TMI Blog2010 (11) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT 1. Manju Bagai, the petitioner seeks winding up of M/s. Magpie Retail Limited, the respondent company under section 433(e) of the Companies Act, 1956 ( the Act ). 2. It is stated that the petitioner is the owner landlady and had rented out commercial space No. UGF-1, Wedding Souk (now known as Gold Souk), Local Shopping Centre, Sharda Niketan, Pitampura, Delhi,(hereinafter referred to as the premises, for short) to the respondent company on a monthly rent of Rs. 1,29,580 excluding water, electricity charges. The respondent company started paying rent with effect from 1-11-2006 and while the same was continuously paid till the end of February, 2007, the respondent company did not pay the agreed rent for the months of March, April and May, 2007 and handed over the possession of the premises on 31-5-2007. Thus the respondent company is liable to pay rent from March, 2007 to May, 2007 of Rs. 3,88,740. 3. The petitioner relies upon clause 5 of the "Agreement to Lease" dated 5-9-2006 and submits that the respondent company is liable to pay liquidated damages in form of rent for a period of 29 months i.e., unexpired portion of the lease of three years starting with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore definite, agreement frequently means one of many stipulations in a contract. A contract for a lease is to be distinguished from a lease, because a lease is actually a conveyance of an estate in land, whereas a contract for a lease is merely an agreement that such a conveyance shall be entered into at a future date. [Emphasis supplied]" In contradistinction to this, in the case of a lease, there must be words of demise. On this Woodfall states at page 184 as under : "The usual words by which a lease is made are demise and let ; but any words which amount to a grant are sufficient to make a lease. Whatever words are sufficient to explain the intent of the parties, that the one shall divest himself of the possession and the other come into it, for any determinate time, whether they run in the form of a licence, covenant or agreement, are sufficient, and will in construction of law amount to a lease for years as effectually as if the most proper and pertinent words had been used for that purpose; for if the words used are sufficient to prove a lease of land, in whatsoever form they are introduced, the law calls in the intent of the parties, and moulds and governs the words a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e documents. On reading of the main or recital clauses it is apparent that the said document is a lease deed in itself in praesenti which was executed on 5-9-2006 but the lease was to begin with effect from 1-11-2006. Clause 13 no doubt refers to execution of another document but this clause is not to be read in isolation. Other clauses indicate that the document dated 5-9-2006 is a lease deed. No other document was executed between the parties. It is well settled that the document has to be read as a whole in entirety to find out the character/ nature of the said document. The main clauses of the lease refer to the rent, the date of payment of rent, the security deposit, the right to terminate the rent agreement, subletting, maintenance charges and interest. It also talks about the method of termination i.e., how notice of termination was to be issued. 8. The petitioner had written a letter dated 11-4-2007 to the respondent making allegation that the respondent company being a tenant as per the rent agreement dated 5-9-2006 was in arrears of rent in violation of clause 2 of the agreement and asking for the rent for March and April, 2007 within ten days. The respondent company ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misplaced and cannot be accepted. 10. Even otherwise the claim for liquidated damages is not sustainable. It may be noted that Clause 5 relied upon by the petitioner uses the term liquidated damages in case the tenant vacates the property during the lock-in-period of first three years. It is a contention of the petitioner that the respondent company, as a tenant, is liable to pay the balance rent for the unexpired period of the lease of three years. The distinction between liquidated and un-liquidated damages is well settled. Mere use of the term liquidated damages in a document cannot be the criteria to determine and decide whether the amount specified in the agreement is towards liquidated damages or un-liquidated damages. Amount specified in an agreement is liquidated damages; if the sum specified by the parties is a proper estimate of damages to be anticipated in the event of breach. It represents genuine covenanted pre-estimate of damages. On the other hand un-liquidated damages or penalty is the amount stipulated in terrorem. The expression penalty is an elastic term but means a sum of money which is promised to be paid but is manifestly intended to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Railways Company of London). These two principles also follow from the law as laid down in section 73 read with the Explanation thereof. If therefore the contract was to be performed at Kanpur it was the respondent s duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it suffered any damage thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss. Even if the respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the contracted rate resulting in loss to it. But the respondent did not make any attempt to prove the rate for similar canvas prevalent in Kanpur on the date of breach. Therefore it would obviously be not entitled to any damages at all, for on this state of the evidence it could not be said that any damage naturally arose in the usual course of things." [Emphasis supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
