Case Note & Summary
The plaintiff, Polaroid India P.Ltd, filed a summary suit under Order 37 of the Code of Civil Procedure, 1908, for recovery of Rs.1,60,00,000/- being the security deposit paid under a leave and licence agreement with the defendant, Nav Nirman Co. and Ors. The plaintiff had occupied the premises on leave and licence basis and, by letter dated 12.8.99, vacated the premises and offered to hand over possession to the defendant. The defendant refused to accept possession, contending that the real arrangement was an agreement to sell the premises to the plaintiff. The defendant relied on two subsequent agreements: one dated 1.7.95 which stated that the licence would not be terminated and clauses 9 and 12 would not apply, and an undated agreement granting the plaintiff an option to purchase the premises during the last three months of the licence period at a price of Rs.1,75,00,000/-. It was admitted that the plaintiff did not exercise the option. The court considered whether the defendant had raised a triable issue entitling them to unconditional leave to defend. The court held that the subsequent agreements did not convert the leave and licence into an agreement to sell; the option was not exercised, and the defendant's mere denial of possession acceptance did not create a triable issue. The court allowed the summons for judgment, directing the defendant to pay the plaintiff the sum of Rs.1,60,00,000/- with interest at 6% per annum from the date of the suit until payment.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order 37 of the Code of Civil Procedure, 1908 - The court examined whether the defendant raised a triable issue by alleging that the leave and licence agreement was actually an agreement to sell. The court held that the subsequent agreements only provided an option to purchase, which was not exercised, and did not alter the character of the original agreement. The defendant's denial of possession acceptance did not create a triable issue. (Paras 1-3) B) Contract Law - Leave and Licence - Security Deposit - Recovery - The plaintiff sought recovery of Rs.1,60,00,000/- as security deposit under a leave and licence agreement. The defendant contended that the arrangement was a sale. The court held that the option to purchase, not exercised, did not convert the licence into a sale, and the defendant was liable to return the deposit. (Paras 1-3)
Issue of Consideration
Whether the defendant has raised a triable issue entitling them to unconditional leave to defend in a summary suit for recovery of security deposit under a leave and licence agreement, when the defendant contends that the transaction was actually an agreement to sell.
Final Decision
Summons for Judgment allowed. The defendant is directed to pay the plaintiff the sum of Rs.1,60,00,000/- with interest at 6% per annum from the date of the suit until payment.
Law Points
- Leave and licence agreement
- security deposit
- option to purchase
- summary suit
- triable issue
- Order 37 CPC
