Silicon Graphics Systems India ... vs Nidas Estates Private Limited & ...
2011 Latest Caselaw 4209 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                         Judgment Reserved on:   25.08.2011
                          Judgment Pronounced on: 30.08.2011

+ CS(OS) 1661/2003

M/S. SILICON GRAPHICS SYSTEMS INDIA PRIVATE
LIMITED                                ..... Plaintiff
             Through: Mr. Rajiv Tyagi, Adv.

                          versus


NIDAS ESTATES PRIVATE LIMITED & ORS ...Defendants
              Through: Ms. Malavika Rajkotia, Adv.,
              Mr Ravi Awasthi and Mr Ramakant
              Sharma, Advs.

                          &

+ CS(OS) No. 2108/2011
(SUIT NO. 100/2005/02 of District Court)


M/S NIDAS ESTATES PRIVATE LTD.                    ....Plaintiff

                          versus

SILICON GRAPHICS SYSTEMS INDIA PRIVATE LIMITED
                                   .... Defendant

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in Digest? Yes

V.K. JAIN, J

CS(OS) 1661/2003

1. This is a suit for recovery of Rs.45,23,414/-. The

plaintiff and defendant No.1, both of which are Private

Limited Companies, entered into a license agreement dated

1st September 1995 in respect of premises bearing No.305-A

and 305-B, Embassy Square, 148 Infantry Road, Bangalore.

Under the agreement the aforesaid premises was given to

the plaintiff company on license for a period of 36 months

and license was renewable for another term of three years.

The license was accordingly renewed for a further period of

three years expiring on 31st August 2001. The plaintiff

company also deposited a sum of Rs.2,02,100/- as security

with Karnataka Electricity Board on behalf of defendant

No.1 company. This amount according to the plaintiff was

agreed to be refunded to it by defendant No.1 on expiry of

the license. Another sum of Rs.6,25,000/- was deposited by

the plaintiff with defendants No.2 and 3 for providing

standby generating sets and upkeep and maintenance of the

premises subject matter of the license agreement, and

according to the plaintiff was to be refunded to it on expiry

of the term of the license. It is alleged that on expiry of the

term of the license defendant No.1 requested the plaintiff

not to take refund of the deposits made by it with Karnataka

Electricity Board and defendants No.2 and 3 since it wanted

to retain the benefit of the higher load sanctioned by

Karnataka Electricity Board as also the generator sets made

available by defendant No.2 and 3 and agreed to pay an

equivalent amount to the plaintiff company.

2. Vide letter dated 4th September 2001 the plaintiff

called upon defendant No.1 to either renew the license on

the terms contained in the letter or to take back possession

of the licensed premises, against refund of security deposits.

Defendant No.1, however, did not agree to the terms offered

by the plaintiff for renewal of the license and the plaintiff

had to repeatedly call it upon to take possession of the

licensed premises against security deposits. This led to a

meeting between the officials of the plaintiff and defendant

No.1 on 5th October 2001, wherein the possession of the

licensed premises was again offered to defendant No.1

against refund of security deposits. It is alleged that

defendant No.1 did not come forward to take possession of

the premises and also did not refund the security deposit,

despite repeated reminders. It rather sent a notice claiming

a sum of Rs.25,29,582.50 from the plaintiff towards license

fee for the period from September to December, 2001. In a

legal notice dated 14th February 2002 defendant No.1 also

raised a claim of Rs.9,58,448/- on the plaintiff company,

after adjusting the security amount of Rs.27,45,000/-.

Finally defendant No.1 took possession of the premises

using a duplicate set of keys and also failed to release the

security deposits and other deposits amounting to a total

sum of Rs.35,72,100/-. According to the plaintiff,

defendants No.2 and 3 have also failed to refund the

amount of Rs.6,25,000/- which it had deposited with them,

in respect of the aforesaid premises, taking the stand that

this deposit was made by the plaintiff on behalf of defendant

No.1. The plaintiff has now claimed the aforesaid sum of

Rs.35,72,100/- from all the defendants along with interest

on that amount @ 18 % per annum amounting to

Rs.9,51,314/-, thereby raising a total claim of

Rs.45,23,414/-. Alternatively the plaintiff has sought

Rs.36,74,647/- comprising security deposit of

Rs.27,45,000/- and a sum of Rs.2,02,100/- deposited with

Karnataka Electricity Board along with interest on that

amount @ 18% per annum making a total sum of

Rs.36,74,647/- and a sum of Rs.8,48,767/- from

defendants No.2 and 3 which comprises Rs.6,25,000/-

towards security deposit and the balance amount towards

interest @ 18% per annum.

3. The suit has been contested by defendant No.1. It

is alleged in the written statement that defendant No.1

wanted the plaintiff to remove the fixtures and restore the

premises to its original condition as per the terms of the

license agreement, but the plaintiff wanted a sum of Rs.5

Lacs for those fittings and was refusing to vacate the

premises till its demand for such payment was met.

Defendant No.1, however, was not willing to pay Rs.5 lacs

which the plaintiff was demanding for those fittings and

fixtures comprising false ceiling air condition ducting with

pipes, fire protection pipes, electrical control panel and was

willing to take vacant possession of the premises on

payment of its just dues which comprised license fee arrears

of two months at that time. It is further alleged that when it

became clear to defendant No.1 that the plaintiff had no

intention of returning the premises it entered the premises

exercising its right under the license agreement. Defendant

No.1 has however admitted having entered into license

agreement dated 1st September 1995 and having raised a

sum of Rs.27,45,000/- as deposit from defendant No.1. It is

also admitted that the plaintiff deposited a sum of

Rs.2,02,100/- for sanction of additional load of electricity

and Rs.6,25,000/- with defendants No.2 and 3 for providing

standby generators and for maintenance charges.

This is also the claim of defendant No.1 that the

plaintiff is entitled to pay rent for the months of September

2001 and October 2001 as no notice to terminate the

license was given by it.

CS(OS) No. 2108/2011 (Suit No. 100/2005/02 of District Court)

4. This suit filed before the District Court, Delhi was

transferred to this Court and was consolidated with CS(OS)

No. 1661/2003 vide order dated July 13,2011. The case of

the plaintiff in this suit, which is defendant no.1 in CS(OS)

No. 1661/2003 is that it is entitled to a sum of

Rs.37,03,448/- from the plaintiff which comprises

Rs.1,17,425/- being the deficient license fee for September

1995, Rs.1,37,750/- towards license fee arrears,

Rs.6,69,828/- towards license fee from June to August,

2001, Rs.21,62,336/- towards additional license fee from

September 2001 to 10th February 2002, Rs.258754/-

towards interest @ 18% per annum and Rs.357855/-

towards maintenance charges, and that after adjusting

Rs.2745000/- deposited by the plaintiff company, it is yet to

recover a sum of Rs.958448/- from it. The claim for

additional license fee is based on the license agreement

which provided for payment of additional fee of Rs.5,000/-

per day upto 30 days and thereafter at the rate of 10% of

the total license fee payable immediately prior thereto for

each 30 days period after the first 30 days period, in case

the licensee continued to use the premises beyond the

terms of the license.

5. The following issues were framed in CS(OS)

No.1661/2003:-

1. Has the plaintiff been always willing to make over possession w.e.f 1.9.01 and accordingly not liable to pay any charges for any period beyond

1.9.01?

2. Has the defendant been in possession w.e.f. 1.9.01 by virtue of Clause of the Licence Deed?

3. Is the defendant entitled to adjust the security amount in the manner stated by him in the written statement?

4. Is the plaintiff entitled to recover the suit amount and if so from whom?

5. Relief.

The following issues were framed in suit

No.100/2005/02 of District Court:-

1. Whether plaintiff is entitled to relief claimed?

2. Relief.

Issues No.1 to 3 in CS(OS) 1661/2003 and issue No.1 in suit No.100/2005/02 of District Court

6. In CS(OS) 1661/2003, the plaintiff has filed

affidavit of its Financial Controller Shri Sanjay Bhanot by

way of evidence. Defendant No.1 in this suit has filed the

affidavit of its Director Mr. Rajesh Dutta by way of evidence.

The suit against defendants No.2 & 3 in CS(OS) 1661/2003

was decreed for recovery of Rs.6,25,000/- since they failed

to deposit a sum of Rs.6,25,000/- which they were required

to deposit as a pre-condition for grant of leave to contest the

suit.

7. In 100/2005/02, Mr. Rajesh Dutta has appeared

in the witness box as PW-1 and Mr. Sanjay Bhanot has

been examined as DW-1. In his affidavit by way evidence,

Mr. Sanjay Bhanot has stated that on expiry of the licence

agreement, the plaintiff called upon defendant No.1 several

times to take over vacant possession of the premises, but,

defendant No.1 did not come forward to take possession

since the rentals at that time were falling and it was not

able to find another suitable tenant. According to him, the

plaintiff had taken a new accommodation at 405/406, P-2,

Prestige Metropolitan, M.G.Road, Bangalore, with effect from

01.09.2001, vide lease agreement PW-17 and it was always

ready and willing to handover the possession of the

premises to defendant No.1. According to him, the plaintiff

having already vacated the premises, defendant No.1 could

have taken its possession at any time, but, it did not come

forward to take the possession until its own pressing need

arose in this regard.

8. Mr. Rajesh Dutta, Director of defendant No.1

Company has, in his affidavit, stated that the plaintiff was

holding defendant No.1 to ransom by insisting upon large

payments, ostensibly for fixtures like control panel and

refusing to vacate the premises till the payment demanded

by it was made. According to him, the plaintiff was in

possession and occupation of the premises till they

re-entered the premises on 15th February, 2002. According

to him, defendant No.1 had entered into a fresh agreement

commencing 15.02.2002 to let out the premises in question.

9. The license deed, executed between the parties,

initially provided as under:-

"As a security for the due payment by the Licensee and due performance by the Licensee of its obligations hereunder, the Licensee shall at the time of the execution of this Agreement deposit with the Licensor a sum of Rs 27,45,000/- (Rupees Twenty Seven Lac forty five thousand only) which the Licensor shall hold until the Licensee vacates the licensed Premises.

Without prejudice to any other right or remedy which the Licensor has in this behalf the Licensor shall be entitled to adjust from the security deposit any License Fee or other amounts payable hereunder, which remain unpaid by the Licensee and, upon such adjustment the Licensee shall forthwith replenish the security deposit to bring it to an amount of Rs 27,45,000/- (Rupees twenty seven lacs and forty five thousand only) and pay interest on the amount adjusted @ 18% per annum from the date of adjustment up to date of repletion.

The Licensor shall refund to the Licensee

the unadjusted amount of the security deposit remaining in the hand of the Licensor simultaneously at the time of the Licensee vacating the Licensed Premises, free of any liability of interest and after deducting a reasonable amount for any damage caused to the premises. However, should the Licensor fail to make the refund of the security deposit stipulated above simultaneously with the Licensor delivering the vacant possession of the Licensed Premises, the Licensor shall be liable to pay interest during the period the unadjusted amount of security deposit remain unpaid by the Licensor to the Licensee. Such interest on the unadjusted amount of the security deposit shall be payable by the Licensor to the Licensee at the rate of the 18% per annum (payable on a per day basis) for up to the first 30 days during the period the amounts remain unpaid and thereafter at a rate which is enhanced by 10% (ten percent) of the rate immediately prior thereto for each 30 (thirty) days period after the first 30 (thirty) days period of non-refund of the unadjusted amount of security deposit. Interest at the enhanced rates of interest shall be payable on a cumulative basis.

The Licensee may apply for and obtain additional electricity/power for the purposes of its office activities and the Licensor shall provide all necessary assistance to enable the Licensee to security such additional electricity/power requirements from concerned authorities, to the paid or made for the additional load.

In so far as such payments shall constitute refundable deposits the Licensee shall on determination of the license give the Licensor an option to retain the original load, and if the Licensor opts to retain the load, the Licensor shall pay the Licensee the refundable amount of such deposits. If the Licensor opts not to retain the additional load, the Licensee will be at liberty to withdraw the refundable deposits with respect to addition loan and the Licensor shall execute any and all documents and authorities as are required to enable the Licensee to obtain the refund.

The Licensee shall not make any structural alterations in the Licensed Premises. However, the Licensee may make any additions or alterations in the Licensed Premises for making enclosures, cabins, false ceilings etc., and install air conditioners, exhaust fans, coolers and other electric appliances and wiring for local area network without in any manner damaging the Licensed Premises and on termination of the license, the Licensee shall be entitled to remove the same. The Licensee may remove the wall connecting the licensed premises to flat nos. 304A and 304B. However, the LICENSEE shall on determination of the license restore the Licensed Premises to its original condition, including the partition wall or pay the Licensor the costs likely to be incurred for such restoration.

The Licensee shall stop using the Licensed Premises on the expiry of this license either by efflux of time or revocation by the Licensor. If the Licensee commits default,

the Licensee shall be bound to pay apart from the license fee payable under Clause (2) supra, an addition fee of Rs.5000/- (Rupees five thousand only) per day during the period in which it continues to use the Licensed Premises for upto 30 (thirty) days, and thereafter an additional license fee enhanced by 10% (ten per cent) of the total license fee payable immediately prior thereto for each 30 (thirty) days period after the first 30 (thirty) days period of use beyond the term of license. Acceptance of such amount, however shall not constitute acceptance of a fresh license, and shall be without prejudice to all recourse/remedy that the Licensor may have to repossess the premises."

10. It is an admitted case that the license agreement

expired on 31st August, 2001. Vide letter dated 04th

September, 2001 (Ex.PW-8), the plaintiff proposed renewal

of the lease/license for two years on payment of rent/license

if which was lower than the rent/license fee which it was

paying up to 31st August, 2003. It also requested defendant

No. 1 to refund the security deposit and accept vacant

possession of the premises if the terms proposed for the

renewal of the lease/license were not acceptable to it.

Admittedly, the lower rent/license fee proposed by the

plaintiff was not accepted by defendant No. 1. Vide letter

dated 05th September, 2001 (Ex.PW-9), defendant No. 1

proposed renewal of the lease at the rent of Rs 60 per sq.

feet as against the rent Rs 50 per sq. feet offered by the

plaintiff. This, obviously, was not acceptable to the plaintiff,

which vide its letter dated 28th September, 2001 (Ex.PW-11),

referring to its letter dated 04th September, 2001, reiterated

its request for refund of the security deposit and asked the

plaintiff to send its representative to accept vacant

possession of the premises and complete the formalities in

this regard not later than 05th October, 2001. In reply to

plaintiff's letter dated 28th September, 2001, defendant No.

1 wrote a letter dated 1st October, 2001 (Ex.PW-12)

informing that its representative will get in touch with the

plaintiff on 05th October, 2001 to take the possession of the

premises in tenantable condition, subject to the premises

being restored to its original condition and to hand over

security deposit after deducting outstanding dues against

the premises, including cost of restoration to original

condition if it was found necessary and deducting rent

arrears in accordance with a statement, enclosed with the

letter. The statement indicated that a sum of Rs

13,71,055/- was due to defendant No. 1 from the plaintiff.

This amount comprised Rs 1,37,250/- towards past arrears,

Rs 2,54,675/- towards rent for September, 1995, Rs

8,93,104 towards rent from June, 2001 to September, 2001

@ Rs 2,23,276 per month and Rs 2,23,276/- towards one

month's additional rent in lieu of notice as per agreement.

After amount of tax required to be deducted at source, the

net amount payable by the plaintiff to defendant No. 1, as

per this statement, came to Rs 11,15,314/-.

11. Admittedly, a meeting was held on 05 th October,

2001 between Mr. Ashish Randhawa of defendant No. 1-

Company and Mr. K.V. Subramanian of plaintiff-company.

The minutes of the meeting, signed by both these persons,

read as under:-

1. NEPL acknowledge the receipt of security deposit of Rs

6,25,000/-.

2. NEPL also has confirmed from Embassy Group, the

deposit of Rs 6,25,000/- for genset paid by SGI to

Embassy Group on NEPL's behalf. This amount needs

to be refunded to SGI. Embassy Group and NEPL to

decide amongst themselves as to who would refund

this.

3. NEPL have claimed that rent for the month of

September, 1995 (Rs 152,500 less TDS of Rs 35,075/-)

has not been received by them. SGI to reconcile this

account by Tuesday the October, 9, 2001 and get back

to NEPL.

4. NEPL has also claimed Rs 1,37,250 being the balance

due against arrears received in the month of May,

1998. SGI to reconcile this as well by Tuesday the

October 9, 2001 and get back to NEP.

5. NEPL has requested SGI not to surrender the

additional electrical load obtained by SGI to KEB since

NEPL wants to retain the same. NEPL to apply to KEB

for transferring the same from SGI to NEPL. Any

deposits paid by SGI would be refunded to SGI by

NEPL. All charges pertaining to this would be borne

by NEPL.

6. The vacant possession has already been offered by SGI

to NEPL at the end of the lease period, against refund

of Security Deposit.

7. SGI offers the following to NEPL against payment.

Amounts to be mutually decided.

 False Ceiling

 Air Condition ducting with pipes

 Fire protection pipes

 Electrical Control Panel

12. The following facts emerged from the above-

referred correspondence and minutes of the meeting held on

05th October, 2001:-

(a) Though the offer of the plaintiff to renew the

lease/license for two years on payment of rent at

the rate of Rs 50 per sq. feet, made vide letter

dated 04th September, 2001, was rejected by

defendant No. 1 on the very next day and a

counter offer for renewal of lease at the rate of 60

per sq. feet was given, there was no response from

the plaintiff, to the counter offer till 28 th

September, 2001. If the counter offer made by

defendant No. 1 was not acceptable to the plaintiff,

it ought to have rejected the same immediately on

receipt of the letter dated 05th September, 2001.

Moreover, the plaintiff itself had requested

defendant No.1, vide letter dated 28th September,

2001, to take possession by 05 th October, 2001.

Hence, it is difficult to accept that the plaintiff had

unequivocally offered vacant possession of the

premises to defendant No. 1 on 04th September,

2001;

(b) The plaintiff having sought refund of security

deposit and having requested defendant No. 1 to

depute its representative to accept vacant

possession of the premises not later than 05 th

October, 2001, it made an unambiguous and

unequivocally offer to defendant No. 1 to take

possession of the premises and refund the security

deposit. In fact, defendant No. 1 also had no

doubt in its mind regarding the intention of the

plaintiff in this regard and that is why it informed

the plaintiff that its representative would get in

touch with them on 05th October, 2001 to take

vacant possession of the premises.

(c) The letter of defendant No. 1 dated 01st October,

2001 leaves no doubt that defendant No. 1 was not

prepared to accept vacant possession of the

premises in the condition in which the premises at

that time was and wanted to accept possession

only when the premises was restored to its original

condition. Admittedly, the plaintiff, in terms of the

provisions of the license agreement, had installed

fittings and fixtures comprising false ceiling air

condition ducting with pipes, fire protection pipes,

electrical control panel in the tenancy premises.

Defendant No. 1, obviously, wanted the plaintiff to

remove those fittings and fixtures before it took

possession of the premises from the plaintiff.

(d) The letter of defendant No. 1 dated 01st October,

2001 also shows that defendant No. 1 was not

willing to refund the whole of the security deposit

to the plaintiff at the time of taking vacant

possession of the premises and wanted to deduct

from it a sum of Rs 11,15,314/-, as detailed in the

annexure of the letter.

(e) though defendant No. 1 had claimed a gross sum

of Rs 13,71,055/-, net amount of Rs 11,15,314/-

after deduction of tax at source amount to Rs

2,55,714/-), the whole of the demand was not

justified, as is evident from the minutes of the

meeting held on 05th October, 2001, wherein

defendant No. 1 claimed only a sum of Rs

1,17,425/- towards arrears of license fee and Rs

1,37,250/- toward balance due against arrears

received in May, 1998. Hence, it cannot be

disputed that defendant No. 1 had not offered to

refund the whole of the amount due to the plaintiff,

after adjustments which were permissible in terms

of the license deed.

acknowledged that the plaintiff had offered vacant

possession of the premises to it at the end of the

lease period, against refund of security deposit.

Thus, it cannot be disputed that the plaintiff was

ready and willing to deliver possession to the

defendant on the refund of the security deposit.

13. The next question which comes up for

consideration is as to whether defendant No. 1 could have

insisted upon removal of the fittings and fixtures and

payment of the aforesaid sums of Rs 1,17,425/- and Rs

1,37,250/- before accepting possession of the premises.

14. As noted earlier, the licensor was required to

refund the unadjusted amount of the security deposit to the

licensee simultaneously at the time of the licensee vacating

the licensed premises, after deducting a reasonable amount

for any damage caused to the premises. The

correspondence between the parties up to the meeting held

on 05th October, 2001 does not indicate that defendant No.

1 had adjusted any unpaid amount of the license fee from

the security deposit by the plaintiff-company with it, though

it had claimed initially a sum of Rs 13,71,055/-, which was

later reduced to two sums one of Rs 1,17,425/- and the

other Rs. 1,37,250/-. Defendant No. 1, under clause 3 of

the license deed could definitely have adjusted the arrears of

license fee or any other amount payable to it under the

license deed from the security amount, deposited with it.

The question which arises for consideration is whether any

amount was actually due to defendant No. 1 towards

arrears of license fee on 1st October, 2001 when it wrote to

the plaintiff or on 05th October, 2001 when its

representative had a meeting with the representative of the

plaintiff-company. A perusal of the minutes of the meeting

held on 05th October, 2001 would show that the plaintiff-

company did not admit its liability for payment of the

aforesaid amounts to defendant No. 1 though it agreed to

reconcile its account by 09 th October, 2001 and get back to

defendant No.1-company. There is no evidence of the

plaintiff-company having written back to defendant No. 1 in

this regard at any point of time. In my view, if any amount

was actually due to defendant No. 1 from the plaintiff,

defendant No. 1 was very much entitled to adjust that

amount while refunding the security deposit to the plaintiff-

company. It was contended by the learned counsel for the

plaintiff that the arrears which defendant No. 1 had claimed

from the plaintiff-company had become barred by limitation

by 1st October, 2001 and, therefore, even if it is assumed

that these amounts were due to defendant No. 1 from the

plaintiff-company, they could have adjusted while refunding

the security deposit. I, however, do not find myself in

agreement with the learned counsel for the plaintiff. The

period of limitation, prescribed in Limitation Act, bars the

remedy of filing a suit for recovery of an amount which has

become barred by limitation, but it does not bar the claim

for an amount which is otherwise due and payable and,

therefore, even if some arrears had become barred by

limitation, defendant No. 1 was entitled to deduct those

arrears while refunding the security deposit to the plaintiff.

The next question which comes up for consideration in this

regard as to whether the amounts, claimed by defendant No.

1, were actually due to it or not.

As noted earlier, both the parties have produced

one witness each. In his affidavit Mr Rajesh Dutta of Nidas

Estates Private Limited, which is defendant No. 1 in Suit No.

1661/2003, has stated that the plaintiff had worked out the

accounts and a sum of Rs 1,17,425/- was due to it towards

license fee for September, 1995 and Rs 1,37,250/- was

payable to it towards arrears, in addition to license fee for

the period from June to August, 2001. It is an admitted case

that the plaintiff in Suit No. 1661/2003 did not pay license

fee from June to August, 2001. Defendant No. 1 in this

case, therefore, could definitely have adjusted the aforesaid

amount from the security deposit, along with interest for the

delayed payment in terms of the license agreement. There is

no material on record to suggest that the plaintiff at any

point of time disputed its liability to pay license fee for those

four months. As regards license fee for September, 1995, Mr

Sanjay Bhanot, in his affidavit by way of evidence, did not

claim that this amount was not due to defendant No. 1-

company or that the whole of the license fee for September,

1995 had been paid by the plaintiff-company. Once there

was a claim for recovery of this amount, the onus was on

the tenant/licensee to prove that it had paid rent/license fee

for the month of September, 1995. No evidence having been

led by the plaintiff in Suit No. 1661/2003 to prove payment

of rent/license fee for September, 1995, I see no reason to

disbelieve the deposition of Mr Rajesh Dutta in this regard.

Another important aspect in this regard is that even in the

correspondence subsequent to the meeting held on 05th

October, 2001, the plaintiff in Suit No. 1661/2003 did not

claim that it had paid license fee for September, 1995. In its

notice dated 27th December, 2001, defendant No. 1 claimed

rent for September, 1995. In the reply sent on 22nd

January, 2002, through its counsel, the plaintiff did not say

that it had paid rent/license fee for September, 1995.

Rather, it was claimed that the plaintiff was willing to settle

and adjust the dues of defendant No. 1 on reconciliation of

the accounts between the plaintiff and defendant No. 1. As

noted earlier in the meeting held on 05th October, 2001, the

plaintiff-company had agreed to reconcile its account and

revert back to defendant No. 1 by 09th October, 2001. But,

there is no evidence of the plaintiff having written to

defendant No. 1, disputing its liability to pay the arrears of

rent/license fee for September, 1995. I, therefore, have no

hesitation in holding that the rent/license fee for

September, 1995 having not been paid, defendant No. 1 was

entitled to adjust the aforesaid amount while refunding the

security deposit.

15. Coming to arrears, amounting to Rs 1,37,250/-,

the case of defendant No. 1 in Suit No. 1661/2003, if

examined with the help of the Annexure-II to the letter

dated 1st February, 2001, appears to be that a sum of Rs

4,71,225/- was due to it as arrears up to March 1999, out

of which only Rs 3,33,975/- were received in May, 1998,

leaving balance arrears of Rs 1,37,250/-. However, there is

no averment to this effect in the plaint of Suit No.

100/2005/02 of District Court filed by licensor Nidas

Estates Private Limited or in Suit CS (OS) No. 1661/2003.

In para 22 of the plaint, Nidas Estates Private Limited

claimed that it had worked out the accounts and a sum of

Rs 9,58,448/- was payable to it, which figure had been

arrived at by debiting the amount of Rs 1,37,250/- to the

licensee Silicon Graphics Systems India Private Limited

towards license fee arrears. But, it did not say to which

period these arrears pertained and how they had been

worked out. Thus, there is no specific averment to the effect

that a sum of Rs 4,71,225/- was due as arrears to the

plaintiff in the suit by March, 1999 and the defendant in the

suit had paid a sum of Rs 3,33,975/- in May, 1998, leaving

a balance of Rs 1,37,250/-. In his affidavit by way of

evidence, Mr Rajesh Dutta, Director of Nidas Estates Private

Limited, simply lifted and reproduced the averment made in

para 22 of the plaint and claimed that the plaintiff had

worked out the accounts by debiting Rs 1,37,250/- towards

licence fee arrears. He did not say that a sum of Rs

4,71,225/- was due to Nidas Estates Private Limited by

March, 1999 and since only a sum of Rs 3,33,975/- was

paid to it in May, 1998, the amount of Rs 1,37,250/-

represented unpaid amount of the arrears. He did not tell

the Court to which period the alleged arrears of

Rs.4,71,225/- pertained and how they had been worked

out. In my view, the annexure of the letter dated 1 st

October, 2001 is not sufficient to prove that a sum of Rs

1,37,250/- remained unpaid to Nidas Estates Private

Limited, towards unpaid arrears up to March, 1999. The

plaintiff in Suit No. 1661/203 was required to produce

positive evidence during trial, to prove its claim with respect

to arrears, amounting to Rs 1,37,250/-. It was required to

lead positive evidence to prove how much was the total

amount payable by Silicon Graphics Systems India to it

towards rent/license fee, how much amount was deducted

towards tax and how much was the total payment received

from Silicon. Only then, the arrears could have been verified

by the Court during trial. The annexure to the letter dated

1st October, 2001, in my view, cannot be a substitute for the

positive evidence which Nidas Estates Private Limited was

required to prove in this regard. It is settled proposition of

law that mere production or even proof of a document does

not amount to proof of its contents. The truthfulness or

otherwise of the contents of a document can be proved only

by legally admissible evidence, i.e., the evidence of a person

who is in a position to vouchsafe for the truthfulness of

those contents.

In Judah v. Isolyne Bose, AIR 1945 PC174, the

issue before the Court was whether the testatrix was as

seriously ill as would result in impairment of her

testamentary capacity. To substantiate the degree of illness,

a letter and two telegrams written by a nurse were tendered

in evidence. The question was whether in the absence of any

independent evidence about the testamentary capacity of

the testatrix the contents of the letter could be utilized to

prove want of testamentary capacity. In these

circumstances, the Privy Council observed that the fact that

a letter and two telegrams were sent by itself would not

prove the truth of the contents of the letter and, therefore,

the contents of the letter bearing on the question of lack of

testamentary capacity would not be substantive evidence. It

was held that the contents of the letter and telegram were

not the evidence of the facts therein and mere proof of

handwriting of a document would not tantamount to proof

of all the contents or the facts stated in the document

therein.

In Malay Kumar Ganguly v. Dr. Sukumar

Mukherjee (2009) 9 SCC 221, Supreme Court observed that

a document does not become admissible in evidence unless

its author is examined and that the contents of a document

cannot be said to have been proved unless he is examined

and subjected to cross-examination in a Court of law.

In Narbada Devi Gupta v. Birendra Kumar

Jaiswal (2003)8 SCC 745, Supreme Court, inter alia,

observed as under:

"The legal position is not in dispute that mere production and marking of a document as exhibit by the court cannot be held, to be a due proof of its contents. Its execution has to be proved by admissible evidence that is by the evidence of those persons who can vouchsafe for the truth of the facts in issue."

16. Therefore, it was obligatory for the Nidas Estates

Private Limited to lead positive evidence to prove the case

setup by it in this regard. Consequently, I hold that Nidas

Estates Private Limited could not have adjusted the amount

of Rs 1,37,250/- while offering the refund of the security

deposit.

17. As noted earlier, vide letter dated 1st October,

2001, defendant No. 1 in Suit No. 1661/203 had informed

the plaintiff in this suit that its representative would contact

them on 05th October, 2001 to take possession of the

premises and refund the security deposit after adjusting

outstanding dues against the premises, including cost of

restoration and rent arrears in accordance with the

statement, annexed to the letter. A perusal of the

statement, annexed to the letter, would show that in

addition to arrears of rent/license fee, defendant No. 1 in

Suit No. 1661/2003 was also seeking to deduct a sum of Rs

2,23,276/- towards additional rent in lieu of one month's

notice. The license agreement between the parties expired

on 31st August, 2001. Since the license expired by efflux of

time on 31st August, 2001, there could be no question of the

licensee paying an amount equivalent to one month's

license fee in lieu of notice to the licensor. The licensee

would have been required to give notice only if it were to

terminate the license before expiry of its term, but, once the

license had expired by efflux of time, there was no question

of its premature termination and consequently no occasion

for giving of any notice or any amount in lieu of notice to the

licensor. Therefore, Nidas Estates Private Limited was

wholly unjustified in seeking to deduct the aforesaid

amount of Rs 2,23,276/- while offering the refund of the

security deposit. The licensor could have adjusted from

security deposit only the license fee arrears or any amount

payable to it under the provisions of the license deed, which

could also have deducted a reasonable amount for any

damage, caused to the premises. This was not the case of

Nidas Estates Private Limited either in its notice dated 1st

October, 2001 or during the meeting held on 05 th October,

2001 that the licensee Silicon Graphics Systems India

Private Limited had caused any damage to the premises and

it was seeking to recover any particular amount towards

compensation for such damage. In fact, no particular

amount was indicated in the letter dated 1st October, 2001

even for restoration of the premises to its original condition.

Even during the meeting held on 05th October, 2001, Nidas

Estates Private Limited did not claim that it was entitled to

make some deduction from the security deposit on account

of damage caused by the licensee to the premises

licensed/let out to it. The impression I get from the minutes

of the meeting on 05 th October, 2001 is that the false ceiling

air condition ducting with pipes, fire protection pipes,

electrical control panel were offered by Silicon Graphics

Systems India Private Limited to Nidas Estates Private

Limited against payment. It is also quite clear from the

minutes that Nidas Estates Private Limited was not

unwilling to accept these fittings and fixtures against

payment though, of course, it would have accepted them

only on such payment which it was ready to pay for them.

Therefore, it cannot be said that false ceiling air condition

ducting with pipes, fire protection pipes, electrical control

panel construed by Nidas Estates Private Limited, caused

damage to the premises for which it could have deducted a

reasonable amount from the security deposit. Before

making any deduction from the security deposit on account

of the damage, if any, caused to the premises, the licensor

was required not only to specify the damage caused to the

premises, but was also required to specify a particular

amount in this regard and that amount was also had to be a

reasonable amount. An ambiguous offer was made to refund

the security deposit, after deduction of the cost of

restoration of the premises of its original condition, without

claiming that the fittings and fixtures provided by the

tenant/licensee in the premises had damaged the premises

and without specifying a particular amount sought to be

deducted in this regard. Hence, the offer to refund the

security deposit made vide letter dated 1st October, 2001,

does not amount to an appropriate offer to refund the

security deposit.

18. In my view, Nidas Estates Private Limited could not

have sought to deduct the amount of Rs 1,37,250/- or the

amount of Rs 2,23,276/-, towards additional license fee in

lieu of its or any amount for restoration of the premises to

its original condition, while offering the security deposit to

Silicon Graphics Systems India Private Limited. There would

have been nothing wrong in Nidas Estates Private Limited

paying/offering the balance amount of security deposit to

Silicon Graphics Systems India Private Limited after

adjusting the amount of Rs 1,17,425/- towards rent for

September, 1995 and taking possession of the premises on

or before 05th October, 2001 but no such offer was ever

made by Nidas Estates Private Limited to Silicon Graphics

Systems India Private Limited. No doubt, Silicon Graphics

Systems India Private Limited could not have compelled

Nidas Estates Private Limited to accept the fittings and

fixtures which it had provided in the premises, but, its

failure to remove those fittings and fixtures did not come in

the way of Nidas Estates Private Limited taking possession

of the premises from it on or before 05th October, 2001.

Silicon Graphics Systems India Private Limited had done

whatever it was expected to do in this regard by offering

vacant possession of the premises to Nidas Estates Private

Limited against payment of security deposit, vide its letter

dated 28th September, 2001, it was Nidas Estates Private

Limited, which failed to take possession of the premises on

05th October, 2001. Since Nidas Estates Private Limited did

not offer the balance security deposit after deduction of Rs

1,17,425/- to Silicon Graphics Systems India Private

Limited and consequently, Silicon Graphics Systems India

Private Limited did not handover physical possession of the

premises to it, it cannot be said that Silicon Graphics

Systems India Private Limited continued to be liable to pay

license fee/damages for use and occupation till the time

physical possession of the premises was actually taken by

Nidas Estates Private Limited on 14th February, 2002. The

provisions of the license deed provided for payment of the

security deposit simultaneously with handing over of the

possession of the premises by the licensee to the licensor. It

did not provide for refund of the security deposit

subsequent to the licensor taking vacant possession of the

premises from the licensee/tenant. Had the agreement

between the parties been for refund of the security deposit

after receipt of vacant possession by the licensor, Nidas

Estates Private Limited would have justified in claiming

license fee/additional license fee from Silicon Graphics

Systems India Private Limited in terms of the provisions

contained in the license deed because in that case, Silicon

Graphics Systems India Private Limited would have been

under an obligation to handover the vacant possession of

the premises to the licensor even before receipt of the

security deposit from it and in the event of failure of the

licensor to refund the security deposit, the remedy available

to it, would have been to sue the licensor for refund of the

security deposit. But, since the license deed provided for

refund of the security deposit simultaneously with the

receipt of vacant possession by the licensor, the licensee

was entitled to hold back the physical possession, in case

the licensor was not tendering the security deposit, after

permissible adjustments, to it while receiving possession

from it.

19. In my view, on receipt of letter dated 28th

September, 2001 from the plaintiff in Suit No. 1661/2003,

defendant No. 1 in the suit should have paid/offered the

security deposit to the plaintiff in the suit after adjusting

the amount of Rs 1,17,425/-. Assuming that the claim of

Nidas Estates Private Limited for Rs 1,37,250/- was a

genuine claim, it could, at best, have adjusted the aforesaid

amount along with Rs 1,17,425/- and offered the balance

amount to Silicon Graphics Systems India Private Limited

when its representative approached them on 05th October,

2001. That, however, was not done and the letter dated 1 st

October, 2001 would show that Nidas Estates Private

Limited was seeking to deduct not only the aforesaid two

amounts, but also the amount of Rs 2,23,276/- towards

license fee in lieu of notice and an unspecified amount

towards cost of restoration of the premises to its original

condition, which it was not entitled to do in terms of the

license deed. Even in its letter dated 18th October, 2001,

receipt of which has been denied by Silicon Graphics

Systems India Private Limited, Nidas Estates Private Limited

was insisting on one month's license fee in lieu of notice. As

regards removal of fittings and fixtures which Silicon

Graphics Systems India Private Limited had installed in the

premises, if Nidas Estates Private Limited did not want

them, it ought to have said so during the meeting held on

05th October, 2001 and in case it was willing to have those

fittings, on a price acceptable to it and was not getting any

quote from Silicon Graphics Systems India Private Limited

for them, it ought to have been deputed its representative to

accept possession of the premises in as is where is condition

against refund of security deposit after making adjustments

which were permissible in terms of the license deed.

Nothing prevented Nidas Estates Private Limited from

removing those fittings and fixtures after taking possession

of the premises and even recovering the cost of removal of

those fittings from Silicon Graphics Systems India Private

Limited at a later date, but it could not have insisted on

removal of those fittings and fixtures, nor could it have

waited for a quote from Silicon Graphics Systems India

Private Limited for them before taking possession of the

premises. Admittedly, even on 15th February, 2001, Nidas

Estates Private Limited took possession of the tenancy

premises of its own, without receiving it from Silicon

Graphics Systems India Private Limited. This would show

that there was no genuine difficulty in Nidas Estates Private

Limited accepting possession of the premises from Silicon

Graphics Systems India Private Limited on 05th October,

2001. Since one set of keys was always in possession of

Nidas Estates Private Limited in terms of the license deed,

the only thing which it was required to do was to take a

formal possession from Silicon Graphics Systems India

Private Limited, along with the other set of keys.

20. In ICRA Ltd. v. Associated Journals Limited and

Another, 2007 (98) DRJ 638, the lessee by its letter dated

18th November, 1997 sent a notice of termination with effect

from 19th November, 1997 calling upon the

landlords/defendants to take possession of the tenanted

premises and refund the security deposit after deducting the

rent of previous three months along with stipulated interest.

Vide reply dated 22nd November, 1997, the defendants

requested the plaintiff for a rethinking in the matter. This

letter was followed by several reminders. On 16 th April,

1998, the lessee communicated to the lessor that it had

shifted to new building and was no longer in possession of

the tenanted premises. In reply, the landlord claimed that

delivery of vacant possession of the tenanted premises was a

condition precedent to the refund of the security deposit.

The case of the plaintiff, however, was that constructive

possession was handed over by them to the defendants with

the determination of the lease and actual possession was

subject to reciprocal arrangement on the part of the

defendants to refund the amount of the security deposit

along with stipulated interest. As per the agreement

between the parties, the security was interest free and was

refundable on determination/termination of the lease.

Since the defendants/landlords failed to refund the security

amount, the plaintiff/tenant filed a suit seeking recovery of

the amount of security along with interest, after adjustment

of rent payable by them. The defendants filed a counter

claim claiming that determination of the lease was not in

accordance with the agreement since the plaintiff continued

to be in possession of the demised premises and without

giving possession, the notice stood withdrawn/waived and

hence no claim for refund of balance security amount was

made out. This was also the case of the defendants that

they had come into possession of the tenanted premises

only on plaintiff's delivering the keys to them on 7 th

December, 1998. On receipt of letter dated 18 th April, 1998

from the defendants, the plaintiff reiterated its willingness

to give actual possession on receipt of the refund of the

security deposit. The factual position which emerged from

the correspondence between the parties was that the

plaintiff/tenant had terminated the lease, and had called

upon the defendants/landlords to take possession of the

tenanted premises and refund the balance security.

Accepting the plea taken by the plaintiff/tenant, this Court

held that the offer to vacant possession of the demised

premises having been made by the plaintiff company, it was

the duty of the defendants thereafter to act on the same and

take possession after notice of termination of the lease.

Regarding handing over of possession of the tenanted

premises, this Court held that constructive possession was

handed over to the defendants by the plaintiff by making an

offer to take over actual possession on payment of the

balance security deposit, which was sufficient to fulfill the

requirement of the lease agreement between the parties.

Decreeing the suit filed by the tenant, this Court, inter alia,

held as under:-

21. Taking into consideration the aforesaid, I am of the view that when possession of the tenanted premises is offered upon termination of the lease, the landlord/Lessor must act upon the same and cannot refuse to take the possession. If the Lessor/landlord refuses to take the possession or act upon the offer being made, the lease would not continue and therefore the contention of the defendant that the plaintiff had been in continued possession of the demised premises making him liable to pay the rent for the same would not stand. In such a case, the plaintiff who has done the needful on this part is left with no other option but to remain in possession of the said premises."

In Onida Finance Ltd. v. Mrs. Malini Khanna,

2002 III AD (Delhi) 231, the security deposit, which was

equivalent to six months' rent, was refundable to tenant on

expiry or termination of the lease. The plaintiff terminated

the lease vide notice dated 18 th January, 1997, with effect

from 14th February, 1997 and called upon the defendant to

return the security amount as also the amount of advance

rent. The landlord was also intimated that the tenanted

premises would remain vacant at her risk and the plaintiff

shall not be liable to pay any rent from the date the tenancy

stood terminated. The contention of the defendant before

the Court was that mere offer to surrender possession was

of no consequence unless actual physical possession was

delivered to her. Rejecting the contention, this Court, inter

alia, held as under:-

"28. It is trite that when the lease is terminated by notice and the possession is offered, the landlord cannot refuse to take the possession. If the landlord refuses to take the possession, the lease would not continue. Therefore, even if the contention of the defendant herein was that the tenancy was for a period three years, she could take possession and thereafter sued the plaintiff for rent. She did not do so. She took calculate risk by challenging the action of the plaintiff in terminating the tenancy and avoided to take possession."

The view taken by me is in consonance with the

view taken in the above-referred cases.

21. It was contended by the learned counsel for Nidas

Estates Private Limited that the licensor was forced to take

physical possession on 15th February, 2002 only because

Silicon Graphics Systems India Private Limited failed to

deliver possession to it, despite repeated requests. Be that

as it may, nothing prevented Nidas Estates Private Limited

from taking possession on 05th October, 2001 after

tendering the security deposit to Silicon Graphics Systems

India Private Limited after making the permissible

adjustments.

For the reasons given in the preceding paragraphs,

I am of the view that Nidas Estates Private Limited is

entitled to recover license fee only up to 04th October, 2001.

22. Admittedly, license fee for the period from June to

August, 2001, amounting to Rs 6,69,828/- has not been

paid to Nidas Estates Private Limited. That amount has

been to be adjusted from the security deposit along with

interest on that amount @ 18% per annum, in terms of the

provisions of the license. It is also entitled to adjust the

license fee of September, 1995, amounting to Rs 1,17,425/-,

along with interest on that amount @ 18% per annum w.e.f

7th September, 1995, when it was payable to the licensor.

In terms of the license agreement, Silicon Graphics Systems

India Private Limited is liable to pay a sum of Rs 3,73,276/-

towards license fee and additional license fee for September,

2001 along with interest on that amount @ 18% per annum

up to 05th October, 2001 when the security deposit became

refundable to it. Silicon Graphics Systems India Private

Limited is also liable to pay a sum of Rs 52,981/- towards

licence fee/additional licence fee for the period from 1 st

October, 2001 to 04th October, 2001.

23. Balance amount of security deposit which Nidas

Estates Private Limited had to refund to Silicon Graphics

Systems India Private Limited on 5th October, 2011 comes to

Rs. 13,74,835/- in the following manner:

Amount of Security Deposit : Rs.27,45,000/-

(i) license fee for September, 1995: Rs 1,17,425/-;

(ii) Interest on the sum of Rs 1,17,425/- @ 18% per annum up to 05th October, 2001: Rs.1,28,410/

(iii) license fee for June, 2001: Rs.2,23,276/-

(iv) Interest on license fee of June, 2001 up to 05th October, 2001: Rs. 13,306/-

(v) license fee for July, 2001: Rs.2,23,276/-

(vi) Interest on the license fee of July, 2001 up to 05th October, 2001: Rs.9,939/-

(vii) License fee of August, 2001 : Rs.2,23,276/-

(viii) Interest on license fee of August, 2001 up to 05 th October, 2001: Rs.6,590/-

(ix) License fee and additional license fee for September, 2001: Rs 3,73,276/-.

(x) Interest on license fee and addl. License fee for September 2001: Rs.5,226/-

(xi) license fee and additional license fee from 1st October, 2001 up to 04th October, 2001: Rs.46,165/-

Interest on the amount of Rs. 13,74,835/- from 05th

October, 2001 till the date of filing of CS(OS) No. 1661/2003

i.e. 22nd August, 2003 @ 18% per annum comes to Rs.

4,65,004/- The plaintiff in suit CS(OS) No. 1661/2003 is

entitled to recover the aforesaid amount of Rs.18,39,839/-

from defendant No.1 in the suit towards balance security

deposit and pre-suit interest on it.

24. The Plaintiff in Suit No. 1661/2003 has also

claimed a sum of Rs 2,02,100/- being the security deposit

by it with Karnataka Electricity Board through and on

behalf of defendant No. 1 along with interest on that

amount @ 18% per annum. A perusal of the minutes of the

meeting held on 05 th October, 2001 would show that Nidas

Estates Private Limited had requested Silicon Graphics

Systems India Private Limited not to surrender the

additional electricity load which it had obtained from

Karnataka Electricity Board since it wanted to retain the

same. It was also agreed that the deposit paid by Silicon

Graphics Systems India Private Limited would be refunded

to it by Nidas Estates Private Limited. There is no dispute

with respect to the deposit of Rs 2,02,100/- by Silicon

Graphics Systems India Private Limited with Karnataka

Electricity Board. In view of the agreement dated 05 th

October, 2001, Nidas Estates Private Limited is liable to pay

the aforesaid amount to Silicon Graphics Systems India

Private Limited. However, there is no agreement between

the parties for payment of interest on the aforesaid amount.

Hence, Silicon Graphics Systems India Private Limited is not

entitled to any amount towards interest on this deposit.

25. Silicon Graphics Systems India Private Limited has

also claimed Rs 6,25,000/- which it had deposited with

defendants No. 2 and 3 for the genset and common

maintenance services. Though the case of the Silicon

Graphics Systems India Private Limited is that the deposit

was made on behalf of Nidas Estates Private Limited, there

is absolutely no evidence to prove that the deposit was made

on behalf of Nidas Estates Private Limited. There is no

document which would indicate that Nidas Estates Private

Limited had agreed to pay this amount to Silicon Graphics

Systems India Private Limited. The minutes of the meeting

held on 05th October, 2001 indicate that though the deposit

was acknowledged by Nidas Estates Private Limited, it was

yet to be decided whether this amount would be paid by

Nidas Estates Private Limited or by Embassy Group with

which the amount was deposited. Since there is no proof of

the amount having been deposited on behalf of Nidas

Estates Private Limited and it had never agreed to pay this

amount to Silicon Graphics Systems India Private Limited,

this amount cannot be recovered by Silicon Graphics

Systems India Private Limited from Nidas Estates Private

Limited. It would be pertinent to note here that a decree for

recovery of the aforesaid amount has already been passed

by this Court against defendants No. 2 and 3 in Suit No.

1661/2003. It is open to Silicon Graphics Systems India

Private Limited to recover this amount from them. Thus,

the total amount payable by Nidas Estates Private Limited

to Silicon Graphics Systems India Private Limited comes to

Rs. 2,041,439/-. The issues are decided accordingly.

26. During the course of arguments, it was contended

by the learned counsel for Nidas Estates Private Limited

that Silicon Graphics Systems India Private Limited had

failed to prove that the plaint has been signed, verified and

instituted by a competent person. No issue was framed by

the Court in this regard. In find that in para 2 of the plaint

of Suit No. 1661/2003, it has been specifically alleged that

the suit has been signed, verified and instituted by Mr

Sanjay Bhanot, who was working as Financial Controller

and Companies Secretary with the plaintiff and who had

been duly authorized by the Board of Directors of the

Company by a duly passed resolution. There is no specific

denial of this averment in the written statement of Nidas

Estates Private Limited. In reply to para 2 of the written

statement, Nidas Estates Private Limited simply stated that

para 2 was denied for want of knowledge. Denial for want of

knowledge is not a specific denial and amounts to

admission of the averments which have not been specifically

denied.

Order VIII Rule 3 of the Code of Civil Procedure, to

the extent it is relevant provides that it shall not be

sufficient for a defendant in his written statement to deny

generally the ground alleged by the plaintiff, but the

defendant must deal specifically with each allegation of fact

of which he does not admit the truth, except damages. Rule

4 of the aforesaid Order, to the extent it is relevant, provides

that where a defendant denies an allegation of fact in the

plaint, he must not do so evasively, but answer the point of

substance.

Therefore, by denying the contents of para 2 of the

plaint for want of knowledge, defendant No. 1 in Suit No.

1661/2003 is deemed to have admitted the averment with

respect to competence of Shri Sanjay Bhanot to sign and

verify the pleadings and institute the suit on behalf of the

Silicon Graphics Systems India Private Limited.

The learned counsel for the defendant No. 1 has

relied on State Bank of Travancore vs Kingston

Computers (I) P. Ltd. 2011 (3) SCALE 33, Lucas Indian

Services Ltd. vs. Sanjay Kumar Agarwal 173 (2010) DLT

438, Food Corporation of India vs. Sardarni Baldev Kaur

& Ors., AIR 1981 Punjab and Haryana 113, Birla Dlw Ltd.

vs. Prem Engineering Works 77 (1999) DLT 171,

Manoranjan Paul and two Ors. vs. Narendra Kumar Paul

and Ors., AIR 1994 Gau 64 and Nedunuri Kameswaramma

vs. Sampati Subba Rao AIR 1963 Supreme Court 884.

However, none of these judgments are of help to defendant

No. 1 in Suit No. 1661/2003 for the simple reason that

neither the authority of Shri Sanjay Bhanot to sign and

verity the plaint and institute the suit on behalf of the

plaintiff-company was specifically denied in the written

statement nor the Court has framed any issue on this

aspect of the matter. In the absence of there being any issue

on this aspect, there was no necessity for the plaintiff to

prove the resolution in favour of Shri Sanjay Bhanot. It

would be unfair to return a finding against Silicon Graphics

Systems India Private Limited on this aspect of the case

without framing an issue and, thereby giving an opportunity

to the plaintiff in this suit to lead evidence in this regard.

Issue No. 5 in CS(OS) No. 1661/2003 and Issue No. 2 in Suit No. 100/2005/02 of District Court

27. In view of my findings on the aforesaid issues,

CS(OS) No. 2108/2011 (Suit No. 100/2005/02 of District

Court) is liable to be dismissed, whereas Suit No.

1661/2003 is liable to be decreed only for recovery of Rs.

20,41,939/-.

ORDER

CS(OS) No. 2108/2011 (Suit No. 100/2005/02 of

District Court) is hereby dismissed with costs. In Suit

No.1661/2003, a decree for Rs.20,41,939/- with

proportionate cost and pendente lite and future interest @

6% per annum is passed in favour of the plaintiff and

against defendant No. 1.

Decree sheet be drawn accordingly.

(V.K. JAIN) JUDGE AUGUST 30, 2011 sn/vn/bg