Case Note & Summary
The plaintiff, Play Games 24X7 Pvt. Ltd., filed a summary suit under Order XXXVII of the Code of Civil Procedure, 1908, against the defendant, Loran Leasing And Infotech Pvt. Ltd., for recovery of a security deposit of ₹96,21,204/- along with interest of ₹12,24,133.46/- at 18% per annum. The plaintiff had entered into a registered Leave and License Agreement dated 24th March 2015 for premises in Mumbai for a period of five years ending 23rd March 2020. The plaintiff paid a security deposit of ₹1,05,00,000/-. After the agreement expired, the plaintiff vacated the premises on 30th June 2020 and handed over possession. The defendant failed to return the security deposit despite demands. The defendant sought leave to defend, alleging that there was an oral agreement for an additional security deposit of ₹50,00,000/- and that the plaintiff owed license fees and other charges. The court examined whether the defendant raised any triable issues. It found that the defendant's claims were not supported by any written agreement or credible evidence. The alleged oral agreement was not pleaded in the written statement and the supplementary agreement produced was unregistered and not proved. The court held that the defendant's defense was moonshine and did not disclose a substantial defense. However, considering the commercial nature, the court granted conditional leave to defend upon the defendant depositing the entire suit amount in court within four weeks. The court also directed that upon such deposit, the suit would be treated as a regular suit and proceed for trial. If the defendant failed to deposit, the plaintiff would be entitled to a decree.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII of Code of Civil Procedure, 1908 - The court examined whether the defendant disclosed a substantial defense to warrant leave to defend. Held that the defendant's allegations of an oral agreement for additional security deposit and set-off were not supported by evidence and did not raise a triable issue. The court granted conditional leave to defend upon deposit of the suit amount. (Paras 1-23) B) Contract Law - Leave and License Agreement - Security Deposit - Interest - The plaintiff sought recovery of security deposit with interest at 18% per annum. The court found that the defendant's failure to return the deposit after surrender of premises constituted a clear liability. Held that the defendant's defense was moonshine and did not require trial. (Paras 5-15) C) Evidence - Oral Agreement - Unregistered Document - The defendant relied on an unregistered supplementary agreement and oral understanding to claim additional security deposit. The court held that such evidence was inadmissible and did not create a triable issue. (Paras 16-20)
Issue of Consideration
Whether the defendant has raised any triable issues entitling it to unconditional leave to defend the summary suit for recovery of security deposit under a Leave and License Agreement.
Final Decision
The court granted conditional leave to defend to the defendant upon depositing the entire suit amount of ₹1,08,45,337.46/- in court within four weeks. Upon such deposit, the suit shall be treated as a regular suit and proceed for trial. If the defendant fails to deposit, the plaintiff shall be entitled to a decree as prayed.
Law Points
- Order XXXVII CPC
- Summary Suit
- Leave to Defend
- Triable Issue
- Security Deposit
- Leave and License Agreement
- Interest on Security Deposit
- Set-off
- Oral Agreement
- Unregistered Agreement
