IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26th DAY OF JUNE, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE DR. JUSTICE K.MANMADHA RAO COMMERCIAL APPEAL No.554 OF 2024 BETWEEN: M/S. B.S. ENTERPRISES A PARTNERSHIP FIRM, CARRYING ON BUSINESS UNDER THE NAME AND STYLE OF M/S. UDUPI GRAND & VANDANA GARDENIA, NO.784 & 785, LOCATED AT 16TH B CROSS ROAD, 14TH MAIN, BUS STAND ROAD, YELAHANKA NEW TOWN, BANGALORE-560 064. REP. BY ITS PARTNER SRI. K. BASAVA, S/O SRI KORAGA, AGED 62 YEARS. ...APPELLANT (BY SRI. S. BASAVARAJ S. SR.COUNSEL A/W SRI. GOUTHAM A.R. ADVOCATE) AND: S. PRAKASH S/O SRI S. SHANKARAIAH, AGED ABOUT 66 YEARS, RESIDING AT NO.3068, NAGARATHPET, DODDABALLAPUR, BANGALORE RURAL DISTRICT, BENGALURU-560 064. …RESPONDENT (BY SRI. PARAS JAIN FOR C/RESPONDENT) 2 THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13(1A) OF THE COMMERCIAL COURTS ACT, 2015, PRAYING TO SET ASIDE THE ORDER DATED 10.12.2024 PASSED IN COMMERCIAL ORIGINAL SUIT NO.926/2024 ON THE FILE OF THE COURT OF LXXXVI ADDL. CITY CIVIL AND SESSIONS JUDGE (COMMERCIAL COURT) BANGALORE BY ALLOWING THE SUIT WITH COSTS AND ETC. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 03.06.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, DR. K.MANMADHA RAO, J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE DR. JUSTICE K.MANMADHA RAO CAV JUDGMENT (PER: HON'BLE DR. JUSTICE K.MANMADHA RAO) The present Commercial Appeal No.554/2024 is filed by the Appellant/Defendant challenging the judgment and decree dated 10.12.2024 passed in Com.O.S.No.926/2024, by the LXXXVI Addl. City Civil and Sessions Judge, (Commercial Court) Bengaluru (hereinafter referred to as ‘the Commercial Court’). 3 2. The appellant herein is the defendant and the respondent herein is the plaintiff in Comm.O.S No.926/2014 before the Commercial Court. 3. The respondent/plaintiff filed the Commercial Original Suit seeking for eviction of the appellant/defendant- partnership firm and to direct the appellant/defendant to pay mesne profits for its illegal occupation of the suit property w.e.f. 01.01.2024 and differential in amount in mesne profit from January 2024 to May 2024 with interest at the rate of 18% per annum and such other consequential reliefs. 4. For convenience of reference, the parties are hereinafter referred to as arrayed before the Commercial Court in Comm.O.S.No.926/2014. 5. Brief facts of the case are that the plaintiff claiming to be the absolute owner of a commercial immovable property bearing Municipal Corporation Nos.784 and 785 (PID No.1073/784 and 785), situated at 16th B Cross Road, 14th Main, Bus Stand Road, Yelahanka New Town, Bangalore – 560064, along with the buildings constructed thereon. He executed a registered lease deed dated 08.01.2015 in favour 4 of the defendant-firm in which the plaintiff leased out the suit property for a period of 9 years and the same was expired on 30.12.2023. Since 01.01.2024 the defendant-firm is in illegal occupation of the suit property. On expiry of the said lease, the plaintiff had issued a notice on 30.11.2023 under Section 106 of Transfer of Property Act (for short “the T.P.Act”) calling upon the defendant to vacate and handover the said property. On receipt of such notice, the defendant has issued reply dated 07.12.2023 through its advocate admitting the jural relationship of landlord and tenant and did not choose to vacate the suit property. Hence, the plaintiff filed the Comm. Suit. 6. The defendant filed written statement before the Commercial Court while denying the allegations made in the plaint, admitted the issuance of quit notice under Section 106 of T.P. Act. It is stated that the defendant started a business of a restaurant under the name ‘M/s. Udipi Grand and Vandana Gardenia’, under a registered lease deed dated 08.01.2015 for a term of 9 years and when the defendant picked-up its business the plaintiff has filed the present suit. 5 The defendant has spent Rs.7,06,27,805/- on the construction and established a hotel on the schedule premises. The valuation of the building is Rs.3.00 Crores. The defendant has paid property tax from 2016-2025 to the tune of Rs.44,72,394/-, the defendant also deposited certain amount while getting the electricity and water connections to the BESCOM, BWSSB in Rs.16,45,000/- and Rs.2,72,030/- respectively. Therefore, the defendant has sought for a counter claim of Rs.3,63,89,424/-. 7. The plaintiff filed counter claim to the written statement filed by the defendant stating that, as per the clauses of the agreement the defendant was authorised to make constructions in the suit property in accordance with its volition to carry out business and after the expiry of the lease time the defendant was required to handover the vacant possession of the suit property to the plaintiff. Since the plaintiff has not agreed in the agreement to pay anything to the defendant at the time of vacating the premises, the plaintiff need not pay the counter claim amount or any part thereof. Therefore prayed to reject the counter claim. 6 8. Based on the above pleadings, the Commercial Court has framed the following issues : 1. Whether the plaintiff is entitled for peaceful possession of the suit property? 2. Whether the plaintiff is entitled for mesne profits and interest thereon? 3. Whether the defendant is entitled for its counter? 4. What order or decree? 9. Having heard both the sides and without recording any evidence, the Commercial Court has decreed the suit vide judgment dated 10.12.2024. The operative portion of the said judgment is as follows: “The suit of the plaintiff is decreed with costs. The defendant-partnership firm is directed to quit, vacate and deliver the peaceful possession of the suit property to the plaintiff forthwith. The plaintiff is entitled for mesne profits at the prevailing market rate of the rent w.e.f. 01.01.2024 until actual handing over of the possession. The plaintiff is at liberty to initiate final decree proceedings to compute the mesne profits and interest thereon. The counter claim of the defendant against the plaintiff is hereby partly allowed. The defendant, is entitled to collect the deposits made 7 with the BESCOM and BWSSB. The plaintiff shall co-operate with the defendant to collect the deposits made with the BESCOM and BWSSB. The rest of the claims of the defendant is hereby dismissed.” 10. Assailing the above decree and judgment dated 10.12.2024 passed in Comm.O.S No.926/2024 on the file of the Commercial Court, the present Commercial Appeal came to be filed. 11. Heard learned counsel appearing for the appellant and learned counsel appearing for the respondent. 12. On hearing, learned counsel appearing for the appellant while reiterating the averments made in the petition, has argued that, trial court failed to provide opportunity to the appellant to prove its case against the eviction and also in support of the counter claim. He submits that there is gross violation of the principles of natural justice inasmuch as the appellants were not even permitted to lead evidence in support of their case and further contended that the decree was erroneously granted under Order XII Rule 6 of the CPC despite there being no clear, unconditional, 8 unambiguous or unequivocal admission by the appellant, contrary to the decision of the Apex Court in the case of Rajesh Mitra v. Karnanai Properties Ltd., reported in 2024 SCC OnLine SC 2607, which emphasized strict criteria for invoking this rule which confers discretionary power on the courts which cannot be claimed by a party as a matter of right. He further submits that the facts of the case and the pleadings require full fledged trial by leading both oral and documentary evidence by both the parties, but there cannot be a shortcut in a matter like this magnitude and the judgment of the trial court is liable to be set aside. 13. Per contra, learned counsel for the respondent while denying the allegations made by the learned counsel for the appellant has argued that the trial Court has rightly concluded and decreed the suit and opposed for allowing the appeal and prayed to dismiss the same. 14. Perused the material on record. 15. On a perusal of the material on record, it is observed that, it is an admitted fact that the respondent/plaintiff is the absolute owner of the suit schedule 9 property. It is also an admitted fact that the respondent/plaintiff executed a registered lease deed dated 08.01.2015 in favour of the appellant/defendant for a period of 9 years and the same was expired on 30.12.2023. The registered lease deed indicates that the partnership firm represented by its four partners have entered into the lease deed with the respondent through which the respondent leased out the suit property to the appellant on monthly rental basis, which commences from 01.01.2015. There was no rent for the month of January 2015. For the month of February 2015, the rent was Rs.90,000/- and from March 2015 onwards the rent was Rs.1,50,000/- per month until 31.12.2015. From 01.01.2016, the monthly rent was Rs.1,65,000/-. The rent was kept on increasing at the rate of 10% every year. It is also observed that, the respondent has issued legal notice to the appellant to vacate the premises immediately after expiry of lease. Similar notices have also been issued on 29.12.2023 and 01.01.2024. Thus the respondent has complied with Section 106 of T.P.Act. Despite receipt of said notice, the appellant, instead of vacating the 10 premises, has issued reply contending that the appellant spent Rs.7.00 Crores for the purpose of construction of building. 16. The clauses of agreement clearly indicates that immediately after 9 years, the appellant was required to vacate the suit premises. Clause 3.6 of the lease deed reads as follows: "3.6 No further extension of lease period is permitted and the Lessee has to vacate the premises on completion of 9 years Lease period and should deliver peaceful vacant possession of the schedule property to the lessor". 17. On a reading of the above clause, it clearly indicates that, in view of the clause in the agreement, it is the duty of the appellant to vacate the suit property. The lease period was expired on 31.12.2023 and therefore the possession of the appellant from 01.01.2024 is held illegal. 11 18. In so far as payment of rents paid until May 2024 is concerned, after expiry of lease period, even after the rent is paid same cannot be termed as a ‘rent’. The appellant is liable to pay the mesne profits for its continuous occupation of the suit property even after the expiry of the lease. 19. Having regard to the facts and circumstances and in view of the submissions of both the learned counsels, this Court is of the opinion that, the Commercial Court has rightly concluded and decreed the suit and further there is no illegality or perversity in the order passed by the Commercial court. 20. Therefore, finding no merit in the instant appeal and devoid of merits and the same is liable to be dismissed. 22. Accordingly, the Commercial Appeal is dismissed. However, the appellant is directed to vacate the premises within a period of one month from the date of 12 receipt of copy of this order on payment of the monthly rent as stipulated. No order as to costs. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (DR. K.MANMADHA RAO) JUDGE BNV Ct-ADP