Ptb Hospitality LLP Through Its Partners vs. Jayanti Danabhai Patel And Ors

Facts

The Petitioners (Defendants) challenged an order dated October 11, 2022, by the Small Causes Court, Pune. This order directed the Defendants to deposit arrears of license fees amounting to Rs. 1,34,37,986/- for the period from March 1, 2019, to March 31, 2022. Additionally, they were ordered to deposit monthly license fees of Rs. 6,98,097.70/- from April 1, 2022, until they vacated the premises. The suit premises, a restaurant and open space, were leased to the Defendants by the Plaintiffs under an agreement dated November 11, 2016. The Plaintiffs alleged irregular payment of license fees, dishonored cheques, and failure to pay penal interest, leading to the termination of the agreement on March 1, 2019. The Defendants disputed the termination and the court's jurisdiction.

Held

The High Court held that the Small Causes Court was justified in directing the deposit of license fees from March 1, 2019, during the pendency of the suit or until possession was delivered. However, the Court modified the operative portion of the Small Causes Court's order. It found that directing the deposit of double the license fee amount (Rs. 6,98,097.70/-) was impermissible under Order XV-A, as the provision allows for the deposit of license fees, not damages or compensation, even if predetermined in the agreement. The Court also determined that a uniform monthly deposit amount would be appropriate, considering the discretion vested in the court under Order XV-A. It fixed the monthly license fee deposit at Rs. 3,00,000/- from March 1, 2019, onwards. The Defendants were directed to deposit arrears for the period up to August 31, 2024, by September 30, 2024, and thereafter continue monthly deposits of Rs. 3,00,000/-.

Key Issues

1. Whether the Small Causes Court erred in directing the deposit of arrears of license fees and future monthly license fees under Order XV-A of the Code of Civil Procedure, 1908, considering the Defendants' contentions that the Leave & License Agreement was valid and subsisting and that they disputed the liability? (Question of law and fact, turning on Order XV-A of the CPC and the terms of the Leave & License Agreement). Petitioner's arguments: The Petitioners argued that the impugned order was erroneous as it directed the deposit of arrears of license fees and future monthly payments, which they disputed. They contended that the Small Causes Court incorrectly directed the deposit of amounts that were effectively damages or compensation, rather than just license fees, and that the monthly deposit amount was excessive and not in line with the agreement or Order XV-A. They also argued that a uniform monthly deposit amount should be fixed, considering the discretion vested in the court. Respondent's arguments: The Respondents (Plaintiffs) argued that the Defendants were in arrears of license fees and had failed to pay them regularly. They contended that the Small Causes Court's order was justified in directing the deposit of arrears and future payments to secure the Plaintiffs' interests during the pendency of the suit.