Varun Maurya vs. Sumit Chauhan

Facts

The appellant, Varun Maurya, filed a commercial suit seeking recovery of Rs. 1,42,34,756/- with interest from the respondent, Sumit Chauhan, under Order XXXVII of the CPC. The claim was based on a registered Lease Deed dated 05.10.2020 for four shops, with a monthly rent including GST of Rs. 3,54,000/-. The appellant claimed arrears of rent from April 2021 to November 2021, and for the balance lock-in period (December 2021 to 04.10.2023), along with illegal occupation charges at Rs. 20,000/- per day from 11.05.2021 to 01.12.2021. The respondent was served but did not appear. The District Judge, however, directed the suit to be tried as an ordinary civil suit, finding the claims under Order XXXVII not maintainable.

Held

The Court held that the learned District Judge rightly observed that if there is an inherent question regarding the maintainability of the suit under Order XXXVII of the CPC, the Court cannot be bound by the summons issued. The Court agreed with the District Judge's finding that the claim for illegal occupation charges was prima facie not maintainable as there was no termination of the lease despite alleged consecutive defaults. Furthermore, the claim for rent for the balance period under the lock-in clause was also not maintainable under Order XXXVII, as it constituted a claim for damages for the unexpired period of the lease, which requires proof of actual damages and mitigation of losses under Sections 73 and 74 of the Contract Act, 1872, as held in M.C. Agrawal HUF Vs. Sahara India & Ors. The Court also noted that the appellant had not been able to show any stipulation for the payment of interest at 18% and that the arrears of GST needed to be established by evidence. Therefore, the District Judge was correct in directing the suit to be treated as an ordinary commercial suit. The appeal was dismissed.

Key Issues

1. Whether the claim for arrears of rent, rent for the balance lock-in period, and illegal occupation charges is maintainable under Order XXXVII of the CPC, 1908, given the nature of the claims and the absence of a formal termination of the lease despite alleged defaults? Petitioner's arguments: The petitioner contended that the suit was maintainable under Order XXXVII of the CPC, relying on previous judgments of the High Court (CS(COMM) 299/2016 and CRP 42/2019) to argue that the issue of maintainability should not be reconsidered. The petitioner also argued that the respondent's failure to appear did not preclude the court from examining the maintainability. Revenue/State's arguments: The respondent did not appear and no arguments were recorded on their behalf. The District Judge, in the impugned order, observed that the claim for illegal occupation charges was prima facie not maintainable as there was no termination of lease. The claim for rent for the balance period under the lock-in clause was also deemed not maintainable under Order XXXVII, citing Zoom Communications (P) Ltd. vs. Brij Mohan Punj. The court also noted that the maintainability of a suit under Order XXXVII can be challenged even without appearance, as per Sarla Devi & Ors. vs. Daya Ram & Ors.