Atma Ram Properties PVT LTD vs. Hillarious Hospitality PVT LTD & Ors

Held

The Court held that a decree of possession is to be passed in favour of the plaintiff and against the defendants for the suit property. The Court also passed a decree in favour of the plaintiff and against the defendants jointly and severally for a sum of Rs. 40,19,866, representing unpaid rentals, mesne profits/damages, less the security deposit. The plaintiff is further entitled to unpaid rentals/mesne profits at the rate of Rs. 16,52,000 per month from May 15, 2018, until the recovery of possession. Additionally, the plaintiff is entitled to interest at 12% per annum from the date of the decree until recovery, and costs. The Court found no need to ask the plaintiff to file evidence due to the unrebutted contentions regarding the directors' personal liability as guarantors and the defendant's failure to contest the suit or comply with court directions. The suit was disposed of, and all pending applications were also disposed of.

Facts

The plaintiff, Atma Ram Properties Pvt Ltd, filed a suit seeking a decree of possession for a commercial property in Connaught Circus, New Delhi, and a sum of Rs. 5,99,999 towards arrears of rent, GST, and TDS. Additionally, a decree for Rs. 40,19,868 was sought for mesne profits/unauthorized use and occupation charges from March 3, 2018, to May 14, 2018. The defendant, Hilarious Hospitality Pvt Ltd, was served but did not appear or file a written statement. An earlier application under Order 15A CPC directed the defendant to deposit arrears amounting to Rs. 46,19,865, which was not done. The plaintiff's case was that the property was let out to the defendant on a month-to-month tenancy, with rent enhanced to Rs. 14 lacs per month from September 15, 2017. The defendant defaulted in payments, and a legal notice dated February 12, 2018, terminated the tenancy.

Key Issues

1. Whether the plaintiff is entitled to a decree of possession of the suit premises? 2. Whether the plaintiff is entitled to recover arrears of rent, GST, TDS, and mesne profits/unauthorized use and occupation charges from the defendant? 3. Whether the directors of the defendant company (Defendants No. 2 to 8) are personally liable for the outstanding dues as guarantors? Arguments for the Plaintiff: The plaintiff argued that the tenancy was terminated by a legal notice dated February 12, 2018, and the defendant had failed to file a written statement or comply with court orders for deposit of arrears. The plaintiff also contended that the directors of the defendant company had assured personal liability in case of rent payment defaults, making them guarantors under the Indian Contract Act. The plaintiff relied on the averments in paragraph 5 of the plaint regarding this assurance. Arguments for the Revenue/State: No arguments were recorded for the revenue or state in this judgment.