M.Kamaraj vs T.G.Praveen Kumar
2023 Latest Caselaw 3482 Mad

                                                                                       C.R.P.No.2389 of 2021

                                        IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                            Dated : 30.03.2023

                                                               CORAM

                                   THE HON'BLE MRS.JUSTICE V.BHAVANI SUBBAROYAN

                                                     C.R.P.No.2389 of 2021 &
                                                     C.M.P.No.18144 of 2021

                     1. M.Kamaraj
                     2. R.Ranjith
                     3. S.Sumith Jain                                                  ... Petitioners

                                                                   Vs.
                     T.G.Praveen kumar                                                 ... Respondent


                                  Civil Revision Petition is filed under Article 227 of the Constitution of

                     India to set aside the fair and decreetal order dated 04.10.2021 of the

                     learned XV Additional Judge, City Civil Court, Chennai in I.A.No.1 of 2021

                     in O.S.No.9041 of 2019 by allowing the present Revision.



                                          For Petitioners     : Mr.S.Hajamohideen Gisthi

                                          For Respondent : Mr.R.Narayanan

                                                              ORDER

The present Civil Revision Petition has been filed to set aside the fair

and decreetal order dated 04.10.2021 of the learned XV Additional Judge,

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City Civil Court, Chennai in I.A.No.1 of 2021 in O.S.No.9041 of 2019 by

allowing the present Revision.

2. The brief facts of the case are as follows:-

The petitioners are the plaintiffs and the respondent is the defendant.

The suit in O.S.No.9041 of 2019 is filed by the plaintiffs to direct the

respondent to pay the 1st petitioner / 1st plaintiff a sum of Rs.9,01,000/-

payable under the memorandum of understanding dated 23.04.2019 in

addition to Rs.1,00,000/- towards monetary compensation for the delay and

mental agony caused to the petitioners / plaintiffs. I.A.No.1 of 2021 was

filed by the respondent / defendant to grant unconditional leave to him to

defend the suit. Resisting the same, a counter was filed by the petitioners /

plaintiffs. The said petition was allowed on 04.10.2021, thereby the

respondent / defendant was granted unconditional leave to defend the suit.

As against the same, the present revision is filed by the petitioners /

plaintiffs.

3. The learned counsel for the petitioners would submit that the fair

and decreetal order dated 04.10.2021 passed by the learned XV Additional

Judge, City Civil Court in I.A.No.1 of 2021 in O.S.No.9041 of 2019 allowing

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the same unconditionally is unsustainable in law and facts, in view of the

fact that under Memorandum of Understanding dated 23.04.2019 (Ex.R.3)

executed by the respondent, he categorically and in clear terms already

admitted that he will pay Rs.9,01,000/- to the petitioners' partnership firm

'Brunch Partnership Juices', as confirmed under Ex.R-9, Email dated

27.05.2019 and that the amount payable by the respondent was arrived at

after deducting the rental arrears of Rs.1,50,000/- payable to his mother

viz., Gowri, owner of the premises in the ground floor taken on rent by the

petitioners under rental agreement dated 01.06.2018.

4. The learned counsel for the petitioners also contends that the

learned Judge ought to have seen that the respondent herein let out the

residential portion of the house in the 2nd floor under another rental

agreement dated 01.06.2018 and that the revision petitioners had vacated

both the premises / shop portion owned by the respondent's mother and

the residential portion of the house in the 2nd floor owned by the respondent

on 31.03.2019 and that the security deposit of Rs.3,00,000/- paid in respect

of the premises / shop portion owned by the respondent's mother as well

as the security deposit of Rs.50,000/- paid in respect of the residential

portion of the house in the 2nd floor owned by the respondent were returned

on 23.04.2019 under cheques.

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5. The learned counsel for the petitioners also submits that the

learned judge erred in entertaining the plea of the respondent that the

respondent executed Ex.R.3 Memorandum of understanding dated

23.04.2019 due to threat, coercion and undue influence and the same is

only an after thought and the respondent is making incorrect statement for

the first time only to obtain leave to defend the suit and drag on the same

without any substantial and sustainable defence or triable issue in the

cause. The learned judge failed to note that the so called threat and

coercion and undue influence was never even whispered on any occasions

and only in the reply notice dated 16.07.2019, he alleges the same.

6. The learned counsel for the petitioners also represented that

learned judge erred in not appreciating that the contentions relating to the

payments made by the petitioners in respect of the sale agreement dated

12.05.2018 entered into with the respondent for purchase of the materials

and articles lying within the rented premises for a sum of Rs.4,51,000/- and

receipt of sale price was duly acknowledged and endorsed in writing by the

respondent and the articles purchased were resold to the respondent under

Ex.R3 which cannot be construed as disputed liability, it is an admitted

liability.

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7. Lastly, the learned counsel for the petitioners contends that the

learned Judge should have atleast directed the respondent to deposit the

amount due under Ex.R3 in view of the Judgment of the Hon'ble Supreme

Court of India reported in 2017 (1) SCC Page 568 [IDBI Trusteeship

Services Limited Vs.Hubtown Limited], thereby seeks to allow the present

Revision.

8. Per contra, it is the contention of the learned counsel for the

respondent / defendant that the defendant's mother, viz., T.Gowri is the

absolute owner of the property being shop at ground floor. Considering the

petitioners' interest, the defendant entered int a rental agreement with the

petitioners on 01.06.2018 and received a rental advance of Rs.3,00,000/-

on 19.05.2018 and fixed a monthly rent of Rs.18,000/- and maintenance

amount of Rs.17,000/- for the said premises. Prior to the execution of said

rental agreement dated 01.06.2018, the respondent intended to sell the

articles, viz., table, chairs, vessels, cash counter, iron racks, freezers lights

fans and other electronic equipment, gas stoves, cupboards, juice

counters, chimney, chat counter display counter including other interior for

a total consideration of Rs.4,51,000/- to the petitioners.

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9. Further, the learned counsel for the respondents contends that the

petitioner had entered into sale agreement and thereby paid Rs.21,000/-

and agreed to pay the remaining amount of Rs.4,30,000/- within a month

from thereon and accordingly, the petitioners paid a sum of Rs.2,00,000 on

17.07.2018 and 19.07.2018 through their bankers and also paid the

remaining sum of Rs.2,30,000/- in cash. But it is quite contrary that they

had given a hand loan of Rs.2,00,000/- The petitioners expressed their

inability to continue the said business and intended to resell the said

articles to the respondent and gave an intimation to vacate the said rented

premises. Accordingly, the advance amount of Rs.3,00,000/- was paid by

way of cheque dated 23.04.2019 and the same was recorded by the

petitioners by way of their letter.

10. It is represented on behalf of the respondent that the petitioners

have literally violated the terms and conditions enumerated in the rental

agreement dated 01.06.2018 more particularly in respect of clause nos.11,

12, 14 and 17 and thereby committed breach of agreement.

10(i) As per clause 11, 'both the parties should give 3 months' notice

for vacating the shop either side' . The petitioners have not complied with

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the said clause. On 27.03.2019 the petitioners had called over mobile and

suddenly intimated regarding termination of the rental agreement and also

intended to vacate the premises on 31.03.2019 and on such date, without

even such basic courtesy to handover the keys gave the keys to the

neighbour shop namely, Bengali Fun foods, after vacating the same.

10(ii) As per clause 12: During the process of vacating the premises,

the petitioners have taken away, major articles, namely, chairs, vessels,

cash counter, freezers, juice counter, chat counter and other essential

items worth Rs.1,85,000/- and also damaged interior works of the said

rented shop premises including the removal of electricity service, wires,

switch boards, which cost Rs.40,000/- , hence the respondent was

constrained to bear huge financial investments totalling to Rs.2,25,000/- ,

which is against Clause 12.

11. The learned counsel for the respondent further contends that the

petitioners have further defaulted in making monthly rents both to the

rented shop and house premises more particularly, for the months of

January, February and March 2019 aggregating to a sum of Rs.1,50,000/-

which has to be paid by the petitioners. That apart, on 23.04.2019, the

petitioners demanded to sign Memorandum of Understanding for the resale

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of the said articles thereby compelled the respondent to purchase the same

without providing sufficient opportunity to him in order to verify the articles,

its working nature and assess the valuation of the same after its

depreciation. Therefore, with respect to alleged claim of Rs.4,00,000/- for

the petitioners' additional interior works, which is not binding on the

respondent, hence clause 17 that ' tenant cannot claim for the investment

that he had made in the premises for the business at any point of time' has

been violated.

12. Lastly, the learned counsel for the respndent submits that the

claim of Rs.9,01,000/- by the petitioners is false and incorrect. As far as

the hand loan of Rs.2,00,000/- and their additional works of Rs.4,00,000/-,

there is no existing liability on the part of the respondent. Regarding the

liability of purchase of articles at Rs.3,01,000/- the petitioners had taken

away articles worth Rs.1,85,000/- due to poor maintenance of tenanted

premises, thereby incurred huge repair works at cost of Rs.40,000/- , intotal

Rs.2,25,000/- which sum is to be deducted from the petitioners claim of

Rs.3,01,000/- . The respondent already paid the rental advance amount of

Rs.3,00,000/- and Rs.50,000/- on 23.04.2019 itself to the petitioners, who

admitted the same. Therefore, the total claim of Rs.9,01,000/- made by the

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petitioners is against the respondent, hence the same is vexatious, thereby

pleaded to dismiss the present revision. The learned counsel has relied on

the Order of this Court [Palaniappa Chettiar Vs. S.A.Chidambaram

Chettiar] reported in AIR 1965 Mad 218 in support of his contention.

13. Heard the learned counsel on either side and perused the

documents placed on record.

14. With regard to the question of leave to defend, as noticed, the

court below has observed that the respondent / defendant is entitled to

such leave because triable issues were arising out of the defence sought to

be taken by the petitioners. The principles of law for grant or refusal of

leave to defend has been well settled by the Hon’ble Supreme Court in

IDBI Trusteeship Services Limited vs. Hubtown Limited, (2017) 1 SCC 568.

The relevant portion of the judgement are as follows:

“17. Accordingly, the principles stated in para 8 of Mechelec case [Mechelec Engineers & Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] will now stand superseded,given the amendment of Order 37 Rule 3 and the binding decision of four Judges in Milkhiram case [Milkhiram (India) (P) Ltd. v. Chamanlal Bros., AIR 1965 SC 1698 : (1966) 68 Bom LR 36], as follows:

17.1. If the defendant satisfies the court that he has a

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substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit.

17.2. If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend.

17.3. Even if the defendant raises triable issues, if a doubt is left with the trial Judge about the defendant's good faith, or the genuineness of the triable issues, the trial Judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.

17.4. If the defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires.

17.5. If the defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith.

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17.6. If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised),shall not be granted unless the amount so admitted to be due is deposited by the defendant in court.”

15. Further, the Hon'ble Supreme Court in the case of B.L. Kashyap

and Sons Ltd. vs. JMS Steels and Power Corporation and Ors (18.01.2022

- SC) :[MANU/SC/0048/2022] among other things held as under:

“The Supreme Court while discussing the scope of Order XXXVII Rule 3 of the Code of civil Procedure 1908; The grant of leave to defend (with or without conditions) is the ordinary rule; and denial of leave to defend is an exception, the court held as follows:-

17.1 As noticed, if the Defendant satisfies the Court that he has substantial defence, i.e., a defence which is likely to succeed, he is entitled to unconditional leave to defend. In the second eventuality, where the Defendant raises triable issues indicating a fair or bonafide or reasonable defence, albeit not a positively good defence, he would be ordinarily entitled to unconditional leave to defend. In the third eventuality, where the Defendant raises triable issues, but it remains doubtful if the Defendant is raising the same in good faith or about genuineness of the issues, the Trial Court is expected to balance the requirements of expeditious disposal of commercial causes on one hand and of not shutting out triable issues by unduly severe orders on the other. Therefore, the Trial Court may impose conditions both as to time or mode of trial as well as payment into the Court or furnishing

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security. In the fourth eventuality, where the proposed defence appear to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of payment into the Court or furnishing security or both, which may extend to the entire principal sum together with just and requisite interest.

17.2. Thus, it could be seen that in the case of substantial defence, the Defendant is entitled to unconditional leave; and even in the case of a triable issue on a fair and reasonable defence, the Defendant is ordinarily entitled to unconditional leave to defend. In case of doubts about the intent of the Defendant or genuineness of the triable issues as also the probability of defence, the leave could yet be granted but while imposing conditions as to the time or mode of trial or payment or furnishing security. Thus, even in such cases of doubts or reservations, denial of leave to defend is not the rule; but appropriate conditions may be imposed while granting the leave. It is only in the case where the Defendant is found to be having no substantial defence and/or raising no genuine triable issues coupled with the Court view that the defence is frivolous or vexatious that the leave to defend is to be refused and the Plaintiff is entitled to judgment forthwith. Of course, in the case where any part of the amount claimed by the Plaintiff is admitted by the Defendant, leave to defend is not to be granted unless the amount so admitted is deposited by the Defendant in the Court.

17.3. Therefore, while dealing with an application seeking leave to defend, it would not be a correct approach to proceed as if denying the leave is the Rule or that the leave to defend is to be granted only in exceptional cases or only in cases where the defence would appear

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to be a meritorious one. Even in the case of raising of triable issues, with the Defendant indicating his having a fair or reasonable defence, he is ordinarily entitled to unconditional leave to defend unless there be any strong reason to deny the leave. It gets perforce reiterated that even if there remains a reasonable doubt about the probability of defence, sterner or higher conditions as stated above could be imposed while granting leave but, denying the leave would be ordinarily countenanced only in such cases where the Defendant fails to show any genuine triable issue and the Court finds the defence to be frivolous or vexatious.

16. That apart, the Hon'ble Supreme Court in Sudin Dilip Talaulikar

Vs. Polycap Wires Pvt. Ltd. and Ors. (15.07.2019 - SC) : reported in

MANU/SC/0908/2019 among other things held as under:-

“11. In a summary suit, if the Defendant discloses such facts of a prima facie fair and reasonable defence, the court may grant unconditional leave to defend. This naturally concerns the subjective satisfaction of the court on basis of the materials that may be placed before it. However, in an appropriate case, if the court is satisfied of a plausible or probable defence and which defence is not considered a sham or moonshine, but yet leaving certain doubts in the mind of the court, it may grant conditional leave to defend. In contradistinction to the earlier subjective satisfaction of the court, in the latter case there is an element of discretion vested in the court. Such discretion is not absolute but has to be judiciously exercised tempered with what is just and proper in the facts of a particular case. The ultimate object of a

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summary suit is expeditious disposal of a commercial dispute. The discretion vested in the court therefore requires it to maintain the delicate balance between the respective rights and contentions by not passing an order which may ultimately end up impeding the speedy resolution of the dispute”

17. In the present case on hand, the Trial Court had observed that

the respondent / defendant has raised triable issues. Even as per the plaint

averments and petitioners / plaintiffs' assertions, Ex.R.1, rental agreement,

dated 01.06.2018 , Rs.3,00,000/- is shown as advance and the same has

been returned while vacating the property and another sum of Rs.50,000/-

is shown as advance, vide Ex.R2 another rental agreement for residential

portion. It is admitted that the same was also returned. When the advance

amount is returned, then, there is no question of alleged damages to the

building arise after refund of advance amount. On going through the

Memorandum of Understanding [filed by the respondent] dated

23.04.2019, Ex.R3, it is stated that the petitioners sold the articles inside

the shop to the respondent for a sum of Rs.4,51,000/-, which were earlier

sold by the respondent to the petitioners under sale agreement dated

12.05.2018, out of the said amount, after adjusting the sum of

Rs.1,50,000/- towards rental arrears the balance of Rs.3,01,000/- will be

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paid by the respondent to the petitioners, however, the respondent claims

that the petitioners have taken away the articles worth Rs.1,85,000/- and

due to poor maintenance of the tenanted premises, the respondent had

incurred huge repair works at the cost of Rs.40,000/- in totaling to

Rs.2,25,000/-. Other than that, interiors done by the petitioners namely,

furniture, name board in acrylic sheet and outside elevation for a sum of

Rs.4,00,000/-, handloan Rs.1,00,000/- and another sum of Rs.1,00,000/-,

in toto a sum of Rs.10,51,000/- and out of this, Rs.1,50,000/- has been

paid by the petitioners and balance of Rs.9,01,000/- will be paid by the

petitioners to the respondent on or before 23.05.2019 and there is no

default clause mentioned. From the above facts, it is clear that the

respondent has raised triable issues and the lower court has rightly allowed

the application filed by the respondents.

18. Before parting with the case, it is important to note that even as

per Memorandum of understanding dated 23.04.2019 filed by the

respondent, it is agreed by the respondent that a sum of Rs.3,01,000/-

would be paid to the respondent on or before 23.05.2019, it appears that

the same has not been paid till now, however, in the counter, the

respondent at paragraph no.15 had stated that with regard to the liability of

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purchase of articles at Rs.3,01,000/-, the petitioners had taken away

articles worth Rs.1,85,000/- and due to poor maintenance of tenanted

premises, the respondent incurred huge repair works at Rs.40,000/- and in

toto a sum of Rs.2,25,000/- is to be deducted, which sum is to be deducted

from the petitioners claim of Rs.3,01,000/- cannot be accepted in view of

the reason that the same is without any breakage and petitioners have paid

the advance amount while vacating the premises. Hence the respondent is

directed to deposit a sum of Rs.3,01,000/- as accepted by him in the

Memorandum of Understanding dated 23.04.2019 [Submitted by the

respondent in his typed set of papers] as well as in the E-mail dated

22.05.2019, Ex.R7.

19. In the totality of the circumstances of this case, this Court is

clearly of the view that the respondent has indeed raised triable issues and

the defence of the respondent cannot be said to be frivolous or vexatious

altogether.

20. In the aforesaid view of the matter, this Court is inclined to hold

that the respondent was rightly granted the leave to defend the claim made

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in the suit by the court below and the impugned order deserves to be

affirmed for reasons assigned in this order and the respondent is directed

to deposit a sum of Rs.3,01,000/- as agreed by him in the Memorandum of

Understanding dated 23.04.2019 [Submitted by the respondent in his typed

set of papers]. As the respondent is being granted leave to defend, the

other contentions urged on behalf of the parties concerning its liability is not

dealt with at present and all the relevant aspects are left open for

consideration of the Trial Court.

21. Accordingly, this Revision Petition is disposed of and the amount

of Rs. 3,01,000/- to be deposited by the respondent on or before 28th April,

2023 and the said amount shall be treated to be a deposit towards the

condition for leave to defend. The Trial Court shall pass appropriate orders

for treatment of the said amount of Rs. 3,01,000/- after trial. The court

below shall proceed with the trial of the suit in accordance with law and the

complete the same preferably within a period of six months from the date of

receipt of a copy of the order. Consequently, connected miscellaneous

petition is closed. No costs.

30.03.2023

Index : Yes/No;Internet : Yes/No Speaking /Non-Speaking Order

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V.BHAVANI SUBBAROYAN, J.,

ssd

To

The XV Additional Judge, City Civil Court, Chennai

C.R.P.No.2389 of 2021

30.03.2023

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