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Non-Maintainability of the suit shall result into an otiose effect upon the judgment: Delhi High Court

The above has been observed in the recent case of Alok Kumar Lodha v. Asian Hotels (North) Ltd. [IA Nos.5173/2021 & 5174/2021], listed in the Delhi High Court. The final proceedings of the above case were held on September 15th 2021, and the said proceedings were presided by a single judge bench of Justice Jayant Nath.

The facts, as presented before the court of law, are as follows. As part of the Asian Games, the Hyatt Hotel was launched subsequent to allotment of land under a lease deed. The plaintiff, through the original allottee, paid a total sum of Rs.8.47 lakhs to the defendant in 1991 which was received as security deposit.

In furtherance to the above, the petitioner was served with a revocation of license notice during the pandemic, along with other shops. It was contended, by the petitioners, that the said notices are illegal and do not related to any of the illegal breaches mentioned in the agreement. Along with the above, the defendant had also blocked the movement and access of the plaintiff towards the shop.

The petitioners, by placing reliance on two of the judgments, of Supreme Court of India, namely, Kasturi v. Iyyamperumal & Ors., [2005 (6) SCC 733]; and Ma Shwe Mya v. Maung Po Hnaung, [AIR 1922 PC 249], contended that that under the license agreement the defendant could only have mortgaged the property for construction purposes at best and not for any other purpose. The construction however of the building was completed in 1980’s and no such mortgage could be carried out thereafter.

In response to the above, the defendants stated that the plaintiff had no rights against the banks and financial institutions. It was further asserted that before, declaring any judgment, the rights and claims of plaintiff in the impugned property are to be verified. The defendants also followed their contention through the precedent of Deccan Paper Mills Company Ltd. v. Regency Mahavir Properties & Ors., [2021 (4) SCC 786], and stated that the suit is non-maintainable since there is an arbitration clause in the agreement.

Court, after hearing both the sides, analyzing facts, and considering a perusal of all evidences, held:

Reliance was placed on Rajesh Kumar Aggarwal and Ors. vs. K.K. Modi and Ors., [AIR 2006 SC 1647], and was held that “at this stage, it is not for this court to go into the correctness and falsity of the case as is sought to be made out in the amendments.

Court also referred in the matter of Revajeetu Builders and Developers vs. Narayanaswamy and Sons & Ors [(2009) 10 SCC 84], the court declared that the impugned amendments are bona fide and such amendments are necessary for adjudication of the dispute. “Merely getting relief from the court as presently sought may not constitute sufficient relief for the plaintiff.”

The court also opined that “If the plaintiff were to succeed this court would pass appropriate declaration declaring that the plaintiffs have rights in the property or have an irrevocable license in their favour. However, if any such relief is granted by this court, it would be otiose in view of the fact that the property already stands mortgaged to the proposed defendants.”

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Judgment Review by Lakshya Sharma

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