Amitbhalla & Ors. v. Bharat Rao

1. By a registered lease-deed dated January 21, 2013, flats bearing No.1216 to 1220 situated on the 12^*^ floor ofabuilding known as Naurang House, 21 Kasturba Gandhi Marg, New Delhi were let-out by the appellants to the respondent with effect from January 15, 2013. An interest free security deposit in sum of ?27,60,000/- (Rupees Twenty Seven Lac Sixty Thousand only) was received by the appellants from the respondent. Though the lease was for a period five years, lock-in period was of one year 1.e. after one year the respondent could terminate the lease.

2. On January 15, 2014 the respondent gave notice that the lease would be determined with effect from April 15, 2014 and prayed that security RFA(OS) 96/2015 2015:DHC:12018-DB deposit be refunded when possession would be handed over. The appellants raised an issue ofthe property let-out as also fittings and fixtures provided. As per the appellants the damage caused was beyond the normal wear and tear. The appellants claimed aright to adjust such sum as would be required to restore the tenanted premises as also the fixtures to their original condition andrequired therespondent tojoin inthe estimation ofthe amount required. The respondent tookthe stand that except for the usual wear and tear there was no damage to the tenanted premises and/or fixtures. Stalemate ensued. The respondent proceeded to file a suit under Order 37 of the Code of Civil Procedure and pleaded that the foundation of the suit was the written lease agreement between the parties.

3. Learning of the suit being filed and listed for admission before the learned Single Judge on May 02, 2014, counsel for the appellants appeared and agreed that as prayed by the respondent a local commissioner be appointed to inspect the tenanted premises. The order passed by consent of the parties concerning appointment of a local commissioner and his mandate reads as under:- ^''Both the counsel submit that the dispute can be narrowed down ifa local commissioner is appointed to visit the subject premises and take photographs ofthepremises in thepresence of both the parties with a view to access the condition of the premises. Counsel also submits that simultaneously in the presence of the local commissioner, the possession will be handed over to defendants, which shall be accepted by the defendants."

4. Local Commissioner inspected the tenanted premises and has given a report which is favourable to the respondent. On the day when the local.commissioner visited the tenanted premises i.e. May 03, 2014, possession RFA(OS) 96/2015 P,ge2of[7] of the tenanted premises was handed over by the respondent to the appellants. The appellants have paid ^16,37,211/- (Rupees Sixteen Lacs Thirty Seven Thousand Two Hundred Eleven only) by return of security deposit and claimed to have adjusted ?11,22,789/- (Rupees Eleven Lacs Twenty Two Thousand Seven Hundred Eighty Nine only) on account of expenses which appellants claim would be incurred to restore the tenanted premises to their original condition after taking into account the normal wear and tear as also rent and maintenance for the month of May 2014, for whichreasongivenby the appellants is that it took the appellants 20 daysto restore the premises which became available to be let-out on June 01, 2014. We note that out of ^11,22,789/- (Rupees Eleven Lacs Twenty Two Thousand Seven Hundred Eighty Nine only) retained by the appellants from the security deposit, a sum of ^5,16,855/- (Rupees Five Lacs Sixteen Thousand Eight Hundred FiftyFive only) is for rent for the month of May 2014 and ?14,027/- (Rupees Fourteen Thousand Twenty Seven only) towards maintenance charges for the same period.

5. In the application seeking leave to defend the appellants have raised objections to the report of the learned local commissioner. The defence taken in the leave to defence is as already aforenoted.

6. Vide impugned order dated July 22, 2015, lA No.18393/2014 filed by the appellants seeking leave to defend has been dismissed and the reason given by the learned Single Judge is that the order dated May 02, 2014 was binding on the parties with respect to the report of the learned local commissioner and since the report was in favour ofthe respondent, the suit had to be decreed.

7. Two issues arise in the appeal. The first is whether the suit was RFA(OS) 96/2015 Page 3of? maintainable under Order 37 of the Code of Civil Procedure. Second whether the impugned decree could be passed with reference to the report ofthe local commissioner.

8. The lease agreement dated January 21, 2013 is an admitted document and that monthly rent payable is ?4,60,000/- (Rupees Four Lacs Sixty Thousand only) plus maintenance charges. As per clause 7 of the leasedeed, refundable security deposit in sum of ^27,60,000/- (Rupees Twenty Seven Lacs Sixty Thousand only) has been received by the appellants from V the respondent, but upon the term that the refund would be subject to the possession being returned sans any damage caused to thetenanted premises save and except which would be occasioned due to normal wear and tear.

9. As per the respondent the suit was maintainable because a liquidated demand arising out of a written document was the foundation ofthe suit and that under Order 37 Rule 2(b)(i) of the Code of Civil Procedure a suit raising a liquidated demand on a written contract was maintainable as a summary suit.

10. The learned Single Judge hasnot dealt withthis issue because the suit ^ has been decreed with reference to the report ofthe local commissioner and thus we do not have the benefit ofthe reasoning ofthe learned Single Judge on this aspect ofthe matter.

11. It is trite that a liquidated demand has to be concerning an amount which can be made certain by mathematical calculations from factors which are or ought to be in possession or knowledge ofthe party to be charged. It must thus exclude demands which need to be quantified after determining disputed facts.

12. In the instant case the written agreement between the parties does not h create any liquidated demand claim concerning the security deposit because its refund is upon a condition of the tenanted premises being returned in good condition and without any damage caused other than occasioned due to normal wear and tear i.e after determining disputed facts.,

13. But law permits a suit to be decreed on an admission and a suit filed as a summary suit, even if not maintainable as a summary suit and hence liable to be converted into an ordinary suit may result in a decree being passed, if an admission surfaces. We take guidance from the decision of ^ the Supreme Courtreported as (2009) 2 SCC 426Malwa StripsPvt.Ltd. vs. JyotiLtd. in which a suit, maintainability whereofas a summary suit was in doubt, but it was held that it was possible to sustain the decree on an admission. Though on facts the Supreme Court deemed it to be a fit case where the decree passed was set aside upon a condition of the defendant depositing ^35,00,000/- (Rupees Thirty Five Lacs only).

14. Learned counsel for the respondent cites a decision pronounced by a learned Single Judge ofthis Court reported as 1999 (49) DRJ 342 Ms. Veena Mehra vs.International Amusement Ltd.& Anr. in which a decree was ^ Passed without atrial on the report ofalocal commissioner.

15. Said decision would evince that the mandate of the local commissioner was to submit areport with reference to fair market rental of aproperty and no objections were filed to the report.