IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 01st DAY OF AUGUST, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE DR. JUSTICE K.MANMADHA RAO REGULAR FIRST APPEAL NO. 605 OF 2025 (RES) BETWEEN: 1 . DR. R.C. PARINITHA AGED ABOUT 60 YEARS D/O SRI. CHIKKARANGAIAH RESIDING AT No.294, 39TH CROSS 10TH MAIN, 5TH BLOCK, JAYANAGAR BENGALURU-560 041 2 . DR. H.M. PRASANNA AGED ABOUT 55 YEARS S/O SRI. H.N. HUCHAIAH RESIDING AT No.877 PRISTINE HOSPITAL MODI HOSPITAL ROAD WEST OF CHORD ROAD 2ND STAGE EXTENSION BENGALURU-560 086 3 . DR. D. SHIVANAND AGED ABOUT 70 YEARS S/O LATE D. BARAMAPPA RESIDING AT No.121, 3RD STAGE NHCS LAYOUT, 4TH BLOCK BASAVESHWARANAGAR BENGALURU-560 079 4 . SRI. ANUP NAGANNA AGED ABOUT 48 YEARS - 2 S/O NAGANNA RESIDING AT No.121, 3RD STAGE NHCS LAYOUT, 4TH BLOCK BASAVESHWARANAGAR BENGALURU-560 079 ...APPELLANTS (BY SRI. KASHYAP N. NAIK, ADVOCATE) AND: 1 . MR. A.M. SUDHAKAR (HUF) S/O LATE A.L. MUNI REDDY AGED ABOUT 67 YEARS 15TH CROSS, 14TH B MAIN 4TH SECTOR, HSR LAYOUT BENGALURU-560 102 2 . M/S. MAGNUS HEALTH CARE AND RESEARCH CENTER PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 2013 HAVING REGISTERED OFFICE AT No.81, S.T. BED, 4TH BLOCK KORAMANGALA, BENGALURU-560 095 REPRESENTED HEREIN BY ITS AUTHORIZED REPRESENTATIVE …RESPONDENTS (BY SRI. YESHU BABA R. MISHRA, ADVOCATE FOR R1; NOTICE TO R2 IS DISPENSED WITH V.C.O. DATED 17.06.2025) THIS RFA IS FILED UNDER SEC.96 READ WITH ORDER XLI RULES 1 & 2 OF THE CPC, 1908, AGAINST THE JUDGMENT AND DECREE DATED 25.04.2024 PASSED IN O.S.No.3028/2021 ON THE FILE OF XLIV ADDITIONAL CITY CIVIL & SESSIONS JUDGE, AT BENGALURU (CCH-45), PARTLY DECREEING THE SUIT FOR ARREARS OF RENT AND FOR DAMAGES. - 3 THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 26.06.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE DR. JUSTICE K.MANMADHA RAO CAV JUDGMENT (PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) This is a Regular First Appeal filed by defendants No.2 to 5 in O.S.No.3028/2021 assailing the judgment and decree dated 25.04.2024 on the file of XLIV Additional City Civil and Sessions Judge, Bengaluru (CCH-45), decreeing the suit for ejectment, arrears of rent and damages, filed by the respondent No.1/Plaintiff. 2. For the purpose of convenience, the parties are referred to as per their rankings before the trial Court. 3. Facts of the case are as follows: The first defendant is a Company and defendants No.2 to 5 were its Directors. The plaintiff is the absolute owner of the suit property. The plaintiff and the first defendant entered into a Lease Deed for a period of 4 years and at - 4 agreed rent of Rs.5,05,000/- per month. Upon expiry of the aforesaid lease deed, the plaintiff and defendant company renewed the lease by executing a lease deed dated 19.04.2018, for another five years, with monthly rent increased to Rs.6,37,537/-. The Company maintained timely rental payments until January 2020. Thereafter, payment of rent became irregular. 4. The plaintiff issued an eviction notice dated 08.06.2020. The defendant contended that an addendum to the lease was executed on 24.07.2020, where the plaintiff agreed to withdraw the eviction notice and accept 75% of the rent from June 2020 to December 2020. It was further contended by the defendants in the suit that there was an oral agreement between the plaintiff and the defendants to receive 50% of the rentals from October 2020 and that the first defendant had continued to pay the 50% rentals. Thereafter, the plaintiff issued a notice dated 15.04.2021 terminating the lease deed dated 19.04.2018. A reply notice was issued by the first defendant on 22.05.2021. The plaintiff filed the suit against the Company and its Directors - 5 as defendants No.2 to 5 seeking ejectment and arrears of rent. The defendants entered appearance and filed a common written statement. 5. The trial Court based on the pleadings framed the following issues for consideration: "1. Whether the plaintiff proves that defendants are liable to pay Rs.34,40,384/- along with the interest @ 18% p.a., from the date of suit to till its realization? 2. Whether the plaintiff proves that, it is the defendant defaulted in making the payment of rent for the period between January 2021 to March 2021 which prompted him to terminate the tenancy of the defendant by issuing notice dated 15- 04-2021? 3. Whether the plaintiff proves that, he is entitle for the damages @ Rs.10,00,000/- per month for the use and occupation of the suit schedule property by the defendant? 4. Whether the plaintiff proves that, it is the defendant not deposited the TDS deducted from the rent paid for the period between April 2020 to March 2021? (Deleted as per the order dated 25/04/2024) - 6 5. Whether the plaintiff proves that, he has paid the GST amount of Rs.6,19,265/- for which he is entitle to recover the same from the defendant with interest @ 18% p.a.? 6. Whether the plaintiff proves that, he paid Rs.1,01,338/- as interest and penalty for the late payment of TDS by the defendants, thus the plaintiff is entitle to recover the said amount with interest @ 18% p.a.,? 7. Whether the plaintiff proves that he is entitle for damages of Rs.10 lakh per month for use and occupation of the suit schedule property from the date of suit to till its delivery of vacant possession? (Deleted as per the order dated 25/04/2024) 8. Whether the plaintiff proves that the defendants are liable to pay the TDS amount for the month of April 2020 to March 2021? 9. Whether the defendants prove that, the plaintiff has not terminated the tenancy by issuing the proper notice? 10. Whether the defendants proves that, it is the plaintiff received the rents even after termination of lease which is amounts to waiver of determination of tenancy under Section 114 of the TP Act? - 7 11. Whether the defendants prove that, they are not liable to pay the GST amount and late payment of penalty imposed thereon? 6. Mr. A.M. Suresh, Power of Attorney holder of the plaintiff was examined as PW.1 and got marked Exs.P1 to P23 on the plaintiff's side. The defendants examined one Mr. Srinivas Murthy N, Authorized Representative of the first defendant and got marked Exs.D1 to D10. The trial Court after considering the evidence and the pleadings on record, decreed the suit holding that all the defendants including defendants No.2 to 5 are jointly liable to make good the claims of plaintiff arising out of the Lease Deed between the plaintiff and first defendant company. In the meanwhile, the plaintiff has filed an Interim Application to direct the defendants to deposit the amount of Rs.34,29,649/- towards use and occupation of suit schedule property from May 2021 to January 2022 along with GST payable on the said amount, a sum of Rs.8,04,875/- towards rent payable for the months of February 2022 to December 2022. The said interim application was allowed by the trial Court vide order dated 02.12.2022. - 8 7. The plaintiff has filed an execution petition bearing Execution Petition No.1997/2023 for executing the order dated 02.12.2022 passed by the trial Court. The said execution is pending on the file of City Civil and Sessions Court. Subsequently, plaintiff has filed another execution petition bearing Execution Petition No.1794/2024 seeking to execute the impugned judgment and decree. Plaintiff has not only sought for attachment of assets of company but has also sought for attachment of personal assets of defendants No.2 to 5, who are directors of the Company. 8. The learned counsel appearing for the appellants contended that in the present case the trial Court has erroneously held that defendants No.2 to 5 (directors of defendant No.1 company) are jointly liable along with the defendant No.1 company for the claim of the plaintiff as claimed in the suit. It is well settled law that merely a person is a director of a Company does not make him/her automatically liable for defaults of the Company. It is not in dispute that the lease deed dated 22.04.2013 and the lease deed dated 19.04.2018 and the addendum to the lease deed - 9 dated 19.04.2018, were all executed between the plaintiff and defendant No.1 company. The suit filed by the plaintiff can only be maintainable against the defendant No.1- company, which is the tenant in possession of the property. Defendants No.2 to 5 were mere directors or representatives of the defendant No.1 company. The plaintiff ought not to have arrayed the directors or representative of the defendant No.1 Company and make claims against them that are arising from lease deeds. 9. In support of his contentions, the learned counsel has relied on the following decisions:- • Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji and Ors reported in (1987)2 S.C.R. 387; • N Balakrishnan v. M Krishnamurthy reported in (1998) Supp.1 SCR 403; • K Subbarayadu and Others v. Special Deputy Collector (Land Acquisition) reported in (2017) 6 S.C.R. 524; • Prahlad Shankarrao Tajale & Ors. v. State of Maharashtra through its Secretary (Revenue) and Anr. reported in (2018) 3 S.C.R. 627; and - 10 • Sheo Raj Singh (Deceased) through LRs., & Ors. v. Union of India & Anr. reported in (2023) 13 S.C.R. 743. 10. The learned counsel appearing for respondent No.1/plaintiff contended that the appeal is filed belatedly and no reason is made out to condone the delay. It is further contended that the appellants have filed another appeal in RFA 2112/2024 before this Court challenging the same Judgment and Decree through the first defendant and therefore, the contentions in the Interlocutory Application for condonation of delay are per se false and frivolous. 11. W.P.No.21068/2024 has also been filed by the first appellant and there are no bonafides in the contentions of the appellants. 12. It is further contended that the conduct of appellants is highly questionable and that they have drained the funds of the Company. The Company had admitted in its cross examination that respondents have repaid the loan to Sri G. Vasudeva, who is a shareholder of the Company. The first appellant - Smt. R.C. Pranita has filed writ petition in - 11 W.P.No.21068/2024 in which she has contended that her personal property is not liable to be attached as she is the director of the Company. She has paid over ₹1,30,00,000 towards arrears affront in the said proceedings which is pending adjudication. Therefore, it is clear that she has accepted the liability to pay rent as a tenant. Therefore, the appellants are estopped from contending otherwise. 13. It is further contended that the written statement filed by the appellants herein have not raised the defense that they are not liable for payment of rents to the plaintiff/respondent No.1 herein being Directors of the Company. Therefore, the same will amount to an admission as per Order VIII Rule 5(1) of CPC. The appellants have dodged payment of rents even after order of the Court and the judgment and decree. It is further contended that the first appellant undertook to pay the decreetal amount by filing an undertaking in the form of a memo dated 06.06.2025 stating that “With the consent of the decree holder I have taken the possession of the said property by undertaking to pay the decreetal amount to the Court within - 12 a week.” The first appellant failed to honour the aforesaid undertaking and has dodged payment by all possible ways. The appellants have committed the contempt of Court by selling the movables attached in execution petition. The appellants have used all technicalities of law to dodge the liability under the decree they are pleading ignorance of law on one side and on the other side they have employed all possible opportunities to dodge the decree going to an extent of removing and selling of attached movables without permission of the Court. 14. In support of his contentions, he has relied on the following decisions:- • Jyoti Limited v. Kanwaljit Kaur Bhasin and Ors. reported in 1987 Cri.L.J 1281; • Majji Sannemma @ Sanyasirao v. Reddy Sridevi & Ors. by Order dated 16.12.2021 passed in Civil Appeal No.7696 of 2021; • P.K. Ramachandran v. State of Kerala and Anr reported in AIR 1998 SC 2276; • State of Madhya Pradesh v. Ramkumar Choudhary reported in 2024 SCC OnLine SC 3612; and - 13 • The Swadeshi Cotton Mills Co. Ltd v. The Government of U.P and Ors. reported in (1975) 4 SCC 378. 15. We have considered the contentions advanced. The main contention of the appellants in this appeal is that the Lease Deed was entered into by the Company and that the appellants being the Directors of the Company cannot be held to be personally liable for the arrears of rent which is to be paid by the Company as a Lessee. We immediately notice that the suit had been filed seeking ejectment and arrears of rent with the Company and four of its Directors as defendants on the party array. Relief was sought against all the defendants. A common written statement had been filed by the defendants in the suit. There is no averment in the said written statement that defendants No.2 to 5 are not liable for payment of rents to the plaintiff since they are only Directors of the first defendant Company. There was a clear contention in the written statement as follows:- "The plaintiff has received orally agreed rents from defendant No.1 even after the said notice was issued and continues to receive the orally agreed rents from the defendants as on date." - 14 16. This is an implied admission of the claim raised in the plaint that the defendants are liable to pay the agreed rent to the plaintiff. It is further contended that the appellants were perfectly well aware of the decree against them as well, since the first defendant Company had already filed an appeal from the very same decree, but had not moved the same. W.P.No.21068/2024 had also been filed by the first defendant before this Court challenging the execution of the decree as against her. Therefore, we find that there is no valid explanation for the delay in approaching this Court. The appellants who had never raised the contention before the trial Court as to their liability to pay rent cannot be permitted to take up such a contention in this appeal to get over a decree which has already been put to execution. The contention raised by the learned counsel for the appellants with regard to wrong legal advice also cannot be accepted under any circumstances. 17. In the above factual situation and in the light of the admissions made by the appellants, we are of the - 15 opinion that the reasons stated in the application for condonation of delay cannot be accepted. 18. In the above view of the matter, the application for condonation of delay (I.A.No.1/2025) is dismissed. Consequently, the appeal also stands dismissed with costs. Pending interlocutory applications, if any, shall stand disposed of. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (DR. K.MANMADHA RAO) JUDGE cp*