Case Note & Summary
The Supreme Court dealt with a special leave petition filed by Infinity Infotech Parks Limited (the petitioner) against an order of the Calcutta High Court dated 31.07.2019. The High Court had directed the petitioner to restore electricity to the premises occupied by Shiva Jute Mills Private Limited (respondent no. 1), a sublessee, without requiring payment of any arrears. The petitioner was the lessee of a building known as INFINITY BENCHMARK in Kolkata. The 16th floor of the building was subleased by the petitioner to Pearl Studios Pvt. Ltd. (respondent no. 2), which further subleased it to respondent no. 1 vide a lease deed dated 01.02.2012. Respondent no. 1 had been in occupation of the premises since 01.02.2012 but had not paid any lease rent, maintenance charges, or electricity charges. The petitioner claimed Rs. 7,29,240 as lease rent up to 02.12.2019, maintenance charges at Rs. 15 per sq. ft. per month for 29,445 sq. ft., and electricity charges. Respondent no. 1 contended that no air conditioning was provided, so the maintenance rate was not applicable, and that electricity charges should be based on actual consumption. The Supreme Court noted that the sublessee had not paid a single rupee for over seven years and that the High Court had erred in directing restoration of electricity without ensuring payment. As an interim measure, the Court fixed maintenance charges at Rs. 7.50 per sq. ft. (50% of the agreed rate due to non-provision of air conditioning), totaling Rs. 2,20,000 per month, and minimum electricity demand charges at Rs. 1,10,000 per month. The Court calculated the total arrears from 01.02.2012 to 31.01.2020 as Rs. 3,24,09,240 (lease rent Rs. 7,29,240, maintenance Rs. 2,11,20,000, electricity Rs. 1,05,60,000). It directed respondent no. 1 to pay Rs. 1,00,00,000 within one month and the balance in three equal monthly instalments starting 15.03.2020. The Court clarified that these observations were interim and without prejudice to the rights of parties in the main proceedings.
Headnote
A) Property Law - Sublease - Arrears of Rent and Charges - Restoration of Electricity - The sublessee occupied premises for over seven years without paying any lease rent, maintenance charges, or electricity charges - The High Court directed restoration of electricity without requiring payment - The Supreme Court set aside the order, holding that restoration of electricity must be conditional upon payment of arrears - The Court fixed interim amounts for lease rent, maintenance charges (at 50% of agreed rate due to non-provision of air conditioning), and minimum electricity demand charges - The sublessee was directed to pay Rs. 1 crore within one month and the balance in three instalments (Paras 1-12).
Issue of Consideration
Whether the High Court was justified in directing restoration of electricity to a sublessee who had not paid any lease rent, maintenance charges, or electricity charges for over seven years, without requiring payment of the arrears.
Final Decision
The Supreme Court set aside the order of the Calcutta High Court and directed respondent no. 1 to pay Rs. 1,00,00,000 within one month and the balance of Rs. 2,24,09,240 in three equal monthly instalments of Rs. 74,69,746, Rs. 74,69,747, and Rs. 74,69,747 on 15.03.2020, 15.04.2020, and 15.05.2020 respectively. Upon payment, electricity shall be restored.
Law Points
- Interim equitable relief
- Restoration of electricity subject to payment of arrears
- Sublessee's liability for maintenance and electricity charges
- Minimum demand charges payable even if electricity not used
