Kerala High Court
K.M.Baby vs Rujvi Saraf on 2 August, 2024
Author: T.R.Ravi
Bench: T.R.Ravi
RFA NO. 511 OF 2008
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
FRIDAY, THE 2ND DAY OF AUGUST 2024 / 11TH SRAVANA, 1946
RFA NO. 511 OF 2008
AGAINST THE JUDGMENT DATED 23.02.2008 IN OS NO.716 OF 2006 OF
I ADDITIONAL SUB COURT, ERNAKULAM
APPELLANT IN FRA/DEFENDANT IN SUIT
K.M.BABY,
S/O.MATHEW,
KAVALLAMTHARAYI HOUSE,
MATHA ROAD, ERNAKULAM, KOCHI-17.
BY ADVS.
BASIL MATHEW
NINAN JOHN(K/346/1997)
SANJANA SARA VARGHESE ANNIE(K/000582/2018)
AJAY KRISHNAN S.(K/1630/2020)
ARYA A.R.(K/1666/2018)
RESPONDENTS IN RFA/PLAINTIFFS IN SUIT:
1 RUJVI SARAF,
D/O.AVINASH SARAF, VINAYAKA ROAD
PALLIYIL LANE, DEWAN'S ROAD, ERNAKULAM.
2 V.G.SARAF & SONS
REPRESENTED BY ITS
DIRECTOR, AVINASH SARAF, VINAYAKA,
PALLIYIL LANE, DEWAN'S ROAD, ERNAKULAM.
BY ADVS.
SRI.BOBBYMATHEW KOOTHATTUKULAM
SRI.P.B.KRISHNAN
SRI.S.SHYAM
THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION ON
02.08.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
RFA NO. 511 OF 2008
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T.R.RAVI.J
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RFA No.511 of 2008
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Dated this the 02nd day of August, 2024
JUDGMENT
The appeal has been filed by the defendant in a suit
for return of the advance money paid pursuant to Ext.A1 lease
agreement dated 18.01.2006. The case of the plaintiffs is that
the building bearing No.CC.32/3018-c was taken on rent as
per a lease agreement dated 18.01.2006 for using it as a
godown for the business of 2 nd plaintiff. The agreement was
entered into on an understanding that the building has a
carpet area of 110 sq.feet. A rent of Rs.10,000/- was fixed and
a sum of Rs.2 lakhs was paid as security by way of cheque. It
is stated that besides the above said amount, Rs.1,000/- was
also paid for adjusting the same towards the rent for
February- March, 2006. According to the plaintiffs, though the
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defendant was aware of the purpose of the lease, for which
electricity and license from the Corporation would also be
required, the defendant refused to do anything in that regard
to facilitate the plaintiffs' occupation of the premises.
According to the plaintiffs, they could not use the building
since none of the required documents were given and there
was no electricity connection. The plaintiffs issued a notice on
20.04.2006 terminating the lease and the lawyer notice was
issued demanding back the amount given as security. The suit
was filed praying for a decree for a sum of Rs.2,17,300/-
being the amounts due as on the date of the suit.
2. The defendant filed written statement. Though the
execution of the lease deed and the payment of the security
amount was admitted, it was contended that a monthly rent
of Rs.10,000/- was fixed mutually for the entire premises and
was not calculated on the basis of the square feet area. It is
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contended that security deposit becomes refundable only at the
time of surrender of the vacant possession of the building and
that the plaintiffs had not surrendered the building when they
filed the suit. It is hence contended that as on the date of
suit, no amount is payable towards security deposit since there
has been no surrender. It is further contended that there is no
privity of contract between the defendant and the 2 nd plaintiff
and the agreement was entered into only with the 1 st plaintiff.
Another contention taken is that the 1 st plaintiff had used the
building for storing goods of the 2nd plaintiff. It is contended
specifically that the electricity had been provided and water
connection to the building has also been provided with effect
from 01.02.2006. According to the defendant, there was no
requirement to give any NOC or any further document and the
lease agreement is sufficient for the purpose of availing any
license from the Corporation for the building. It is further
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submitted that whether or not the plaintiffs occupied the
building, they are liable to pay the contractual amount. The
counsel argued that if the plaintiffs were not interested in
continuing the agreement, they could have surrendered the
building even much earlier so that the building will be
available for the defendant for personal use or for renting it
out to others. It is further contended that no amount has been
paid as rent for the period from 01.02.2006 till the date of
surrender which is stated as 23.02.2007. According to the
defendant, after adjusting the amount payable towards rent for
the period from February, 2006 to the date of surrender, the
balance payable would be only Rs.59,400/-.
3. Exts.A1 to A9 were marked on the side of the
plaintiffs. Ext.A1 is the copy of the lease deed. Ext.A2 is the
receipt evidencing the payment of Rs.2 lakhs to the defendant.
Ext.A3 is the lawyer notice dated 28.06.2006 issued by the
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plaintiffs to the defendant. Ext.A4 is the postal receipt for
issuance of the lawyer notice. Ext.A5 is the acknowledgment
card showing the receipt of the lawyer notice by the
defendant. Ext.A6 dated 10.03.2006 is the copy of the letter
and postal receipt issued by the plaintiffs to the defendant.
Ext.A7 is the acknowledgment card for receipt of the letter.
Ext.A8 dated 20.02.2006 is a letter issued under certificate of
posting by the plaintiffs' representatives to the defendant.
Ext.A9 is a reply notice issued by the defendant to the
plaintiffs in reply to the letter dated 20.02.2006. The father of
the 1st plaintiff was examined as PW1. Defendant examined
himself as DW1 and DW2 was examined to prove the
occupancy of the building by the plaintiffs. The trial court
after consideration of the evidence held that the lease deed
has not come into effect for want of necessary materials to use
it for the purpose stated in Ext.A1. It was found that the
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plaintiffs had issued several letters demanding documents for
getting license for using the building as godown and the same
had not been made available by the defendant. The Court
found that since the defendant refused to issue such
documents which were required, the lease has been terminated
with due notice. On the basis of the above findings, the suit
has been decreed allowing the plaintiffs to realise a sum of
Rs.2,17,300/- with pendente lite and future interest at the rate
of 9% per annum from the defendant and his assets. Aggrieved
by the judgment and decree, the defendant has preferred this
appeal.
4. The main contention of the counsel for the
appellant is that as on the date of suit, no amount was
payable as security deposit since the obligation to return the
security comes only after the surrender of the building.
Reliance is placed on the relevant clause in Ext.A1 lease deed,
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which specifically says that the defendant is liable to return
the interest free deposit after the surrender of the building by
the plaintiffs and after adjusting the amounts due as rent from
the plaintiffs. It is contended that irrespective of the fact that
the plaintiffs had occupied the building, the liability to pay
the rent arises from the contract and the same cannot be
denied. It is further argued that going by the rent deed, there
is no stipulation to pay the rent based on the square area
which is being occupied and a consolidated sum of Rs.10,000/-
has been fixed as rent. Regarding the failure to provide the
amenities, it is contended that amenities had been provided
from 01.02.2006 as seen from the reply which has been given
by the defendant to the letter issued by the plaintiffs.
Reference is made to Ext.A9. Another contention raised is that
even according to the plaintiffs, the rent payable should have
been Rs. 8863.63 per month and the expression for willingness
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to pay rent at the said rate itself amounts to an admission
regarding the liability to pay rent. It is further argued that the
plaintiffs had to take possession of the rented premises after
being fully satisfied of the facilities that were available there
and cannot thereafter contend that there was no electricity
connection in the building.
5. The counsel for the respondents/plaintiffs submitted
that the very purpose of the taking the building was for using
it as a godown and going by the evidence on record, it is
evident that the defendant was also aware of the requirement
of production of documents for the purpose of availing license
from the Corporation and from other statutory authorities. It is
submitted that letters had been issued from the very month on
which the key was handed over to the plaintiffs and there had
been no proper response from the side of the defendant. It is
stated that it was in these circumstances that the lawyer
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notice had been issued wherein they have clearly stated that
the building may be taken back by the defendant after paying
the amounts due to the plaintiffs. The counsel submits that as
a matter of fact, there is a surrender even on that date and it
is not a case where plaintiffs wanted to hold on to the
property to the detriment of the defendant. Regarding the
occupation of the building, it is specifically contended that the
building was never occupied as can be seen from the evidence
tendered and there was no possibility of occupying the
building since there was no electricity connection. To prove
the occupation of the building, the counsel for the defendant/
appellant relied on the evidence tendered by DW2 who was an
independent witness, who has specifically stated that whenever
he is gone to the locality, he has seen the building in question
being used. He says that he has specifically seen materials
being brought to the godown. The court below had found that
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DW2 was not a person residing in the locality and his
evidence cannot be believed. The Court found that he is an
interested witness since he is a person who brings building
materials particularly for the defendant.
6. The rental agreement was entered on 18.01.2006.
The key for the building was handed over on 15.02.2006. The
suit was filed on 06.12.2006. The key was surrendered
pending the suit on 23.02.2007. Ext.A1 agreement specifically
says that the rent is Rs.10,000/- per month. Regarding the
extent it says the area of the building is approximately 1100
sq.feet. It says that if there is a default in payment of the rent
for more than three months, the defendant can evict the
plaintiffs irrespective of the time fixed in the lease deed. There
is an obligation to the plaintiffs to give vacant possession of
the building on the expiry of the period of lease. Ext.A8 is a
letter given five days after the key was handed over by the
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defendant. The letter is addressed to the defendant and it was
sent by one T.R.Sethumadavan who is stated to be an
employee of the 2nd plaintiff. It is specifically stated in the
letter that though the defendant had to provide electricity for
the building, light/fan, toilet/water etc., the same were not on
site on 15.02.2006. It is also requested that sketch showing
the space of the building and the NOC to be submitted to the
Corporation for license, may be issued. The letter would also
say that the signatory will be meeting the defendant on
16.02.2006 and the letter is being given since it had been
requested to by the defendant. Ext.A9 is a reply sent to
Ext.A8. The date seen under the signature is 24.02.2006. It is
stated in the letter that facilities had been made available
from 01.02.2006 onwards. It is also stated that to avail license
from the Corporation all that is required is the lease
agreement. There is also an offer to inspect the premises in
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the presence of the defendant for convincing that all the
facilities are made available as per the requirement. Ext.A6 is
a letter written on 10.03.2006 by the 2 nd plaintiff, wherein it
is again stated that even though advance had been paid and
key had been received on 15.02.2006, there is no power
connection/consumer meter. The letter also says that the
defendant had refused to give NOC for license and sketch for
the statutory registration under the Central Excise, K-VAT etc.,
It is stated in the letter that the plaintiffs had measured the
premises and found that the extent is only 975 sq.feet only as
against 1100 sq.feet which was the promised area. The
defendant was again requested to provide the amenities. Even
though Ext.A6 letter was sent on 10.03.2006, there is no reply
sent to the said letter. It is thereafter that Ext.A3 lawyer
notice was sent by the plaintiffs to the defendant. In Ext.A3,
the plaintiffs had reiterated their case that the amenities have
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not been provided and required documents have not also been
issued for the purpose of using the premises. It is stated that
they are not able to use the premises and that the premises
may be taken back after returning the amount of advance
paid. It is also stated that if the amount was not returned and
the key is not taken back, the plaintiffs will be constrained to
initiate legal action. No reply has been sent to the lawyer
notice as well. The counsel for the defendant on the other
hand contends, that the key was surrendered only on
23.02.2007 and the defendant is entitled to rent till the
surrender of the key. According to the defendant, only a sum
of Rs.59,400/- is due. As against the statement in the written
statement, DW1 at the time of evidence has taken a specific
stand that he had not received the lawyer notice at all. On a
comparison with the written statement, the above statement
cannot be accepted as true. So also, the 1st plaintiff's father
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who was examined as PW1 has specifically stated that there
was no electricity connection at the time the key was handed
over on 15.02.2006. There is nothing in the cross examination
to discredit the above version of DW1. The plaintiffs were also
given oral evidence to the effect that they have not used the
premises. There is no effective cross examination on the said
aspect. As regards the electricity connection, even though
there is specific contention and despite the fact that the
defendant had contended that they are entitled to adjust the
electricity charges from the deposit amount, no effort had
been taken to produce the electricity bill for the payment of
charges during the period in question. A contention was taken
by the counsel to submit that this is an aspect which ought to
have been proved by the plaintiffs, since it is their case that
they have not occupied the building. I do not think that on
the facts that have been pleaded, the burden is wholly on the
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plaintiffs. It is a building belonging to the defendant and he is
the best person to furnish proof regarding electricity
connection and payment of bills. As per the lease agreement,
it is the duty of the tenant to pay the electricity charges for
the amount of electricity consumed and convince the landlord
regarding the said payment. However, in the absence of even
a consumer meter, based on which the bill could be raised
against the building in question, there is no manner in which
the plaintiffs could have paid the electricity charges. Hence, it
cannot be held that the burden is entirely on the plaintiffs to
provide necessary evidence on the above aspects. The landlord
could have taken steps to prove his contention regarding the
occupation of the building as well as the electricity connection
to the building. Viewed thus, there is nothing wrong in the
finding of the trial court that the lease agreement did not
come into effect as the defendant did not provide the required
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amenities for the plaintiffs to use the premises. The premises
had been specifically taken for the purpose of using as a
godown and if the landlord does not facilitate the use of such
building as a godown by giving necessary documents and
providing the amenities, he cannot be heard to contend that
he is not liable to pay back the amount received as security
deposit.
7. The question then is whether a modification is
required in the directions issued by the trial court. The trial
court has decreed the suit in its entirety finding that the entire
security deposit is liable to be paid without any adjustment
towards the rent payable. Admittedly, a suit notice was issued
only on 28.06.2006. 15.02.2006 is the admitted date on which
the key was handed over to the plaintiffs. As such, whether or
not the plaintiffs used the premises, they are liable to pay the
rent for the period till 28.06.2006 irrespective of the fact
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whether they actually occupied the building. The first
expression of willingness to surrender came only in Ext.A3
lawyer notice. Going by the written statement, the lawyer
notice has been received by the defendant. The version put
forward in the written statement cannot be relied upon. I am
hence of the opinion that the rent payable for the period from
15.02.2006 to 28.06.2006 is liable to be deducted from the
amount payable. Another aspect that needs modification is the
future interest which has been granted by the trial court. The
trial court ought not to have granted 9% interest towards
future interest and 6% alone should have been granted.
8. The appeal is hence partly allowed by modifying
the decree allowing the plaintiffs to realise a sum of
Rs.2,17,300/- after deducting a sum of Rs.45,000/- towards the
rent payable for the period from 15.02.2006 to 28.06.2006,
with pendente lite interest at the rate of 9% and future
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interest at the rate of 6% from the defendant and his assets.
The plaintiffs will be allowed cost in the trial court.
Sd/-
T.R.RAVI
JUDGE
sn
