ABHEYA REALTORS PRIVATE LIMITED Vs. SSIPL RETAIL LIMITED

JUDGEMENT

(1.) The plaintiff owns a shop-room measuring about 1077 sq.ft. on the ground floor of one of the units at the Astral building complex on up-market Gurusaday Road. The plaintiff purchased the shop from the proforma defendant. The proforma defendant executed a lease on August 26, 2008 in favour of the first defendant. The proforma defendant also entered into a second agreement to provide certain facilities to the first defendant. The plaintiff claims to be entitled to the proforma defendant's rights under the agreements following the plaintiff having acquired the shop.

(2.) The lease provides for a lock-in period of three years from the date of commencement of the lease. It stipulates that if the first defendant was desirous of surrendering the lease during the lock-in period, it would be liable to pay the monthly rent payable for the remaining lock-in period. The lessor was similarly locked in for three years without being entitled to terminate the lease during such period unless the lessee breached the covenants thereof. The following three clauses in the agreement are of some significance:

(3.) The plaintiff says that the parties agreed to liquidated damages to the extent of the unpaid lease rent for the balance lock-in period which was a genuine pre-estimate of the damages suffered or likely to be suffered by the lessor consequent upon the earlier determination of the lease by the first defendant. The plaintiff asserts that the first defendant is impecunious and unless the lease rent for the balance lock-in period is secured, the plaintiff may not be able to realise such sum after obtaining the decree that is certain to be made in its favour. The plaintiff contends that to allow the first defendant the luxury of waiting till the trial would amount to putting a premium on dishonesty and encouraging the breach of an express covenant.