Vipin Malik & Anr. vs. Pacl INDIA LTD. & Ors

Held

The Court held that the plaintiffs would not be entitled to the enhanced rental beyond the nine-year period of the lease deeds, as no fresh lease deeds were executed after the expiry of the initial term. Regarding the claim for the difference in property tax, the Court found that no evidence had been led on this count, and therefore, it could not be allowed. Consequently, a decree was granted in favour of the plaintiffs against the defendant company for a total sum of ₹10,69,796/- representing the rent of the two flats, along with interest at 12% from the date of accrual. The plaintiffs were also awarded costs of ₹10,16,057, with interest at 12% if not paid within four weeks. The Court did not expressly leave any issue undecided.

Facts

The plaintiffs filed a suit seeking eviction, arrears of rent, damages, and service tax from the defendant company for two flats leased under registered deeds dated January 5, 2007. The lease was for nine years, divided into three segments of three years each, commencing December 23, 2006, and terminating December 22, 2015. The company defaulted on rent and service charges from November 23, 2014. After partial payment following intervention by the Enforcement Directorate, the company again defaulted, citing frozen accounts by the CBI. The plaintiffs' application to the Justice R.M. Lodha Committee was withdrawn. The company was served through publication as it had become defunct. The plaintiffs led ex-parte evidence, and the physical possession of the flats was handed over on January 11, 2018.

Key Issues

1. Whether the plaintiffs are entitled to enhanced rental beyond the nine-year lease period, as per the lease deeds, given that no fresh lease deeds were executed after December 22, 2015? (Question of law) 2. Whether the plaintiffs are entitled to recover the difference in property tax, as claimed? Petitioner's arguments: The plaintiffs argued they were entitled to the enhanced rental as per the lease deeds. They also claimed entitlement to recover the difference in property tax. The plaintiffs sought a decree for arrears of rent, damages, increased rental, service tax with interest, and property tax payable until February 2017. Revenue/State's arguments: No arguments were recorded for the revenue or state as they were not parties to the suit. The defendant company was proceeded ex-parte.