High Court Upholds Rs. 3.90 Lakh Decree in Landlord-Tenant Commercial Dispute

The Appellants, M/S Ritas Heritage & Others, filed an appeal against a judgment and decree dated January 11, 2023, passed by a Commercial Court. The original suit was filed by the Respondents (landlords) for the recovery of arrears of rent, mesne profits, and other dues related to a commercial property.

The Commercial Court had partly decreed the suit in favor of the landlords, awarding them a sum of Rs. 3,90,163 along with 6% interest per annum and litigation costs. The tenants challenged this recovery, arguing against the findings and the calculated amounts.

Main Issue: Whether the judgment of the Commercial Court warrants interference by the High Court based on any illegality, perversity, or patent error in its reasoning regarding the recovery of commercial dues from the tenants.

HC’s Decision: The Hon’ble High Court dismissed the appeal and affirmed the Commercial Court’s judgment in its entirety. The Court that the scope of the appeal was confined to whether the findings against the tenants were sustainable.

Relying on the decision of the Supreme Court of India in Siri Chand (Dead) through Legal Representatives v. Surinder Singh, it held that an escalation clause operating during a subsisting tenancy does not, by itself, render the lease compulsorily registrable. However, since the landlords had not filed any appeal or cross-objection, the Court declined to modify the award.

The High Court held that the reasoning adopted by the Commercial Court was sound and free from any legal perversity or patent error. Thus, the decree for recovery stood confirmed.

To Read Full Judgment, Download PDF Given Below