Delhi High Court
M/S Ansal Housing And Construction Ltd vs Mrs Hardarshan Kaur on 15 July, 2025
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 15.07.2025
+ RFA(COMM) 33/2024 & CM Nos.6948/2024 & 6949/2024
M/S ANSAL HOUSING AND
CONSTRUCTION LTD ..... Appellant
Versus
MRS HARDARSHAN KAUR ..... Respondent
Advocates who appeared in this case:
For the Appellant : Ms. Mansi Gupta, Ms. Aishwarya Rao &
Ms. Mansi Rao, Advocates.
For the Respondent : Mr. Ajay Gaind & Mr. Abhay Gaind, Mr.
Prashant Pratap Singh & Mr. Arjun Gaind,
Advocates.
CORAM
HON'BLE MR. JUSTICE VIBHU BAKHRU
HON'BLE MR. JUSTICE TEJAS KARIA
JUDGMENT
VIBHU BAKHRU, J.
1. The appellant [the defendant] has filed the present appeal under
Section 13 of the Commercial Courts Act, 2015 [the CC Act]
impugning the judgment dated 25.04.2023 and decree dated 08.05.2023
[impugned judgment] passed by the learned District Judge
(Commercial Court) -02, West District, Tis Hazari Courts, Delhi [the
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Commercial Court] in CS (COMM) No.232/2019 captioned Mrs
Hardarshan Kaur v. M/s Ansal Housing & Construction Limited.
2. The learned Commercial Court has, in terms of the impugned
judgement, decreed the aforesaid suit in favour of the respondent [the
plaintiff] for an amount of ₹24,29,285/- along with costs and future and
pendente lite interest at the rate of 12 per cent per annum till its
realisation.
3. The plaintiff – a senior citizen of an advanced age of eighty-four
years – had filed the aforesaid suit for recovery of rent for the premises,
which comprised of four flats bearing No.1009,1011,1016 and 1018
located at the 10th Floor, Classique Tower, Plot No.1, J Block,
Community Centre, Rajouri Garden, New Delhi – 110027 comprising
of total area of 2,516 square feet [the demised premises].
4. The plaintiff is the owner of the demised premises and had
acquired the same by virtue of the allotment letter dated 30.03.2005
issued by the defendant.
5. The defendant had leased the demised premises from the plaintiff
for a period of nine years commencing from 01.06.2014 to 31.05.2023
in terms of the lease agreement executed on 30.08.2014.
6. In terms of the lease deed, the defendant agreed to pay monthly
rent of ₹1,25,800/- calculated at the rate of ₹50/- per square feet for the
initial block of three years. The lease was extendable for further two
terms of three years each, albeit, with an increase of rent by 15 per cent
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over the rent for the previous block of three years. Thus, the lease for
the second block of three years commencing from 01.06.2017 to
31.05.2020 was ₹1,44,670/- and the last block of three years
commencing from 01.06.2020 to 31.05.2023 would be ₹1,66,370/- per
month. The defendant also deposited a sum of ₹3,77,400/- [equivalent
to three months lease rent] with the plaintiff as refundable security
deposit.
7. The defendant had further sub-leased a larger space, which
included the demised premises to HDFC Bank [HDFC]. HDFC
terminated the sub lease, which was entered into between the defendant
and HDFC in terms of the notice dated 18.01.2019.
8. The defendant issued the notice dated 21.01.2019 [Ex.DW1/P1]
terminating the lease. It informed the plaintiff that HDFC had issued
three months’ notice dated 18.01.2019 terminating the sub lease, and
would vacate the premises with effect from 21.04.2019. The plaintiff
was called upon to adjust the rent for three months till 21.04.2019 from
the security deposit paid by the defendant. The plaintiff was further
informed that the defendant would hand over the physical possession of
the demised premises to the plaintiff on “as is where is basis” on
21.04.2019 and would not be liable to pay the monthly charges with
effect from the said date.
9. The plaintiff claims that her husband visited the demised
premises to take the possession on 21.04.2019 and again on 22.04.2019,
however, no representative of the defendant was present to hand over
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the possession of the demised premises. The plaintiff also claims that
the entrance to the 10th floor of the building was locked. The plaintiff
claims that she sent a letter dated 26.04.2019 informing the same to the
defendant and also called upon the defendant to give a firm date and
time for handing over the possession, mark the outline of the units and
complete the formalities of handing over / taking over of the possession.
The plaintiff claims that the photographs of the locked door were also
taken on 14.05.2019 and 19.05.2019 and were sent to the defendant on
19.05.2019.
10. In view of the above, the plaintiff claims that the possession of
the demised premises continued to be in possession of the defendant
and it would be liable to pay compensation for the same till the
possession was handed over.
11. Notwithstanding, that the possession of the demised premises
was not handed over to the plaintiff, the defendant did not voluntarily
make payments of any rent or compensation. In view of the above, the
plaintiff issued the legal notice dated 08.06.2019 to the defendant, inter
alia, calling upon the defendant to pay a sum of ₹5,13,641/- comprising
of rent amount of ₹4,90,620/- payable till June 2019 and interest
aggregating ₹23,021.40 computed at the rate of 24% per annum. The
notice further states that till the demised premises are not restored and
handed over to the plaintiff, the defendant would be liable to pay the
rent.
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12. Since the defendant did not make any further payments nor
handed over possession of the demised premises, the plaintiff filed the
aforesaid suit for recovery of rent of the demised premises till the
possession of the same was returned. The plaintiff had also sought a
decree that the demised premises be restored to its original condition in
order to enable the plaintiff to enjoy each of the four flats independently
and exclusively. Additionally, the plaintiff sought damages suffered or
liable to be suffered by her for restoration of the demised premises to
the original status.
13. Summons in the suit were issued by the Commercial Court on
06.07.2019, returnable on 03.09.2019. The defendant was served on
15.07.2019 and entered appearance on 03.09.2019. On 30.09.2019, the
plaintiff filed an application under Order XV-A read with Section 151
of the Code of Civil Procedure, 1908 [the CPC] seeking deposit of
rent/shortfall of rent amounting to ₹10,92,312/- for the period from
January 2019 to October 2019. The defendant filed its written statement
on 14.10.2019 contesting the suit. The defendant also filed a reply to
the plaintiff’s application under Order XV-A of the CPC, inter alia,
stating that it had received the possession of the demised premises from
HDFC on 21.09.2019. It was thus, conceded, that the defendant did not
have the possession of the demised premises prior to the said date. The
application of the plaintiff filed under Order XV-A of the CPC was
disposed by the Commercial Court by an order dated 18.06.2020
whereby the defendant was directed to pay the shortfall of rent of
₹18,870/- per month for the period of three months, that is, January
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2019 to March 2019. Additionally, the Court also directed payment of
rent from April 2019 to September 2019 at the rate of ₹1,44,670/- within
the period of 15 days from de-containment of the red zone of the area,
in which the office of the defendant was located or within the period of
15 days from the date of the order, whichever is later. The defendant
had appealed the said order before this Court; however, the defendant’s
appeal was dismissed.
14. On 22.02.2021, the plaintiff filed another application under Order
XV-A Rule 6(1)(k) read with Section 151 of the CPC, inter alia,
seeking the decision of the Court. It is material to note that the
defendant’s in their reply dated 17.12.2019 to the application, inter alia,
unequivocally stated that it is ready and willing to hand over the
possession of the demised premises to the plaintiff. The defendant also
prayed that directions be issued to the plaintiff for taking over of the
possession of the demised premises. The plaintiff’s application was
initially listed on 29.02.2020 and was put up for completion of the
pleadings for 16.03.2020. The plaintiff’s arguments were completed on
the said date. However, the order sheet indicates that further hearing
was adjourned at the request of the defendant to 30.03.2020. The
application was finally heard and disposed of by the order dated
18.06.2020.
15. It is material to also note that while the defendant was certain that
it had handed over the possession of the demised premises, the same
was stoutly disputed by the plaintiff. However, considering that the
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defendant had expressed that it was ready and willing to hand over the
possession of the demised premises, the Commercial Court passed the
order dated 18.01.2021, inter alia, directing for handing over of the
possession of the demised premises to the plaintiff. The relevant extract
of the said order is set out below:
“It is further submitted by Ld counsel for the
defendant that they have also handed over the
peaceful possession of the premises in question to
the plaintiff, however, same is disputed by Ld.
Counsel for plaintiff.
Without prejudice to the contentions and
rights of the parties, it is directed that defendant shall
handover the peaceful possession of the premises in
question to the plaintiff or his representative on
20.01.2021 at 4.00 PM. Parties or their respective
representative shall remain present at the time of
handing over of possession of the premises in
question and plaintiff or his representative shall give
acknowledgment in writing regarding receiving
possession of the premises in question.
It is expected that counsel of both parties shall
remain present at the spot.
Put up for compliance report on 18.02.2021.”
16. In compliance of the aforesaid order, the physical possession of
the demised premises was handed over by the defendant to the plaintiff
on 20.01.2021.
17. The plaintiff filed another application dated 22.02.2021 under
Order XV -A Rule 6(1)(k) of the CPC seeking disposal of the suit in
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terms of the admitted facts, which was disposed of by an order dated
15.07.2021, the Commercial Court noted that there subsists a dispute
involving question of facts as to whether the defendant was ready and
willing to hand over the possession of the demised premises to the
plaintiff after receiving the possession from HDFC, but the plaintiff was
not willing to accept the possession. The Commercial Court reasoned
that the said question cannot be decided on the basis of the pleadings
alone.
18. The relevant extract of the order dated 15.07.2021 passed by the
learned Commercial Court is set out below:
“13. Coming to real controversy as to whether the defendant
had handed over the possession of the premises to the plaintiff
after it was vacated by HDFC Bank sub-lessee? The said issue
had arisen in the earlier application and on perusal of the record
it is transpired that in Para 8 of the written statement it was
observed that possession was not handed over by HDFC Bank
to the defendant on the stipulated date i.e. 21.04.2019. After
receiving the possession from HDFC Bank on 21.09.2019 the
defendant when contacted by plaintiff was ready and willing to
hand over possession to plaintiff in the same condition as it was
received from HDFC Bank but the plaintiff was not willing for
the same. Hence, the period of September 2019 was taken into
account while directing payment of rent. Once it was observed
that the defendant was to hand over the possession and alter
premises was received from the Bank but the plaintiff was not
willing to take the same which is although disputed by plaintiff
cannot be determined on the basis of pleadings alone. It is
disputed question of fact to whether offer to band over premises
was made or not? Whether plaintiff deliberately avoided to take
possession? Therefore, the amount as claimed by plaintiff till
actual physical possession was handed over under the orders of
the Court be made to the plaintiff is not tenable.”
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19. Thereafter by an order dated 30.11.2021, the learned Commercial
Court framed the following issues for its consideration:
“1. Whether defendant had handed over peaceful possession
of the premises in question before 20.01.2021 (when
premises was handed over under the order of the court)
O.P.D.
2. Whether plaintiff is entitled to rent or enhanced rent, if so,
for which period? O.P.P.
3. Whether plaintiff is entitled to interest, if yes, at what rate
and for what period? O.P.P.
4. Whether suit is not maintainable for non-compliance of S.
12 A of Commercial Courts Act, 2015? O.P.D.
5. Relief.”
20. The plaintiff did not lead any oral evidence. The defendant
examined its Manager (Legal) [DW-1] who tendered his affidavit by
way of evidence and was also cross-examined by the learned counsel
for the plaintiff. The learned Commercial Court heard the oral
submissions and rendered the impugned judgment.
DISPUTE
21. As noted above, there is no dispute as to some of the basic
fundamental facts and the controversy is essentially confined to (a)
dispute relating to the date of handing over the possession of the
demised premises and (b) whether there was non-compliance of Section
12A of the CC Act, and if so, whether the suit is liable to be dismissed
on that ground. The said issues were covered by issues no. (1) and (4)
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as framed by the learned Commercial Court vide order dated
30.11.2021.
22. The learned Commercial Court had decided the abovementioned
issues in favour of the plaintiff as it found that there was no credible
evidence to prove that the defendant had called upon the plaintiff to take
physical possession of the demised premises but the same was declined
by the plaintiff. Thus, the learned Commercial Court found that the date
of handing over the possession of the demised premises was required to
be reckoned as 20.01.2021.
23. Before proceeding further, it is relevant to refer to the written
statement filed by the defendant. The defendant had terminated the
agreement by letter dated 21.01.2019 [Ex.DW1/P1]. In terms of the said
letter, the defendant had informed the plaintiff that it would hand over
the physical possession of the demised premises on 21.04.2019. It was
plaintiff’s case that she had visited the demised premises on 21.04.2019
and again on 22.04.2019 but there was no representative of the
defendant at the demised premises to handover the possession of the
same. The plaintiff further asserted that her husband had visited the
demised premises and had found the tenth floor locked. She also
claimed that she had forwarded the photographs of the said unit to the
defendant. The defendant filed the written statement denying the said
assertions. Paragraph 8 of the written statement is relevant and is set
out below:
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“8. That the contents of para no.8 of plaint are wrong and
denied. It is denied that the plaintiff visited the leased
premises on 21.04.2019 and again on 22.04.2019 and
found no one to hand over the possession. It is further
denied that office of Sunrise Estate Management Services,
was also contacted, who informed LESSOR that they did
not have any instruction to this effect and they are
concerned only with maintenance and cleaning jobs. It is
further denied that the entrance to 10th floor was locked. It
is further denied that this information was placed on record
by plaintiff on 26.04.2019 and again on 04.05.2019 when
a photograph of locked door was also enclosed. It is further
denied that thereafter on 14.05.2019 and 19.05.2019,
photographs were taken and communications to defendant
at its offices were sent on 19.05.2019 which stand received
by said defendant on 21.05.2019. It is submitted that the
defendant company has not received any such
communication from the plaintiff.”
24. Apart from the aforesaid, the defendant had also made averments
that in terms of Clause 9 of the Lease Agreement, it was obligated to
only hand over the demised premises on an ‘as is where is basis’ and it
had asked the plaintiff to take possession and get the demised premises
restored to its original position, but the plaintiff had declined.
Paragraph six of the written statement is relevant and the same is set out
below:
“6. That the contents of para no. 6 of plaint pertaining to
HDFC Bank issuing termination notice dated 18.01.2019
and defendant issuing notice dated 21.01.2019 to the
plaintiff regarding handing over the vacant physical
possession on “as is where is basis” to the plaintiff on
21.04.2019 are matter of record. However it is submitted
that the HDFC Bank had substantially delayed delivery of
possession to the defendant making the predicament of the
defendant difficult and because of which the defendant
suffered huge losses. It is further submitted that HDFCSignature Not Verified
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Bank has not paid the rent for the delayed period to the
defendant, and the defendant has suffered huge losses due
to the above said reason. Also in terms of the agreement
between the parties, the defendant is not liable to pay any
rent to the plaintiff after termination of the lease deed.”
25. It is material to note that there is no averment in the written
statement as to when and in what manner the defendant had called upon
the plaintiff to take possession of the demised premises. The only
written communication referred to by the defendant in this regard is the
letter of termination dated 21.01.2019, whereby the plaintiff was called
upon to take possession of the demised premises on 21.04.2019.
26. Concededly, the defendant did not have the physical possession
of the demised premises on 21.04.2019 and was not in a position to hand
over the same to the plaintiff as on that date. HDFC handed over the
possession of the demised premises to the defendant on 21.09.2019. The
defendant did not lead any evidence to establish that there was any
written communication calling upon the plaintiff to take possession of
the demised premises after the said date. As noted above, the only
written communication issued by the defendant to the plaintiff in this
regard is the notice of termination dated 21.01.2019.
27. It is relevant to note that the letter of termination [Ex.DW1/P1]
also expressly stated that the rent payable for the period of three months
till 21.04.2019 (the date on which the plaintiff was called upon to take
possession) would be adjusted from the security deposit. And, “any
amount payable / recoverable after adjustment of security deposit
would be intimated to the plaintiff separately”. The defendant has not
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produced any written communication intimating the plaintiff of the
payment of any further amount payable after adjustment of the security
deposit. Undisputedly, the defendant would be liable to pay the
damages or compensation till the date of handing over of possession.
The defendant has also not produced any written communication
quantifying the amount payable as mentioned in the termination letter,
which would have been possible only after the date of handing over of
the possession of the demised premises.
28. Mr. Alam Zameer [DW-1] in his affidavit had affirmed that the
defendant was always ready and willing to handover the possession of
the demised premises and had also stated the same in its written
statement. DW-1 also referred to the reply dated 17.12.2019 to the
plaintiff’s application under Order XV-A of the CPC whereby
defendant had reiterated its willingness to handover possession of the
demised premises on as is where is basis. DW-1 had also affirmed that
“the defendant when contacted by the plaintiff / his agent /
representative telephonically was ready and willing to hand over
possession to the plaintiff in the same condition as it was received from
HDFC Bank but the plaintiff was not willing for the same.” However,
the affidavit was silent as to when the plaintiff had contacted the
defendant telephonically after 21.09.2019 and expressed her
unwillingness to accept the possession of the demised premises.
29. DW-1 was cross-examined by the plaintiff. He, in his cross-
examination, accepted that the plaintiff was not given possession of the
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demised premises in question. He further accepted that after the letter
of termination dated 21.01.2019 [Ex.DW1/P1] no other written notice
was issued to the plaintiff for possession of the demised premises.
However, he also stated that the plaintiff was informed telephonically
and personally and the same was also mentioned in the written
statement. He reiterated that the plaintiff was informed telephonically
and personally by Mr. Navtej Singh and other marketing persons of the
defendant. However, we do not find his deposition to that effect credible
as DW1 did not have any specific information as to when the plaintiff
had refused to take possession or the date of handing over of the
demised premises.
30. We concur with the finding of the learned Commercial Court that
the defendant had not led any credible evidence in the form of any
communication, whereby the plaintiff was called upon to take over
physical possession of the demised premises after 21.09.2019.
Although, it was stated by DW-1 that the plaintiff was informed
telephonically by Mr. Navtej Singh and other marketing persons but
there were no specific particulars as to when such oral communications
were made. However, it is important to note that even according to DW-
1, the defendant had not initiated the telephone call, whereby the
plaintiff was to take over possession of the demised premises. The
affidavit filed by DW-1 is to the effect that the plaintiff was informed
about the same when the plaintiff had telephonically contacted the
defendant. However, as stated above, we are unable to accept the same
in the absence of any direct evidence in this regard.
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31. In view of the above, the only question to be examined is whether
the averments made by the defendant in his written statement, pleadings
or the reply to the application under Order XV-A of the CPC could be
considered as constructive handing over of possession of the demised
premises to the plaintiff.
32. As noted above, the written statement does not contain any
averment calling upon the plaintiff to take over possession of the
demised premises nor can it be construed as a notice for taking over
possession of the demised premises. The averments made in the written
statement are ambiguous and appear to be in support of the notice of
termination dated 21.01.2019. There is no unequivocal averment for
handing over the physical possession of the demised premises. On the
contrary, the averments suggest the defendant’s stand was that it had
already handed over possession of the demised premises as it has denied
all the averments made by the plaintiff to the effect that the plaintiff had
visited the site and there was no representative of the defendant present
to handover the possession of the demised premises on 21.04.2019 and
22.04.2019.
33. Ms. Mansi Gupta, learned counsel appearing for the defendant
mainly focused her submissions on the reply filed by the defendant to
the plaintiff’s application under Order XV-A of the CPC. She
contended that the said reply was filed on 17.12.2019 and therefore, it
should be deemed that the defendant had handed over the possession of
the demised premises to the plaintiff on 17.12.2019. In its reply, the
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defendant had averred “that it is ready and willing to handover the
possession of the premises as per Clause 9 of the Lease Deed.” It had
also made the following prayers:
“i) Dismiss the application under reply with heavy costs;
ii) Direct the plaintiff to receive the possession in terms of
clause 9 of lease agreement;”
34. Section 108 of the Transfer of Property Act, 1882 [TP Act] sets
out the rights and liabilities of a lessor and a lessee. Specifically, Section
108(B) of the TP Act sets out the rights and liabilities of the lessee. In
terms of Clause (q) of Section 108 of the TP Act, a lessee is bound to
put the lessor into possession of the property. The said Clause is set out
below:
“108. Rights and liabilities of lessor and lessee –
*** *** ***
(q) on the determination of the lease, the lessee is bound
to put the lessor into possession of the property.”
35. Clause(e) and (f) of Section 111 of the TP Act are relevant and
are set out below:
“111 Determination of lease.-A lease of
immoveable property determines-
*** *** ***
(e) by express surrender; that is to say, in case the lessee
yields up his interest under the lease to the lessor, by
mutual agreement between them;
(f) by implied surrender;”
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36. It is now well settled that once a tenant gives a notice to the
landlord that he no longer requires the premises and calls upon the
landlord to take back the possession, the landlord cannot resist the same.
The remedies available to the landlord for any breach is to claim
damages for loss sustained by the landlord.
37. In Onida Finance Ltd. v. Malini Khanna: 2022 (3) AD Delhi
231, this Court considered a case where the tenant had terminated the
lease and called upon the landlord to take over the possession and return
the security. The landlord did not do so and the tenant instituted a suit
for recovery of security and unadjusted advance rent. The tenant also
deposited the keys in the court. In this context, this Court observed as
under:
“28. It is trite that when the lease is terminated by notice
and the possession is offered, the landlord cannot refuse
to take the possession. If the landlord refuses to take the
possession, the lease would not continue. Therefore,
even if the contention of the defendant herein was that
the tenancy was for a period of three years, she could
take possession and thereafter sue the plaintiff for rent.
She did not do so. She took calculated risk by
challenging the action of the plaintiff in terminating the
tenancy and avoided to take possession.
29. … It is held that the plaintiff had offered to surrender
the actual vacant possession of the premises and it is he
defendant who did not take the possession thereof on
15th February, 1997 although offered by the plaintiff.
Therefore, the valid surrender of the tenanted premises
took place on 15th February, 1997 even when the actual
possession was taken on 13th September, 1997 when theSignature Not Verified
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keys of the tenanted premises were taken by the
defendant which was deposited by the plaintiff while
filing the suit.”
38. This Court also held in Uberoisons (Machines) Ltd. v. Samtel
Color Ltd.: 2003 (69) DRJ 523 that the tenant cannot withhold the
possession of the premises till the security amount was refunded. In that
case, the tenant had terminated the lease and called upon the landlord to
refund the security deposit and take possession of the tenanted
premises. The representative of the landlord visited the leased premises
on the specified date, however, did not take possession as the premises
had not been restored to a condition in which the possession of the
premises were handed over to the tenant. Thereafter, the tenant restored
the premises and called upon the landlord to take possession and refund
the security deposit but the landlord was unwilling to refund the security
and the tenant was not willing to handover possession till the security
was refunded. The landlord instituted a suit against the tenant for
possession, recovery of rent, mesne profits and damages. The tenanted
premises were handed over during the pendency of the suit. In this
context, the Court held as under:
“12. Now the question arises whether the tenant could
have retained the possession of the premises without
paying the rent thereof on account of non-refund of
security amount by the plaintiff. The answer is emphatic
‘no’. The tenant has an independent remedy to recover
the security but in no way can retain the possession of
the premises on the plea that until and unless security is
refunded, possession will not be handed over. Such a
possession by the tenant is a possession for which he has
to pay the rent as the premises could not have been putSignature Not Verified
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in use by the landlord nor have been let out by the
plaintiff. No tenant can take the defence that he is
entitled to retain the possession of the premises unless
security amount is refunded to him. When there is an
independent remedy to recover this amount, the
retention of possession cannot be justified. In order to
avoid the liability of rent, the tenant has the obligation to
handover the possession. It is immaterial whether
premises was put into use by the defendant/tenant or not.
What is material was whether possession is retained by
him or not.
13. In view of this position of law, the suit of the plaintiff
has to be decreed in respect of recovery of arrears of rent
upto the period the possession was retained by the
defendant…”
39. In H.S. Bedi, v. National Highway Authority of India: 2015
SCC OnLine Del 9524, this Court had examined a catena of decisions
and summarized the law as under:
“10. Summary of Principles of law : From the analysis
of the above decisions and the provisions with which we
are concerned, the following principles emerge : –
10.1. Determination of lease – Section 111 of the
Transfer of Property Act provides various modes of
determination of lease such as determination by efflux
of time [Section 111(a)]; expiry of the period of notice
of termination [Section 111(h)]; express surrender
[Section 111(e)] and implied surrender [section 111(f)].
10.2. Obligations of the landlord and the tenant upon
determination of lease – The tenant is bound to handover
the vacant and peaceful possession of the tenanted
premises to the landlord upon determination of lease
[under Section 108(q)].
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10.3. Duty of tenant to restore the tenanted premises –
The tenant is bound to restore the tenanted premises in
the same condition in which it was taken.[Section
108(B)(m].
10.4. Remedy of landlord in the event of non-
restoration by the tenant – In the event of non-
restoration of the tenanted premises to their original
condition, the remedy of the landlord is to adjust the
damages in the security deposit or sue the tenant for
damages after taking over of the possession.
10.5. Landlord cannot refuse to take over the
possession upon determination of lease and offer of
possession by the tenant – The landlord, upon
determination lease and offer of possession by the
tenant, cannot refuse to take over the possession on the
ground that the property has been damaged or not
restored to its original condition.
10.6. Consequences of the landlord refusing to take the
possession offered by the tenant – In the event of refusal
of the landlord to take the possession offered by the
tenant, the possession shall be deemed to have been
delivered to the landlord and the tenant shall not be liable
to pay the rent thereafter.
10.7. Consequences of the tenant refusing to handover
the possession – If the landlord is ready to accept the
possession but the tenant refuses/fails to handover the
possession, the liability of the tenant to pay the rent shall
continue till the handing over of the possession.
10.8. Remedy of tenant in case of non-refund of
security deposit by the landlord- The tenant cannot
refuse to hand over the possession till the security
deposit is refunded. In the event of non-refund of
security deposit by the landlord, the remedy of the tenant
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is to sue the landlord for refund of security deposit after
handing over the possession.”
40. In the facts of the present case, the defendant had called upon the
tenant to take possession of the premises on 21.04.2019. However, it is
clear that the defendant did not handover the possession to the plaintiff
on that date. As noted above, the defendant had also failed to establish
that it had at any point thereafter notified the time and date for handing
over the possession of the demised premises and the plaintiff had failed
and neglected to accept the same. However, the defendant had offered
that it was ready and willing to handover the possession of the premises
in its reply dated 17.12.2019 in response to the plaintiff’s application
for payment of rent filed under Order XV-A of the CPC. The record
does not indicate that the plaintiff had refused to take over possession
of the demised premises.
41. It is contended on behalf of the defendant that the plaintiff was
insisting that the demised premises be restored to its original condition
and was refusing to take possession of the demised premises. The
defendant has been unable to establish the same. The controversy, thus,
is effectively reduced to whether making an averment in the reply
constitutes constructive handing over of the possession of the demised
premises in question.
42. Making an averment in the pleadings cannot by itself be
construed as constructive handing over of the possession of the demised
premises. The tenant is also required by its conduct to establish that it
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has taken all steps for handing over of the possession of the demised
premises. In the facts of the present case, it is established that:
(i) the defendant had taken the demised premises on rent to
sublease the same to HDFC. The same is reflected in the Lease
Agreement as well;
(ii) HDFC had terminated the sub-lease by a three months’ prior
notice dated 18.01.2019;
(iii) Consequently, the defendant had terminated the lease of the
demised premises by a three months’ prior notice dated
21.01.2019 [ Ex PW1/D1]
(iv) the defendant had called upon the plaintiff to take possession
of the demised premises on 21.04.2019 but did not hand over
the possession of the demised premises on that date as HDFC
had not handed over possession of the same to the defendant;
(v) HDFC handed over the premises leased from the defendant,
including the demised premises, to the defendant on ___ after
vacating the same;
(vi) the defendant did not use the demised premises after HDFC
had vacated the same and there is no material to even remotely
suggest that it had any intention of using the demised
premises;
(vii) the defendant had also – in unequivocal terms – stated that it
was ready and willing to handover possession of the demised
premises and also made a prayer to the said effect in its reply
filed on 17.12.2019
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43. It is apparent from the above that the defendant had not only
offered possession of the demised premises to the plaintiff but its
conduct was also in conformity with its offer to put the plaintiff in
possession. It appears that the defendant also persisted with its stand
that it had already handed over the possession of the premises. The order
sheet indicates that this contention was advanced by the defendant
before the Court on 18.01.2021. However, the plaintiff had disputed the
same.
44. It is in the aforesaid context, this Court had passed an order for
handing over possession of the premises in question which was
extracted hereinabove.
45. The physical possession of the demised premises was handed
over to the plaintiff pursuant to the said order. In terms of Section
108(q) of the TP Act, it is the obligation of the tenant to handover the
leased premises to the landlord. It is only in case where the landlord
refuses to take over the possession as offered by the tenant that the
inference of handing over of constructive possession can be drawn.
Merely making an averment that the tenant is ready and willing to
handover the possession without taking further steps in this regard,
would be insufficient to discharge the obligation to hand over the
possession of the leased premises. In the present case, the demised
premises had been vacated and the defendant had not only offered
possession but also sought a direction to the said effect from the learned
Commercial Court.
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46. In view of the above, it is difficult to accept that the defendant
had not offered possession of the demised premises to the plaintiff until
the date of actual handing over of the possession of the demised
premises. The statement made in the reply filed on 17.12.2019 coupled
with the conduct of the defendant clearly indicates that on 17.12.2019,
the defendant had called upon the plaintiff to take over possession of
the demised premises on an ‘as is where is basis’. However, the
defendant had not indicated any time for handing over possession.
Accounting for reasonable period of two weeks for the plaintiff to act
pursuant to the said offer and to coordinate with the defendant; the
defendant is liable to pay compensation for occupation of the premises
till the end of the month of December 2019.
47. The plaintiff is entitled to rent/compensation for occupation of
the demised premises at the rate of ₹144,670/- per month from January
2019 till December 2019. The plaintiff is also entitled to interest at the
rate of 12 per cent per annum. In terms of the lease agreement, the
parties had agreed that the rent would be paid on the 10th day of the
subsequent month. The interest payable by the defendant would be
payable considering the 10th day of the subsequent month as the due
date. The defendant had furnished interest free security deposit to be
refunded at the time of handing over of possession of the property.
However, the plaintiff has adjusted the same over a span of three
months – January 2019 to March 2019 – at the rate of ₹125800/- per
month and has claimed interest on the shortfall of ₹18870/- per month
for those months. Therefore, the interest payable on rent due for those
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months (January 2019 to March 2019) will be confined to the shortfall.
The amount paid by the defendant pursuant to orders of the court shall
be duly adjusted from the amount payable on the dates when the
amounts were paid.
48. Insofar as the defendant’s contention that the suit is liable to be
dismissed for non-compliance of Section 12A of the CC Act is
concerned, we find no merit in the said contention.
49. The plaintiff is of an advance age of 84 years. According to her,
the suit involved urgency as she is in need of funds. Section 12A of the
CC Act 2015 proscribes the institution of a suit which does not
contemplate urgent interim relief, till the plaintiff exhausts the remedy
of pre-institution mediation in accordance with the prescribed
procedure. Section 12A of the CC Act does not apply to a suit that
contemplates urgent interim relief. The question whether the suit
involved urgent interim relief is required to be viewed from the
standpoint of the plaintiff and the said issue is not contingent upon
whether any interim relief is granted. However, the urgent relief sought
must be bona fide and not a ruse to avoid the provisions of Section 12A
of the CC Act. The plaintiff must have reasonable grounds for seeking
urgent relief. In the present case, the plaintiff has explained her sense of
urgency.
50. It is also material to note that the suit was filed prior to the
decision of the Supreme Court in Patil Automation Pvt. Ltd. v.
Rakheja Engineers Pvt. Ltd.: 2022 SCC OnLine SC 1028. The
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Supreme Court held that provisions of Section 12A of the CC Act are
mandatory. However, the Supreme Court had also clarified that this
declaration would be effective from 20.08.2022. The suit in question
was instituted prior to the said date.
51. In view of above, the impugned judgement and decree is
modified to extent as set out above. The appeal is allowed to the
aforesaid extent.
52. The parties are left to bear their own costs.
VIBHU BAKHRU, J
TEJAS KARIA, J
JULY 15, 2025
M/’gsr’/RK
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