Prabhudev S/O. Gurushantappa ... vs Kadamba Credit Co-Operative Ltd
2021 Latest Caselaw 5166 Kant

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 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

       DATED THIS THE 1ST DAY OF DECEMBER, 2021

                       BEFORE

        THE HON'BLE MS. JUSTICE JYOTI MULIMANI

    CIVIL REVISION PETITION NO.1098 OF 2013

BETWEEN:

PRABHUDEV
S/O GURUSHANTAPPA HANCHINAL,
AGED ABOUT 49 YEARS,
OCC: BUSINESS, BASAVESHWARA NILAYA,
R/O CHOWAKIMATH ROAD, SIRSI,
UTTARA KANNADA DISTRICT.                  ... PETITIONER

(BY SRI S.G. KADADAKATTI AND
    SRI LINGESH V.KATTIMANI, ADVOCATES)

AND:

KADAMBA CREDIT CO-OPERATIVE LTD.,
SIRSI, REP. BY ITS CHIEF EXECUTIVE OFFICER,
GOVERDHAN
S/O SARESHWRA HEGDE,
AGED ABOUT 34 YEARS, OCC:SERVICE
R/O SAROJA PALCE, HOSPET ROAD, SIRSI,
UTTARA KANNADA DISTRICT.                  ... RESPONDENT

(SRI VISHWANATH HEGDE, ADVOCATE)

       THIS CIVIL REVISION PETITION IS FILED UNDER
SECTION 18 OF KARNATAKA SMALL CAUSES COURT, ACT.


       THIS CIVIL REVISION PETITION POSTED FOR FINAL
HEARING THIS DAY; THE COURT MADE THE FOLLOWING:
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                          ORDER

Sri.S.G.Kadadakatti, learned counsel for appellant

and Sri.Vishwanath Hegde, learned counsel for

respondent, have appeared in-person.

2. The parties are referred to as per their ranking

before the trial Court.

3. The facts are simply stated as under:-

It is stated that the plaintiff is a Co-Operative

Society registered under Souharda Act. The defendant had

leased his premises to the Society on a monthly rent of

Rs.2000.00 per month (Rupees Two Thousand only). The

Lease Agreement was entered in to on 01.02.2001.

Plaintiff-Society deposited a sum of Rs.25,000.00 (Rupees

Twenty-Five Thousand only) as security deposit. The said

amount was repayable to the plaintiff at the time of

vacating the leased premises. The lease agreement dated

01.02.2001 was initially for a period of 11 months.

Plaintiff- Society used to deposit the monthly rent to the

savings account of the defendant in the plaintiff -Society.

Subsequent to the expiry of the lease, the lease

between the parties nevertheless continued and was orally

renewed. The deposit of Rs.25,000.00 (Rupees Twenty-

Five Thousand only) was treated as security deposit after

the expiry of initial lease. Under the renewed lease, the

rent was fixed at Rs.2,000.00 (Rupees Two Thousand

only) till 31.01.2003.

Subsequent to the expiry of oral lease on

01.02.2003 fresh oral lease was created between the

parties. The deposit of Rs.25,000.00 (Rupees Twenty Five

Thousand only) was treated as deposit for the fresh oral

lease as well. Under the renewed lease the rent was fixed

at Rs.2,300.00 (Rupees Two Thousand Three Hundred

only) with effect from 01.02.2003 till 31.03.2007. Again,

with effect from 01.04.2007 the oral lease was renewed

orally and Rs.25,000.00 deposit made earlier was treated

as security deposit by plaintiff repayable to the plaintiff at

the time of vacating the premises. The said agreement

continued till 31.01.2009. Again on 31.01.2009 lease was

orally renewed and oral arrangement with respect to

security deposit continued with an understanding that the

same shall be repayable to the plaintiff at the time of

vacating the premises. Rent was fixed at Rs.3,000.00

(Rupees Three Thousand only) per month.

It is averred that the plaintiff credited the rent to the

account of defendant in terms of written lease agreement

and oral lease. The rent for the month of November was

not deposited as defendant made untenable demand in

respect of arrears rent.

The plaintiff on 30.11.2011 issued reply to the

defendant to his letter dated 21.11.2011. It is said that

plaintiff shifted its office to new building in Hospet road

and made a request to the defendant to accept the

possession of the lease premises. The defendant did not

accept the possession and refused to issue possession

receipt. Hence, plaintiff was constrained to intimate the

factum of handing over the possession, vacating the

premises to the defendant vide letter dated 07.12.2011.

The letter was served on the defendant. The defendant

issued a legal notice dated 05.12.2011. The notice was

served on the plaintiff on 08.12.2011. To the said notice,

plaintiff replied vide notice dated 14.12.2011 and the

same was served on the advocate for defendant.

It is also averred that the plaintiff - Society already

vacated the premises in the month of December 2011 and

plaintiff is not liable to pay any rent for the month of

December 2011. The plaintiff occupied the premises till

November 2011. Thus, plaintiff is liable to pay

Rs.3,000.00 (Rupees Three Thousand only) towards rent.

Deducting Rs.3,000.00, the defendant is liable to refund

Rs.22,000.00 to the plaintiff. Accordingly, plaintiff-initiated

action for recovery of money.

After the issuance of the summons, the defendant

appeared through his counsel and filed written statement.

He admitted certain plaint averments and denied other

averments made in the plaint.

The defendant contended that former Chairman of

plaintiff- Society requested him to give the premises for

rent purpose. The defendant agreed for the same and the

premises was given on lease on 01.02.2001. It is

contended that the then Chairman of the Society

repeatedly requested the defendant to give some time to

vacate the premises. The plaintiff- Society has used the

premises from 01.02.2001 to 07.12.2012.

The defendant wrote a letter to the plaintiff-Society

on 21.04.2011 and made a request to increase the rent

and a deposit of Rs.2,00,000.00 (Rupees Two Lakhs only)

or in the alternative, to give Rs.10,000,00.00 (Rupees Ten

Lakhs only) for 10 years on lease. The plaintiff did not

answer to the letter. Thereafter, in the month of

November 2011, the plaintiff-Society orally agreed to

vacate the premises in the month of December 2011.

The defendant specifically contended that as per

clause 3 of the Agreement dated 01.02.2001, the plaintiff

agreed for 15% increase in the rent for every 11 months.

As per the agreement, the plaintiff is liable to pay arrears

of rent of Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine

Thousand Two Hundred and Thirty-Three only) to the

defendant. The defendant specifically contended that he is

entitled for arrears of rent of Rs.3,59,233.00 (Rupees

Three Lakhs Fifty-Nine Thousand Two Hundred and Thirty-

Three only) in the event of holding that the lease

agreement is valid. It is also said that he is ready to pay

the Court fee. Among other grounds, he prayed for the

dismissal of the suit.

Based on the pleading, the trial Court framed the

following points for consideration:-

1. Whether the plaintiff proves that Lease

Agreement dated 1.2.2001 entered into

between it and defendant, has been

continued and it was orally renewed from

time to time till 31.1.2009 and finally

monthly rent was fixed to Rs.3000/-

towards the premises of the defendants?

2. Whether plaintiff proves that defendant is

liable to pay suit claim of Rs.22,000/- to it

towards refund of security deposit with

interest at 12% p.a. from the date of suit till

realization?

3. Whether the defendant proves that suit is

barred by limitation?

4. What decree or order?"

The C.E.O. of the Plaintiff-Society was examined as

PW-1 and produced four documents which were marked as

Exs.P-1 to P-4. Defendant got examined himself as DW-1

and produced five documents which were marked as

Exs.D-1 to D-5.

On summary trial, the suit came to be decreed.

Hence, this revision petition is filed under Section 18 of

the Karnataka Small Causes Court Act.

4. Sri.Kadadakatti, learned counsel for petitioner

submits that the judgment is illegal, perverse, arbitrary

and is opposed to the facts and law.

Next, he submitted that clause 5 of the lease

agreement indicates that the plaintiff agreed to pay 15%

enhancement of rent for the renewal period. Hence,

plaintiff was liable to pay the enhanced rent. It is

submitted that the plaint averments and the evidence on

record would establish that plaintiff has not paid the

enhanced rent.

A further submission was made that plaintiff witness

has admitted that the defendant has written letter

demanding arrears of rent in terms of the lease agreement

and that plaintiff is liable to pay a sum of Rs.3,59,233.00

(Rupees Three Lakhs Fifty-Nine Thousand Two Hundred

and Thirty-Three only) .

Counsel vehemently urged that the defendant in the

written statement has pleaded that he is ready to pay the

Court fee on counter claim after setting off on the claim of

the plaintiff. However, the trial Judge without examining

the claim of the defendant has decreed the suit which is

totally unsustainable in law.

It is also submitted that plaintiff filed the suit for

recovery of security deposit but the defendant disputed

the said claim. Hence, the trial Court ought to have

converted and tried it as a regular suit. Hence, the

findings recorded by the trial Court are not tenable.

Lastly, he contended that the judgment lacks judicial

reasoning hence, the same is liable to be set-aside and the

petition may be allowed.

5. Sri.Vishwanath Hegde, learned counsel for

respondent justified the judgment and decree of the trial

Court.

Next, he submitted that the defendant wrote two

letters one on 21.04.2011 and another on 21.11.2011

(Exs.D-1 and D-2) to which the plaintiff-Society replied on

30.11.2011 (Ex.D-5).

A further submission was made that the defendant

issued a legal notice on 05.12.2011 and the plaintiff

replied on 14.12.2011.

Learned counsel vehemently urged that plaintiff-

Society admitted the execution of the lease deed dated

01.02.2001. However, the plaintiff - Society requested the

defendant to take possession of the premises on

30.11.2011 but the defendant did not accept the

possession. The defendant has accepted the possession on

07.12.2011. It was requested to deduct the monthly rent

of Rs.3000.00 (Rupees Three Thousand only) for the

month of November and repay the balance amount of

Rs.22,000.00 (Rupees Twenty Two Thousand only).

It is submitted that since there was no reply from

the defendant hence, plaintiff was constrained to initiate

action.

Lastly, he submitted that the defendant has not

pleaded set off. Hence, the said contention may be

rejected. Accordingly, he submitted that the trial Court

referred to the oral and documentary evidence on record

and decreed the suit. The petitioner has not made out any

good grounds to interfere with the judgment and decree of

the trial Court and hence, prayed for the dismissal of the

petition.

6. Heard the contentions urged on behalf of

respective parties and perused the records with care.

7. The case really falls within a small compass.

The plaintiff brought an action for recovery of money.

The defendant leased his premises to the plaintiff-

Society on a monthly rent of Rs.2,000.00 (Rupees Two

Thousand only) under a lease agreement dated

01.02.2001. The plaintiff- Society deposited a sum of

Rs.25,000.00 (Rupees Twenty-Five Thousand only) as

security deposit. The lease was for a period of 11 months.

Ex P-2 is the lease agreement. After the expiry of

period of lease both plaintiff and defendant orally agreed

to renew the lease. The deposit of Rs.25,000.00 (Rupees

Twenty-Five Thousand only) treated as security deposit.

The period of lease was orally extended from time to time.

As on 2011, the rate of rent was Rs.3,000.00 (Rupees

Three Thousand only).

As things stood thus, the defendant intimated the

plaintiff-Society to pay the arrears of rent of

Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand

Two Hundred and Thirty-Three only). Exs-D1 and D2 are

the letters dated 21.04.2011 and 21.11.2011. It is noticed

that the plaintiff-Society replied on 30.11.2011. The reply

is at Ex.D5.

I have perused the reply letter. The plaintiff-Society

intimated the defendant that the Society has shifted the

office to new building and also requested the defendant to

accept the vacant possession of the premises. But the

defendant instead of accepting the possession, issued

legal notice on 05.12.2011 and made a demand that as

per the clause 5 of the lease agreement the plaintiff-

Society is required to pay enhanced rent at 15% and

hence claimed arrears of rents. The plaintiff - Society

replied on 14.12.2011 and denied that the arrears of rent.

It is significant to note that the plaintiff also intimated the

defendant that it has already vacated the premises and

that the defendant has accepted the vacant possession on

07.12.2011.

While arguing the matter, Sri.Kadadakatti, counsel

for petitioner strenuously urged that the defendant

pleaded set off. Hence, the trial Court ought to have

treated the suit into one of regular suit.

In reply, Sri.Vishwanath Hegde submits that in the

written statement there is no pleading with regard to set

off.

I have heard the rival contentions with care. It is

necessary to refer to Order VIII Rule 6 of CPC which reads

as under:-

6. PARTICULARS OF SET-OFF TO BE GIVEN IN WRITTEN STATEMENT.

(1) Where in a suit for the recovery of money the defendant claims to set-off against the plaintiff's demand any ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court, and both parties fill the same character as they fill in the plaintiff's suit, the defendant may, at the first hearing of the suit, but not afterwards unless permitted by the Court, presents a written statement containing the particulars of the debt sought to be set-off.

(2) Effect of set-off- The written statement shall have the same effect as a plaint in a cross- suit so as to enable the Court to pronounce a final judgment in respect both of the original claim and of the set-off: but this shall not affect the lien, upon the amount decreed, of any pleader in respect of the costs payable to him under the decree.

(3) The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off."

As could be seen from Order 8 Rule 6 a set off is a

demand which a defendant makes against the plaintiff for

the purpose of liquidating the whole or a part of his claim.

This rule deals with legal set-off as it is restricted only to

"ascertained sum". Conditions that must exist for the

applicability of the rule are: -

A. Suit must be for recovery of money.

B. The claim demanded to be set-off must be an ascertained sum of money.

C. It must be legally recoverable from the plaintiff.

D. It must not exceed the pecuniary jurisdiction.

E. Both parties must fill the same character as they fill in the plaintiff's suit.

F. The claim must be made at the first hearing unless permitted by the court to do so afterwards.

It is significant to note that a set-off is a ground of

defence, and if established it affords an answer to

plaintiff's claim wholly or pro tanto. The question as to

what is set-off is to be determined as a matter of law and

is not in any way governed by the language used by the

parties in their pleadings. Set-off can only be claimed in a

suit for recovery of money. A plea of payment means that

the debt claimed has ceased to be due or paid off

pro tanto. A plea of set-off is a request that the debt to be

found due to plaintiff shall be treated as extinguished or

reduced pro tanto by being set- off against the debt to the

defendant.

Bearing these principles in mind let me consider

whether the defendant has pleaded set-off.

I have carefully perused the pleadings. The claim of

set-off is not raised in the written statement. A vague

statement is made in paragraphs 11 and 12 of the written

statement that as per the agreement dated 01.02.2001,

the plaintiff is liable to pay the arrears of rent of

Rs.3,59,233.00 (Rupees Three Lakhs Fifty-Nine Thousand

Two Hundred and Thirty-Three only) and the defendant is

ready to pay the Court fee. In my considered view, this

claim is not a claim of set -off.

I may venture to say that assuming for a while that

the statement is to be considered as claim of set-off, the

trial Court could not have entertained the same since the

amount claimed exceeds the pecuniary jurisdiction.

The suit is filed for recovery of money. The trial

Court in extenso referred to the oral and documentary

evidence on record and rightly concluded that the plaintiff

has established its claim and is entitled for the sum

claimed. I think there is no justification to interfere with

judgment and decree of the trial Court.

It is perhaps well to observe that the scope of

jurisdiction of the High Court under Section 18 of the

Karnataka small Cause Courts Act, 1964 is limited to the

question whether the decision is according to law.

The scope of the jurisdiction under Section 18 is not

for rehearing as it would be done in appeals. The Section

does not entitle the Court to interfere with a finding of fact

simply on the ground that the Court can take a different

view of the matter on materials on record.

In my considered view, learned Judge has exercised

the material evidence on record and rightly decreed the

suit.

8. I see no reason to interfere with the Judge's

order. Accordingly, the revision petition is dismissed.

Parties to bear their own costs.

Sd/-

JUDGE

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