M/s Amit Motorcycles Pvt. Ltd., Vs. M/s Axis
Bank Ltd., in I.A. No.GA 3 of 2019 in CS 217 of 2018, decided on
15.12.2020 has held that Section 12-A of the Commercial Courts Act, 2015 is
mandatory.
36. Moreover, the matter has travelled further. The objection of the matter
not referred to mediation is raised for the first time in present appeals after
the applications filed by plaintiff and defendant are decided. The defendant
filed counter claim and also application for temporary injunction. The
defendant on merits got the application decided but did not raise objection of
matter to be referred for mediation. Having regard to the above legal
position, it cannot be said that suit is bad for non-compliance of Section 12-A
of the Commercial Courts Act, 2015. Moreover, it would be too late in a day
now to refer the lis to the mediation center for adjudication when both the
parties fighting with strong arms and legal tools.
37. So far as point of limitation is concerned, on perusing the pleadings of
both the sides and documents on record, it is evident that the
respondent/original plaintiff has filed the suit against the appellant/original
defendant for possession of the suit premises. The suit is not for mandatory
injunction. As such, Article 113 of the Limitation Act, 1963 has no application
in view of facts and circumstances of case on hand. It is difficult to accept
the argument advanced by Mr Kulkarni that suit is barred by limitation in view
of Section 113 of the Limitation Act, 1963.
38. Now coming to the main ground regarding grant of relief of interim
mandatory injunction in favour of respondent/original plaintiff, both the sides
have canvassed their arguments on this aspect by placing reliance on the
citations.
Comm.Apeal 1 & 2 - 2021
39. It is well settled legal position that in view of provisions of Order
XXXIX, Rule 1 and 2 of the Code of Civil Procedure read with Section 39 of
the Specific Relief Act, the Court is empowered to grant relief of interim
mandatory injunction. The Civil Court has inherent power to issue interim
injunction when it considers it absolutely necessary to meet the ends of
justice to do so. It is while exercising such inherent powers that the Court in
exceptional circumstances of the case has jurisdiction to grant such relief.
The inherent power which is vested in the Court is to maintain the status quo
as of the date of the suit till the disposal of the suit. It is not to disturb the
status quo as of the date of the suit. When the suit is one for possession,
normally, interim mandatory injunction cannot be issued pending the final
decision of the suit. In case of Metro Marins & Anr. Vs. Bonus Watch Co.
Pvt. Ltd. & Ors. (supra), it is held by the Hon'ble Apex Court that the final
relief cannot be granted at interim stage when the suit itself is for eviction
and possession of the property. Grant of mandatory injunction is not correct.
40. If the relief of interim mandatory injunction is allowed to continue, then
what would remain in the suit to adjudicate between the parties. The issues
are yet to be framed. The parties are yet to adduce the evidence. According
to their pleadings, they will cross-examine their respective witnesses
according to their legal stand. Admittedly, on the date of the suit,
appellant/original defendant is in possession of the suit premises. There are
triable issues involved including settlement of accounts. If these peculiar
facts of the case on hand are considered, certainly, it is not a fit case to grant
relief of interim mandatory injunction. The trial Court seems to have granted
interim mandatory injunction in a casual manner without taking into
consideration the consequences of it. The impugned order of granting
interim mandatory injunction is certainly defective in the eyes of law. Having
Comm.Apeal 1 & 2 - 2021
regard to the facts of the case on hand, It cannot be sustained in the eyes of
law.
41. It is true that leave and licence period was for 49 months, i.e. from
30.12.2015 to 31.12.2019. The licence period is over. It seems that the
appellant/original defendant seems to have paid licence fees only for three
months and from March 2016, not paid the licence fees though total dues
according to the plaintiff is more than Rs.16 Crore, as claimed by the
respondent/plaintiff in pleadings. On one hand, the appellant/original
defendant is using the said premises for running his hotel business and
earning profit. On the other hand, the respondent/original plaintiff is deprived
of getting his legitimate licence fees though he is entitled for the same.
Equities will have to be adjusted. Defendant cannot be allowed to enjoy
possession of such a huge property free. Defendant is required to be put to
terms.
42. As per the terms and conditions of the leave and licence agreement,
the appellant/original defendant has spent an amount of Rs.4.70 Crore
towards renovation of hotel. The monthly rent was agreed at Rs.14,25,000/-
inclusive of service tax with increase of 6% every year. It was further agreed
between the parties that an amount of Rs.9,10,000/- per month shall be
deducted towards renovation out of licence fees of Rs.14,25,000/- per month
and an amount of Rs.5,15,000/- would be paid to the respondent/plaintiff
towards licence fees. Further it is admitted position that leave and licence
period between the parties was for 49 months from 1.12.2015 to 31.12.2019.
As per the memorandum of understanding between the parties dated
7.11.2013 and in view of declaration-cum-undertaking dated 14.12.2015, the
respondent/original plaintiff has paid Rs.1,20,00,000/- to the
appellant/original defendant for renovation of hotel in advance which is to be
Comm.Apeal 1 & 2 - 2021
adjusted in the licence fees. Therefore, it is clear that out of renovation
expenses of Rs.4.70 Crore, an amount of Rs.1,20,00,000/- is already paid by
the respondent/original plaintiff to the appellant/original defendant and
remaining balance amount of Rs.3,50,00,000/- was remained to be
recovered from the respondent/original plaintiff. As agreed between the
parties, Rs.9,10,000/- per month would be adjusted to recover remaining
balance amount of renovation expenses. If we calculate the said amount of
Rs.9,10,000/- per month towards payment of renovation expenses, the total
comes to (Rs.9,10,000 x 36 = Rs.3,27,60,000/-). Thus, renovation expenses
seems to have been recovered by the appellant/original defendant. The
respondent/original plaintiff is entitled to get full licence fees i.e.
Rs.14,25,000/- per month after satisfying renovation expenses. Thus,
respondent/original plaintiff would be entitled to get Rs.14,25,000/- per month
(+) 6% increase per year for atleast 24 months and after necessary
calculation that figure comes to Rs.3,42,00,000/- without increase of 6% per
annum in rent/licence fees. Having regard to the above calculation, the
arrears against the appellant/original defendant seems to be approximately
more than Rs.4 Crore. By taking into this aspect and to make the justice we
thought it proper to issue certain directions in t his behalf in the final order.
43. Having regard to the nature of dispute and in order to protect the
interest of both the parties, we are of the considered view that impugned
order of granting interim mandatory injunction is liable to be modified. At the
same time, rights of the respondent/original plaintiff need to be protected by
issuing certain directions to the appellant/original defendant subject to final
decision in the suit, which will take care of legitimate rights of
respondent/original plaintiff. With this, we conclude and proceed to pass the
following order :
Comm.Apeal 1 & 2 - 2021
ORDER
(i) The impugned order below Exh.77 in Commercial Suit No.2/2019
dated 8.12.2020, passed by the Commercial Court at Kopargaon is modified.
(ii) The appellant/original defendant shall deposit an amount of Rs.4
Crores within six weeks from the date of this order in the trial Court and
continue to pay regular licence fees at the rate of Rs.14,25,000/- per month
till final decision of the Commercial Suit.
(iii) The respondent/original plaintiff is entitled to withdraw the amount
deposited by the appellant/original defendant in the trial Court.
(iv) In case the appellant/original defendant fails to comply the abovesaid
clauses of the order of this Court, the order of the Commercial Court/trial
Court passed below Exh.77 in Commercial Suit No.02/2019 dated 8.12.2020
would be operative and the respondent/original plaintiff is at liberty to take up
execution proceeding and legal recourse accordingly.
(v) The respondent/original plaintiff has already put the law in motion
against the appellant/original defendant for possession of the suit
property/suit premises, there is no force in the apprehension raised by the
appellant/original defendant. As such, there is no need to pass any order on
Exh.57 and Exh. 57 shall stand simply filed.
44. In view of above terms, both the Commercial Appeals stand disposed
of.
45. In view of disposal of Commercial Appeals, Civil Applications also
stand disposed of. No order as to costs.
( SHRIKANT D. KULKARNI, J.) ( S.V. GANGAPURWALA, J.)
vvr
