Sri Palakolanu Sudhakar Reddy Vs Smt Chunchu Sandhya Rani

SMT. PALAKOLANU SOWJANYA, W/O PALAKOLANU SUDHAKAR REDDY AGED ABOUT 38 YEARS R/AT NO. 3, DARSHAN LAYOUT, KADUBEESANAHALLI, PANATHUR MAIN ROAD BENGALURU -560 103

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…PETITIONERS

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Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA

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(BY SRI.SURESH LOKRE, SENIOR ADVOCATE A/W SRI. SHRAVAN S LOKRE.,ADVOCATE)

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AND:

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SMT.CHUNCHU SANDHYA RANI W/O CHUNCHU RAMA KRISHNA AGED ABOUT 44 YEARS R/AT FLAT NO.405, BLOCK NO.7 PANCHAVATI APARTMENT ANAND PETA EXTENSION PONNUR ROAD, KOTHAPETA GUNTUR ANDHRA PRADESH-522 003

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SRI. CHUNCHU RAMAKRISHAN S/O CHUNCHU VENKATESHAIAH AGED ABOUT 45 YEARS R/AT FLAT NO.405, BLOCK NO.7, PANCHAVATI APARTMENT, ANAND PETA EXTENSION, PONNUR ROAD, KOTHAPETA, GUNTUR, ANDHRA PRADESH-522 003

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…RESPONDENTS

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(BY SRI.GIRIDHAR S V.,ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED 24.6.2025 ON I.A NO.1 AND 2 IN COMMERCIAL O.S. NO.134/2025 PASSED BY THE XI ADDITIONAL DISTRICT AND SESSIONS JUDGE (DEDICATED COMMERCIAL COURT) BANGALORE RURAL DISTRICT, BANGALORE VIDE ANENXURE-A ETC.,

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR

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ORAL ORDER

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Heard learned senior counsel - Sri Suresh Lokre alongwith learned counsel - Sri Shravan S. Lokre for petitioner and learned Counsel - Sri S.V. Giridhar for Respondent Nos.1 and 2.

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Parties shall be referred to as per their ranking before the Commercial Court.

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This petition is filed by the petitioners/defendant

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Nos.1 and 2 seeking the following reliefs:

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"a) Issue a writ of certiorari or of any other nature to set aside the impugned orders passed under I.A No.1 and 2 by the XI Additional District and Sessions Judge (dedicated commercial court) Bangalore rural district, Bangalore dated 24/06/2025 in commercial O.S. No.134/2025 (ANNEXURE-A) .

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b) Issue a Writ of Mandamus or any other nature directing the XI Additional District and Sessions Judge (dedicated commercial court) Bangalore rural district, Bangalore dated 24/06/2025 in Commercial O.S. No.134/2025 to return the plaint and direct the compliance of PreInstitution Mediation as contemplated under Sec.12-A of the Commercial Courts Act.

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c) Award the costs and grant such other relief(s) as this Hon'ble Court may deem fit and necessary in the above Writ Petition in the interest of justice and equity."

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The respondents/plaintiffs filed a suit against the petitioners/defendants in Commercial O.S. No.134/2025 seeking the following reliefs.

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"Wherefore, the Plaintiffs pray that this Hon'ble Court may be pleased to pass a Judgement and Decree in favour of the Plaintiffs and against the Defendants as under:

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(a) Decree of Ejectment directing the Defendants to quit and deliver the vacant possession of the Schedule Property forthwith, failing which the Plaintiffs shall be at liberty to secure the vacant possession of the Schedule Property through the process of the Court at the cost of the Defendants;

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(b) A Money Decree directing the Defendants to pay to the Plaintiffs a sum of Rs.44.27,940/ [Rupees Forty Four Lakhs Twenty Seven Thousand Nine Hundred and Forty Only] towards the arrears of rent, damages and interest due to the Plaintiffs on account of the delay in payment of the rents and damages together with current and future interest thereon @ 24% per annum with effect from the date of the institution of the suit till the date of payment in entirety:

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(c) A Decree of Damages directing the Defendants to effect payment of a sum of ₹4,50,000/- [Rupees Four Lakh Fifty Thousand Only] per month or part thereof to the Plaintiffs for the use and occupation of the Schedule Property post the termination of tenancy as "tenant of sufferance" from the date of institution of the suit till the delivery of the vacant possession of the Schedule Property, failing which a Money Decree be passed for the payment of the same together with current and future interest thereon @ 24% per annum to be computed with effect from the respective due dates of the damages till the date of realisation;

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(d) Pass an Order for an enquiry for payment of additional mesne profits in an appropriate Final Decree Proceedings in terms of Order XX Rule 12 of the Code of Civil Procedure, to be computed from the date of filing of this suit till the date of delivery of possession of the Schedule Property in excess @ 4,50,000/- [Rupees Four Lakh Fifty Thousand Only] per month or part thereof with current and future interest @24% per annum;

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(e) For an Order as to the costs of the present proceedings, and

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(f) For such other Order/Orders as this Hon'ble Court deems fit for grant under the circumstances of the case;

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in the interest of justice and equity."

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Along with the plaint, the plaintiff filed two applications - I.A. No.I and I.A. No.II.

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5.1 I.A. No.I is filed under Order XXXVIII Rule 5 r/w Section 151 of CPC for a direction to the defendants to place at the disposal of the Court, property/ security/ deposit as may be sufficient to satisfy the decree in a sum of ₹ 44,27,940, failing which a direction be issued for a conditional attachment of the movables in the schedule property as per the details to be furnished at the time of such attachment.

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5.2 I.A. No.II is filed under Section 151 of the Code

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of Civil Procedure for a direction to the defendants to pay to the plaintiffs, damages in a sum of ₹ 4,50,000/- per month or part thereof, for the use and occupation of the

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suit schedule property with effect from the month of the institution of the suit, which is equivalent to the last paid rent per month, pending adjudication of the suit.

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On hearing these two applications, prior to issuance of notice to the defendants, the Commercial Court allowed both the applications by an order dated 24.6.2025.

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6.1 By the impugned order, the Commercial Court allowed I.A. No.I and an order of conditional attachment of movable properties in the schedule property as per the details furnished by the plaintiffs was granted. The Commercial Court also ordered for issue of attachment of moveables warrant by way of attachment before judgment as per list furnished.

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6.2 By the impugned order, the Commercial Court allowed I.A. No.II also and directed the defendants to deposit a sum of ₹ 4,50,000/- per month in the Court by way of damages for use and occupation of the schedule

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premises from July 2024 till further orders by deducting the amount, if any already paid.

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It is the vehement contention of Senior Counsel - Suresh S. Lokre that the Commercial Court proceeded on the basis of the details that are already furnished by the plaintiffs, but it ought to have proceeded on the basis of the details to be furnished at the time of attachment, as prayed in the application. He submits that the impugned order passed by the Commercial Court on I.A. Nos.I and II is illegal, perverse and arbitrary and it is contrary to the judgment of the Hon'ble Apex Court in the case of Patil

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Automation Private Limited and others -vs- Rakheja Engineers Private Limited reported in (2022)10 SCC 1.

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7.1 Learned counsel further contends that the Commercial Court has not provided an opportunity to the defendants before passing the ad-interim order on I.A. No.I filed under Order XXXVIII Rule 5 of the Code of Civil Procedure and has allowed the application without going

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into the merits. The Commercial Court has believed the

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case of the plaintiffs without scrutinizing any of the documents that are produced to prove or establish the arrears of rent or damages and has extended relief beyond the prayer made in I.A. Nos.I and II.

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7.2 It is also contended by learned Senior Counsel that the impugned order has not considered the issue of the requirement of pre-institution mediation, which is mandatory and required in a commercial suit proceedings.

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7.3 It is also contended by learned Senior Counsel that the impugned order was passed without any justifiable reasons and the same is unsustainable in law and also on facts as no material is placed on record to show that the defendants are in arrears of rent and are making hectic efforts to flee or evade the Court's process to make the payment of rent as claimed by the plaintiffs in the plaint and in the application.

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7.4 It is also contended by learned counsel for

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petitioners that the Commercial Court ought to have provided opportunity to show cause to the defendants before passing the coercive orders of attachment of the movable properties as the petitioners/defendants have paid substantial amount of rent and he contends that in fact the defendants have paid excess rent including the advance security deposit amount and they have to recover the excess amount paid to the plaintiffs.

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7.5 It is also contended by learned counsel for the petitioners/defendants that the orders passed on I.A. No.II with regard to payment of damages to an extent of ₹ 4,50,000/- is arbitrary, illegal and highly excessive for the reason that the Commercial Court has ordered the amount of ₹ 4,50,000/- to be paid from the month of July 2024, which is quite prior to the date of institution of the suit, as the institution of the suit is in the year 2025. The Commercial Court has probably taken this date on the

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basis of the averment in paragraph-7 of I.A. No.II, which

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is not correct and the same also requires to be set aside.

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7.6 On these grounds, learned counsel seeks to set aside the impugned order passed on IA Nos.I and II and provide an opportunity to the defendants to substantiate that they have already made good the amount as sought by the plaintiffs in the plaint and the application or furnish security for the required amount. Thereby, the question of ordering attachment of movables cannot be justified. Therefore, learned counsel seeks to allow the present petition and consequently set aside the impugned order passed by the Commercial Court.

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Per contra, Sri S.V. Giridhar, learned counsel for respondents/plaintiffs contends that there is no illegality and perversity in the impugned order passed by the Commercial Court. He sustains the impugned order passed by the Commercial Court on I.A. No.1 and 2. He contends that the plaintiffs have made specific plea in the

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plaint as well as in both the applications with regard to the urgency of consideration of these applications and the financial constraint that has occurred to the plaintiffs due to the fault and violation and breach of the terms and conditions of the rental agreement. He further contends that non-payment of the rent has caused immense financial hardship for the reason that the plaintiffs had taken financial loans from bankers and from the LIC Housing Finance, for which they had to pay EMI and since the defendants did not pay the amount in time, the plaintiffs were unable to make payment of the EMI to the financial organisations and consequently the plaintiffs suffered huge loss, immense trauma and financial distress. Despite the legal notice having been issued, the rent has not been paid and therefore, the plaintiffs were constrained to file these applications to protect their own rights and to make the payment back to the LIC Housing Finance and other financial organisations from where loans were secured by the plaintiffs. These averments have been

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clearly made by the plaintiffs in both the applications and

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so also in the plaint pleadings.

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8.1 It is also contended by the learned counsel - Sri Giridhar that the provision under Order XXXVIII Rule 5 of the Code of Civil Procedure contemplates that if there is any urgency made out by the plaintiffs, it attracts the provisions of Order XXXVIII Rule 5(1)(a) and (b), then he can maintain an application for attachment, conditional attachment of the whole or part of the property. Therefore, it is well within the provision of law to make such an application and he has made out a ground for passing of the conditional attachment as the defendants have not paid the whole or part of the amount as claimed. It is also contended by learned counsel for the respondents/plaintiffs that in case the defendants were to show that they have made good the payment or want to show cause with regard to furnishing of security as required by the plaintiffs in the suit proceedings, they are at liberty to make such an application before the

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Commercial Court, show cause and furnish the security for

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the amount sought in the plaint and seek for lifting of the conditional attachment ordered by the Commercial Court under the required provisions of law.

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8.2 Learned counsel for the respondents also makes a submission with regard to I.A No.II, where an order of damages to an extent of ₹ 4,50,000/- is made. The defendants have been dragging on and protracting the proceedings without making payment of the monthly rent. Therefore, the order passed on IA No.II also does not require interference as it is for the defendants to come before the Court or directly pay the amount to the account of the plaintiffs as they have not disputed the lease.

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Having heard learned senior counsel for the petitioners and learned counsel for the respondents, apparently it is seen that the suit is filed for ejectment by the plaintiffs against the defendants and so also for other consequential reliefs of recovery of the amount. By the

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impugned order on I.A. No.I filed under Order XXXVIII Rule 5 of CPC, the Commercial Court has passed an order of conditional attachment of movables in the schedule property as per the details furnished by the plaintiffs and directed to issue attachment of movables warrant by way of attachment before judgment as per the list furnished. Therefore, it is seen that the Commercial Court has proceeded based on the details that are already furnished by the plaintiffs, but it ought to have proceeded on the basis of the details to be furnished at the time of attachment, as prayed in the application. The attachment of movables warrant is issued as per the list furnished. But

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it is seen that there is no list furnished along with the application by the plaintiffs. There is serious dispute that is raised by the defendants with regard to the amount due to be paid. Though the defendants contend that they have

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paid excess amount, it is for them to place on record and establish before the Court as to what is the amount that they have actually paid and place such materials before

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the Court for the satisfaction of the Court to come to a conclusion as to whether the defendants have paid the amount due as sought in the suit or whether they have paid any excess amount.

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The memo of calculation furnished by the defendants today in the open Court, is not accepted as portion of same is disputed by the learned counsel for the plaintiffs. Therefore the same cannot be taken on the face value to come to a conclusion whether the defendants have paid excess amount or only the amount that was sought in the plaint. These facts will have to be adjudicated by placing relevant materials before the Commercial Court.

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As stated supra, with regard to the application - I.A No.I, where conditional attachment of movables is ordered, it is seen that no such movables are mentioned in the application. In view of the list having been not furnished and notice having been issued after the

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impugned orders are passed and this Court having granted

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an interim order of stay of further proceedings, nothing has proceeded further.

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For the reasons stated supra, this Court deems it appropriate to set aside the impugned order passed on I.A. No.I and direct the Commercial Court to hear the petitioners/defendants and direct them to show cause as provided under the provisions of Order XXXVIII Rule 5(4) and Order - XXXVIII Rule 6 of CPC and place materials before the Court to satisfy the Court why the attachment order should not be issued for non-furnishing of the security. The petitioners/defendants are at liberty to furnish security, if required to the amount sought by the plaintiffs in the suit proceedings. The Commercial Court shall provide an opportunity of hearing to the defendants and also the plaintiffs and pass orders afresh on the said application - I.A. No.1.

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With regard to the order passed on I.A. No.II, whereby the Commercial Court has ordered ₹ 4,50,000/per month as damages for the use and occupation of the schedule premises from July 2024, it appears that the Commercial Court has committed an error in stating that the damages are required to be paid from July 2024 without actually assessing as to what is the amount totally paid by the defendants. The Commercial Court ought to have issued notice on this application and heard both the parties and on the basis of the materials placed on record and after hearing the defendants, could have arrived at a rightful conclusion with regard to the correct and the legal amount due to be paid to the plaintiffs by the defendants, which has not been done by the Commercial Court and has passed an ad interim order without hearing the defendants, which is not the correct proposition of law.

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The order passed on I.A. No.II with regard to the requirement under Section 12-A of the Commercial Courts Act as opined by the Commercial Court is not correct and

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the same would not be applicable in the present facts and

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circumstances of the case. In the instant case, the preinstitution mediation mechanism was not exercised by the plaintiffs. In view of urgency having been shown, this portion of the order would not sustain and the same requires to be set aside. Accordingly, the same is set aside.

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Therefore, the order passed on I.A. No.II requires to be set aside and the Commercial Court is ordered to hear I.A No.II afresh and pass suitable orders thereafter.

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Accordingly, I pass the following:

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i) The petition is allowed .

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ii) The impugned order dated 24^th June 2025 on I.A. Nos.I and II in Commercial O.S. No.134/2025, is hereby set aside.

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iii) The matter is matter is remitted back to the Commercial Court.

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iv) The Commercial Court shall not proceed further in the matter with regard to the issuance of movable warrant.

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v) The Commercial Court shall provide an opportunity to the petitioners/defendants to show cause as provided under Order XXXVIII Rule 5(4) and Order XXXVIII Rule 6 of the Code of Civil Procedure.

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vi) The petitioners/defendants are at liberty to show cause and furnish security, if required to the amount sought by the plaintiffs in the suit proceedings and place all materials to satisfy the Court with regard to why the attachment warrant should not be issued for nonfurnishing of the security etc.,

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vii) The Commercial Court shall provide an opportunity to the defendants with regard to payment of monthly rent and pass suitable orders after providing opportunity to both parties.

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