Simka Schools Pvt. Ltd. vs Ansal Properties And Industries ...
2006 Latest Caselaw 1778 Del

JUDGMENT

S.L. Bhayana, J.

1. This is an appeal arising out of the judgment and decree passed by the Learned Additional District Judge, Delhi dated 30th November, 2004 wherein the learned Additional District Judge has decreed the suit of the plaintiff in the sum of Rs.12,72,314/- with interest @ 12% per annum from the date of filing the suit till realisation. The brief facts of the case of the plaintiff are that the plaintiff and the defendants entered into a lease agreement on 01.03.1997 wherein the plaintiff agreed to give a space on the terrace of their building known as Ansal Chambers-1 on lease and license basis. The defendant was permitted to put an antena on the said space for the purpose of business of the defendant. As per terms and conditions of the plaintiff's agreement, the defendant agreed to pay a license fee @ Rs.15,000/- per month. The defendant kept on paying the agreed license fee up to 28.02.1998 but failed to pay the license fee w.e.f. 01.03.1998 to 28.02.2002. The defendant failed to pay the license fee and a sum of Rs.9,18,918/- being the license fee for this period becoming due and payable against the defendant. The plaintiff demanded this amount from the defendant but despite demands, the defendant failed to pay the suit amount to the plaintiff. In the written statement filed by the defendant, they have stated in the preliminary objection that there is no amount due and payable by the defendant to the plaintiff and that the plaint does not show any cause of action and the suit is barred by time. On merits, the defendant has submitted that although an agreement dated 01.03.1997 was entered between the parties but the said agreement was taken over by another company named ISF Securities Limited who took over all the rights, liabilities and obligations under the said agreement and the defendant has no concern with the said agreement at all. The defendant has also denied that he had paid any license fee under the agreement to the plaintiff but has submitted that ISF Securities Limited has paid license fee up to 28.02.1998 to the plaintiff. This company is a separate legal entity from the defendant. The defendant has nothing to do with the said company. The defendant has also denied that the payment of a sum of Rs.9,18,918/- is due and payable for the period 01.03.1998 to 28.02.2002. Defendant has also denied to have any business in which use of the antena was involved. The defendant has also denied receipt of letter dated 27.08.2001 from the plaintiff.

2. After going through the pleadings of the parties, the following issues were framed by the learned trial court:

1. Whether the suit is barred by limitation? OPD.

2. Whether plaint has been signed, verified and filed by duly authorised person? OPP.

3. Whether no cause of action has arisen in favor of the plaintiff and against the defendant?OPD.

4. Whether under the license agreement dated 1.3.97 all the rights, obligations and liabilities of the defendants were taken over by ISF Securities Ltd. If so its effect? OPD.

5. Whether the defendant used the space and put up an anteena on the terrace of the building as contended by the plaintiff? OPP.

6. Whether license Agreement dated 1.3.97 stood expired w.e.f. 15.2.98 and no amount was payable to the plaintiff for any period thereafter?OPD.

7. Whether plaintiff is entitled to a decree for a sum of Rs.12,72,314/-? OPP.

8. Whether the plaintiff is entitled to claim interest. If so at what rate and for which period? OPP.

9. Relief.

3. Both the parties led their evidence in support of their case. After going through the evidence and after hearing the arguments of the parties, the learned trial court decided all the issues in favor of the plaintiff and against the defendant and ultimately decreed the suit of the plaintiff as aforesaid.

4. We have heard learned Counsel for both the parties and perused the record carefully. Learned Counsel for the appellant has submitted that the learned trial court has not given adjustment of a sum of Rs.1,80,000/- which was given by the defendant to the plaintiff as security at the time of entering into the license agreement with the plaintiff. The learned Counsel for the appellant has drawn our attention to the license agreement entered into between the parties. Clause 2 of the license agreement reads as under:

That the Licensee shall pay to the Licensor an amount equivalent to 12 months license fee as an interest free security deposit amounting to Rs.1,80,000/- (Rupees One Lakh Eighty Thousand only) which shall be refunded to the Licensee on the expiry of this license or its earlier determination.

5. Learned Counsel for the defendant has submitted that although he had brought clause 2 of the license agreement to the notice of the learned trial court but the learned trial court has not given relief regarding this amount to the defendant which was paid as security deposit at the time of entering into the license agreement. Learned Counsel for the respondent has, however, agreed with the contention of the appellant that this amount was deposited as security deposit by the defendant with the plaintiff and learned trial court has not given any relief regarding this amount to the defendant.

6. We, therefore, feel that a sum of Rs.1,80,000/- which has been paid as security deposit at the time of license agreement is to be deducted from the principal amount decreed by the learned trial court against the defendant. Learned Counsel for the appellant/defendant has further submitted that the interest awarded by the trial court in suit amount @ 12% per annum is much too excessive. He has submitted that the parties have never agreed to pay interest on any amount due to be paid by the defendant to the plaintiff at the time of entering into the license agreement. However, he has fairly conceded that the defendant is prepared to pay interest @ 6% per annum on the said amount of Rs.9,18,918/-. Learned Counsel for the appellant has further submitted that admittedly defendant has not paid the license fee for the period 01.03.1998 to 28.02.2002 and a sum of Rs.9,18,918/- is due and payable by the defendant to the plaintiff for this period as license fee. However, the plaintiff has claimed interest @ 18% per annum for this period which comes to a sum of Rs.3,53,396/- which is exhorbitant and on the higher side. The defendant has now agreed to pay interest @ 6% per annum on the amount outstanding and due against them. There was no clause for payment of interest in the license agreement. However, the defendant is prepared to pay reasonable rate of interest on the amount due w.e.f. 01.03.1998 to 28.02.2002. Learned Counsel for the plaintiff/respondent has submitted that the learned trial court has rightly decreed the suit in the sum of Rs.12,72,314/- and that they have rightly claimed interest @ 18% per annum on the principal amount of Rs.9,18,918/- which comes to Rs.3,53,396/- and the interest @ 18% claimed by the plaintiff is reasonable and it is not exhorbitant and the defendant is liable to pay interest @ 18% per annum on the amount due for the said period as the defendant has with-held money for the aforesaid period without any justification and that the appeal may be dismissed with cost.

7. We have gone through the record and found that as per clause 2 of the license agreement dated 01.03.1997, the appellant/defendant had paid a sum of Rs.1,80,000/- to the plaintiff as security deposit but no such adjustment of this amount has been given by the learned trial court. The appellants are entitled to this adjustment on the principal amount from the plaintiff. We have also gone through the license agreement and there is no clause for payment of interest by the defendant to the plaintiff. So, the defendant had never agreed to pay interest on any amount due towards the license fee to the plaintiff. So, the interest claimed by the plaintiff @ 18% per annum for the period 01.03.1998 to 28.02.2002 is exhorbitant and on the higher side. The interest amount claimed by the plaintiff amounting to Rs.3,53,396/-on the principal amount of Rs.9,18,918/- is, therefore, much too excessive and exhorbitant.

8. We, therefore, hold that the learned trial court had not applied its mind while awarding the amount of Rs.3,53,396/- towards interest @ 18% per annum for the said period. Although, there is no clause in the license agreement for payment of interest by the defendant to the plaintiff but we still hold that since defendant had with-held the money of the plaintiff without any just cause. They are liable to pay reasonable rate of interest to the plaintiff. The ends of justice would be served if the defendant is given adjustment of Rs.1,80,000/- from the principle amount of Rs.9,18,918/-. We, therefore, hold that the plaintiff is entitled to recover a sum of Rs.7,38,918/- from the defendant along with interest @ 6% per annum w.e.f. 01.03.1998 till realisation. The judgment and decree of the learned trial court stands modified to that extent. With these modifications in the judgment and decree passed by the learned trial court, the appeal is partly allowed. The parties are left to bear their own costs.