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As per case facts, a licensee failed to vacate the premises after the three-year Leave and License Agreement expired on October 31, 2016. The licensors (appellants) filed a suit for
...possession, arrears of license fee, and mesne profits, including liquidated damages of ₹10,000 per day as per the agreement. The Trial and Appellate Courts directed payment of the liquidated damages as an interim measure, but the High Court set this direction aside while maintaining the injunction against the licensee. The licensor appealed to the Supreme Court. The question arose whether the Trial Court and Appellate Court were justified in awarding mesne profits/liquidated damages as an interim measure under Order XXXIX Rules 1 and 2 of CPC, or if the High Court was right to set it aside. Finally, the Supreme Court held that the lower courts erred in awarding liquidated damages/mesne profits at the interim stage under Order XXXIX Rules 1 & 2 CPC. However, the High Court was not justified in failing to direct payment of arrears and regular license fee in terms of the original agreement and the mandatory spirit of Order XV-A of CPC (Bombay Amendment). Consequently, the Court upheld the injunction but directed the licensee to pay the calculated arrears (over ₹1.46 crore) and continuing regular license fees with annual increases, reserving the issue of liquidated damages for the final trial.
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