M/S Headmaster Ludhiana Salon And Spa PVT. LTD. And Another vs. Mrs. Shivdeep Braich And Others

Facts

The petitioners, tenants, filed a Civil Revision Petition challenging an order dated 26.11.2024 by the Appellate Authority, Ludhiana. This order allowed an appeal by the respondent/landlord and set aside a provisional rent assessment by the Rent Controller. The Rent Controller had directed the tenants to pay provisional rent of ₹5,00,000/- per month plus GST. The Appellate Authority, however, enhanced this to ₹6,50,000/- per month plus GST. The tenants argued that despite a Memorandum of Understanding (MOU) dated 02.04.2022, an oral settlement was reached for rent at ₹5,00,000/- per month plus GST, supported by invoices and the landlord's admission in a rejoinder. The landlord contended that the MOU stipulated higher rent rates for specific periods, including ₹6,50,000/- per month plus GST from November 2022 to March 2023, and that the tenants had paid less than agreed.

Held

The Court allowed the Civil Revision Petition and set aside the impugned order of the Appellate Authority. The Court found merit in the petitioners' submissions. It held that the terms of the MOU were superseded by the landlord's conduct in issuing invoices for rent at ₹5,00,000/- per month plus GST. The Appellate Authority had ignored the fact that the landlord could not provide any valid reason for accepting rent at ₹5,00,000/- per month plus GST if the agreed rate was ₹6,50,000/- per month plus GST. The invoices for November 2022 to March 2023 clearly reflected the receipt of ₹5,00,000/- per month plus GST. The Court also noted that, as per settled principles, provisional rent is determined based on the last paid rent, which in this case was undisputedly ₹5,00,000/- per month plus GST. The Court clarified that its observations were not an expression of opinion on the merits of the case.

Key Issues

1. Whether the Appellate Authority erred in setting aside the Rent Controller's order and directing payment of provisional rent at ₹6,50,000/- per month plus GST, contrary to the admitted last paid rent of ₹5,00,000/- per month plus GST, thereby failing to appreciate the effect of the landlord's conduct and invoices on the MOU? (Mixed question of law and fact, concerning interpretation of contractual terms and evidence). Petitioner's Arguments: The petitioners contended that an oral settlement for ₹5,00,000/- per month plus GST superseded the MOU. They relied on invoices (Annexure P-8) showing rent paid at this rate and the landlord's admission in the rejoinder (Annexure P-3) of accepting rent at ₹5,00,000/- plus GST to avoid departmental objections. They argued that the Appellate Authority wrongly disregarded these facts and the landlord's acquiescence. Respondent's Arguments: The respondent/landlord argued that the MOU dated 02.04.2022 was duly proven by the petitioner's own statement and that it stipulated rent of ₹6,50,000/- per month plus GST from November 2022 to March 2023. They claimed the tenants paid less than this agreed rate and that the invoices showing a discount did not negate the agreed rent.