Mani Square Limited vs. Hm Leisure
Original PDF →Facts
The appellant, Mani Square Limited, is appealing an order dated March 24, 2022, passed by a lower court. The dispute concerns the amount of rent, Common Area Maintenance (CAM) charges, and electricity/AC charges payable by the respondent, H.M. Leisure, for a property. The impugned order reduced the monthly rent from the contractual rate of Rs. 10,14,513/- to Rs. 8.5 lakh and CAM charges from Rs. 2,37,110/- to Rs. 40,000/-. It also stipulated fixed charges for electricity and AC. The appellant contends these reductions are flawed. The respondent argues the concessions were due to the COVID-19 pandemic. The appellant has also filed a suit for eviction against the respondent.
Held
The Court found infirmity in the impugned judgment and order dated March 24, 2022. Regarding rent and CAM charges, the Court held that the respondent ought to have been directed to pay at least the contractual rate (Rs. 10,14,513/- for rent and Rs. 2,37,110/- for CAM charges) without prejudice to the rights and contentions of the parties. The Court directed that from March 2024, the respondent shall pay rent and CAM charges at these contractual rates by the 7th of each month in advance. Regarding electricity and AC charges, the Court held that the stipulation for fixed charges was flawed and should have been on actual consumption basis. The Court directed that from March 2024, the respondent shall pay electricity and AC charges on actuals. The Court also clarified that all statutory liabilities, including GST, required to be discharged by the respondent shall be paid by them. The Court further directed the parties to approach the lower court to expedite the hearing of both suits, including the eviction suit filed by the appellant. The appeal and connected applications were disposed of, modifying the impugned order.
Key Issues
1. Whether the impugned order dated March 24, 2022, erred in directing the respondent to pay rent and CAM charges at a rate lower than the contractual rate, contrary to the lease agreement? 2. Whether the impugned order erred in stipulating fixed charges for electricity and AC, instead of payment based on actual consumption? Petitioner's Arguments: The appellant argued that the rent and CAM charges directed by the lower court were significantly less than the agreed contractual rates. They contended that the court should have directed payment at least at the contractual rate, without prejudice to the parties' rights. The appellant also argued that electricity and AC charges should be based on actual consumption, not fixed amounts. Respondent's Arguments: The respondent submitted that the concessions in rent and CAM charges were granted by the learned court below in view of the prevailing COVID-19 pandemic.
Sections Cited
GST
AI-generated summary — verify with the full judgment below
20-02-2024 Item no.1 CD Subrata Bhattacharyya AR(C) IN THE HIGH COURT AT CALCUTTA Civil Appellate Juri iction (Commercial Division) FMAT No.428 of 2022 Mani Square Limited -vs- H.M. Leisure with CAN No.2 of 2023 and CAN No.3 of 2024 Mr. S.N. Mookherjee, sr. adv. Mr. Jishnu Saha, sr. adv. Mr. Suddhasatva Banerjee, adv. Ms. Rituparna Chatterjee, adv. Mr. Khushboo Chowdhury, adv. Mr. Ishan Saha, adv. Mr. Yash Singhi, adv. …for the appellant Mr. Rajarshi Dutta, adv. Mr. Debjyoti Saha, adv. Mr. A. Goyal, adv. …for the respondent The interim applications, after exchange of affidavits, were heard out.
While hearing the applications, we are also in a position to dispose of the appeal itself. We find infirmity in the impugned judgement and order dated 24th March 2022 to the extent stated hereinbelow. The rent or occupation charge that was directed to be paid by the respondent at the rate of Rs.8.5 lakh per month is less than the contractual rate at the time of the alleged expiry of the lease in 2017. The contractual rate was Rs.10,14,513/-. Similarly, the CAM charges which were Rs.2,37,110/- per month were reduced to Rs.40,000/-.
2 The respondent ought to have been directed to pay at least the contractual rate without prejudice to the rights and contentions of the parties. However, Mr Dutta, learned advocate appearing for the respondent, submits that in view of the prevailing COVID-19 pandemic, this concession was granted by the learned court below. Whatever may have been the reason for this reduction, from March 2024 the respondent shall pay rent or occupation charges and CAM charges at the above contractual rate by the 7th of each month in advance without prejudice to the rights and contentions of the parties. Furthermore, the stipulation in the impugned judgement and order of payment for fixed electricity and AC charges is also flawed. It should have been on actual consumption basis. Again, Mr Dutta tries to justify this order by the above reason. We direct that from March 2024 the respondent shall pay electricity and AC charges on actuals. All statutory liabilities, including GST, required to be discharged or paid by the respondent, shall be paid by them. It is submitted before us that apart from the suit by the respondent, the appellant has also instituted a suit for eviction of the respondent. We direct that the learned court below be suitably approached by the parties so that hearing of both the suits are expedited. Although the respondent shall make payment of occupation and other charges at the above rate in 3 modification of the impugned judgement and order, we make it absolutely clear that the said order would not stand in the way of the appellant prosecuting their suit for eviction of the respondent and moving the court for any interim order in aid of it. We also make it absolutely clear that it would be open to the parties to ask for vacation or further variation of the impugned judgement and order and also for modification of the present arrangement directed to be maintained by this order as circumstances of the case may warrant.
The appeal and the connected applications – FMAT No.428 of 2022 with CAN No.2 of 2023 and CAN No.3 of 2024 – are thus disposed of, modifying the impugned judgement and order, as above.
[I.P. Mukerji, J] [Biswaroop Chowdhury, J]
4
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.