2012 (11) TMI 1318 - HC - Indian Laws

Court upholds suit within limitation period, affirms jurisdiction based on lease agreement, grants rental & interest.

Mahavir Spinning Mills Ltd. Versus HB Leasing and Finances Co. Ltd.

The court held that the suit was not barred by limitation as it was filed within the prescribed period. It also determined that the court had territorial ... - Issues Involved:1. Whether the suit is barred by limitationRs.2. Whether this Court has territorial jurisdiction to try and decide the suitRs.3. Whether the plaint discloses any cause of actionRs.4. Whether the plaintiff entered into a lease agreement dated 30.5.1984 with Mohta Industries Ltd., in pursuance of a request raised by the plaintiff under letter dated 23.5.1984 for leasing out one Hydraulic Bricketting PressRs.5. Whether the Hydraulic Bricketting Press was delivered and supplied to the defendant Company by the plaintiffRs.6. Whether the plaintiff is entitled to a decree for Rs. 23,04,199/- from the defendant and also for recovery of possession of Hydraulic Bricketting Press, as claimed in the suitRs.7. Whether the plaintiff is entitled to interest and if so, at what rateRs.8. Relief.Summary of Judgment:1. Whether the suit is barred by limitationRs.The court held that the suit is not barred by limitation. The lease agreement dated May 31, 1984 was not determined but came to an end due to efflux of time. The suit was filed within 3 years of the expiry of the lease agreement, thus within the period of limitation. The court rejected the application of Section 22 of the Limitation Act, 1963, stating that the non-payment of lease rental is not a continuing wrong but a successive breach of contract. The suit pertaining to non-payment of lease rental for the period from October 1986 to April 1989 is barred by limitation, while the suit for the period from May 1989 to May 1992 is within limitation.2. Whether this Court has territorial jurisdiction to try and decide the suitRs.The court held that it has territorial jurisdiction to try the suit. Article 10.8 of the lease agreement dated May 31, 1984 stipulates that the civil courts at Delhi shall have exclusive jurisdiction. Additionally, the appellant company tendered cheques towards lease rental payment at Delhi, which were deposited by the respondent company in Delhi.3. Whether the plaint discloses any cause of actionRs.The court found that the plaint discloses a cause of action. The respondent company's documents and evidence established that the equipment was leased to Mohta Industries Ltd. and that the appellant company was liable to pay the lease rental.4. Whether the plaintiff entered into a lease agreement dated 30.5.1984 with Mohta Industries Ltd., in pursuance of a request raised by the plaintiff under letter dated 23.5.1984 for leasing out one Hydraulic Bricketting PressRs.The court concluded that the lease agreement dated May 31, 1984 was indeed entered into between the respondent company and Mohta Industries Ltd. The documents and testimonies provided by the respondent company supported this fact.5. Whether the Hydraulic Bricketting Press was delivered and supplied to the defendant Company by the plaintiffRs.The court held that the Hydraulic Bricketting Press was delivered and installed at the premises of Mohta Industries Ltd. The respondent company's documents, including the certificate of installation, supported this claim. The appellant company failed to produce the register of plant and machinery to disprove the delivery.6. Whether the plaintiff is entitled to a decree for Rs. 23,04,199/- from the defendant and also for recovery of possession of Hydraulic Bricketting Press, as claimed in the suitRs.The court modified the decree, entitling the respondent company to lease rental for the month of May 1989 and for the period from June 1989 to May 1992, along with pre-suit simple interest at 18% per annum, pendente lite interest at 12% per annum, and future interest at 9% per annum. The total amount was to be computed accordingly.7. Whether the plaintiff is entitled to interest and if so, at what rateRs.The court awarded pre-suit simple interest at 18% per annum, pendente lite interest at 12% per annum, and future interest at 9% per annum, modifying the original decree which had awarded compound interest.8. Relief.The court modified the judgment and decree dated August 27, 2008, requiring the decree writer to compute the amounts due based on the modified terms. The respondent was entitled to proportionate costs in the suit, and the parties were to bear their own costs for the appeal. The amount deposited by the appellant pursuant to orders in the appeal was to be returned with interest, and the guarantee bond invoked for any amount to be refunded by the respondent to the appellant.