Kerala High Court

M/S. Muthoot Finance. Ltd vs Mammu Haji on 4 June, 2024

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
              THE HONOURABLE MRS. JUSTICE C.S. SUDHA
     TUESDAY, THE 4TH DAY OF JUNE 2024 / 14TH JYAISHTA, 1946
                         RSA NO. 224 OF 2024
AGAINST THE JUDGMENT AND DECREE DATED 10.11.2023 IN AS NO.21
     OF 2019 OF THE COURT OF SUBORDINATE JUDGE, KOYILANDY,
 ARISING OUT OF THE JUDGMENT AND DECREE DATED 28.02.2019 IN
         OS NO.271 OF 2015 OF MUNSIFF COURT, PERAMBARA
APPELLANT/APPELLANT/PLAINTIFF:

           M/S. MUTHOOT FINANCE. LTD.
           AGED 30 YEARS
           MUTHOOT CHAMBERS, OPP. SARITHA THEATRE COMPLEX,
           BANERJI ROAD, COCHIN - 682018, REPRESENTED BY
           GEORGE ALEXANDER MUTHOOT, MANAGING DIRECTOR,
           MUTHOOT FINANCE LTD., MUTHOOT HOUSE, KOZHENCHERY
           P.O., ERNAKULAM, REPRESENTED BY POWER OF ATTORNEY
           HOLDER, SRI. PRABHA T FRANCIS EMPLOYEE ID NO. MF
           33605, WORKING AS SENIOR MANAGER-LEGAL, MUTHOOT
           FINANCE LTD, HEAD OFFICE, MUTHOOT CHAMBERS,
           BANERJEE ROAD, ERNAKULAM, PIN - 682018
           BY ADV P.I.GEORGEKUTTY


RESPONDENT/RESPONDENT/DEFENDANT:

           MAMMU HAJI
           AGED 66 YEARS
           S/O. LATE KUNHAMMED, AGED 66 YEARS, BUSINESS,
           RESIDING AT KOODATHANKANDY HOUSE, CHANGAROTH
           VILLAGE, AVADUKKA DESOM, AVADUKKA PO, KOYILANDI
           TALUK, KOZHIKODE DISTRICT, PIN - 673528

       THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION
ON   04.06.2024,   THE   COURT    ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
                                       2
R.S.A.No.224 of 2024



                             C.S.SUDHA, J.
                       ----------------------------------
                          R.S.A.No.224 of 2024
                  -------------------------------------------
                  Dated this the 4th day of June 2024

                            JUDGMENT

This second appeal under Section 100 read with Order

XLII Rule 1 CPC filed by the plaintiff/appellant is against the

judgment and decree dated 10/11/2023 in A.S.No.21/2019 on the

file of the Subordinate Judge's Court, Koyilandy, which appeal in

turn is against the judgment and decree dated 28/02/2019 in

O.S.No.271/2015 on the file of the Court of Munsiff, Perambra.

The parties and the documents will be referred to as described in

O.S.No.271/2015.

2. The plaintiff as per lease agreement dated 30/03/2013

took on rent the plaint schedule property belonging to the

defendants for a monthly rent of ₹28,000/-. After execution of the

lease agreement, the area of the tenanted premises was found to be

lesser than what was stated in the agreement and so the rent was

reduced to ₹26,250/-. The defendant had demanded an interest free

advance of ₹2 lakhs for constructing a strong room and other

constructions in the plaint schedule room which was agreed to be

recovered from the monthly rent @₹5,556/- per month. The

plaintiff had also paid an amount of ₹2,80,000/- as deposit to the

defendants, which amount was agreed to be refunded on the

termination of the lease agreement. On fulfilling the aforesaid

conditions, the plaintiff Company started its branch office at

Koorachund in the plaint schedule building/room on 30/03/2013.

As the business was at a loss, the plaintiff Company decided to

close the branch office in the tenanted premises, pursuant to which

it was closed on 31/01/2015. The plaintiff Company sent a

registered notice informing the defendant about the closure of the

branch. However, the defendant refused to accept the notice.

Subsequently, the defendant agreed to terminate the lease

agreement by receiving the rent till 31/03/2015. The key was

handed over to the defendant on 31/03/2015. The defendant then

agreed to refund the security deposit of ₹2,80,000/- within a period

of one month. Despite repeated requests, the defendant did not

return the security deposit and hence the suit claiming refund of the

same.

3. The defendant filed written statement admitting the

execution of the lease agreement dated 30/03/2013. However, the

allegation that the monthly rent was reduced from ₹28,000/- was

denied. The plaintiff is liable to pay rent @₹28,000/- per month.

The receipt of ₹2,80,000/- as advance deposit from the plaintiff

Company was admitted. The defendant did not refuse to receive

the notice issued by the plaintiff. The defendant had never

conceded to terminate the lease agreement by receiving rent upto

31/03/2015. The key of the plaint schedule property had never

been handed over to the defendant. As long as the plaintiff did not

vacate the property and deliver possession of the same to the

defendant, the latter is not liable to refund the security amount.

The claim for refund of the security amount is premature and hence

not maintainable. It was also contended that a huge amount was

due from the plaintiff towards arrears of rent, which the defendant

was entitled to set off against the amount payable from the

advance.

4. Necessary issues were framed by the trial court on the

basis of which parties went to trial. PW1 and PW2 were examined

and Exts.A1 to A9 were marked on the side of the plaintiff. DW1

was examined on behalf of the defendant. No documentary

evidence has been produced. The trial court on an appreciation of

the oral and documentary evidence found that the plaintiff had

failed in establishing that the plaint schedule building had been

vacated and possession handed over to the defendant and hence

declined the relief sought for. The plaintiff aggrieved by the

judgment and decree preferred appeal, namely, A.S.No.21/2019.

The first appellate court also confirmed the judgment and decree

of the trial court. Aggrieved, the plaintiff has come up in second

appeal.

5. Heard the learned counsel for the plaintiff/appellant.

6. Execution of Ext.A9 lease agreement is admitted. As

per clause 11 of Ext.A9, the period of lease was 10 years.

However, the lessee had the liberty to vacate the premises before

the period of 10 years and in such an event, he had to give a notice

in writing three moths' prior to the date of vacating the premises.

According to the plaintiff, in compliance with clause 11, the

plaintiff Company had issued Ext.A3 notice dated 29/12/2014,

which was refused to be accepted by the defendant. Therefore

there was proper service of notice on the defendant. According to

the plaintiff, he had complied with clause 11 and so he was entitled

to the reliefs prayed for. The trial court on a perusal of the recitals

in Ext.A3 concluded that the same was not a notice as

contemplated under clause 11 of Ext.A9. The relevant portion of

Ext.A3 notice reads thus -

"We had taken on lease your above referred building and

opened our Koorachund branch with the expectation of exploiting the good business potential available in the area. As the business is not picking up as expected we are having second thoughts about continuing our Branch in the present premises especially as we have other branches functioning in nearby areas. In this connection, though we will be merging this branch with another branch at the centre, considering our good relationship with your good selves we have not taken our final decision to vacate the building. However please note that the monthly rent of the building henceforth will be adjusted towards the outstanding rent advance and the rented opposite so that it will be easier for both yourself and the company to settle the accounts in case we are forced to take a decision to vacate the premises at a later date" [Emphasis Supplied]

Therefore as rightly held by both the courts, this is not a notice as

contemplated in clause 11 of Ext.A9.

7. The plaintiff also alleges that tenanted premises was

vacated and that possession and key of the building had been

handed over to the defendant on 31/03/2015. However, there is

absolutely no evidence to substantiate the same. PW1 deposed

that he had no direct knowledge about the key of the schedule

premises being handed over to the defendant. PW2 also deposed

that he is unaware of the handing over of the key of the plaint

schedule building to the defendant. PW1 also deposed that he is

unaware as to whether the building was vacated by the plaintiff on

30/03/2015 or whether possession was handed over to the

defendant on the said date. Therefore the trial court and the first

appellate court found that there is no evidence/materials to show