Karnataka High Court

M/S. B.S Enterprises vs S. Prakash on 26 June, 2025

   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 26th DAY OF JUNE, 2025

                        PRESENT

       THE HON'BLE MRS. JUSTICE ANU SIVARAMAN

                           AND

       THE HON'BLE DR. JUSTICE K.MANMADHA RAO

           COMMERCIAL APPEAL No.554 OF 2024


BETWEEN:

M/S. B.S. ENTERPRISES
A PARTNERSHIP FIRM,
CARRYING ON BUSINESS UNDER THE
NAME AND STYLE OF
M/S. UDUPI GRAND & VANDANA GARDENIA,
NO.784 & 785, LOCATED AT
16TH B CROSS ROAD, 14TH MAIN,
BUS STAND ROAD, YELAHANKA NEW TOWN,
BANGALORE-560 064.
REP. BY ITS PARTNER SRI. K. BASAVA,
S/O SRI KORAGA,
AGED 62 YEARS.
                                          ...APPELLANT

(BY SRI. S. BASAVARAJ S. SR.COUNSEL A/W
SRI. GOUTHAM A.R. ADVOCATE)

AND:

S. PRAKASH
S/O SRI S. SHANKARAIAH,
AGED ABOUT 66 YEARS,
RESIDING AT NO.3068,
NAGARATHPET, DODDABALLAPUR,
BANGALORE RURAL DISTRICT,
BENGALURU-560 064.
                                           ...RESPONDENT

(BY SRI. PARAS JAIN FOR C/RESPONDENT)
                                   2




      THIS COMMERCIAL APPEAL IS FILED UNDER SECTION
13(1A) OF THE COMMERCIAL COURTS ACT, 2015, PRAYING TO
SET    ASIDE   THE   ORDER   DATED      10.12.2024   PASSED    IN
COMMERCIAL ORIGINAL SUIT NO.926/2024 ON THE FILE OF THE
COURT OF LXXXVI ADDL. CITY CIVIL AND SESSIONS JUDGE
(COMMERCIAL COURT) BANGALORE BY ALLOWING THE SUIT WITH
COSTS AND ETC.


       THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT       ON    03.06.2025       AND   COMING    ON      FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, DR. K.MANMADHA
RAO, J., PRONOUNCED THE FOLLOWING:

CORAM:     HON'BLE MRS. JUSTICE ANU SIVARAMAN
           and
           HON'BLE DR. JUSTICE K.MANMADHA RAO



                       CAV JUDGMENT

(PER: HON'BLE DR. JUSTICE K.MANMADHA RAO)

The present Commercial Appeal No.554/2024 is filed by

the Appellant/Defendant challenging the judgment and decree

dated 10.12.2024 passed in Com.O.S.No.926/2024, by the

LXXXVI Addl. City Civil and Sessions Judge, (Commercial

Court) Bengaluru (hereinafter referred to as 'the Commercial

Court').

2. The appellant herein is the defendant and the

respondent herein is the plaintiff in Comm.O.S No.926/2014

before the Commercial Court.

3. The respondent/plaintiff filed the Commercial

Original Suit seeking for eviction of the appellant/defendant-

partnership firm and to direct the appellant/defendant to pay

mesne profits for its illegal occupation of the suit property

w.e.f. 01.01.2024 and differential in amount in mesne profit

from January 2024 to May 2024 with interest at the rate of

18% per annum and such other consequential reliefs.

4. For convenience of reference, the parties are

hereinafter referred to as arrayed before the Commercial

Court in Comm.O.S.No.926/2014.

5. Brief facts of the case are that the plaintiff claiming

to be the absolute owner of a commercial immovable

property bearing Municipal Corporation Nos.784 and 785 (PID

No.1073/784 and 785), situated at 16th B Cross Road, 14th

Main, Bus Stand Road, Yelahanka New Town, Bangalore -

560064, along with the buildings constructed thereon. He

executed a registered lease deed dated 08.01.2015 in favour

of the defendant-firm in which the plaintiff leased out the suit

property for a period of 9 years and the same was expired on

30.12.2023. Since 01.01.2024 the defendant-firm is in illegal

occupation of the suit property. On expiry of the said lease,

the plaintiff had issued a notice on 30.11.2023 under Section

106 of Transfer of Property Act (for short "the T.P.Act")

calling upon the defendant to vacate and handover the said

property. On receipt of such notice, the defendant has issued

reply dated 07.12.2023 through its advocate admitting the

jural relationship of landlord and tenant and did not choose to

vacate the suit property. Hence, the plaintiff filed the Comm.

Suit.

6. The defendant filed written statement before the

Commercial Court while denying the allegations made in the

plaint, admitted the issuance of quit notice under Section 106

of T.P. Act. It is stated that the defendant started a business

of a restaurant under the name 'M/s. Udipi Grand and

Vandana Gardenia', under a registered lease deed dated

08.01.2015 for a term of 9 years and when the defendant

picked-up its business the plaintiff has filed the present suit.

The defendant has spent Rs.7,06,27,805/- on the

construction and established a hotel on the schedule

premises. The valuation of the building is Rs.3.00 Crores. The

defendant has paid property tax from 2016-2025 to the tune

of Rs.44,72,394/-, the defendant also deposited certain

amount while getting the electricity and water connections to

the BESCOM, BWSSB in Rs.16,45,000/- and Rs.2,72,030/-

respectively. Therefore, the defendant has sought for a

counter claim of Rs.3,63,89,424/-.

7. The plaintiff filed counter claim to the written

statement filed by the defendant stating that, as per the

clauses of the agreement the defendant was authorised to

make constructions in the suit property in accordance with its

volition to carry out business and after the expiry of the lease

time the defendant was required to handover the vacant

possession of the suit property to the plaintiff. Since the

plaintiff has not agreed in the agreement to pay anything to

the defendant at the time of vacating the premises, the

plaintiff need not pay the counter claim amount or any part

thereof. Therefore prayed to reject the counter claim.

8. Based on the above pleadings, the Commercial Court

has framed the following issues :

1. Whether the plaintiff is entitled for peaceful possession of the suit property?

2. Whether the plaintiff is entitled for mesne profits and interest thereon?

3. Whether the defendant is entitled for its counter?

4. What order or decree?

9. Having heard both the sides and without recording

any evidence, the Commercial Court has decreed the suit vide

judgment dated 10.12.2024. The operative portion of the

said judgment is as follows:

"The suit of the plaintiff is decreed with costs.

The defendant-partnership firm is directed to quit, vacate and deliver the peaceful possession of the suit property to the plaintiff forthwith.

The plaintiff is entitled for mesne profits at the prevailing market rate of the rent w.e.f. 01.01.2024 until actual handing over of the possession.

The plaintiff is at liberty to initiate final decree proceedings to compute the mesne profits and interest thereon.

The counter claim of the defendant against the plaintiff is hereby partly allowed. The defendant, is entitled to collect the deposits made

with the BESCOM and BWSSB. The plaintiff shall co-operate with the defendant to collect the deposits made with the BESCOM and BWSSB.

The rest of the claims of the defendant is hereby dismissed."

10. Assailing the above decree and judgment dated

10.12.2024 passed in Comm.O.S No.926/2024 on the file of

the Commercial Court, the present Commercial Appeal came

to be filed.

11. Heard learned counsel appearing for the appellant

and learned counsel appearing for the respondent.

12. On hearing, learned counsel appearing for the

appellant while reiterating the averments made in the

petition, has argued that, trial court failed to provide

opportunity to the appellant to prove its case against the

eviction and also in support of the counter claim. He submits

that there is gross violation of the principles of natural justice

inasmuch as the appellants were not even permitted to lead

evidence in support of their case and further contended that

the decree was erroneously granted under Order XII Rule 6 of

the CPC despite there being no clear, unconditional,

unambiguous or unequivocal admission by the appellant,

contrary to the decision of the Apex Court in the case of

Rajesh Mitra v. Karnanai Properties Ltd., reported in

2024 SCC OnLine SC 2607, which emphasized strict criteria

for invoking this rule which confers discretionary power on

the courts which cannot be claimed by a party as a matter of

right. He further submits that the facts of the case and the

pleadings require full fledged trial by leading both oral and

documentary evidence by both the parties, but there cannot

be a shortcut in a matter like this magnitude and the

judgment of the trial court is liable to be set aside.

13. Per contra, learned counsel for the respondent

while denying the allegations made by the learned counsel for

the appellant has argued that the trial Court has rightly

concluded and decreed the suit and opposed for allowing the

appeal and prayed to dismiss the same.

14. Perused the material on record.

15. On a perusal of the material on record, it is

observed that, it is an admitted fact that the

respondent/plaintiff is the absolute owner of the suit schedule

property. It is also an admitted fact that the

respondent/plaintiff executed a registered lease deed dated

08.01.2015 in favour of the appellant/defendant for a period

of 9 years and the same was expired on 30.12.2023. The

registered lease deed indicates that the partnership firm

represented by its four partners have entered into the lease

deed with the respondent through which the respondent

leased out the suit property to the appellant on monthly

rental basis, which commences from 01.01.2015. There was

no rent for the month of January 2015. For the month of

February 2015, the rent was Rs.90,000/- and from March

2015 onwards the rent was Rs.1,50,000/- per month until

31.12.2015. From 01.01.2016, the monthly rent was

Rs.1,65,000/-. The rent was kept on increasing at the rate of

10% every year. It is also observed that, the respondent has

issued legal notice to the appellant to vacate the premises

immediately after expiry of lease. Similar notices have also

been issued on 29.12.2023 and 01.01.2024. Thus the

respondent has complied with Section 106 of T.P.Act. Despite

receipt of said notice, the appellant, instead of vacating the

premises, has issued reply contending that the appellant

spent Rs.7.00 Crores for the purpose of construction of

building.

16. The clauses of agreement clearly indicates that

immediately after 9 years, the appellant was required to

vacate the suit premises. Clause 3.6 of the lease deed reads

as follows:

"3.6 No further extension of lease period is permitted and the Lessee has to vacate the premises on completion of 9 years Lease period and should deliver peaceful vacant possession of the schedule property to the lessor".

17. On a reading of the above clause, it clearly

indicates that, in view of the clause in the agreement, it is the

duty of the appellant to vacate the suit property. The lease

period was expired on 31.12.2023 and therefore the

possession of the appellant from 01.01.2024 is held illegal.

18. In so far as payment of rents paid until May 2024 is

concerned, after expiry of lease period, even after the rent is

paid same cannot be termed as a 'rent'. The appellant is

liable to pay the mesne profits for its continuous occupation

of the suit property even after the expiry of the lease.

19. Having regard to the facts and circumstances and in

view of the submissions of both the learned counsels, this