Allowed

The Hongkong and Shanghai Banking Corporation Ltd. v. Nadeem Zakaria Maklai

Bombay HC3 Apr 2007SJ/70/2007

Case brief

AI extract

What is this about?

The High Court of Bombay held that a summary suit filed under Order 37 CPC for recovery of a security deposit was maintainable. The agreement contemplated the licensee retaining possession while the license period was delayed due to non-return of deposit. The court emphasized the defendant had not filed a written defense.

What did the court decide?

Decree was granted in terms of prayer clause (1) of the plaint for recovery of the security deposit.

The Hongkong and Shanghai Banking… — Contract and Commercial Disputes | Bombay HC (2007)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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O.O.C.J.

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SUMMONS FOR JUDGMENT NO. 70 OF 2007 IN SUMMARY SUIT NO. 20 OF 2007 The Hongkong & Shanghai Banking Corporation Ltd. ... Plaintiff. V/s. Nadeem Zakaria Maklai. ... Defendant. ....

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Mr. Persy Ghandy with Ms. Vedpathak i/b. Maneksha & Sethna for the Plaintiff. Mr. S.P. Bharati for the Defendant.

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CORAM : DR. D.Y.CHANDRACHUD,J.

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03rd April 2007.

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P.C. :

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. The suit under Order 37 of the Code of Civil Procedure 1908 has been instituted to recover an amount of Rs.30,48,438/together with interest at

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the rate of 18% per annum on the principal sum of

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Rs.20 lakhs.

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An agreement of leave and licence was entered

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into	between	the parties on	6th	March	2002,	by
which,	the	Plaintiff was granted	a	licence	to	use
and	occupy	a residential flat	(flat	no.C-3	on	the
3rd	floor	of Malabar		Apartments	Co-	operative
Housing	Soci	ety Ltd., Jagmohan	das	Road,	Mumbai	-
400	006)	admeasuring 750 sq.ft.		The ter	m of	the
licence	was	11 months to com	mence	on	10th	March

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2002 until 10th February 2003. Clause 4 of the

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agreement provided as follows :-

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	" The Licensee	shall, throughout	the
term	of the lic	ence hereby	created,
deposit	and keep	deposited with	the
Licensor	as and by	way of a	security
deposit	an amount	of Rupees	Twenty
Lakhs	(Rs.20,00,000/-)	and	which
amount	of security	deposit shall	be
refunded,	without	any	interest
thereon,	by the	Licensor to	the
Licensee	on the	expiry or	sooner
terminatio	n/determination	of	the
Licence	but after	adjusting	thereout
any	costs, charges,	and expenses	which

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the	Licensor	may be	req	uired	to	incur
by reas	on of	occupation	and	use	of	the
licenced	pre	mises by	the	Licen	see	and
which	costs	charges	a	nd	ex	penses
should	have	been met	and	borne	by	the
Licensee	in	course	of	such	occu	pation
and						use."

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Clause	18	of the agre	ement	stipulated that	the
security	de	posit of Rs.20	lakhs	was to be	returned
to	the	Plaintiff within	a	week of	the
expiry/ter	mination	of the licence.		In the event	of
the	Defendant	failing to do	so	within a week	of
such	exp	iry/determination, th	e	Defendant	as
Licensor	wa	s liable to pay	i	nterest at the rate	of
18%	per	annum for the	per	iod of such defa	ult/delay
and	the	Plaintiff as lic	ensee	was entitled	to
reside	in	the premises dur	ing	the period of	the
delay	without	the payment	of	any rent.	Under
clause	21	the licence w	as	terminable with	one

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month’s notice upon the expiry of the term of the

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licence.

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3 The licence was renewed for a further period

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of	11	mont	hs commencing	from	9t	h February	200	3, by
a	letter	d	ated 8th	Febru	ary	2003.	On	27th
September		2	003, the		Plaint	iff term	inated	the
agreement		in	pursuance	of	the	provisions	of	clause
21	of	the	agreement with	one	mo	nth’s notice	.	The
Defendant		was	called upon	to	arran	ge for	a	refund
of	the	s	ecurity deposit	and	to	issue a	letter	of
having		taken	possession	of	the	flat,		certifying

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that the accessories and fixtures were in proper

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order.

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4.	The	Defendant	admitted hi	s liabilit	y, by a
letter	dated	2nd	Januar	y	2004	to refund the	deposit
but	sought	time	to	do	so	until the middle	of
February		in t	he	year	2004.	The Plaintiff,	not
having		received	a	refund	of	the deposit,	addressed
reminders		dated	5th	June	and	10th June 2004.	In
response,		the	Defendant	by	a	letter dated 7th	July
2004	o	nce	again	admit	ted	his liability	and
requested		the	Plaintiff	t	o g	rant him an i	ndulgence

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of a few more days. Eventually, a suit has been

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instituted for a recovery of the security deposit.

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5.	The	Defendant	has not filed any defence to	the
claim	in	the	suit thought		he	appears	th	rough
Counsel.		From	the narration	of	the	facts	it	is
abundantly		clear	that the	clai	m	of the	Pl	aintiff
falls wi	thin	the	purview of Orde	r	37	of the	Code	of
Civil	Proc	edure,	1908, since	it	is	based	on	a
written	contr	act	between the pa	rties.		On	behalf	of
the	De	fendant,	the maintainabil	ity	of	the	Sum	mary
Suit	is	sought	to the questio	ned	in	the cou	rse	of

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the oral submissions on the ground that the

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pleadings of the Plaintiffs as they stand would

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not

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sustain	a Summary Suit under O	rder 37	of the	C.P.C.
The	submission is that the	Plaint	iff has	not
averred	that he is willing	to hand	over	possession
of	the residential premises	to	the	Defendant.
There	is no merit in the	submission	for the	simple
reason	that by a letter dat	ed 27th	September	2003,
the	Plaintiff has clearly evinc	ed an	intention	to
hand	over possession against	the retur	n of	the
security	deposit. In fact,	the agre	ement	between
the	parties stipulates that if	the	licensor	fails
to	return the security deposit	of	Rs.20	lakhs

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within	a	period of	one	week	of		the
expiry/determi	nation	of the l	icence,	he	would		be
liable	to pay	interest of 18%	per	annum	and	in	the
meantime	the	Plaintiff would	be	entitled	to		retain
possession	without	the payment		of	rent.		The
agreement	did	not contemplate	that	the	Plainti	ff	as
licensee	must	first surrender	poss	ession	and		then
institute	proceedin	gs for the		recovery	of		its
security	deposit.	The Sum	mary	Suit	is		clearly
maintainable.	T	he objection	in	regard	to		the
maintainability	of	the Summary		Suit	has		been
considered	by	the Court since	it	proceeded	on		the
basis	of the	pleadings as th	ey	stand.	Howe	ver	, it

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needs to be emphasised that no written defence has

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been filed on behalf of the Defendant to the Suit.

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6.	The Plain	tiff would	be entitled to a d	ecree as
prayed.	Co	unsel	appearing	on	behalf	of	the
Plaintiff	has	st	ated be	fore the	Court	that	the
Plaintiff	is	ready	and	willing	to	tender	an
undertaking		that	possession	of the	premises		would
be han	ded	over	to the	Defendant	immedia	tely	against
the	receipt	of	the	decretal	dues.		Counsel
appearing	on	behalf	of the	Defendan	t objects	to	the

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recording	of	any s	uch	undertaking s	ince	the
submission	of	the D	efendan	t is that the	Defe	ndant
has	obtained	possession	of	the premises.	This	is
disputed	on	behalf	of	the Plaintiff.	Noneth	eless,
in view	of	the objecti	on	which the Defend	ant has	to
the	recording	of	the	Plaintiff’s under	taking	to
hand	over	possession	agai	nst the receipt	of	the
decretal	dues, t	he suit	shall	have to be	decreed	in

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terms of prayer clause (1). There shall be a

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decree accordingly.

The Hongkong and Shanghai Banking Corporation Ltd. v. Nadeem Zakaria Maklai

Case brief

What is this about?

What did the court decide?

The Hongkong and Shanghai Banking Corporation Ltd. v. Nadeem Zakaria Maklai

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Coram

Case details

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