Case Note & Summary
The Plaintiffs, M/s. Mangla International Pvt. Ltd. and others, filed a Summary Suit under Order XXXVII Rule 2 of the Code of Civil Procedure, 1908, against the Defendant, Next Media Works Ltd. (formerly Mid Day Publications Limited), seeking recovery of Rs. 4,78,73,030/- with interest at 24% per annum. The suit premises were originally owned by M/s. Saidpur Jute Co. Pvt. Ltd., which leased them to M/s. MBK Enterprises for 60 years from 2nd July, 1975. MBK Enterprises sub-leased the premises to the Plaintiffs for 9½ years from 15th July, 1995. The Plaintiffs then entered into a Leave and License Agreement dated 19th December, 1995, with the Defendant, granting license to use the premises for three years from 16th August, 1995, with an option to extend twice for three years each, subject to a 20% escalation in license fee at each extension. The Defendant paid an interest-free deposit of Rs. 64,67,895/-. The Defendant occupied the premises and paid license fee initially, but later defaulted. The Plaintiffs filed the suit for arrears of license fee and refund of deposit. The Defendant entered an unconditional appearance and took out a Summons for Judgment seeking leave to defend. The Court considered whether the Defendant had raised any triable issues. The Defendant contended that the escalation clause was not agreed upon and that the deposit was refundable only after vacating. However, the Court found that the Agreement dated 1st August, 1998 recorded mutual consent to the escalation, and the Defendant had paid the escalated fee without protest. The Court also noted that the Defendant had vacated the premises, making the deposit refundable. The Court held that the Defendant's defence was not bona fide and did not raise any triable issues. Consequently, the Court allowed the Summons for Judgment and decreed the suit in favour of the Plaintiffs for the claimed amount with interest at 24% per annum from the date of filing till realisation.
Headnote
A) Civil Procedure - Summary Suit - Leave to Defend - Order XXXVII Rule 2, Code of Civil Procedure, 1908 - The Plaintiffs filed a summary suit for recovery of license fee and deposit. The Defendant entered an unconditional appearance and sought leave to defend. The Court held that since the Defendant had entered an unconditional appearance, it was not entitled to leave to defend unless it disclosed a defence that raised triable issues. The Court found that the Defendant's defence was not bona fide and did not raise any triable issues, and therefore granted summary judgment in favour of the Plaintiffs. (Paras 1-10) B) Contract - Leave and License Agreement - Escalation Clause - Specific Performance - The Leave and License Agreement dated 19th December, 1995 provided for escalation of license fee by 20% at the time of extensions after the third and sixth year. The Defendant contended that the escalation was not agreed upon, but the Court found that the Agreement dated 1st August, 1998 recorded mutual consent to the escalation, and the Defendant had acted upon it by paying the escalated fee. The Court held that the Defendant could not now dispute the escalation. (Paras 3-8) C) Contract - Interest Free Deposit - Refund - The Agreement provided for an interest free deposit of Rs. 64,67,895/-. The Defendant claimed that the deposit was refundable only after vacating the premises, but the Court noted that the Defendant had already vacated and the deposit was not refunded. The Court held that the Plaintiffs were entitled to recover the deposit along with the arrears of license fee. (Paras 3-10)
Issue of Consideration
Whether the Defendant is entitled to leave to defend the summary suit on the grounds that there are triable issues, given that the Defendant entered an unconditional appearance.
Final Decision
The Summons for Judgment is allowed. The suit is decreed in favour of the Plaintiffs and against the Defendant for a sum of Rs. 4,78,73,030/- with interest at 24% per annum from the date of filing of the suit till realisation and costs.
Law Points
- Summary suit under Order XXXVII CPC
- Leave to defend
- Unconditional appearance
- Triable issues
- Interest free deposit
- Escalation of license fee
