MADAN LAL KHANNA Vs. LAKSHMI VILAS BANK LTD

JUDGEMENT

(1.) THE PRIMARY QUESTION ARISING IN THIS APPLICATION AND THE SUIT IS WHETHER AN UNWILLING LESSEE CAN BE DIRECTED BY AN INTERLOCUTORY ORDER TO CONTINUE AS A LESSEE BEYOND NOVEMBER 2005 ON THE GROUND THAT THE LEASE DEED UPON RENEWAL PROVIDED STARTING IN NOVEMBER 2005 THAT THE LESSEE WAS CONTINUE UPTO A PARTICULAR PERIOD I.E. NOVEMBER 2011 UNTIL THE EXPIRY OF THE RENEWAL PERIOD OF THE LEASE. THE LEASE WITH THE 1ST DEFENDANT WAS INITIALLY FOR 9 YEARS COMMENCING FROM 1996 AND PROVIDED FOR A RENEWAL FOR SIX YEARS I.E. UPTO 2011. THERE IS A FURTHER PLEA OF THE PLAINTIFF THAT IT TOOK A LOAN OF RS.1,71,50,000/-, WHICH WAS PAYABLE TO THE DEFENDANT NO.1 WITH INTEREST BY THE DEFENDANT BY ADJUSTING LEASE RENTALS UPTO NOVEMBER 2011. THE LEASE RENTALS UPTO NOVEMBER 2011 WERE SUFFICIENT TO PAY THE ENTIRE AMOUNT LOANED BY THE DEFENDANT NO.1 TO THE PLAINTIFF. THE DEFENDANT NO.1 AT THE REQUEST OF THE PLAINTIFF AGREED TO PAY THE LEASE MONEY DIRECTLY TO DEFENDANT NO. 2 UPON THE ENTIRE AMOUNT LOANED TO THE PLAINTIFF BY THE DEFENDANT NO.1 BEING RETURNED TO THE PLAINTIFF: THUS IN ADDITION TO THE LOAN OF RS. 8 CRORES ALREADY ADVANCED TO THE PLAINTIFF THE DEFENDANT NO.1 AT THE BEHEST OF THE PLAINTIFF, THE SUM OF RS. 1.25 CRORES WAS REFUNDED TO THE DEFENDANT NO.1 BANK BY THE DEFENDANT NO.2. THUS DEFENDANT NO.2 ADVANCED A SUM OF RS. 9.25 CRORES TO THE PLAINTIFF AS A LOAN BY TAKING THE SUIT PROPERTY AS MORTGAGED SECURITY. THE CONTENTION OF THE PLAINTIFF/LESSOR THUS IS THAT A LEASE DEED FOR A FIXED PERIOD COULD NOT BE LIMITED OR CURTAILED BY THE LESSEE. THE PLAINTIFF FURTHER SUBMITS THAT THE RESPONDENT NO.1'S PLEA THAT THE RESPONDENT NO.1'S SECURITY DEPOSIT WITH THE PLAINTIFF EQUAL TO ONE YEAR'S RENT SHOULD BE ADJUSTED TOWARDS THEIR STAY TILL NOVEMBER 2005 IS NOT SUSTAINABLE AS THE SECURITY DEPOSIT IS ONLY REFUNDABLE AFTER VACATION OF PREMISES AND SUCH SECURITY DEPOSIT CAN NOT BE ADJUSTED TOWARDS PAYMENT OF LEASE RENTALS AS PER THE LAW LAID DOWN IN 59(1999) DLT 515 AND 103 (2002)DLT 572. THE PLAINTIFFS PRAYER IN THIS APPLICATION IS THUS TWO FOLD:

(2.) THE PLAINTIFF HAS THUS CONTENDED THAT DEFENDANT NO.1 HAD ALL ALONG TAKEN THE PREMISES ON LEASE FOR A PERIOD OF 15 YEARS AS PER THEIR LETTER DATED 23RD JULY 1996 BY WHICH TWO LEASES FOR 9 YEARS AND 6 YEARS WHICH LED TO AN AGREEMENT TO SUB LEASE BETWEEN DEFENDANT NO.1 AND THE PLAINTIFF FOR A PERIOD OF 9 YEARS AND THE AGREEMENT TO SUB LEASE DATED 30TH NOVEMBER 1996 AND 5TH FEBRUARY 1997 CATEGORICALLY MENTIONED THAT AFTER THE EXPIRY OF 9 YEARS THE PERIOD WILL FURTHER EXECUTE A LEASE OF 6 YEARS. CONSEQUENTLY THE LEASE DATED 27TH APRIL 2001 FOR A PERIOD OF 6 YEARS HAVE BEEN EXECUTED BY DEFENDANT NO.1. AS PER DEFENDANT NO.1 OWN CALCULATIONS THE PERIOD OF LOAN WAS BASED ON LEASE RENTALS PAYABLE TILL NOVEMBER 2001 AND THE LOAN PERIOD WAS 39 QUARTERS STARTING FROM 29TH MARCH 2001. THE DEFENDANT NO.1 HAD GIVEN A TOTAL LOAN OF RS.9.25 CRORES WHICH INCLUDED A SUM OF RS.1.25 CRORES REMITTED BY DEFENDANT NO.2 TO DEFENDANT NO.1 AS PER THE CONDITIONS IMPOSED BY DEFENDANT NO.1 ON 15TH MARCH 2003. IN THIS RESPECT RELIANCE HAS BEEN PLACED ON A DECISION OF THE SUPREME COURT IN SMT. SHANTI DEVI VS. AMOL KUMAR BANERJEE REPORTED AS AIR 1981 SC 1550 WHEREIN IT HAS BEEN HELD:

(3.) RELIANCE HAS ALSO BEEN PLACED ON THE FOLLOWING PASSAGE OF TRANSFER OF PROPERTY ACT BY S.K. RAY: