Partly allowed¶¶62

Mr Masood Ahmed Shariff v. Smt Sumathi

Karnataka HC5 Feb 2025COMAP/161/2024

Case brief

AI extract

What is this about?

Karnataka High Court, Bengaluru; Commercial Appeal (COMAP) No. 161 of 2024; limitation; maintenance charges; refundable security deposit; Dissolution of Partnership Deed dated 30.03.2017; Joint Development Agreement; Declaratory Affidavit 28.07.2017; pre-mediation application 28.10.2022; Non-starter Report PIM:2540/2022 dated 17.01.2023; suit filed 11.04.2023; restoration/revival of suit; interest @18% p.a.; Goodwill Apartments; Khathedar; Section 13 Commercial Courts Act 2015.

What did the court decide?

Appeal allowed in part; suit restored/revived on the file of the LXXXVII Additional City Civil and Sessions Judge, Bengaluru; Trial Court to consider the maintenance-arrears claim for the three years preceding filing with interest @18% p.a.; IA No.1/2024 (permission to produce additional documents) dismissed as infructuous; no costs.

Mr Masood Ahmed Shariff Vs Smt Sumathi — Karnataka HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the Trial Court erred in dismissing the entire suit as barred by limitation, notwithstanding that the maintenance claim covered only the three-year period preceding the filing of the suit.

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Court's answer

The maintenance claim of Rs.3,71,500/-, worked out @Rs.5,500/- p.m., encompasses the three years preceding the filing of the suit; to that extent the suit was within limitation and its complete dismissal on the ground of limitation was erroneous.

¶¶55

Ratio / Principle

Insofar as the refundable security deposit of Rs.5,00,000/- was concerned — paid by the plaintiffs under the Joint Development Agreement and payable on handover of the Flats in 2017 — the suit filed in the year 2023 was barred by time.

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Key takeaways

Appeal allowed in part: the suit stands revived/restored on the file of the LXXXVII Additional City Civil and Sessions Judge, Bengaluru, which shall consider the appellants' claim for maintenance arrears for the three years preceding the date of filing, with interest @18% p.a., and decide the same in accordance with law.ratio¶¶58

Detailed headnote1 paragraphs

Division Bench (V Kameswar Rao and S Rachaiaha, JJ.) partly allowed a commercial appeal under Section 13 of the Commercial Courts Act, 2015 against dismissal of a suit seeking recovery of Rs.17,47,357/- — a refundable security deposit of Rs.5,00,000/- and maintenance arrears of Rs.3,71,500/- @Rs.5,500/- p.m. — arising out of a dissolved partnership and Joint Development Agreement relating to 'Goodwill Apartments', wherein the respondent had been allotted two flats (SF-204 and TF-306) to the extent of her 8.64% share. Held: the maintenance claim encompassed the three years preceding institution of the suit (filed 11.04.2023 after an unsuccessful pre-mediation exercise), so the suit was within limitation to that extent and could not have been dismissed in its entirety; however, the security-deposit claim, payable upon handover of the flats in 2017, was barred by time. The suit was restored to the file of the LXXXVII Additional City Civil and Sessions Judge, Bengaluru, to decide the three-year maintenance-arrears claim with interest @18% p.a. in accordance with law; IA No.1/2024 for production of additional documents was dismissed as infructuous; no costs.

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NC: 2025:KHC:6216-DB COMAP No. 161 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF FEBRUARY, 2025

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PRESENT

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THE HON'BLE MR JUSTICE V KAMESWAR RAO

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AND

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THE HON'BLE MR JUSTICE S RACHAIAH COMMERCIAL APPEAL NO. 161 OF 2024

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BETWEEN:

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MR. MASOOD AHMED SHARIFF, AGED ABOUT 70 YEARS, S/O LATE N.A. REHMAN SHEARIFF, RESIDING AT NO.35/3, FLAT NO.102/3, 2^ND CROSS, TAVAREKERE MAIN ROAD, KAVERY LAYOUT, BENGALURU-560 029.

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Digitally signed by K G RENUKAMBA Location: High Court of Karnataka

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MR. NOOR AHMED SHARIFF, AGED ABOUT 66 YEARS, S/O LATE N.A. REHMAN SHARIFF, RESIDING AT NO.703/A, 9TH ‘A’ MAIN ROAD, 4^TH BLOCK, KORAMANGALA BENGALURU-560 034.

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…APPELLANTS

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(BY SRI. SHANKARANARAYANA BHAT N., ADVOCATE)

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AND:

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SMT. SUMATHI, W/O C.J. MANJUNATH AGED-MAJOR, RESIDING AT NO.204,

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2 - NC: 2025:KHC:6216-DB COMAP No. 161 of 2024

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17^TH ‘B’ MAIN ROAD, GOODWILL APARTMENT, 6TH BLOCK, KORAMANGALA, BENGALURU-560 095.

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…RESPONDENT

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(BY SRI. SITARAMAA G. HEGDE., ADVOCATE)

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THIS COMAP/COMMERCIAL APPEAL IS FILED UNDER SECTION 13 OF THE COMMERCIAL COURTS ACT, 2015, PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO CALL FOR THE RECORDS AND SET ASIDE THE JUDGMENT AND DECREE OF THE COURT OF THE LXXXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU (CCH NO.88) IN COM O.S.NO.496/2023 DATED 29.02.2024 IN SO FAR AS IT RELATES TO THE DISMISSAL OF THE SUIT TO THE CLAIM OF MAINTENANCE FROM THE RESPONDENT FOR THE USE AND OCCUPATION OF THE APARTMENT NO.SF-204 AND TF306 AND DECREE THE SAID SUIT BY DIRECTING THE RESPONDENT TO PAY MAINTENANCE AT THE RATE OF RS.5,500/- PER MONTH AMOUNTING TO RS.1,98,000/- WITH A REASONABLE INTEREST AT THE RATE OF 10% P.A. AMOUNTING TO Rs.1,980/- TOTAL RS.1,99,980/- AND GRANT THE APPELLANTS SUCH OTHER RELIEFS AS DEEMED FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALLOW THIS COMMERCIAL APPEAL WITH COSTS THROUGHOUT.

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THIS APPEAL COMING ON FOR ADMISSION ALONG WITH IA NO.1/2024 THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE V KAMESWAR RAO AND HON'BLE MR JUSTICE S RACHAIAH

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ORAL JUDGMENT

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(PER: HON'BLE MR JUSTICE V KAMESWAR RAO)

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This appeal has been filed by the appellants

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challenging the Judgment/Decree dated 29.02.2024 in Com.O.S.No.496/2023, whereby the learned LXXXVII

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3 - NC: 2025:KHC:6216-DB COMAP No. 161 of 2024

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Additional City Civil and Sessions Judge, Bengaluru (CCH No.88) (‘Trial Court’ in short) has dismissed the suit filed by them.

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The suit was filed by the appellants for recovery of a sum of Rs.17,47,357/- with future interest @18% p.a., from the date of the suit till realization, with costs and other reliefs.

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The case of the appellants/plaintiffs before the

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Trial Court was that, the appellants, who are in the business of construction had obtained sanction from the concerned Local Authority to put-up construction. The partnership firm which was earlier existing was dissolved as per the Dissolution of Partnership Deed dated 30.03.2017. As per the Deed of Dissolution, the respondent herein was entitled to 8.64% in the assets of the said partnership firm and accordingly she was allotted two bedrooms apartment bearing No. SF-204 instead of SF-206 at the request of the respondent on the 2^nd Floor having super built-up area of 948 sq.ft. together with 227

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Sq.ft. of undivided share, right, title, interest and ownership and one bed room with a study room apartment bearing No.TF-306 on the 3^rd Floor having super build-up area of 787 Sq.Ft. together with 189 Sq.Ft. of undivided share, right, title, interest and ownership in the land comprised therein of the multistoried residential apartment building, known as ‘Goodwill Apartments’.

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It was the case of the appellants that, the defendants had undertaken to bear and proportionately pay/share of common expenses being maintenance of common facilities and amenities including Solar Panel Maintenance, Maintenance of Lift and Generator charges, Water Consumption charges, Security Salaries, all Annual Maintenance Contracts etc.. But, to the surprise of the appellants/plaintiffs, the defendant had not so far paid a penny towards the maintenance and such other charges right from handing over the Flats to the respondent. The respondent is liable to pay arrears of maintenance @Rs.5,500/- p.m. along with interest @18% p.a.. The

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other Flat Owners have started paying maintenance charges in respect of the Flats fallen to their share. The respondent is recognized as the Khathedar of the two Flats by the concerned authorities and further, she has been paying only electrical consumption charges in respect of the two Flats. The said documents clearly clinch the factum of possession of the defendant being 8.64% as agreed by the respondent in terms of the affidavit executed by her in the year 2017. The total amount of the claim was made in the suit was for Rs.17,47,357/- as per the break-up given below:-

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i) Rs.5,00,000/- being the refundable Security Deposit along with interest @ 18% p.a., from 28.07.2023 to 28.03.2023 is Rs.10,02,500/-;

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ii) Rs.3,71,500/- being the arrears of maintenance amount payable to the appellants along with interest @18% p.a., from 28.07.2017 to 28.03.2023 is Rs.7,47,357/-.

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In so far as the cause of action is concerned, it

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is specifically stated by the appellants that the same arises on 11.06.2013, as the date on which the Joint

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Development Agreement was entered into between plaintiffs, defendant and others; on 11.06.2023, the date on which a Supplementary Agreement was entered; the date-28.07.2017 on which a Declaratory Affidavit was executed by the respondent; the date-28.07.2017 on which possession of two Flats were handed-over to the respondent; the date-29.01.2022 on which the legal notice was issued to the respondent and on 04.02.2023 the date on which reply was issued by the respondent. The respondent has filed a detailed written statement.

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The Trial Court has dismissed the suit by answering the issue of limitation in the following manner:-

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“46. The plaintiff ought to have filed the sit for recovery of Rs.5,00,000/- within three years from 28.07.2017 i.e., on or before 28.07.2020. In this case, no actual balance period was available to the plaintiff as on 03.10.2021.

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47. The plaintiff has filed application for premediation on 28.10.2022. After the expiry of grace period of 3 months provided by the Hon’ble Supreme Court of India, the DLSA has issued Non-starter Report

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dated 17.01.2023 in PIM:2540/2022 and the same was received by the plaintiff on 29.03.2023. The plaintiff has filed the suit on 11.04.2023. Hence, the suit filed by the plaintiff is barred by limitation. Thus, the plaintiff is not entitled for suit reliefs.”

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7 . According to the Trial Court, the appellants have

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filed a suit for recovery of Rs.5,00,000/- and the same should have been filed within three years from 28.07.2017 i.e., on or before 28.07.2020. A reference is also made to the application for pre-mediation on 28.10.2022 and a Non-starter Report dated 17.01.2023 was received by the appellants on 29.03.2023, whereas the appellants have filed a suit on 11.04.2023. Hence, the suit is barred by limitation.

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The submission of the learned counsel for the appellants is that, the Trial Court has erred in dismissing the suit on the ground of limitation. According to him, the prayer made by the appellants was for the refund of Security Deposit of Rs.5,00,000/and arrears of maintenance of Rs.3,71,500/- along with interest @18%

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8 - NC: 2025:KHC:6216-DB COMAP No. 161 of 2024

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p.a.. According to him, the claim of maintenance is also

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for three years period preceding the filing of the suit and hence, in that sense, the complete claim would not be barred by limitation. Unfortunately, this particular aspect has been over-looked by the Trial Court while dismissing the suit.

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We are in agreement with the said submission made by the learned counsel for the appellants for the reason that Paragraph-7(b) of the impugned judgment/decree clearly reflects the amount of Rs.3,71,500/- has been the arrears of maintenance payable to the appellants by the respondent herein. In fact, if the maintenance is worked-out @ Rs.5,500/- p.m., the said amount encompasses the period of three years preceding the filing of the suit. Hence, to that extent, the suit would be within the limitation period and the complete claim in that regard could not have been dismissed on the ground of limitation. In so far as the plea of Security Deposit is concerned, no doubt the said amount was paid

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by the plaintiffs to the respondent at the time of entering into the Joint Development Agreement as refundable, by way of a Cheque dated 18.12.2013, the same was payable by the respondent at the time of handing over of the Flats. The Flats were handed over to the respondent somewhere in the year 2017. To that extent, surely the suit filed in the year 2023 was barred by time.

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Having said that, in so far as the claim for Rs.3,71,500/-, which includes the maintenance charges for three years preceding the filing of the suit, shall be maintainable and the Trial Court could not have dismissed the suit. Hence, the present appeal is allowed in part reviving the suit on the file of the Court of LXXXVII Additional City Civil and Sessions Judge, Bengaluru. The Trial Court shall consider the claim of the appellants for arrears for the period three years preceding the date of filing of the suit with interest as claimed by the appellants i.e., @18% p.a., and decide the same in accordance with law.

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Accordingly, the suit is restored on the file of

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the LXXXVII Additional City Civil and Sessions Judge, Bengaluru. No costs.

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The appellants shall be at liberty to file an application before the Trial Court for the revival of the suit in terms of this order to enable the Trial Court proceed in accordance with law.

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In view of disposal of this appeal, the IA No.1/2024 filed for permission to produce additional documents , do not survive for consideration and dismissed as infructuous.

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Sd/(V KAMESWAR RAO) JUDGE

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Sd/(S RACHAIAH) JUDGE

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KGR*

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List No.: 1 Sl No.: 32

Mr Masood Ahmed Shariff v. Smt Sumathi

Case brief

What is this about?

What did the court decide?

Mr Masood Ahmed Shariff v. Smt Sumathi

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

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