ISHERDAS SAHNI AND BROS vs IMPRESARIO ENTERTAINMENT AND HOSPITALITY PVT LTC

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on:07th November, 2023
Pronounced on: 12th March, 2024

+ CS (COMM) 274/2020 & I.A. 6035/2020, I.A. 6036/2020,
I.A. 6037/2020
M/S ISHERDAS SAHNI & BROS.
A Partnership Firm
Having its Office at :
The Odeon Cinema Complex,
D-Block, Connaught Place,
New Delhi-110001.

….. Plaintiff
Through: Mr. Amit Bhagat and Ms. Arzoo Raj, Advocates.

versus

M/S IMPRESARIO ENTERTAINMENT
AND HOSPITALITY PVT. LTD.
An Indian Company
Having its registered Office at:
American Express Bakery House,
66A, Claire Road, Byculla,
Mumbai-400008.
AND ITS DELHI OFFICE AT:
Building No.12, Hauz Khas Village,
New Delhi-110016.
ALSO AT:
Odeon Cinema Complex, D-Block,
Connaught Place, New Delhi-110001.
…..Defendant
Through: Mr. J.P. Sengh, Sr. Advocate with
Mr. Jenis Francis and Mr. Rahul Sarkar, Advocate.

CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

NEENA BANSAL KRISHNA, J.
1. The plaintiff has filed the Suit for Possession/Ejectment, Permanent Injunction, Recovery of Arrears of Rent and Maintenance Charges, Damages/Mesne Profits along with pendent lite and future interest against the Defendant, the tenant.
2. Briefly stated, the plaintiff a Partnership Firm through its partners Kapil Sahni and Gita Talwar, entered into a registered Lease Agreement dated 16.06.2016 with the defendant, for renting out the premises comprising of an area admeasuring 8813 sq. ft. (super area admeasuring 11,015 sq. Feet) on the Ground and First Floor of the Odeon Cinema Building situated at Block-D, Connaught Place, New Delhi (hereinafter referred to as suit property) for a period of nine years commencing from 15.01.2016 till 14.01.2025.
3. According to the terms of the Lease Deed, there was a lock-in period of three years during which neither the plaintiff/ lessor nor the defendant/lessee could terminate the tenancy. After the initial three years, the defendant/tenant had a right to terminate the tenancy after giving a Notice of four months or the rent of 4 months in lieu thereof.
4. The rate of tenancy was determined for each year which was specifically mentioned in the Lease Agreement. In addition to the rent, the defendant was liable to pay Service Tax/GST Tax and also Common Area Maintenance (CAM) charges @ Rs.18 per sq. ft. of the super area. The rent was payable by 7th day of each English calendar month and in case of delay, interest @ 18% per annum was payable from the due date till the date of actual payment. An interest free security amount of Rs.1,35,00,000/- was paid by the defendant, which was to be refunded by the plaintiff upon the expiry or earlier termination of the lease, at the time of handing over of the peaceful and vacant possession of the suit premises to the plaintiff.
5. The plaintiff has asserted that in the month of March, 2020 the plaintiff received an email dated 19.03.2020 from the defendant informing that on account of onset of COVID- 19, the Restaurant industry is adversely impacted and the defendant sought a downward revision in the Lease Rent by 50% of the agreed amount. The plaintiff informed the defendant that it would not be feasible for the plaintiff to accede to the request since the same was legally payable and due under the terms of the Lease Deed. It also stated that the plaintiff itself was facing similar difficulty due to the prevailing circumstances and claimed the rent in order to tide over its own financial obligations.
6. The defendant despite the request and the email to pay the rent, defaulted in payment of rent for the month of April,2020 and May, 2020. However, plaintiff being cognizant of the dire situation and the surrounding circumstances due to Covid Pandemic, agreed to discuss the possibility of slight concession in the payments of the monthly rent during the period the Restaurant of the defendant remained un-operational on account of the lockdown. The defendant, however, continued to be in breach of the terms of the Lease Deed and refused to pay the rent for the month of April, 2020 and May, 2020.
7. The plaintiff sent a Demand Notice dated 11.05.2020 via email claiming the arrears of rent for April,2020 and May, 2020. On 02.06.2020 the defendant sent a Letter dated 20.03.2020 stating that the Government of NCT of Delhi had passed an order for closure of certain activities which included Restaurant. It was unable to therefore, fulfil its obligations under the Lease Deed and invoked Clause 11.2 and 11.4 providing for Force Majeure, for suspending all the payments till the cessation of Covid-19 Pandemic condition. The defendant also enclosed the Order bearing No.2733-47 dated 19.03.2020 passed by Health and Family Welfare Department, Government of NCT of Delhi directing all the restaurants in NCT of Delhi to discontinue seating arrangements in their premises till 31.03.2020, but were allowed to continue to carry on their operations of Home Delivery and Take Away Services.
8. The plaintiff asserted that the Force Majeure Clause as invoked by the defendant, was not applicable as this Clause did not cover the limited and the temporary lockdown measures as imposed by Government of NCT of Delhi. Furthermore, Clause 11.2 and 11.4 were not applicable since they did not provide for suspension of contractual obligations but only for extension of time limits. Also, the defendant had incorrectly stated that he was unable to conduct its business from the suit premises in an unhindered and peaceful manner. The operations of the restaurants had never been suspended by any Order of Central or State Government. Rather, from the beginning of the Lockdown till date there have been no restrictions on restaurants from operating their outlets for Home Delivery and Take Away services. The restaurants were directed only to suspend the seating arrangements vide Order date 19.03.2020 of Government of NCT of Delhi. Further, vide Order dated 30.05.2020 the Ministry of Home Affairs, Government of India had permitted restaurants to fully re-open and resume their operations including dine-in, home delivery and take away services with effect from 08.06.2020.
9. Even before the plaintiff could respond to the letter of the defendant, another Letter dated 02.06.2020 was served by the defendant stating that since the operations at the suit premises have remained shut since 22.03.2020 consequent to Government directions and Lockdown, the defendant has not been able to access the premises during the COVID-19 Pandemic. It further stated that Force Majeure seems to be indefinite and though the parties had been in discussions regarding an agreement for modifications of the terms of Lease, no consensus has been arrived at between the parties. The defendant thus, sought to terminate the Lease in terms of Clause 11 of the Lease Deed and requested the plaintiff to refund the security deposit of the defendant.
10. The plaintiff has asserted that this Letter dated 02.06.2020 of the defendant for termination of Lease Deed, perhaps has been triggered by the Notice/ Order dated 30.05.2020 of Ministry of Home Affairs which permitted resumption of all the restaurant from 08.06.2020. The defendant had no reason to presume that Force Majeure was indefinite. Rather, the Order of Ministry of Home Affairs dated 30.05.2020 rendered the Force Majeure Clause unenforceable and incapable of being invoked. The plaintiff claimed that the alleged Termination Notice was pre-mature and not in consonance with the terms of the Lease Deed. Even in terms of Clause 11.3, if Force Majeure situation persisted for a continuous period of 60 days and if in the opinion of the defendant, it was likely to continue for an indefinite period, he was required to give a Notice in writing to the plaintiff. Thereafter, within one month of such Notice, parties were required to reach an agreement for continuation, modification or termination of the Lease Deed. Only if the Agreement could not be reached, the defendant was entitled to terminate the Lease. All the pre-requisites for termination of the Lease Deed were not satisfied and thus, Notice of Termination was illegal and unsustainable.
11. The plaintiff gave a reply dated 11.06.2020 stating that the Notice of Termination sent by the defendant was based on erroneous appreciation of the true facts and circumstances. However, since the defendant had expressed its intention to vacate the premises, the termination would be deemed to be governed under Clause 10.1 of the Lease Deed which mandated a four month Notice or rent for 4 months, in lieu thereof. The plaintiff thus, claimed the arrears of rent from April,2020 till September, 2020 aside from water, electricity, maintenance charges and the tax payable on the rent.
12. The plaintiff also asserted that since there were outstanding amount of arrears of rent, it was under no obligation to refund the security; rather it was the defendant who was liable to pay the balance outstanding amount to the plaintiff after adjustment of the security amount.
13. The plaintiff has claimed that despite the Notice, the defendant has failed to handover the possession of the suit property. Hence, aside from possession, the plaintiff claimed a sum of Rs.2,03,40,409/- as the amount due and payable at the time of institution of suit aside from the interest. The plaintiff has also claimed liquidated damages/ mesne profits pro-rata from the date of termination of the tenancy till the date of handing over of the possession of the suit property. Permanent Injunction was also sought to restrain the defendant from parting with the possession or creating third party interest in the suit property.
14. The defendant in its Written Statement refuted all the averments made in the plaint. It is asserted that COVID-19 Pandemic was a Force Majeure situation in terms of Clause 11 of the Lease Deed as has also been observed by the Coordinate Bench of this Court in R.C. Revision No.447/2017 titled as Ramanand & Ors. vs. Dr. Girish Soni and Anr. The defendant had approached the plaintiff for negotiations and the parties had tried to come to some agreement, but when no acceptable solution could be found, the defendant was compelled to give a Notice of Termination of Tenancy.
15. It was further asserted that the termination was on account of Force Majeure and, therefore, Clause 10 was not applicable and it is not liable to pay the rent for four months since the date of service of Notice of Termination of Tenancy.
16. The defendant further asserted that the Agreement though titled as Lease Deed was in fact a partial “Revenue Share based Agreement” as is evident from the Clause 6 of the Agreement and also from the Letter dated 16.06.2016 and Bills dated 05.01.2017 and 23.01.2019. It being a Revenue Sharing Agreement, the defendant is entitled to seek waiver/ suspension of rent amount/loss. It is submitted that the claim of the plaintiff for the arrears of rent was untenable and the suit is liable to be dismissed.
17. After the filing of the Written Statement, the possession of the suit property was handed over on 10.08.2020.
18. The plaintiff in his replication has clarified that in the present case defendant was liable to pay a Minimum Guarantee rent per month and the revenue was to be shared if 15% of net sales per month were higher than the Minimum Guarantee rent. The defendant is, therefore, liable to pay the Minimum Guarantee rent as agreed in the Lease Agreement.
19. The issues on the pleadings were framed on 14.10.2020 as under:
(i) Whether the defendant is entitled to invoke and seek suspension of the lease money payable on account of eruption of the Coronavirus pandemic in terms of Clause 11 under the lease deed dated 16.06.2016? If so, for which period? OPD
(ii) Whether the termination of lease by the defendant was in consonance with Clause 11.3 of the lease deed? OPD
(iii) Whether the plaintiff is entitled to recover the sums detailed out in paragraph 4 (xxviii) (a) to (j) of the plaint? If so, to what extent? OPP
(iv) Whether the plaintiff is entitled to interest? If so, at what rate and for which period? OPP
(v) Whether the defendant is entitled to recover the sum paid towards security deposit, with or without adjustments, from the plaintiff? OPD
(vi) Whether the defendant is entitled to interest? If so, at what rate and for which period? OPD
(vii) Reliefs, if any?

20. Both the parties agreed that no oral evidence was required as the decision concerning rent/ damages/ mesne profits/ maintenance could be decided on the basis of documents relied upon by the parties. No evidence has, therefore, been led by either party.
21. Submissions heard and the record perused.
22. The issue wise findings are as under:
(i) Whether the defendant is entitled to invoke and seek suspension of the lease money payable on account of eruption of the Coronavirus pandemic in terms of Clause 11 under the lease deed dated 16.06.2016? If so, for which period? OPD

23. Admittedly, the suit premises was rented out by the plaintiff to the defendant vide registered Lease Deed dated 16.06.2016. Also, admittedly on account of onset of Covid Pandemic, the defendant has not paid the rent since April, 2020 onwards till it vacated the premises on 10.08.2020.
24. The COVID-19 Pandemic was an unprecedented situation which brought with it large-scale devastation, loss of human life which hugely impacted socio-economic activities adversely. The consequences that resulted on account of Covid-19 Pandemic, was beyond human comprehension and imagination. The National & State administration was driven to control and address the unique and unparalleled situation created by Pandemic, by resorting to equally unprecedented steps to contain the loss. It led to imposition of Nationwide lockdown, wherein practically the entire nation was brought to a standstill; much to the chagrin and distress of the public at large, only to ensure minimal loss and damage to human life. While some business activities essentially in the area of Pharmaceuticals, Healthcare and essential services were able to survive and thrive, many other business activities essentially dealing with Entertainment, Tourism etc. suffered a huge loss. The imposition of Lockdown was a sudden and an emergent measure of which there was no advance knowledge to the public at large and more so to the business people. The implications of the business loss on account of COVID- 19 Pandemic situation, however, has to be considered on the facts of each case.
25. The Lease Agreement executed on 16.06.2016 worked to the satisfaction of both the parties for about four years till March, 2020 when COVID-19 Pandemic struck the entire world and there was a complete lockdown imposed w.e.f. 20.03.2020, bringing all the activities to a standstill. The defendant who was running a Restaurant from the suit premises, suffered a huge dent in his business. According to him, because of the Lockdown, he was unable to continue his business activities which were completely shut down. The defendant had admittedly not paid rent since April,2020 till he vacated the premises on 10.08.2020 and invoked Force Majeure Clause to seek exemption from payment of rent for the relevant period.
I. Whether the national lockdown imposed on account of Covid Pandemic was Force Majeure:
26. The first aspect for consideration is whether the National lockdown imposed on account of Covid Pandemic was indeed a Force Majeure situation necessitating a relook at the obligations of the parties under the Contract.
27. Black’s Law Dictionary defines Force Majeure as “an event or effect that can be neither anticipated or controlled”. The term also includes both acts of nature (example Hurricane, Floods etc.) and acts of people (example riots, strikes and wars).
28. Historically, the law of Enforcement of Contract was extremely rigid and admitted to no exceptions as to its performance; notwithstanding that it has become impossible of performance owing to some unforeseen events which may happen after entering into the Contract and may not be relatable to the fault of either party to the Contract. In Taylor vs. Caldwell (186-73) All ER REP 24 an exception to the rigid performance of the Contract was first culled out by observing that if some unforeseen event occurs during the performance of the Contract which makes it impossible of performance in a sense that fundamental basis of the Contract itself goes, then it will not be performed and insistence upon performance would be unjust.
29. Chapter-III of the Indian Contract Act, 1872 and more particularly Section 32, deals with the Contingent Contracts. Where the terms of Contract contain an express or an implied clause contemplating Force Majeure, it is governed by the terms of the contract. If however, there is no explicit clause and a Force Majeure event occurs, it is dealt with by rule of positive law under Section 56 of the Contract Act. Section 32 and 56 of the Contract Act are reproduced as under:
“Section 32. Enforcement of contracts contingent on an event happening.
Contingent contracts to do or not to do anything if any uncertain future event happens cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.”

Section 56. Agreement to do impossible act.
An agreement to do an act impossible in itself is void.
Contract to do an act afterwards becoming impossible or unlawful.
– A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Compensation for loss through non-performance of act known to be impossible or unlawful – Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, an which the promise did not know, to be impossible or unlawful, such promisor must make compensation to such promise for any loss which such promise sustains through the non-performance of the promise.”

30. To ascertain whether the Lockdown on account would qualify as Force Majeure, it may be considered under the following components:

(i) Whether the performance became impossible or merely onerous;
(ii) Whether situation was provided in the terms of the Contract; and whether the party complied with the requirements of the terms of contract, to avoid its performance.

(i) Whether the performance became impossible or merely onerous:

31. The first aspect which needs consideration is whether the performance became impossible or merely onerous due to complete lockdown on account of COVID Pandemic. To put it differently, the fundamental question is whether the business of the defendant was hindered leading to loss of business or it resulted in an altered situation making it impossible to continue its business.
32. ‘Chitty on Contracts’, 31st edition in paragraph 14-151has stated that a rise in cost or expense does not frustrate a contract. A number of judgments were referred for the proposition that the core question to be answered is whether the performance of contract was “wholly prevented” or “partly hindered.” Force majeure clauses are to be narrowly construed; this being so, it is clear that there must be something which prevents the performance of the obligation under the Agreement.
33. Also, ‘Treitel on Frustration and Force Majeure’, 3rd edition, in paragraph 15-158 the learned author has opined that the cases provide many illustrations of the principle that a force majeure clause will not normally be construed to apply where the contract provides for an alternative mode of performance. It is clear that a more onerous method of performance by itself would not amount to a frustrating event. A mere rise in price rendering the contract more expensive to perform, does not constitute frustration.
34. In the celebrated judgment of Tennants, (Lancashire) Ld. v. Wilson & Co. Lord Dunedin observed that price is only one of the relevant factors and all entire connected facts are also to be considered. It held as under:
“Where I think, with deference to the learned judges, the majority of the Court below have gone wrong is that they have seemingly assumed that price was the only drawback. I do not think that price as price has anything to do with it. Price may be evidence, but it is only one of many kinds of evidence as to shortage. If the appellants had alleged nothing but advanced price they would have failed. But they have shown much more.”

35. This judgement was followed in Peter Dixon & Sons Ltd. v. Henderson, Craig & Co. Ltd., 1919(2) KB 778 wherein it was held that the expression “hinders the delivery” in a contract would only be attracted if there was not merely a question of rise in price, but a serious hindrance in performance of the contract as a whole. At the beginning of the First World War, British ships were no longer available, and although foreign shipping could be obtained at an increased freight, such foreign ships were liable to be captured by the enemy and destroyed through mines or sub-marines, and could be detained by British or allied warships. English judgment of Tennants (Lancashire) Ltd. (supra) was applied, and the Court of Appeals held:
“Under the circumstances, can it be said that the sellers were not “hindered or prevented” within the meaning of the contract? It is not a question of price, merely an increase of freight. Tonnage had to be obtained to bring the pulp in Scandinavian ships, and although the difficulty in obtaining tonnage may be reflected in the increase of freight, it was not a mere matter of increase of freight; if so, there were standing contracts that ought to have been fulfilled. Counsel for the respondents urged that certain shipowners, for reasons of their own, chose not to fulfil standing contracts. It was not only shipowners but pulp buyers and sellers. The whole trade was dislocated, by reason of the difficulty that had arisen in tonnage…..That is exactly so here. Price, as price only, would not have affected it. They were all standing contracts, but the position has so changed by reason of the war that buyers and sellers and the whole trade were hindered or prevented from carrying out those contracts.”
36. The law in India has been laid down in the seminal decision of Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310. The second paragraph of Section 56 of the Contract Act has been adverted to and it was stated that this is exhaustive of the law on impossibility of performance of Contract as it stands in India. It was held was that the word “impossible” has not been used in the Section in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose of the parties. If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the act which he had promised to do. It was further held that where the Court finds that the contract itself either impliedly or expressly contains a term, according to which performance would stand discharged under certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Act. If, however, frustration is to take place de hors the contract, it will be governed by Section 56 of the Contract Act.
37. In M/s Alopi Parshad & Sons Ltd. v. Union of India, 1960 (2) SCR 793, this Court, after setting out Section 56 of the Contract Act, held that the Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract, are often faced in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made. It is only when a consideration of the terms of the contract, in the light of the circumstances existing when it was made, showed that they never agreed to be bound in a fundamentally different situation which had unexpectedly emerged, that the contract ceases to bind. It was further held that the performance of a contract is never discharged merely because it may become onerous to one of the parties.
38. Similarly, in Naihati Jute Mills Ltd. v. Hyaliram Jagannath, 1968 (1) SCR 821, the Apex Court went into the English law on frustration in some detail, and then cited the celebrated judgment of Satyabrata Ghose v. Mugneeram Bangur & Co. and ultimately concluded that a contract is not frustrated merely because the circumstances in which it was made, are altered. The Courts have no general power to absolve a party from the performance of its part of the contract merely because its performance has become onerous on account of an unforeseen turn of events.
39. It may thus, be observed that the doctrine of frustration must always be within narrow limits. The most illustrative English judgment to understand its nuances is Tsakiroglou & Co. Ltd. Noblee Thorl GmbH, 1961 (2) All ER 179, wherein because of the closure of the Suez canal, the ships had to undertake an alternate route and had to go around the Cape of Good Hope, which was three times the distance through Suez canal. The House of Lords held that even though the contract had become more onerous to perform, it was not fundamentally altered. Where performance is otherwise possible, merely because the performance of the contract entrails more expense/price, it would not allow one of the parties to claim that the contract stands discharged by impossibility of performance.
40. In England, in the celebrated Sea Angel case, 2013 (1) Lloyds Law Report 569, the modern approach to frustration is well explained and it reads as under:
“111. In my judgment, the application of the doctrine of frustration requires a multi-factorial approach. Among the factors which have to be considered are the terms of the contract itself, its matrix or context, the parties’ knowledge, expectations, assumptions and contemplations, in particular as to risk, as at the time of the contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supervening event, and the parties’ reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances. Since the subject matter of the doctrine of frustration is contract, and contracts are about the allocation of risk, and since the allocation and assumption of risk is not simply a matter of express or implied provision but may also depend on less easily defined matters such as “the contemplation of the parties”, the application of the doctrine can often be a difficult one. In such circumstances, the test of “radically different” is important: it tells us that the doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.”

41. In the case of Energy Watchdog vs. Central Electricity Regulatory Commission & Others (2017) 14 SCC 80, the Apex Court after referring to the aforesaid judgments, concluded that the doctrine of frustration cannot apply to the cases where the fundamental basis for performance of the Contract remains unaltered. Merely, because the performance of the Contract has become onerous, it cannot be held to be a case of impossibility of performance of the Contract.
42. In all of aforesaid decisions, the golden thread which is common is that the execution of Contract has to strictly in accordance with the specific terms. Merely because the performance of the contract becomes onerous, it cannot absolve a party from its obligations under the Contract. Partial hinderance in the performance of the Contract, may also not be sufficient to claim impossibility. It is only when then situation arises which was never visualized at the time of entering into the Agreement and there is radical change in the circumstances, that the party may succeed in seeking discharge from its obligations under the Contract.
43. First and the foremost, the defendant is correct in stating that the Force Majeure clause does not exhaust the possibility of unforeseen events occurring outside natural and/or non-natural events. However, the thrust of the argument of the defendant is that so long as the performance is hindered by the unforeseen events, the Clause applies. In this backdrop, it needs to be considered whether the Pandemic radically altered the performance of Contract or it merely became onerous. For this purpose, the relevant Clause of the Lease Deed, may be referred to which reads as under:
“11. FORCE MAJEURE
11.1 Neither party shall be deemed to have defaulted in the performance of its contractual obligations whilst the performance thereof is prevented by force majeure and the time limits/conditions laid down in this agreement for the performance of such obligations shall be extended accordingly upon occurrence and cessation of any event constituting force majeure, provided the party affected immediately gives notice in writing to the other party.
11.2 Force majeure shall include contingencies caused by neither of the parties and unforeseen occurrences and shall only include acts of God, acts of nature, acts of war and civil unrest Force majeure shall also include any new Act of the Central Government as a result of which the LESSEE shall be unable to conduct its business.
11.3….

44. The Government of NCT of Delhi vide its Notification dated 19.03.2020 directed that “All restaurants in NCT of Delhi shall discontinue seating arrangements in their premises till 31.03.2020. However, the operations of Home Delivery and Take Away from the Restaurants would be continued”. Similar Notification was released by Government of NCT of Delhi on 20.03.2020. Another Order dated 14.04.2020 was issued by Government of NCT of Delhi stating that Delhi Disaster Management Authority (DDMA) notified lockdown in the territory of NCT of Delhi w.e.f. 25.03.2020 till the mid night of 14.04.2020 and various subsequent directions have been issued by DDMA. The lockdown period had been further extended till 03.05.2020.
45. The suit premises were located in Odeon Cinema Complex. The complete business activity of the Complex came to a stop as on account of the Lockdown all movement of people came to a standstill thereby none was coming to the Complex. All kinds of businesses including running the Restaurant were told to be shut down and no seating was permitted except that the Take Away/ Home Delivery services. In this context, it would be pertinent to refer to Clause 7 of the Lease Agreement, which reads as under:

7. REPRESENTATIONS AND WARRANTIES OF LESSOR
……
7.7 LESSEE shall be allowed to open a Bar serving alcoholic beverages in the restaurant/ lounge/ bar during the Term of the Agreement or any extension thereof and LESSOR shall have no objection to the same. All licensing to be obtained and that are to be maintained for running of the bar and restaurant in the Premises, shall be the responsibility of LESSEE.

46. The Lease provided for running a Bar to serve alcoholic beverages. It is a known fact that the major business of any Restaurant is Dining and Drinks. On the imposition of the complete Lockdown w.e.f. 20.03.2020 none could get out of their houses; the activities of the business of defendant came to a complete naught. There is nothing on record to suggest that during this period of April-May 2020, any business was carried out by the defendant. The Lockdown brought with it a situation where the working staff also were unable to step out of their place of abode. Essentially, all the activities of the Restaurant got completely stalled.
47. This was just the onset of Covid wherein its effects and the future was a complete mystery, with none aware of what would happen in the following days. The Lock Down was extended vide Govt. Notifications from time to time because of the uncertainty that prevailed. This was a situation when circumstances radically changed in so much as the people were locked in their homes struggling with this mysterious disease with a looming fear of being alive on the next day. Many were left with no means of sustenance in this altered situation which prevented people from stepping out. In this struggle foe life and survival where was the occasion for them to visit the Restaurant.
48. With no customers and no staff available, it was a radically a changed situation. Even the premises also got shut because of the Govt impositions. For no fault of any, there was neither any premises (in practical sense) nor any customers nor any workers.Though the Govt. Notification permitted Home Delivery/ Take Away Services but such was the extent of contagiousness of this mystery disease that the people were advised to observe complete segregation and no items or deliveries were being accepted from outside. The essentials were being left at the doorsteps, to be brought inside after proper sanitization. There is no suggestion, what to talk of evidence if there was the Take Away business especially when no workers were available to cook or deliver, either inside or outside the restaurant. As held in the case of Alopi Parshad and Sons Ltd. (supra), it was not a case where the business became onerous. Rather, as explained in the case of Energy Watchdog (supra),the fundamental basis of the performance of Contract altered and was practically completed prevented/hindered and it was impossible to continue with the activities of the Restaurant.
49. This Court in the case of M/s Halliburton Offshore Services Inc. Vs. Vedanta Limited & Anr. in OMP (I) (COMM) decided on 20.04.2020 observed that the countrywide lockdown, which got imposed on 20th March 2020 was not only unprecedented but was also incapable of being predicted by either of the parties, and was in the nature of force majeure.
50. The Coordinate Bench of this Court in the case of Mehra Jewel Palace vs. Miniso Lifestyle Pvt. Ltd. and Anr. bearing no. CS(COMM) 376/2020 dated 25.05.2022 in the similar factual situation observed that the benefit of Force majeure would enure to the defendant/ tenant for the month of April,2020 and May, 2020 and the contention of the plaintiff that as per the Clause the payment of rent could only be delayed or postponed but not waived, was rejected.
51. Applying the aforesaid principles to the business of the defendant, it has to be necessarily concluded that it was a case wherein the performance was completely frustrated by Force Majeure situation from 20th March,2020 till May,2020.
52. The next aspect is till what time this situation of force majeure continued. The Government of India, Ministry of Home Affairs, thereafter issued an Order dated 30.05.2020 for reopening of prohibited activities in a phased manner in the area outside containment zone. In the Phase-I, it permitted the activities of Hotel, Restaurant and other Hospitality Services w.e.f. 08.06.2020. Following this Order, Government of NCT of Delhi, DDMA issued Order dated 01.06.2020, permitting the activities of Restaurants, Shopping Malls, Religious places w.e.f. from 08.06.2020. However, as per the guidelines of Government of India, Ministry of Health and Family Welfare dated 04.06.2020, the seating capacity limited to not more than 50% with the seating arrangement to be made in such a way that adequate social distancing was maintained in Restaurants. However, in Order dated 08.06.2020 all the Bar Licences in Hotels, Clubs and Restaurants were directed to remain non-operational till further orders. Similar Order was continued in the Guidelines issued by Ministry of Home Affairs on 29.06.2020. The prohibition of operation of Bars was continued by Ministry of Home Affairs, Government of India till 31.08.2020.
53. Thus, the limited functioning of the Restaurant with a 50% seating capacity and by way of takeaway/ home delivery was permitted to commence functioning from 08.06.2020. The business of the defendant was permitted to be continued with some restrictions from 08.06.2020. It has to be, therefore, held that the activities of the Restaurant though were not absolutely prohibited but were partially curtailed by the Orders of the Government w.e.f. 08.06.2020.

Revenue-Sharing Agreement:
54. A plea taken on behalf of defendant was that the payment of rent was based on the Revenue-Sharing as stipulated in the Clause 6 of the Agreement dated 16.06.2016 and also from letter dated 16.06.2016 and bills dated 05.01.2017 and 23.01.2019, raised by the plaintiff on the defendant. It is, therefore, argued that it is not a usual Lease Agreement but a Revenue-Sharing Agreement wherein the payment of rent is on the basis of sales turnover. Since there was no business and Revenue generation, defendant is not liable to pay the rent for the entire period and is entitled to seek waiver of the rent in terms of Clause 6 of the Agreement dated 16.06.2016. Reliance has been placed upon Ramanand and Ors. vs. Girish Soni & Ors., MANU/DE/1072/2020, in R.C. Revision No. 447/2017, decided by this Court vide Judgment dated 21.05.2020, wherein it was held that where there exists a Profit-Sharing Arrangement in a contract, the lessee may seek waiver/suspension of the rent amount, on the basis of profit/loss.
55. Learned counsel on behalf of the plaintiff, however, has countered this argument by asserting that the revenue to be shared was in addition to the Minimum Guaranteed Rent payable, which was agreed to be paid per month. In Clause 6, it was contemplated if the sales from the business were more than the stipulated rent amount then the defendant was liable to share the profit in the ratio and the revenue was to be shared only if 15% of the net sales per month were higher than the minimum guarantee rent. It is further explained that this happened only on two occasions in respect of which two Invoices dated 05.01.2017 and 23.01.2019, were raised and at no other time did the net sales of the defendant increased by 15% of the minimum guarantee rent and therefore, the defendant cannot avoid the payment of rent by claiming the Lease Agreement to be on revenue sharing basis.
56. To comprehend the argument of the parties, it would be appropriate to reproduce the relevant Clauses of the Lease Agreement, which read as under:
“2. LEASE RENTAL
2.1.In consideration of the use and occupation of the Premises provided by LESSOR to LESSEE for the purposes of running restaurant/ lounge/ bar as afore stated. LESSEE shall pay to the LESSOR an amount of Rs. 22,50,000/ (Rupees Twenty-Two Lacs and Fifty Thousand Only) per month as Minimum Guaranteed Rent. (hereinafter referred to as the “Lease Rental”). The afore stated Minimum Guaranteed Rent shall then be increased by 5%, at the end of each year of the Lease, which amount shall form the Minimum Guaranteed Rent payable by LESSEE to LESSOR.

……
6. PAYMENT DUE DATES
6.1 That LESSEE shall be liable to pay the Minimum Guaranteed Rent to
the LESSOR on or before the 7th day of each English calendar month. That LESSEE will pay the Revenue Share based on the sales of previous month in the succeeding month, on or before the 7th day of the said month. Further, the LESSEE shall provide details of the net monthly sales, by the 3rd day of each English calendar month to the LESSOR or their duly authorized representatives.
6.2 If the LESSEE fails to pay the Minimum Guaranteed Rent by the 7th
day of every English calendar month of the year and/or fails to pay the Revenue Share by the 7th day of the succeeding month as aforesaid, the LESSEE shall be liable to pay interest @ 18% per annum to the LESSOR for the period of default commencing from the date such payment falls due till the date of actual payment.
….

8. LESSEE’S OBLIGATIONS AND COVENANTS
8.1 That LESSEE will pay the Minimum Guaranteed Rent on or before the 7th day of each calendar month. That LESSEE will pay the Revenue Share based on the sales of previous month in the succeeding month on or before the 7th of the succeeding month. Further, LESSEE shall provide details of the net monthly sales, by 3rd of each month to the LESSOR or their duly authorized representative.”

57. From these aforesaid Clauses, it is quite evident that the parties had agreed to the amount of rent as Minimum Guaranteed Rent, which was required to be paid per month. However, it was further stipulated that in case the Net Sales were more than 15% of the Minimum Guarantee Rent, then the profits were to also be shared by the defendants with the plaintiff. Hence, It is not a case of revenue sharing but of a predetermined and agreed minimum guarantee rent payable by the defendant.
58. The Judgment of Ramanand and Ors. (supra) relied upon by the defendant, also observed that where in contracts, there is a profit sharing arrangement for monthly payment on the basis of sales turn over, the tenant may be entitled to seek waiver/suspension in terms of the Clause. Such cases would be purely governed by the terms of the contract itself and the tenant’s claim could be that there were no sales and no profits and thus, the monthly rent is not payable.
59. However, this Judgment does not advance the case of the defendant for the simple reason that it was not a purely Revenue Sharing Agreement but there was a Clause providing for minimum guarantee rent and the revenue sharing Clause was only incidental, which was applicable only if the profit revenue was more than 15% of the minimum guarantee rent. It has also been explained on behalf of the plaintiff that this occasion arose only twice as is evidenced by invoices dated 05.01.2017 and 23.01.2019. The arguments raised on behalf of the defendant is, therefore, not tenable.

(ii) Whether situation was provided in the terms of the Contract; and whether the party complied with the requirements of the terms of contract, to avoid its performance.

Liability to Pay Rent:
60. The next aspect for consideration is the liability of the defendant to pay rent for this period as claimed by the plaintiff. That the parties themselves provided for such a situation, is evident from Clause11.4 of the Lease Agreement which states:
“11. Force Majeure:
……..
11.4 In the event of the Premises or any part thereof and/ or the Said Building or any part thereof and/or any services/ infrastructural facility provided by LESSOR in the Said Building, at any time during the Term of the Agreement or the extended Term thereof, be destroyed or damaged or discontinued or becomes suspended by fire, acts of God, riots and civil commotion, enemy action, terrorist attack and such like damages not within the control of LESSOR and/or LESSEE so as to render the Premises or any part thereof and/ or the Said Building or any part thereof and/or any services/ infrastructural facility provided by LESSOR in the Said Building, to be wholly or partially unfit for the use of LESSEE, then the Lease Rental or proportionate part thereof, according to the damage sustained, shall cease to be payable from the time of such destruction or damage or deprivation until the Premises or any part thereof and/ or the Said Building or any part thereof and/or any services/ infrastructural facility provided by LESSOR in the Said Building is reinstated to its original position by LESSOR to enable LESSEE to resume its full operations from the Premises. LESSOR shall upon such reinstatement be bound to provide LESSEE with the Premises again and the Term of the Agreement shall be extended by such period for which LESSEE is deprived the use of the Premises because of the aforesaid reasons. LESSEE shall simultaneously reinstate/replace/repair the equipment, furniture installed in the Premises to start the operation of the restaurants. ”

61. The parties thus, agreed that if Premises or any part thereof of the said Building and/or any services/ infrastructural facility was discontinued or becomes suspended and is rendered wholly or partially unfit for the use, by acts of God not within the control of lessor and/or lessee then the Lease Rental or proportionate part thereof, according to the damage sustained, shall cease to be payable from the time of such destruction or damage or deprivation until the Premises or any part thereof is reinstated to its original position to resume its full operations from the Premises and the Term of the Agreement shall be extended by such period for which LESSEE is deprived the use of the Premises because of the aforesaid reason.
62. This Lease Agreement itself contemplates that in such situation the obligations of the parties including payment of rent for this period, would be suspended proportionately and the parties may mutually agree to extend the period of lease for such period.
63. In terms of Clause 11.4 of the Agreement, the defendant is entitled to proportionate reduction of rent if the premises or part thereof is rendered not usable on account of Force Majeure. It is therefore, held that the Plaintiff is held to 50% rent for the months of June 2020 till 10.08.2020. The rent is payable not payable for April and May but 50% for June and July.
64. The Coordinate Bench of this Court in the case of Mehra Jewel Palace (supra), granted rebate of 50% rent for this Covid Period observing that this situation cannot be interpreted solely in favour of the tenant as the landlord suffered equal hardship and granted 50% rent for this period. However, this judgement is distinguishable from the facts of the present case, in terms of express Agreement between the parties herein.
65. The conclusion that is arrived is that there existed a Force Majeure situation from 20.03.2020 till 08.06.2020 and the plaintiff is not entitled to rent for the months of April, 2020 and May,2020. but is entitled to 50% rent from June, 2020 till August, 2020 when the premises were vacated by the defendant. It is clarified that since rent was payable by 7th day of each month and the premises were vacated on 10.08.2020, the defendant is liable to pay the rent for the entire month of August, 2020.
66. Issue No.1 is answered accordingly.

Issue No.2: Whether the termination of lease by the defendant was in consonance with Clause 11.3 of the lease deed? OPD

67. Having concluded that situation of Force Majeure had arisen from 20.03.2020 till 08.06.2020, it may be further examined whether the Whether the Defendant validly terminated the Agreement in accordance with the terms of Lease Agreement. According to the plaintiff, since there was no Force Majeure situation, Clause 10 of the Agreement became applicable which mandated four months prior Notice and the defendant, irrespective of having vacated the premises on 10.08.2020, is liable to pay the rent till September,2020 i.e. four months from the date of Notice of termination dated 16.06.2020.
68. On the other hand, defendant has contended that because of Force Majeure situation, Clause 11 was applicable and he has duly complied with it. The defendant is correct in his assertion since it has been concluded that it was indeed, a Force Majeure situation. What now needs to be examined is whether the defendant duly complied with the procedure for invoking Force Majeure Clause.
69. Clause 11.3 of the Lease Agreement read thus:
11.3 If force majeure persists for a continuous period of 60 (sixty) days and the opinion of LESSEE it may continue for an indefinite period, LESSEE shall give a notice writing to LESSOR of such continuance. Within one month from the date of such notice, the parties shall meet to reach an Agreement for continuation, modification or termination of this Agreement. If an Agreement as above cannot be reached, this Agreement may be terminated at the sole option of LESSEE.

70. In terms of Clause 11.3 of the Lease Agreement, if the Force Majeure persists for a continuous period of sixty days and in the opinion of the Lessee it may continue for an indefinite period, Lessee shall give a Notice in writing of such continuance and within one month thereafter, the parties shall meet and reach an Agreement for continuation, modification or termination of the Agreement. It further provides that the time limits/ conditions laid down in the Agreement for the performance of such obligations shall be extended accordingly upon occurrence and cessation of any event constituting Force Majeure provided that the party immediately gives Notice in writing to the other party. If no Agreement is reached, the Agreement may be terminated at the sole option of the Lessee.
71. In the present case, the defendant immediately on Notification of Lockdown had informed the plaintiff vide email dated 19.03.2020 about the COVID-19 Pandemic situation, in compliance of the requirement of Clause 11.1 of the Agreement. Thereafter, defendant had been corresponding with the plaintiff vide emails dated 20.03.2020 and 04.05.2020 i.e. for more than two months and there were negotiations where plaintiff was willing to consider reduction of rent, though no consensus could be reached interse the parties. Thereafter, a Notice for Termination of the Tenancy was given on 02.06.2020.
72. The learned counsel on behalf of the plaintiff has contended that the Notice of Termination did not comply with the requirements of Clause 11. The Government Notification date 30.05.2020 had already notified the opening off the Restaurant business. Considering it to be not profitable, the defendant had given a Notice of Termination thereafter on 02.06.2020. There was no independent circumstance demonstrating that the Lockdown situation was to continue for an indefinite period in future. In fact, the businesses were permitted to open up. The defendant, therefore, was not justified to seek termination vide Notice dated 02.06.2020 under Clause 11 of the Lease Deed. In fact, it was on his assessment of profitability that he gave a Notice of Termination which has to be construed as one under Clause 10 of the Lease Agreement.
73. It is further argued that according to Clause 11.3 in case of Force Majeure situation persisted after 60 days, the defendant was required to give a Notice to this effect after which the parties were to meet and negotiate of the modification or termination of the Agreement. It is only after the negotiations that the Notice of Termination of the Agreement under Clause 11.3 could have been served in his discretion, by the defendant. None of the requirements of Clause 11.3 have been complied by the defendant and thus, he cannot claim any benefit thereof.
74. The Covid Pandemic was a completely unprecedented situation and none was aware as to when the situation would return to normalcy in times plagued by this Pandemic. The decisions were being taken by the Government on ad-hoc basis over a period of time depending upon the prevailing situation. This is evident from the fact that while first Lockdown was invoked in March, 2020 after which some normalcy was restored from May,2020 onwards, but it was being done in phases depending upon the impact of the COVID Pandemic. The COVID Pandemic came back with its full fury in the form of Delta variant resulting in huge loss of life from April, 2021 to May, 2021. Even thereafter, the Government treaded cautiously and from time to time the precautionary steps were taken and gradually the life was strived to be brought to normalcy which eventually happened from 28.02.2022. Looking at the entire period, it was a situation where uncertainty prevailed for over two years. The situation was perceived and assessed from time to time by the Government and for the livelihood of people, may have permitted limited opening of trade and commerce and the Restaurants but it was only till further orders, for one was not sure if and when the situation would return to normalcy. In this environment of uncertainty, even though partial opening of business was permitted by the Govt., it cannot be said that the defendant was wrong in estimating that such situation is likely to continue even after 30.05.2020. It has to be accepted that those were not the times of normalcy; as it is a known fact that all steps taken by the Govt. were on adhoc basis with no one being aware of what would happen next. Therefore, the contention of the plaintiff that the Clause 11 was not applicable at the time of service of Notice of Termination on 02.06.2020, is not tenable.
75. The other objection of the plaintiff that the parties did not negotiate before the Termination Notice, is also without merit. COVID-19 Pandemic situation was hostile and self-evident. The defendant immediately on the advent of Covid, had raised his concerns immediately by writing an e-mail dated 19.03.2020 followed by e-mail dated 20.03.2020 and 04.05.2020 to the plaintiff and had been negotiating about downward revision of the rent. In fact, the plaintiff was also conscious of the prevailing situation and had indicated that it would consider slight concession in the rent.
76. Therefore, in the unparalleled situation where its magnitude shocked the world, it was well within the estimation of the parties that the situation is likely to continue for long, which indeed happened as well. There were discussions and negotiations held and it may not be appropriate to take a hyper-technical view that the Notice of Termination by the defendant could have been given only after 60 days of the Pandemic situation and after the negotiations. The parties had a clear indication that the Lockdown situation may continue for long and the negotiations commenced immediately on 19.03.2020 and continued till May, 2020. In spirit, all the requirements as contemplated in Clause 11, were satisfied.
77. The contention of the plaintiff is that despite the Notification Dated 30.05.2020 opening up the business, this Notice of Termination was malafide and prompted by the consideration of business no longer being profitable for the defendant. This argument though may seem to have merit, but in the light of Cause 11 of the Lease Agreement, it cannot be said that termination was prompted by anticipated loss of profitability and not because of Pandemic. The termination was well within the terms of Clause 11 which even contemplated the partial suspension of use of the suit premises. Admittedly, liquor license was not restored, leading to non use of the Bar Lounge by the defendant.
78. It is, therefore, held that the Notice of Termination date 02.06.2020 met the intent and the overall requirement as was contemplated under the Clause 11 of the Lease Agreement and the Lease Agreement was validly terminated by giving due Notice. In the circumstances, Clause 10 does not become applicable making the defendant liable to pay the rent of four months thereof. It is hereby held that the Lease Agreement stood validly terminated w.e.f. 02.06.2020.
The Issue No. 2 is decided against the plaintiff and in favour of the defendant.
Issue No. 5: Whether the defendant is entitled to recover the sum paid towards security deposit, with or without adjustments, from the plaintiff? OPD
Issue No. 6: Whether the defendant is entitled to interest? If so, at what rate and for which period? OPD

79. It is admitted that Interest Free Security Deposit of Rs.1,35,00,000/- was paid to the plaintiff at the time of creation of tenancy. Clause 4.2 of the Lease Agreement provided that if on vacation of the possession, there is any damage or defect found in the premises, the Lessor may get it repaired at its own expense and the amount shall be deducted from the Lease Security Deposit. It was further provided in Clause 4.3 that on handing over of final vacant and peaceful possession of the premises of the Lessor, he shall simultaneously refund the Lease Security amount after making adjustments of any outstanding dues and payments including rent. Admittedly, the security amount of Rs.1,35,00,000/- has been retained by the plaintiff which has not been returned even at the time of handing over of the possession. There is no assertion that there was any damage caused by the defendant to the suit property towards which any damages were liable to be deducted. In so far as electricity and water charges are concerned, it is the claim of the plaintiff that the same are not been paid for the month of April and May, 2020 and a sum of Rs.3,01,912/- & Rs.1,05,399/- towards electricity and water charges are due for the month of March, 2020 Rs.1,05,399/- and April, 2020 respectively. There is no denial or refusal to this assertion made in the plaint.
80. Clause 4 of the Lease Deed reads as under:
“4 SECURITY DEPOSIT
4.1 In addition to the monthly Lease Rentals, LESSEE shall pay a sum of Rs. 1,35,00,000/- (Rupees One Crore Thirty Five Lacs only) as interest free refundable security deposit to the LESSOR. That the said amount has already been paid by the LESSEE to the LESSOR, the receipt of which the LESSOR hereby confirms and acknowledges. The details of the payments made are annexed hereto and marked as Annexure-1.
4.2 The LESSOR shall refund the amount of Lease Security Deposit, without any interest to the LESSEE simultaneous upon (i) the expiry or earlier termination of this Deed, (ii) upon the LESSEE handing over vacant and peaceful possession of the Premises to the LESSOR in good condition (normal wear and tear excepted), and (iii) upon the LESSEE paying the Lease Rent and any other amounts, dues and charges as mentioned in this Agreement to the LESSOR as may be payable by the LESSEE to the LESSOR on the expiry or earlier termination of the Deed.”

81. In view of the above finding, it is hereby concluded that since the possession has been handed over on 08.10.2020 and there are arrears of rent and other dues to be cleared, the security adjustment can be done only on ascertainment and settlement of all pending dues. The security adjustment shall therefore, be done in this suit finally of the outstanding liability of the defendant as determined in this suit and the excess amount, if any shall be then liable to be returned to the defendant.
82. Since it is the interest free security, no interest is liable to be paid for this period.
83. The issues No.5 & 6 are decided accordingly.

Issue No. 3: Whether the plaintiff is entitled to recover the sums detailed out in paragraph 4 (xxviii) (a) to (j) of the plaint? If so, to what extent? OPP
84. It has been held in Issue No.1 that it was a situation of Force Majeure for the month of April, 2020 and May, 2020 and therefore, no rent is payable for this period and 50% rent is payable from June, 2020 till August, 2020.
85. The plaintiff has continued to incur the liability towards CAM amounting to Rs. 12,07,795/- (@ Rs. 2,41,559 p.m. from April 2020 to August, 2020) to which the plaintiff is entitled. Also, the the water and electricity supply continued and was not disrupted and plaintiff is entitled to Rs. 4,07,311 (Rs. 3,01,912/- + Rs.1,05,399/-for the months of March 2020 and April 2020) towards electricity and water bills.
86. The plaintiff is, therefore, entitled to recovery of the following amounts as under:
Rent for the month of April
Nil
Rent for the month of May
Nil
50% Rent for the months of June, 2020 to August, 2020
Rs. 41,02,335/- (@ 50% of 27,34,890 for 3 months)
50% of GST upon Lease Rent for the month of June, 2020 to August, 2020
Rs. 7,38,420/- (@18% of Rs. 41,02,335/-)
Common Area Maintenance (CAM) charges for the month of April,2020 till August,2020
Rs. 12,07,795/- (@ Rs. 2,41,559 p.m. from April 2020 to August, 2020)
Electricity and Water charges for the month of March, 2020 till April 2020
Rs. 4,07,311/- (Rs. 3,01,912/- + Rs.1,05,399/-)
Sum Total
Rs. 64,55,861/-

87. The plaintiff is held entitled to total dues of Rs. 64,55,861/- towards rent, GST, CAM, water and electricity charges. It emerges that the security amount of Rs. 1,35,00,000/- deposited by the defendant, exceeds the rent payable by them. Hence, the Defendant are entitled to an adjustment of the amount of Rs. 70,44,139/- (Rs. 1,35,00,000 – Rs. 64,55,861/-), to be paid by the plaintiffs.

Issue No. 4: Whether the plaintiff is entitled to interest? If so, at what rate and for which period? OPP
88. In this case, peculiarly, the plaintiff has been found to be liable to refund the balance security amount after adjustment of the outstanding dues. The plaintiff was having the security amount with it and no loss of interest has been caused to the plaintiff. It is therefore, held that the plaintiff is not entitled to any interest.
Issue No.4 is accordingly, decided against the plaintiff.

Relief:
89. In view of the findings on the issues, as discussed above, it is held that the plaintiffs are entitled to a sum of Rs. Rs. 64,55,861/- for recovery of rent and other dues to be adjusted from the security amount, leaving a balance of Rs. 70,44,139/- to be returned to the defendant within three months, failing which the plaintiff shall be liable to pay interest @6% p.a. till the date of the payment of the amount.
90. The suit is accordingly decided in the aforesaid terms.
91. The pending applications stands disposed of.
92. Parties to bear their own costs. Decree sheet be prepared.

(NEENA BANSAL KRISHNA)
JUDGE

MARCH 12, 2024/va

CS (COMM) 274/2020 Page 1 of 36