The High Court · 2025

Counsel for the Respondent: Sri Dappu Venkataiah The Court delivered the following: / \ \B tt-, THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA CITY COURT APPEAL No.29 oF'2()11 JUDGMENT: (Per Hon'ble SmL Justice Tintmala Deui Dada) This is an appeal filed by the appellants being aggrieved by the judgment and decree, dated 08.09.2010, passed in O.S.No.998 of 2OO9 by the learned X Additional Senior Civil Judge, Fast Track court, city civil court, Hyderabad (for short "the trial Court'').

2. The appellants herein are the defendants and the respondent herein is the plaintiff bqfore the trial Court and the parties herein are referred to as they were arrayed in the suit :, before the trial Court for the sake of convenience and clarity.

3. The case of the plaintiff before the trial court is that it is a reputed Company dealing with the Government and that as per the letter of intent dated 26.08.2008, it has agreed to take a premises at Begumpet with a carpet area of 8,1OO sft in the ground and first floor of ARK Heights constructed over the premises bearing No.L-10-74, S.P. Road, Begumpet, Hyderabad and that the term of lease would be L2 years and the lease rent shall be Rs.8,25,O00/- per month excluding the service charges z AKS,J & ETD,J CCCA No.29 2011 and that the rent was prone for escalation @ rs%o after every three years. It is their case that the letter of intent also had a clause that plaintiff shatl pay a refundable non-interest bearing security deposit of Rs.4g,50,000/- which is equivalent to 6 months initial rent and that the defendants should handover the possession for fit out on or before September, 2o0g. In pursuance of the letter of intent the plaintiff has paid a sum of Rs.10 lakhs as security deposit as under: a) b) c) d) e) Defendant No.l was paid Rs. 1,2S,OOO/_, by wa.,v of cheque drawn on HDFC Bank, t""rirrg .'fr.qr" No.002428, dated 22.o9.2008. Defendant No.2 was naid ps I / or cheque dr";":?r",fS'f" T#;ffi; :ffi: No.O02429, dated 22.Og.2OOg. Defendant No.3 was paid Rs.1,25,0OO/_, by way of cheque drawn on HDFC Bank, 6."ri.rg .'h"q;; No.0O2430, dated 22.Og.2AOg. Defendant No.4 was paid Rs.1,2S,0OO/_, by way of cheque drawn on HDFC Bank, t"r..i.rg ""t.qrrl No.0O243 1, dated 22.Og.2OOg. Defendant No.S was paid Rs.S,O0,OOO/_, by way of cheque drawn on HDFC Bank, 6.^.i.rg .i-r.q;; No.002432, dared 22.o9.2008. 4' That the said cheques were encashed by the defendants. Ir is their further case that they have taken a regal opinion from its counsel on 08.10.2009 and it is crear from the legar opinion that the defendant No.S has made an application and obtained sanction fcrr construction of building v.ide permit No.125/20 and file No.O417/CSc/Tp3/2005, dated Lo.o2.2006 and has ars<r 3 AKS,J & ETD,J CCCA No.29-2011 submitted an application on 30'O4'2OOS bearing No.BPS/4S50/SC/N2/GHMC12OO8, dated 30.04.2008 seeking regnlarization of the unauthorized, construction made in deviation of the sancti<in plan. On seeing the legal opinion the plaintiff sought for clarification and the defendants tried to convince the plaintiff that they would obtain regularization for the deviation' The plaintiff has waited for a considerable period of time till February, 2OOg and ultimately addressed a termination letter dared 09.03.20O9 and that the defendant No.3 met the plaintiff on several occasions and tried to convince the plaintiff that the deviations are very minor and the application for regularization of the deviations will be disposed. off by December, 2oo8. Further, thc defendants failed to deliver possession of the premises for fit out as mandated under Clause-2o of the letter of intent on or before 15.O9.2OO8 and they have further failed to obtain the occupancy certificate. Thus, the plaintiff got terminated the letter of intent. This letter of termination dated 09.03.2009 was sent to all the defendants by registered post but they have been returned by postal authorities but the plaintiff is in possession of the postal receipts and it has once again forwarded the letter of termination on 15.04 .2009 and has also sent a letter to the defendants I and 2 on 18.03.2009 requesting them to confirm the outstanding balance as on 28.02.2009 and further have also sent similar letter 4 AKS,J & ETD,J CCCA No.29_2011 to defendants 3 and 4 on 26.03.2oog. In repry to the said letters, the defcndants have responded vide their retters dated o2.o4.2oog . stating t.hat the plaintiff is in turn due to a sum of Rs.2,3 s,g31 l_ towards monthly rentals as on 3r.03.2009. It is the case of the plaintiff that without handing over the possession, the defendants cannot claim any rentals from them as per the letter of intent. Thus, he is entitled to recover Rs.10 Lakhs paid by them towards refundable non-interest securit5r deposit paid by them. Therefore, inspite of its repeated requests when the defendants have not paid back the said deposit of Rs. io Lakhs they instit.uted the present 5' The defendants have fired written stateme.t admitting that Rs' 10 Lakhs amount was paid by the plaintiff as security deposit but contended that as per the clause-16 of the retter of intent, there is a lock-in period i.e. first rg.months for the lessee and thus, they are not liable to pay any amount to the plaintiff. It is further contended by the defendants that the alregations of non_ obtaining the municipal permission and the regularization with regard to the deviations are invented for the purpose of the suit by the plaintiii and they have handed over the premises to the plaintiff and they further contended that if at all th.e premir." *r" not handed over by r5.o9.2oog, how courd the defendants wait for .4 5 AKS,J & ETD,J CCCA No.29_2011 six months to terminate the letter of intent. tn turn, the defendants are claiming a due amount of Rs.2,35,937 l- towards monthly rentals as on 31.03.2009. They further denied to have received any intimation of letter of intent from the plaintiff. It is further contended by the defendants that they have handedover the possession of the said premises by 15.12-2008 but the plaintiff failed to open the outlet because of its designs for the interiors and other business requirements were not completed and further they were ready to hand olr", th" possession for fit out on 15.09.2008 itselt as per Clause 20 of the letter of intent dated 26.08.2008. But the plaintiff failed to open its show room as it has sustained loss during the said period and it is their contention that they have issued letter dated 25.05'2O09 addressing the issue of payment of rental due from the plaintiff and it has further contended that it has incurred huge cost and losses due to the inaction of the plaintiff in taking over the premises and they have lost several opportunities to lease out the premises to any other potential lessees. Thus, they denied the liability to pay any amount to the plaintiff' 6 Based on the above pleadings, the trial court has framed the following issues \ 6 AKs,J & ETD,J CCCA No.29 2011 & 1 2 Whether the plaintiff is entitled for suit claim amount? To what relief?" 7' At the time of triar, the plaintiff got examined pwl and got marked Exs.Al to A33. on behalf of the defe,dants, DWl was examined and Exs.Bl to Bl2 were marked. 8' Based on the evidence on record, the trial court has decreed the suit for a sum of Rs.10 Lakhs with interest @ 60/o per annum from the date of fiiing of the suit tilr its realization. Aggrieved by the said judgment and decree, the present appear is filed by the defendants. 9' Heard the submissions of c.S.N.Raju, learned counsel for the appellants and Sri D.Venkataiah, learned counsel for the respondent.

10. The learned counsel for the appelrants has argued that the trial court has failed to aopreciate the evidence read by the defendants and has blindry berieved the evidence let in by the plaintiff and has decreed the suit, which is not proper. He further argued that the letter of intent itself discloses that they have to pay rents on monthly basis by re*r of every month and that when -[thfv have agreed for the letter of intent, they are due to pay the rents, which is ignored by the triar court and thar- if t].e securit5r -4- 7 AKS,J & ETD,J CCCA No.29 2011 deposit is adjusted towards the rents to be payable by the plaintifl in fact the plaintiff would be liable to pay Rs.2,35,9 37 l- to the defendant and that the defendant is not liable to pay any amounts, but the trial Court has held erroneously that the defendants are liable to refund the amount. He therefore, prayed to set aside the judgment and decree by allowing this appeal. 1 1. The respondent counsel, on the other hand, has submitted that the trial Court has appreciated the evidence in a proper perspective and has decreed the suit in their favour. He further argued that Ex.A 1 itself clearly discloses that it is a refundable security deposit and the defendants having admitted the receipt of the said money through cheques, it cannot deny its liability to refund the same" He therefore, prayed to uphold the judgment and decree passed by the trial Court. |L Based on the above rival submissions, this Court frames the following points for consideration: 1) Whether the plaintiff is entitled to recover Rs.lO Lakhs from the defendants? 2l Whether the judgment and decree of the trial court is sustainable in law and under the facts? 3) To what relieP f 8 AKS,J & EI-D,J CCCA No.29_2011

13. POINT NO.1: a) A perusal of Ex.Al, the letter of intent discloses that at clause No.18 the security deposit is mentioned. and it reads as follows: "The Intending Lessee will pay a refundablc non-interest bearing sgcurity deposit oi. Rs.49,5O ,OAO / _ (Rupees Forty Nine_ L.akhs Fifty Thousand only) equivalent to 6 months of Initial Rent.; b) Further, there is clause No.17 which discloses the Rent Free Period, the intending lessors will provide 9o days of rent_free period to setup the store/showroom from the date of handing over possession for fit out. c) Basing on this clause, the contention of the defendants is that rent free period is only for 90 days and that the ptaintiff cannot claim more than that and that the plaintifT is liable to pay the rent after expiry of 9o days on a monthry basis. However, it is pertinent to note in this regard that in clause- rr, it is clearly mentioned that the 90 days would expire flrom the date of handing over the possession. Admittedly, the possession was not handed over to the plaintiff and the payment schedule is zrlso given under clause-l9 and sticking to the said schedure, the said payment #aq siven by the plaintiff i.e. Rs.10,oo,0o0/- arong with the retter of if,tent. Thus, the plaintiff has sent the said amount along with I AKS,J & ETD,J CCCA No.29_2011 the letter of intent, which is not in dispute and the date of possession that has to be given for fit-out was supposed to be 15.09.2008 but the defendant failed to hand over the same by 15.09.2008. It is mentioned under clause 2L of the Ex.A1 that the defendant i.e. the lessor has to pursue all the negotiations and also it has to meet the requirements of municipar corporation or any other authority and that the lessee shall not be responsible under any circumstances and at the end of the clauses it is mentioned that "ir is agreed. to that the confirmation of tetter of intent is subject to uerification of legal rights and. titles of the leased. premises by the intend"ing Jessee and. the aboue ammercial terms and conditions utilt be incorporated into the lease d.eed.". It also mentioned the details of the amounts paid. toward.s the seanritg deposit and it is further mentioned. that in tlrc unlilcely euent of the issues concerning in the terrns and. cond.itions of this LoI remaining unsolued amicable, tlrc intending /essors agrees to refund the seanritg deposit paid by the intend"ing lessee within fiue working dags. Thus, it is clear from Ex.Al that Rs.1o lakhs has to be paid by the plaintiff towards security deposit along with the letter of intent and the possession had to be handedover after obtaining all the municipal permissions and all, if there is any deviation, the said amount is refundable to the plaintiff. *r // 10 AKS,J & ETD,J CCCA No.29_2011 d) During the course of trial, DWl has admitted that they could not hand over the possession to the plaintifl'and that there were deviations. DWl has admitted that they have not obtained any occupancy certificate showing that the building has been constructed in accordance with the sanction plan dated L0.02.20A6. He further admitted that unless he obtains the occupancy certificate from the concerned authorities, he cannot allow anybody to occupy the premises or e\.,en he ca-nnot occupy. Thus, in the absence of obtaining occupancy certj.ficate, he could not d.eliver possession. Therefore, no possession 'vas deliverecl in favoiir of the plaintiff. In vrhich case, he is liable to refi-rnd the amount as per the letter of intent. It is also prcved through the letter, dated 09.03.2009 that the plaintiff has intimateci the termination of letter of intent and it was addresscd to all the five defendants uide Exs.A2 to A6 and Exs.AT to Al L are the postal receipts of the said letter of termination. Further, Ex.A12 to A15 are the ofiice copy of ietters oi coniirmation of balance amount sent by the plaintiff to the defendants on 18.03.2CtO9 to defendant Nos.l and 2 and on 26.03.2009 to defendanr- Nos.3 and 4- Exs.A16 to A19 are the replies sent by defendant Nos.l to 4 to the plaintiff on O2.O4.2OO9 stating that the plaintiff is liable Lo pay seme dues to them and that they can adjust the security deposit 1 11 AKS,J & ETD,J CCCA No.29 2011 towards the same and that the plaintiff is further liable to pay Rs.2,35,937 l-. e) It is elicited from Dwl that they have leased out the subject premises to woodland exclusive showroom under a fresh letter of intent dated 23.o2.2o1o under Ex.B12. Therefore, it can be safely inferred that after obtaining the permission, the defendant must have delivered the premises on lease to woodland showroom subsequently. F'urther, the defendants raised a question with regard to the authorization of the plaintiff company to file a suit. Ex.A30 proves the authorization given in f,avour of pwl. It is clearly made out from Ex.Al at clause No.lg that it is refundable security deposit and when the defendants have admitted that they have received the same, they are bound to return it, when the letter of intent did not get materialized and the premises was not handed over to the plaintiff. 0 A perusal of Ex.B6 dared 30.o4.2oog discloses that the application for regularization is stifl penciing before the municipal corporation authorities. Thus, the question of handing over the premises to the plaintiff does not arise at all. g) Admittedly, DWI could not obtain the occupancy certificate t the occupancy certificate he could not deliver the and \nno,, L2 AKS,I & ETD,J CCCA No.29_2011 possession to the plaintiff. As per the clauses mentioned'in the letter of intent, the plaintiff has terminated the letter of intent vide its letter dated 09.03.2009 under Exs.A2 to A5. As per the Clauses mentioned in Ex.Al, when the lessor fails to obtain the proper sanction from the municipal authorities and failed to hand over the premises to the plaintiff, the defendants are bound to pay back the security deposit. Hence, it is held thar the plaintiff is entitled to recover Rs.1O Lakhs frcrn the defendants. Point No.1 is answered accordingly. 7A - Lq- EDf'lfN,n rffr I vlall llv.3. t. ln vrew of the reasoned findings arrived at point No. l, it is held that the judgment and decree passed by the trial Court is based on sound reasoning and do not need any interference and the same are held to be sustainable in law and under the facts and circumstances of the case.

15. POINT NO.3: In the result, the appeal is dismissed upholding rhe judgment and decree, dated 08.09.2010, passed in O.S.No.998 of zACg by the learned X Additional Senior Civil Judge, Fast Track Court, Cir.v Civil Court, Hyderabad. No costs. t ! 13 AKS,J & ETD,J CCCA No.29 2011 Miscellaneous Applications, if any, pending in this appeal shall stand closed. Sd,- N. SRIHARI DEPUTY REGISTRAR //TRUE COPY/ OFFICER To, 1 The X Addl. senior civil Judge, FTC), City civil court at Hyderabad'(with Records)

2. One CC to Sri C S N Raju, Advocate IOPUCI 3. One CC to Sri Dappu Venkataiah, Advocate [OPUC] 4. Two CD CoPies DL/PSL Y? HIGH COURT DATED:0ll08l2OZS JUDGMENT CCCA.No.29 ot 2011 $TAT'II Oo tr,t,'n6 t1 * It t,1 (i .1., { DISMISSING THE APPEAL G ,ffo ^X" IN THE HIGH COURT FOR THE STATE OF TELANGANA, AT HYDERABAD FRIDAY, THE FIRST DAY OF AUGUST TWO THOUSAND AND TWENW FIVE PRESENT THE HONOURABLE SRIJUSTICE ABHINAND KUMAR SHAVILI AND THE HONOURABLE SMT JUSTICE TIRUMALA DEVI EADA CITY CIVIL COURT APPEAL NO: 29 oF 2011 Between:

1. Viswanathan Srikakulam, S/o. Late S.V.Subbaiah Chetty, R/o. 4O1/Adithya Coral Treasure Apartments, 1-11-21211, Gurumurthy Lane, Begumpet, Hyderabad{16.

2. Smt. S.Hemalatha, Wo. S.Viswanathan, R/o. 4O1/Adithya Coral Treasure Apartments, 1-11-21211, Gurumurthy Lane, Begumpet, Hyderabad-01 6.

3. S.Sridhar, S/o. S.Mswanathan, R/o. 401/Adithya Coral Treasure Apartments, 1-11-21211, Gurumurthy Lane, Begumpet, Hyderabad-O16.

4. S.Srikanth, S/o. S.Viswanathan, R/o. 401/Adithya Coral Treasure Apartments, 1 -1 1 -2121 1, Gurumurthy Lane, Begumpet, Hyderabad-01 6.

5. Ketan R.Shah, S/o. Ramesh D. Shah, R/o. 1-10-98/tu402, Begumpet, Hyderabad-O16. ...Appellants/Defendants AND Peter England Fashion AND Retail Ltd.,, No. 5-8, Regent Gateway, ITPL Road, KIADB lndustrial Area, Bangalore-560048, Rep. by its Authorised Singnatory, Madhuresh Singh, R/o. Bangalore. ... RESPONDENT/PLAINTIFF Appeal under Seclion 96 of C.P.C against the Judgment and Decree Dated 08-09-2010 made in OS NO. 998 of 2009 on the file of the Court of the X Addl. Senior Civil Judge, FTC), City Civil Court at Hyderabad. This appeal coming on for hearing and upon perusing the grounds of appeal, the judgment and Decree of the Lower Court and the material papers in the case and upon hearing the arguments of Sri C S N Raju, Advocate for the Appellant and Sri Dappu Venkataiah, Advocate for the Sole Respondent. This Court doth Order and Decree as follows:

1. That the appeal be and hereby is dismissed upholding the judgment and decree, dated 08.09.2010, passed in O.S. No. 998 of 2009 by the learned X Additional Senior Civil Judge, Fast Track Court, City Civil Court, Hyderabad.

2. That there shall be no order as to costs in this appeal. sd/- N. sRtHARl DEPUW REGISTRAR /,TRUE COPY/' \ CTION OFFICER To,

1. The X Addl. Senior Civit Judge, FTC), City Civil Court at Hyderabad 2. Two CD Copies DUPSL w \ \ HIGH COURT DATED:O1 108t2025 DECREE CCCA.No.29 ol 20'11 DISMISSING THE APPEAL 14 c"fl'[ ,e.