Sure Waves Media Tech Private Limited vs Mr Fathiraj
2026 Latest Caselaw 1080 Kant

Karnataka High Court

Sure Waves Media Tech Private Limited vs Mr Fathiraj on 10 February, 2026

                                            -1-
                                                  COMAP No. 226 of 2025



                    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                       DATED THIS THE 10TH DAY OF FEBRUARY, 2026

                                        PRESENT
                      THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
                                           AND
                        THE HON'BLE MR. JUSTICE C.M. POONACHA
                          COMMERCIAL APPEAL NO. 226 OF 2025
               BETWEEN:

               1.   SURE WAVES MEDIA TECH PRIVATE LIMITED
                    A COMPANY INCORPORATED UNDER
                    THE COMPANIES ACT, 1956
                    HAVING ITS REGISTERED OFFICE AT
                    WE WORK SALARPURIA MAGNIFICIA
                    13TH FLOOR, NO.78, NEXT TO KR PURAM
                    TIN FACTORY, OLD MADRAS ROAD
                    MAHADEVAPURA, BANGALORE - 560 016
                    REPRESENTED BY ITS
                    AUTHORISED SIGNATORY
                    MR. ANANT KANSAL
                                                            ...APPELLANT
               (BY SRI GURU PRASANNA S., ADVOCATE)
Digitally
signed by      AND:
SRIDEVI S
Location:
High Court          MR. FATHIRAJ
of Karnataka        SON OF LATE BALASWAMY
                    AGED ABOUT 73 YEARS (DECEASED)
                    SINCE REPRESENTED BY LR

               1.   MRS. KALA
                    WIFE OF LATE MR. FATHIRAJ
                    AGED ABOUT 69 YEARS
                    RESIDING AT NO. 36, ST BED
                    CHANDRA REDDY LAYOUT
                                 -2-
                                             COMAP No. 226 of 2025



     VIVEKNAGAR POST
     BANGALORE - 560 047
                                                   ...RESPONDENT

(BY SRI PRASAD N., ADVOCATE)

THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13(1-A) OF COMMERCIAL COURT ACT, PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 17.02.2025 IN COM. O.S. NO.668/2021 PASSED BY THE HON'BLE LXXXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, (COMMERCIAL COURT NO.88), AND DECREE THE PLAINTIFF'S CLAIMS IN THEIR ENTIRETY AND DISMISS THE COUNTER-CLAIM OF THE DEFENDANT IN ITS ENTIRETY & ETC.

THIS COMMERCIAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA

C.A.V. JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. The appellant has filed the present appeal impugning a

judgment and decree dated 17.02.2025 [impugned order] passed

in Com.OS.No.668/2021 by the LXXXVII Additional City Civil and

Sessions Judge, Bengaluru [Commercial Court] captioned 'Sure

Waves Media Tech Pvt. Ltd. v. Mr. Fathiraj and another.

2. The appellant [the lessee] filed the aforementioned suit, inter

alia, praying for a decree declaring that the leave and licence

agreement dated 21.10.2019 [the lease agreement] was cancelled

and terminated with effect from 01.07.2020 or, alternatively, on

26.02.2021. The appellant also sought a decree for the recovery of

`12,86,941/- (Rupees Twelve Lakhs Eighty Six Thousand Nine

Hundred and Forty One only) as a refund of rent and security

deposit. Additionally, the appellant claimed damages amounting to

`45,00,000/- (Rupees Forty Five Lakhs only) as compensation for

loss of data, financial losses and computer services rendered

unusable from 25.06.2020 to 24.09.2021. The appellant also

requested interest on these amounts.

3. The original Defendant No.1, Sri B. Fathiraj, passed away

during the pendency of the suit and was represented by his legal

representative, Ms Kala (wife of the deceased), who was brought

on record as Defendant No.1(a). Ms Kala is also arrayed as

Defendant No.2 in her individual capacity.

4. The respondents [the lessors] raised a counter claim, inter

alia, praying for a decree of declaration that the lease agreement

stood terminated as on 15.11.2021; for recovery of an amount of

`81,27,111/- (Rupees Eighty One Lakh Twenty Seven Thousand

One Hundred and Eleven only) towards arrears of rent after

deducting security deposit of `30,00,000/- (Rupees Thirty Lakhs

only); for interest at the rate of 18% per annum on the aforesaid

amount from the date of default till realisation; for recovery of a

sum of `6,15,001/- (Rupees Six Lakhs Fifteen Thousand and One

only) as electricity and maintenance charges; for a sum of

`4,03,700/- (Rupees Four Lakhs Three Thousand and Seven

Hundred only) on account of painting and maintenance of office

furniture; and legal costs.

5. The learned Commercial Court rejected the suit. However, it

partly allowed the counter claim of the defendants. The Court held

that the leave and licence agreement dated 21.10.2019 was

terminated with effect from 15.11.2021 and awarded a sum of

`81,27,111/- (Rupees Eighty One Lakhs Twenty Seven Thousand

One Hundred and Eleven only) towards arrears of rent after

deducting the security deposit of `30,00,000/- (Rupees Thirty

Lakhs only), along with interest at the rate of 12% per annum from

the date of the suit till realisation. Further, the Commercial Court

also directed the plaintiff to pay an amount of `6,15,001/- (Rupees

Six Lakhs Fifteen Thousand and One only) as electricity and

maintenance charges within a period of three (03) months from the

said date.

PREFATORY FACTS

6. The lessors [respondents in the present appeal and the

defendants in the suit] owned a building named 'Ashok Chambers',

located at No. 25, 6th Cross, Koramangala, Srinivagalu, near

Ejipura Junction, 25th Intermediate Ring Road, Bengaluru - 560047.

The lessee, being engaged in the business of providing advanced

technology-based media solutions, had approached the lessors for

hiring the commercial space on the third floor of the said building

[demised premises]. The parties executed the leave and license

agreement dated 27.06.2013 [1st agreement]. The term of the said

leave and license agreement was three (03) years, with effect from

01.09.2013 to 31.08.2016. In terms of the said agreement, the

monthly rent was fixed at `3,00,000/- (Rupees Three Lakhs only)

for the first year, `3,15,000/- (Rupees Three Lakhs Fifteen

Thousand only) for the second year, and `3,30,750/- (Rupees

Three Lakhs Thirty Thousand Seven Hundred and Fifty only) for

the third year. The lessee had paid a sum of `30,00,000/- (Rupees

Thirty Lakhs only) as a security deposit.

7. After the expiry of the 1st agreement, the parties executed

another leave and license agreement dated 29.08.2016 [2nd

agreement], under which the demised premises were leased to the

appellant at a higher rental. The 2nd agreement expired in the year

2019.

8. The parties renewed the lease of the demised premises by

executing another leave and license agreement dated 21.10.2019

[the lease agreement], which was registered with the office of the

Sub-Registrar of Bommanahalli (Jayanagara) bearing Reg.No.

BMH-1-06575-2019-20, stored in Book No.1 and CD No.BMHD

1021. The lease agreement was for a term of thirty six (36) months,

commencing 01.09.2019 to 31.08.2022. The parties had agreed

that the rental for the first twelve (12) months would be `4,63,050/-

(Rupees Four Lakhs Sixty Three Thousand and Fifty only) per

month (01.09.2019 to 31.08.2020), which would be increased to

`4,86,202/- (Rupees Four Lakhs Eighty Six Thousand Two

Hundred and Two only) per month for the next twelve (12) months

(01.09.2021 to 31.08.2021) and would be further enhanced to

`5,10,512/- (Rupees Five Lakhs Ten Thousand Five Hundred and

Twelve only) for the remaining 12 months (01.09.2021 to

31.08.2022). Additionally, the lessee agreed to pay the service tax

as applicable from time to time.

9. There is no controversy between the parties regarding the

liability to pay rent upto February 2020. Admittedly, the lessee paid

the agreed lease rent till February 2020. However, it stopped

paying the rent of the demised premises thereafter.

10. In the year 2020, on account of the outbreak of COVID-19, a

nationwide lockdown was imposed by the Government of India with

effect from 24.03.2020. The lockdown continued in various phases

till 31.05.2020, and in Karnataka, it was extended till the end of

June 2020, with a further lockdown from 14.07.2020 to 22.07.2020.

The lessee claims that due to the pandemic, it shifted its entire

operations to a "work from home" model from 12.03.2020 onwards

and did not use the demised premises during this period.

11. Admittedly, the lessee did not pay any rent from March 2020

onwards. The first written communication between the parties after

the imposition of the lockdown was an email dated 17.06.2020 sent

by an authorised representative of the lessee, to the lessors. In this

email, the lessee requested complete waiver of rent for the

lockdown months of April and May 2020, and a reduction of rent by

50% for the subsequent months till December 2020, citing financial

difficulties arising from the pandemic.

12. The original lessors (original Defendant No. 1 - Sri B.

Fathiraj) responded by email dated 22.06.2020, agreeing to reduce

the rent by 30% for the lockdown period of April and May 2020,

however requesting, that the rent for the remaining months be paid

in full as per the terms of the lease agreement. The lessee

however, did not pay the rent as specified, but instead sent another

email dated 24.06.2020 reiterating its earlier request for a complete

waiver of rent for the lockdown period and a 50% reduction for the

subsequent months till December 2020, expressing its financial

difficulties.

13. The lessee followed up with another email dated 27.07.2020

addressed to the lessors. In this communication, the lessee

alleged, that the defendants had disconnected the power supply to

the demised premises approximately one month prior, which was

adversely affecting its business operations. The lessee once again

requested waiver of rent for the period of "statutory breakdown"

and a reduction of rent to 50% for the remaining period till

December 2020. The lessors did not immediately respond to the

said communication. However, the lessee continued to withhold

payment of rental charges.

14. It appears from the record that discussions were held

between the authorised representatives of the parties in the months

of January and February 2021 with a view to arriving at an

amicable settlement. A meeting was admittedly held at the office of

the lessors on 24.02.2021. Subsequently, Defendant No.1 sent an

email dated 25.02.2021 to the lessee, setting out the terms

allegedly agreed upon during the meeting. The lessee responded

by email dated 26.02.2021, acknowledging receipt of the email

dated 25.02.2021. However, the lessee set out different terms,

which were at variance with those proposed by the lessors. The

lessee also informed that it intended to vacate the demised

premises with immediate effect and requested the lessors to

provide unhindered access to enable it to remove its belongings

and hand over possession after a joint inspection. The terms

proposed by the lessee were evidently unacceptable to the lessors.

The settlement discussions did not fructify into any agreement.

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15. The lessors issued a legal notice dated 20.04.2021 to the

lessee stating that although discussions had been held between

the parties regarding waiver of rents, those discussions had failed,

and none of the terms mentioned in the documents exchanged

were binding. The lessors expressly withdrew all offers made

during the settlement discussions. The lessors called upon the

lessee to pay a sum of `74,08,654/- (Rupees Seventy Four Lakhs

Eight Thousand Six Hundred and Fifty Four only) towards rent

payable for occupation of the demised premises. The lessors also

disputed the allegation that they had disconnected the electricity,

stating that the connection was disconnected by BESCOM due to

non-payment of bills by the lessee.

16. The lessee responded to the said legal notice by a reply

notice dated 18.06.2021. In this reply, the lessee alleged that the

lessors had cut off the electrical power to its office without warning,

resulting in serious damage to its operations. It claimed that in

terms of Clause 40 of the lease agreement, the defendants were

obligated to maintain the premises in good and tenantable

condition, which they had failed to do. The lessee asserted that it

had informed the defendants on 24.02.2021 that it had terminated

the lease agreement in terms of Clauses 17, 28 and 39 of the lease

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agreement and would be vacating the demised premises owing to

the "unprofessional behaviour" of the lessors and the

"inconvenience and hardships faced as a result of the same". The

lessee claimed that although the lease agreement had been

terminated on 24.02.2021 with immediate effect, it was prevented

from accessing the demised premises and removing its belongings.

The lessee set out its claim for refund of security deposit to the

extent of `12,86,941/- (after adjustments for rent allegedly due),

compensation of `30,00,000/- (Rupees Thirty Lakhs only) for

computer servers rendered unusable, `5,00,000/- (Rupees Five

Lakhs only) for loss of data, and `10,00,000/- (Rupees Ten Lakhs

only) for financial losses, aggregating to `57,86,941/- (Rupees Fifty

Seven Lakhs Eighty Six Thousand Nine Hundred and Forty One

only).

17. The lessors responded through a rejoinder notice dated

01.07.2021, denying all the allegations made by the lessee and

refuting the claim that the lease agreement had been terminated.

The lessors reiterated their claim for arrears of rent. Being

aggrieved by the same, the lessee filed the suit in

Com.O.S.No.668/2021 before the learned Commercial Court on

08.10.2021, praying for the reliefs as set out above. The lessors

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filed their written statement denying the allegations made by the

lessee and also raised the counter-claim as stated above. During

the pendency of the suit, the defendants filed a memo dated

12.11.2021 before the learned Commercial Court, stating that the

defendants had no objection to the lessee removing its belongings

from the demised premises. Pursuant thereto, the lessee vacated

the demised premises on 15.11.2021 and handed over possession

to the lessors.

IMPUGNED ORDER

18. The learned Commercial Court framed the following issues

for consideration:

" 1. Whether the plaintiff proves that the lease agreement was terminated on 15.7.2021 or 24.2.2021?

2. Whether the plaintiff further proves that the defendant has violated the terms of the leave and license agreement dated 21.10.2019 and thereby committed breach of the agreement and if they suffered losses and damages owing to it ?

3. Whether the plaintiff further proves that they are entitled for the refund of rental security deposit of `12,86,941/-?

4. Whether the plaintiff further proves that the defendants are liable to pay compensation of `45,00,000/- with interest at 18% p.a., towards loss of data and financial losses from September 2016 to June 2020 ?

5. Whether the defendants proves that they are entitled for a sum of `81,27,111/- towards arrears of rent after

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deducting the security deposit of `30,00,000/-, which was paid by the plaintiff under first agreement ?

6. Whether the plaintiff is entitled the relief as sought under the plaint ?

7. Whether the defendant is entitled the relief as sought under the written statement ?

8. What Order or decree?"

19. The Court observed that there was no dispute that the

parties had executed the lease agreement [Ex.P.3].

20. The lessee examined its authorized signatory Mr. Rajendra

Khare [PW.1] in support of its claims and tendered his affidavit in

lieu of his examination-in-chief. The defendants examined Mr.

Ashok Kumar Rout (DW.1), the Special Power of Attorney holder.

The learned Commercial Court answered Issues 1 to 4 and 6 in the

"Negative", Issue 5 in the "Affirmative", Issue 7 "Partly in the

Affirmative", and passed the decree accordingly.

21. The learned Commercial Court found that the lease

agreement was terminated on 15.11.2021. It also found that the

lessee was obliged to pay the lease rent for the period prior to the

termination of the lease agreement. The learned Commercial Court

rejected the lessee's claim that the lessors had breached the terms

of the lease agreement. Consequently, the Court also held that the

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lessee was not entitled to any damages. The Court found that the

plaintiff had failed to establish that it had suffered any losses as

claimed. Accordingly, the lessee's claims were rejected, and the

counter-claim was partly allowed.

SUBMISSIONS

22. It is contended on behalf of the learned counsel for the

appellant/lessee that the findings of the learned Commercial Court

that the lease agreement had been terminated and cancelled on

15.11.2021, lack any supporting material or evidence. He also

argued that there was no dispute regarding the date of the

termination of the lease agreement. He pointed out that the only

issue framed was whether the lease agreement was terminated as

of 15.07.2021 or 24.02.2021. Therefore, the learned Commercial

Court could not have concluded that the lease agreement was

terminated on 15.11.2021.

23. Secondly, he submitted that the learned Commercial Court

erred in failing to appreciate that the lessors had breached the

terms of the lease by disconnecting the electricity to the demised

premises, thereby effectively preventing the lessee from using the

same. Additionally, he submitted that the lessors had prevented the

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lessee from accessing the demised premises and therefore, they

were not entitled to claim any lease rents. Further, he referred to

the audio recording transcripts and submitted that it clearly

indicates that the employees of the lessee were not permitted to

enter the demised premises. On the strength of the same, he

contended that the evidence on record established that the lessee

was denied access to the demised premises.

24. The contentions advanced by the learned counsel for the

lessee was countered by the learned counsel for the lessors. He

supported the impugned judgment.

REASONS AND CONCLUSION

25. There is no dispute that the lessee occupied the demised

premises under the lease agreement and was therefore liable to

pay the lease rentals as agreed. However, it is the lessee's case

that it was not obliged to pay any lease rent on essentially three

grounds. First, it claimed that on account of the outbreak of

COVID-19 it did not use the demised premises after March, 2020.

Second, it claimed that the lessors had disconnected the electricity

to the demised premises in June 2020, rendering it unusable.

According to the lessee, this constituted a breach of clause 40 of

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the lease agreement and, therefore, absolved it of its obligation to

pay lease rentals. And third, that the lessors had prevented the

lessee from accessing the demised premises and therefore were

not entitled to claim any rental. However, it is not disputed that the

appellant vacated the demised premises in November 2021. A

memo to this effect was filed before the learned Commercial Court.

26. As noted above, the lessee raised a claim for damages

arising from the disconnection of computer servers and loss of

data. However, there is no material on record to establish that the

lessee had suffered any loss or the quantum of loss suffered. Thus,

the lessee's claim for damages is required to be rejected,

irrespective of whether the plaintiff had established breach of the

lease agreement or not.

27. In view of the above, the essential question that fell for

consideration in this appeal is whether the lessee is obligated to

pay the lease rentals until the date of vacation of the demised

premises.

28. Plainly, the lessee's contention that it is not obligated to pay

the rent because it has not used the premises is unmerited. Since

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the lessee had leased the demised premises, it was liable to pay

the agreed rent, regardless of the extent of its use.

29. The lessee claims that its operations shifted to 'work from

home' from March 2020 onwards. However, the lessee had neither

terminated the lease at the material time nor handed over

possession of the same to the lessors. We may at this stage, refer

to Clause 39 of the lease agreement [Ex.P.3], which reads as

under:

"39. That if due to any accident, fire and or Act of God or due to any Government/Local Authorities initiating action for violation of building construction By-Laws, or Lessor committing breach its obligation etc. the Demised Premises are rendered unserviceable, the Lessee may at its own option terminate this agreement immediately, and the balance of advance rent, if any and refundable security deposit, after deduction of undisputed dues on any account in terms of this Deed, shall be refunded back to the Lessee by the Lessor simultaneously on handing over the Demised Premises."

30. It is apparent from the above that in terms of the lease

agreement, the lessee was entitled to terminate the lease

agreement, if the demised premises were rendered unserviceable

on account of any accident, fire or act of God or due to any

Government or local authority initiating action for violation of

building construction by-laws, or by the lessors committing breach

of their obligations. It is not the lessee's case that the demised

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premises were rendered unserviceable on any of the aforesaid

grounds. However, notwithstanding the same, even if it is assumed

(for which we find no grounds) that there was a force majeure

event on the ground of which Clause 39 of the lease agreement

could be invoked, it was incumbent on the lessee to have taken

steps to terminate the lease agreement. However, no such steps

were taken at the material time.

31. We may also refer to the terms of the lease agreement which

entitled the parties to terminate the lease. The lease agreement

expressly provided that the lessor (defendants) was not entitled to

terminate the lease during its term. However, the lessee (plaintiff)

could do so after giving three (03) months' written notice. The

Clauses 4 and 17 of the lease agreement are relevant and are set

out below:

"4. It is agreed between the Parties that Lessor shall not be entitled to terminate the agreement for the term of thirty six (36) months from the Agreement Commencement Date. In case Lessee wants to vacate the deemed premises during the agreement period, they can do so after giving 3 months written notice to Lessor.

** ** ** **

17. The Lessor shall be entitled to terminate this agreement only if there is a breach on the part of Lessee and the same is not rectified within ninety (90) days of receipt of the written notice from the Lessor to the Lessee

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to rectify the breach. The Lessee shall be entitled to terminate this agreement anytime by giving 3 months advance written notice to the Lessor."

32. In terms of Clause 17 of the lease agreement, the lessor

could terminate the lease only if there was a breach of the lease

agreement by the lessee (the plaintiff), and the breach was not

rectified within ninety (90) days of receipt of written notice.

33. Thus, in the event the lessee desired to terminate the lease,

it was necessary for the lessee to provide a three (03) months' prior

written notice under Clause 17. However, the lessee would also be

entitled to terminate the lease agreement immediately if there was

any material breach of the terms of the lease agreement on the

part of the lessors that rendered the demised premises

unserviceable, in terms of Clause 39.

34. Admittedly, there were no disputes between the parties till

March 2020. However, the lessee failed to pay lease rentals after

February 2020. It is apparent that at the material time the lessee

desired that the lease rents for the demised premises be reduced.

The lessee sent an email dated 17.06.2020 (Ex.P.4) - which is the

first written communication between the parties after the imposition

of the nationwide lockdown in March, 2020 - requesting the lessors

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to waive the rent payable for the lockdown period and reduce the

rental to 50% of the agreed amount for the next six (06) months.

35. Original Defendant No.1 (Sri. B. Fathiraj) responded to the

said email by an email dated 22.06.2020 (Ex.P5). He stated that he

was a senior citizen and depended on the rental income for his

survival. However, considering the unprecedented circumstances

of the COVID-19 pandemic, he with great difficulty, would agree to

reduce the rent by 30% for the lockdown period of April and May,

2020. He requested that the rent for the remaining period be paid in

terms of the lease agreement.

36. However, the lessee did not pay the lease rent as required.

Sri. Sudheer Kumar Pobbati of the lessee sent an email dated

24.06.2020 (Ex. P.6) once again, requesting that its earlier request

as set out in the email dated 17.06.2020 be considered. The lessee

expressed that it was facing financial difficulty.

37. The lessee followed up the aforesaid communication with an

email communication dated 27.07.2020 (Ex. P.7), inter alia,

alleging that the defendants had disconnected the power to the

demise premises a month ago, which was adversely affecting its

business. The lessee once again requested waiver of rent for the

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period of statutory breakdown and reduction of rent to the extent of

50% for the remaining period till December 2020.

38. The lessors did not immediately respond to the said

communication. However, the lessee did not pay any rental

thereafter.

39. Admittedly, certain discussions were held between the

parties. There is no dispute that a meeting was held at the office of

the lessors on 24.02.2021. Both the parties stated that they had

discussed the terms of the settlement. The lessors claim that

defendant No. 1 sent an email dated 25.02.2021 (Ex.D1) enclosing

therewith a soft copy of a letter, setting out the terms allegedly

agreed upon, which is set out below:

"To

M/s. Surewaves Media Tech Pvt.Ltd, Represented by its authorized Signatory Mr.AnantKansal, Off at, 3rdFloor, Ashok Chambers, 6thCross, Koramangala, Srinivagalu, Near Eijipura Junction, 25thIntermediate Ring Road, Bangalore-560047.

Sub: Regarding the vacating of the schedule office premises and payment of arrears of rent payable by you.

Sir/Madam,

As per our mutual discussion held on 24/02/2021 in the schedule premises, we both have long discussion on the payment of the arrears of rent which is payable by you to us and

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further on vacating of the schedule premises occupied by you as per the lease agreement dated:

As per the discussion you are due for the rent from the month of Feb2020 to Feb 2021 and further you are due for the electricity charges of the schedule premises to be paid to the concerned authority.

Further we both have arrived at the settlement figure of 40% should be waived off from the rent payable by you and the same has been agreed by us.

The rent payable by after waiver of 40% of rent is `45,24,186/-(Rupees Forty Five Lakh Twenty Four Thousand One Hundred Eighty Six Only), further you have paid an advance amount of `30,00,000/-(Rupees Thirty Lakh Only) and after deduction of advance security deposit amount, you have to pay a sum of `15,24,186/-( Rupees Fifteen Lakh Twenty Four Thousand One Hundred Eighty Six only).

Further you have to pay the electricity charge along with maintenance charges of `4,14,746/-(Rupees Four Lakh Fourteen Thousand Seven Hundred Forty Six Only).

Further we have also agreed to inspect the schedule premises for the painting charges and damages which is payable by you. Further we both agreed to accommodate a civil engineer forthe damages and painting charges of the schedule premises and as per his report you have to pay the charges according to the same.

As per or discussion you will settle the matter within six days from this day i.e., 25/02/2021.

Regards,"

40. The lessee sent an email dated 26.02.2021 (Ex. P.9/Ex. D.2)

acknowledging receipt of the email dated 25.02.2021 and also

setting out the terms which were apparently agreed upon between

the parties. It is material to note that the said terms were at

variance with the terms as set out in Ex.D1.The lessee called upon

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the lessors to confirm the acceptance of the said terms. The lessee

claimed that no rent was payable from November 2020 onwards

because access to its employees was blocked by the building

security. However, it agreed that the rents for the months of July to

October 2020 would be paid, albeit with a discount of 40%. The

lessee called upon the lessors to instruct the building security to

provide unhindered, free access to the demised premises, enabling

them to vacate the premises and hand over possession of the

same to the lessors after a joint inspection.

41. Clearly, the terms set out by the lessee were unacceptable to

the lessors. The lessors thereafter sent a legal notice dated

20.04.2021 (Ex.P.11). The lessors stated that although discussions

had been held between the parties regarding the waiver of rents,

those discussions had failed, and none of the terms mentioned in

the documents were binding. The lessors claimed that, since the

lessee had not accepted their offer, they had withdrawn all offers.

The lessors called upon the lessee to pay a sum of `74,08,654/-

(Rupees Seventy Four Lakhs Eight Thousand Six Hundred and

Fifty Four only) towards the rent payable for occupation of the

demised premises.

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42. It is clear from the above that neither party terminated the

lease agreement. Although the plaintiff had sent communications

seeking a waiver of rent and alleging interruption of utilities and

denial of access to the demised premises, it had not issued any

letter terminating the lease agreement. And, admittedly, it

continued to be in possession of the demised premises.

43. The lessee responded to the legal notice (Ex.P11) by a letter

dated 18.06.2021 sent by its advocate (Ex.P12). It alleged that the

lessors had cut off the electrical power to the lessee's office without

warning, resulting in serious damage to its operations. It also

claimed that in terms of Clause 40 of the lease agreement, the

defendants were obligated to maintain the premises in good and

tenantable condition, which they had failed to do.

44. It is material to note that it was also asserted in the said letter

that the lessee had informed the defendant on 24.02.2021 that it

had terminated the lease agreement in terms of Clauses 17, 28

and 39 and therefore would be vacating the demised premises on

account of "unprofessional behaviour" and "inconvenience faced as

a result of the same". The lessee alleged that although the lease

agreement had been terminated on 24.02.2021 with immediate

effect, it was prevented from accessing the demised premises and

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removing its belongings. The said letter also set out the claim for a

refund of the security deposit to the extent of `12,86,941/- (after

adjustments for rent, which, according to the plaintiff, was

admittedly payable), and damages quantified at `39,00,000/-

(Rupees Thirty Nine Lakhs only). Additionally, the lessee sought

compensation for extra rents allegedly charged between

September 2016 till June 2020, along with tax. The lessors

responded, disputing the contents of the communication.

45. As noted above, the lessee had relied on Clauses 17, 28 and

39 of the lease agreement, claiming that it had terminated the lease

with immediate effect on 24.02.2021. Clause 28 of the lease

agreement states that upon termination of the lease, the lessee is

entitled to remove its belongings from the premises. It does not

provide for termination of the lease agreement. As noted above,

Clause 17 of the lease agreement entitled the plaintiff to terminate

the lease, albeit with three (03) months' prior written notice. It did

not entitle the lessee to terminate the lease with immediate effect.

Clause 39 of the agreement entitled the lessee to terminate the

agreement immediately only if the demised premises had been

rendered unserviceable for the reasons set out therein.

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46. If the lessee's case is accepted that the lessors had, in

breach of the terms of the lease agreement, disconnected the

electricity and rendered the demised premises unserviceable, the

lessee's claim may have some merit. However, none of the other

conditions of Clause 39 are relevant in the given facts.

47. The lessee's case that it is not obligated to pay any lease

rentals essentially rests on its claim that the lessors had

disconnected the electricity.

48. It is material to note that the lease agreement expressly

provides that the lessee would pay all charges based on

consumption of electricity (power and light) and water bills directly

to the authority concerned. Clause 12 of the lease agreement is

relevant and is reproduced below for ready reference:

"12. That the Lessee shall pay all charges based on consumption, for electricity (power & light), and water bills directly to the authority concerned. Lessor has installed and provided a separate 3-phase standard electric meter for the said portion of the office on the 3rd floor of the building. The charges for common facilities like security staff, cleaning/lighting of common area shall be shared with other occupants/residents in the building by the Lessee."

- 27 -

per month for those two months.)

                               TABLE FOR REFERENCE

             Period            Monthly Rent (Rs.)     Months        Amount (Rs.)

March 2020                          4,63,050             1              4,63,050

April 2020 (30% discount)           3,24,135             1              3,24,135

May 2020 (30% discount)             3,24,135             1              3,24,135

June 2020 - August 2020             4,63,050             3             13,89,150

September 2020 - August 2021        4,86,202             12            58,34,424

September 2021 - 15.11.2021         5,10,512        2.5 (approx.)      12,76,280

Total Rent Payable                                                     96,11,174

Less: Security Deposit                                                 30,00,000

Net Arrears of Rent                                                    66,11,174