As per case facts, Benninger India Pvt Ltd (Petitioner) leased land and licensed industrial structures from First Space Infra LLP (Respondent No.1) with a buy-back option. Upon expiration, Petitioner claimed ...
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-WP-12914-2025-J.DOC 3
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 12914 OF 2025
Benninger India Pvt Ltd
A Company incorporated under the provisions of
the Companies Act 1986,
Having its Office and Factory premises at:
Gat No. 782, Village Nighoje, Taluka Khed,
District Pune ...Petitioner
Versus
1. First Space Infra LLP
A Limited Liability Partnership
Firm registered under the provisions
of the Limited Liability Partnership
Act, 2008, Having its registered office
at 15
th
Floor, Regency House, Near
Telephone Exchange, Opposite
Vishnu Darshan, Ulhasnagar,
Thane – 410 501.
2. Yashoda Ganpat Yelavande
Age: 86 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
3. Vikas Ganpat Yelavande,
Age: 50 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
4. Baban Ganpat Yelavande,
Age: 56 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
…Respondents
ARS 1/29
ARUN
RAMCHANDRA
SANKPAL
Digitally signed
by ARUN
RAMCHANDRA
SANKPAL
Date: 2026.08.19
22:01:39 +0530
-WP-12914-2025-J.DOC 3
WITH
WRIT PETITION NO. 12035 OF 2025
Benninger India Pvt Ltd
A Company incorporated under the provisions of
the Companies Act 1986,
Having its Office and Factory premises at:
Gat No. 782, Village Nighoje, Taluka Khed,
District Pune ...Petitioner
Versus
1. First Space Infra LLP
A Limited Liability Partnership
Firm registered under the provisions
of the Limited Liability Partnership
Act, 2008, Having its registered office
at 15
th
Floor, Regency House, Near
Telephone Exchange, Opposite
Vishnu Darshan, Ulhasnagar,
Thane – 410 501.
2. Yashoda Ganpat Yelavande
Age: 86 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
3. Vikas Ganpat Yelavande,
Age: 50 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
4. Baban Ganpat Yelavande,
Age: 56 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
…Respondents
WITH
WRIT PETITION (STAMP) NO. 16617 OF 2026
Benninger India Pvt Ltd
ARS 2/29
-WP-12914-2025-J.DOC 3
A Company incorporated under the provisions of
the Companies Act 1986,
Having its Office and Factory premises at:
Gat No. 782, Village Nighoje, Taluka Khed,
District Pune ...Petitioner
Versus
1. First Space Infra LLP
A Limited Liability Partnership
Firm registered under the provisions
of the Limited Liability Partnership
Act, 2008, Having its registered office
at 15
th
Floor, Regency House, Near
Telephone Exchange, Opposite
Vishnu Darshan, Ulhasnagar,
Thane – 410 501.
2. Yashoda Ganpat Yelavande
Age: 86 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
3. Vikas Ganpat Yelavande,
Age: 50 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
4. Baban Ganpat Yelavande,
Age: 56 years, Occupation: Agriculture
Address:At Post Village Nighoje
Taluka Khed, District Pune.
5. Vijaypal Kishorilal Sharma,
Age: 57 years, Proprietor of Sairaj
Infrastructure, having Address at
Gat No. 357/16/3,
Waghajainagar, Ambettan Road,
Chakan, Pune 410 501.
…Respondents
Mr. Girish Godbole, Senior Advocate, with Ketki Gadkari, S Ghosh,
Jagdish Gorane, Amirban Sen, Vidhi Sharma and Tanvi Darji,
i/b Indus Law, for the Petitioner in all Petitions.
ARS 3/29
-WP-12914-2025-J.DOC 3
Mr. Ramesh D Soni, with Pratik Kothari, for Respondent No.1 in
WP/12035/2025.
Mr. Mayur Khandeparkar, with Pratik Kothari, Harsh Agarwal,
Sukhada Limaye and Amit S Kusalkar, i/b Ram and Co, for
Respondent No.1 in WP/12914/2025.
Mr Pratik Kothari, with Harsh Agarwal, Sukhada Limaye and Amit
Kusalkar, i/b Ram & Co, for Respondent No.1 in
WPST/16617/2026.
CORAM :N. J. JAMADAR, J.
RESERVED ON :28
th
JULY 2026
PRONOUNCED ON :19
th
AUGUST 2026
JUDGMENT:
1.Rule. Rule made returnable forthwith and, with the consent of
the learned Counsel for the parties, heard finally.
2.As all three Petitions between the same parties arise out of same
set of facts, these Petitions are decided by this common judgment.
3.Shorn of unnecessary details the background facts leading to
these Petitions can be stated in brief as under:
3.1 Respondent Nos. 2 to 4 are the holders of an immovable property
bearing Gat No. 782, admeasuring 4H 98R (“the larger property”)
situated at village Nighoje, Taluka Khed, District Pune. Respondent Nos.
2 to 4 executed a registered Lease Agreement in favour of Respondent
No.1 in respect of the land admeasuring 2 H 80 R (“the leased
property”) on 18
th
March 2017. Under the terms of the said Lease Deed,
the Respondent No.1 was entitled to sub-lease the leased property and
also construct industrial sheds on the leased property.
ARS 4/29
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3.2 The Respondent No.1 constructed an industrial structure
admeasuing 1,31,851 sq ft comprising of office building admeasuring
11,008.06 sq ft on the leased land (“the subject structures”)
3.3 The Respondent No.1 entered into a registered Lease Deed dated
30
th
May 2017 with the Petitioner in respect of the leased property. The
term of lease was five years; commencing from 1
st
June 2017.
Simultaneously, the Respondent No.1 entered into a registered Leave
and Licence Agreement of even date, in respect of the subject structures.
(The leased property and the subject structure are hereinafter
collectively referred to as ‘the subject premises’). The licence was also
for five yeas; commencing from 1
st
June 2017.
3.4 Apart from usual terms of licence, the Leave and Licence
Agreement,
inter alia, contained a Buy-back Agreement. It was agreed
between Petitioner-licensee and the Respondent No.1-licensor that, the
licensee will be entitled at its discretion to buy all the constructed
facilities including industrial shed, office building, canteen etc, (the
subject structures) on as is where is basis for an agreed consideration of
Rs.21,00,00,000/- at the end of the term of licence or at any date after
execution of the said Leave and Licence Agreement, with proportionate
increase in the consideration to be paid for early exercise of the option
to purchase.
ARS 5/29
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3.5 The term of sub-lease and licence expired on 30
th
April 2022, by
efflux of time. Disputes arose between the Petitioner and Respondent
No.1.
3.6 Petitioner claimed that it had exercised the option to purchase the
subject structure in accordance with Buy-back Agreement and there was
refusal on the part of Respondent No.1 to perform its part of the
contract. Petitioner thus instituted a suit being Commercial Suit No. 2 of
2022 before the District Court at Khed against Respondent Nos. 2 to 4
seeking a decree of specific performance of the contract contained in
the Leave and Licence Agreement and the consequential reliefs,
including injunction to restrain the Respondents from causing
obstruction to the possession of Petitioner over the subject premises.
3.7 The Respondent No.1, on its part, instituted the suit, i.e.
Commercial Suit No. 1 of 2024, before the District Court seeking
recovery of possession of the leased property and the subject structures,
mesne profits and compensation for the purported illegal and
unauthorised use and occupation of the leased property and the subject
structures.
3.8 In Commercial Suit No. 2 of 2022 instituted by the Petitioner, the
Petitioner filed an Application seeking permission to deposit the agreed
consideration of Rs.24,00,00,000/- to show its bona fide and readiness
and willingness to perform its part of the contract. By an order dated
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12
th
April 2024, the Trial Court permitted the Petitioner to deposit the
said amount of Rs.24,00,00,000/-.
3.9 The Petitioner filed an application for rejection of the plaint in
Commercial Suit No. 1 of 2024, contending
inter alia that the dispute
was essentially between the licensor and licensee. Since the suit was for
recovery of possession of the subject premises, only the Court of Small
Causes has the subject matter jurisdiction.
Secondly, the dispute in
question was not a commercial dispute within the contemplation of the
Commercial Courts Act, 2015.
3.10 The application was resisted by the Respondent No. 1-Plaintiff.
3.11 By an order dated 9
th
May 2025, the learned District Judge
rejected the application observing,
inter alia, that the dispute was a
commercial dispute within the meaning of Section 2(1)(c) of the
Commercial Courts Act, 2015. Even otherwise, the provisions of Section
3 of the Maharashtra Rent Control Act were not attracted to the facts of
the case as the share capital of the Petitioner was more than one crore.
3.12 The aforesaid order is assailed by the Petitioner in Writ Petition
No. 12035 of 2025.
3.13 The Respondent No.1 filed an Application in Commercial Suit No.
1 of 2024 instituted for the eviction of the Petitioner, seeking a direction
to the Petitioner to deposit the lease rent and licence fee, purportedly
under the provisions contained in Order XV-A of the Code of Civil
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Procedure, 1908 (Bombay Amendment). The said Application was
resisted by the Petitioner.
3.14 The substance of the resistance was that under the Buy-back
Agreement, the Petitioner was entitled to purchase the subject
structures at its discretion and since the Petitioner had exercised the
option, the licensor and licensee relationship came to an end and the
possession of Petitioner became traceable to the said Agreement for
Sale. Thus, Petitioner was not liable to pay the lease rent and the
licence fees.
3.15 By an order dated 8
th
September 2025, the learned District Judge
repelled the objections raised on behalf of the Petitioner. The learned
District Judge was of the view that at the interim stage, it could not be
presumed that the Commercial Suit No. 2 of 2022, instituted by the
Petitioner for specific performance of the contract for sale would be
decreed. The relief of specific performance was discretionary in nature.
There was no dispute about the execution of the Leave and Licence
Agreement and the expiry of the term of licence on 30
th
April 2022.
Thus, after the expiry of the term of licence, the Petitioner was liable to
pay the lease rent and licence fee at the agreed rent. Thus, by invoking
the power under Order XV-A of the Code, the learned District Judge
passed the impugned order and thereby directed the Petitioner to pay
the arrears of lease rent at the rate of Rs.8,18,901/- per month and
ARS 8/29
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licence fees at the rate of Rs. 45,87,098/- per month, in respect of the
property described in paragraph 1a and 1b, respectively, from 1
st
May
2022 till the date of the said order and continue to pay the lease rent
and licence fee at the above rates till the disposal of the suit.
3.16 The said order dated 8
th
September 2025 is assailed by the
Petitioner in Writ Petition No. 12914 of 2025.
3.17 After the learned District Judge passed the order dated 8
th
September 2025 in Commercial Suit No. 1 of 2024, the Petitioner filed
an application in Commercial Suit No. 2 of 2022 seeking deposit of the
lease rent only.
3.18 By an order dated 6
th
May 2026, the learned District Judge
rejected the said application, opining that, the Court had already passed
an order in Commercial Suit No. 1 of 2024 directing the Petitioner to
deposit the lease rent as well as the licence fee and, therefore, there was
no propriety in entertaining an application seeking permission to
deposit the lease rent only. The order that may be passed on the said
application (Exhibit-62) in Commercial Suit No. 2 of 2022 would
overlap the order that has already been passed in Commercial Suit No.
1 of 2024. This order is assailed in Writ Petition (St) No. 16617 of 2026.
4.I have heard Mr. G.S. Godbole, the learned Senior Advocate, for
the Petitioner in all Petitions, Mr. Ramesh D Soni, the learned Counsel
for Respondent No.1 in Writ Petition No. 12035 of 2025, Mr. Mayur
ARS 9/29
-WP-12914-2025-J.DOC 3
Khandeparkar, the learned Counsel for Respondent No.1 in Writ Petition
No. 12914 of 2025 and Mr. Pratik Kothari, the learned Counsel for
Respondent No.1. in Writ Petition (Stamp) No. 16617 of 2026, at some
length. The learned Counsel took the Court through the pleadings and
the material on record.
WRIT PETITION NO. 12035 OF 2025:
5. Mr. Godbole, the learned Senior Advocate for the Petitioner,
made an endeavor to urge that the view of the trial Court that the
dispute in question is a commercial dispute is completely erroneous. A
faint attempt was made by Mr. Godbole to drive home the point that the
dispute in question cannot be said to be arising out of, "agreements
relating to immovable property used exclusively in trade or commerce",
covered by sub-clause (vii) of clause (c) of Section 2(1) of the
Commercial Courts Act, 2015.
6.Mr. Soni, the learned Counsel for the Respondent No. 1- Plaintiff
in Commercial Suit No. 1 of 2024, would urge that not only the facts of
the case but even the pleadings of the Petitioner in the plaint in
Commercial Suit No. 2 of 2022 belie the case of the Petitioner.
7.An elaborate evaluation would be wholly superfluous. In the
considered view of this Court, the dispute in question is clearly
governed by sub-clause (vii) of clause (c) of sub-section (1) of Section 2
of the Commercial Courts Act, 2015.
ARS 10/29
-WP-12914-2025-J.DOC 3
8.Plainly, the Respondent No. 1-Plaintiff is seeking recovery of
possession of the subject premises on the ground that after the expiry of
the term of sub-lease and licence, the possession of the Petitioner has
become unlawful. The dispute has its genesis in the Lease and Leave
and Licence Agreement executed by and between the parties on 30
th
May 2017. Incontrovertibly, the property which was given on licence
consists of industrial structures and office building. The industrial
structures comprise factory shed, glass blasting room, MSEB room, DG
and air compressor room, canteen, toilets, scrap yard, etc. Under the
Leave and Licence Agreement, the licensor was to allow the licensee to
carry on its business within the licenced premises.
9.In the plaint, in Commercial Suit No. 1 of 2024, there are
averments to the effect that the Petitioner was in need of the premises
for its industrial and commercial use and the subject premises was given
on leave and licence basis to the Petitioner for commercial use. It
would be contextually relevant to note that, in the plaint in Commercial
Suit No. 2 of 2022, instituted by the Petitioner for specific performance
of the contract as well, the Petitioner has asserted that the Petitioner
was in need of a premises for its industrial and commercial use, and
based on the assurances and promises of the Defendants, the Petitioner
entered into the Lease Agreement and Leave and Licence Agreement.
ARS 11/29
-WP-12914-2025-J.DOC 3
10.The test enunciated by the Supreme Court in the case of Ambalal
Sarabhai Enterprises Limited vs. K.S. Infraspace LLP and Another
1
, that
for the applicability of sub-clause (vii) of clause (c) of Section 2(1) of
the Commercial Courts Act, 2015, the immovable property should be
“actually used” for the purpose of trade and commerce seems to be
fulfilled in the case at hand. Not only the subject premises was used for
trade and commerce at the time the parties entered into the contracts,
but the Petitioner entered into the agreements in question only for the
reason that the subject premises met its requirement of industrial and
commercial use. The learned District Judge was thus fully justified in
holding that the dispute in Commercial Suit No. 1 of 2024 was a
commercial dispute and, therefore, there was no bar to the suit
warranting the rejection of the plaint.
11.Writ Petition No.12035 of 2025 thus deserves to be dismissed.
WRIT PETITION NO. 12914 OF 2025:
12.Mr. G.S. Godbole, the learned Senior Advocate, for the Petitioner
canvassed multi-pronged submissions. First and foremost, Mr. Godbole
would urge, with the exercise of the option to purchase the subject
structures and even the deposit of the agreed consideration, the licensor
and licensee relationship between Respondent No.1 and the Petitioner,
came to an end. The Petitioner’s possession, post the expiry of the term
of the licence and exercise of option to purchase the subject structures,
1 (2020) 15 SCC 585.
ARS 12/29
-WP-12914-2025-J.DOC 3
is in the capacity of the promisee who is put in possession of the subject
premises in part performances of the contract. This crucial factor was
completely missed by the learned District Judge.
13.Secondly, laying emphasis on the Buy-back clause in the Leave
and Licence Agreement, Mr. Godbole would submit that, the option to
purchase was at the discretion of the licensee - the Petitioner only.
Consequently, once the Petitioner exercised the said option, in
accordance with the terms of the Buy-back Agreement, Respondent
No.1 had no option but to execute the conveyance. Terms of the Buy-
back Agreement, according to Mr. Godbole, make the performance of
the contract to sell the subject structure, in a sense, obligatory on the
Plaintiff, and from this standpoint, Mr. Godbole would urge, the learned
District Judge was clearly in error in holding that the relief of specific
performance was discretionary in nature.
14.Thirdly, the Petitioner’s obligation was only to exercise the option
and pay the agreed consideration. Both the conditions have been
fulfilled as the Petitioner did exercise the option to purchase and has
deposited the entire agreed consideration in the suit instituted for
specific performance. Therefore, having deposited the entire
consideration of Rs. 24,00,00,000/-, the Petitioner could not have been
again directed to deposit licence fee in respect of the subject structures
as if the licensor and licensee relationship subsisted. In a situation of the
ARS 13/29
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present nature, according to Mr. Godbole, provisions contained in Order
XV -A of the Code have no application.
15.Mr. Godbole further submitted that, under the terms of the Leave
and Licence Agreement it is the obligation of the sub-lessee to pay the
lease rent in respect of the leased premises and the Petitioner does not
assail that part of the impugned order. The Petitioner is willing to
deposit the lease rent. However, the impugned order to the extent it
directs the payment of licence fee during the pendency of the suit
operates onerously, especially in the context of the deposit of the entire
consideration of Rs.24,00,00,000/-. It was further submitted that, in the
event the Plaintiff succeeds and the Trial Court finds that the Petitioner’s
occupation of the subject premises was unlawful, the Court can pass a
decree for
mesne profit and also award compensation but, at this stage,
the Trial Court could not have directed the payment of the licence fee.
16.Mr. Khandeparkar, the learned Counsel for Respondent No.1,
supported the impugned order. It was submitted that the Petitioner-sub-
lessee/licensee cannot be permitted to take refuge under the deposit of
the purported agreed consideration of Rs.24,00,00,000/-. Laying
emphasis on the fact that the said amount of Rs.24,00,00,000/- was
deposited by the Petitioner voluntarily, Mr. Khandeparkar would submit
that the lessor/licensor cannot be left in the lurch while the Petitioner
continues to unauthorisedly use, occupy and exploit the subject
ARS 14/29
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premises awaiting the adjudication of the suit for specific performance.
There are substantial defences to the suit for the specific performance
and the lessor/licensor cannot be presented a
fait accompli.
17.Mr. Khandeparkar submitted that, no fault can be found with the
impugned order which directs the deposit of the lease rent and the
license fee in accordance with the terms of the contract between the
parties. The provisions contained in Order XV -A are clearly attracted to
the facts of the case at hand, urged Mr. Khandeparkar.
18.Before appreciating the aforesaid rival submissions, it may be
apposite to note the material terms of the Lease Agreement and the
Leave and Licence Agreement, dated 30
th
May 2017, which bear upon
the determination of the controversy at hand. The sub-lease of the
leased property was for a term of five years, with gradual increase in
the lease rent. For the fifth year the lease rent was agreed to be paid at
the rate of Rs.8,18,901/- per month. It would be relevant to note that,
the Plaintiff-Licensor was, in turn, required to pay the lease rent to
Defendant Nos. 2 to 4, the head lessors. The Leave and Licence
Agreement also provides for gradually increased licence fee. For the
fifth year the licence fee was agreed to be paid at the rate of
Rs.45,87,098/- per month. There is not much controversy over these
stipulations in the Lease Agreement and Leave and Licence Agreement.
ARS 15/29
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19.At the heart of the controversy is the implication of the Buy-back
Agreement. It reads as under:
“3) BUY-BACK AGREEMENT
It has been agreed between the LICENSEE AND LICENSOR that
LICENSEE will be entitled at its discretion to buy all the
constructed facilities including Industrial Shed, Office Building,
Canteen etc, on as is where is basis for an agreed consideration
of INR 21 Crores (All Inclusive Price of Rupees 21 Crores only),
at the end of 5 years i.e., on or after 1
st
May 2022, or at any date
after signing of this Leave and Licensee Agreement.
LICENSEE will also be entitled to buy back the said premises
before the end of 5 years at a premium of INR 1.25 Crores per
year of pre-ponement of buy-back agreement:
i.e. buy-back price on 1
st
May 2021 will be INR 22.25 Crores, on
1
st
May 2020 will be INR 23.5 Crores, on 1
st
May 2019 will be
INR 24.75 Crores, on 1
st
May 2018 will be 26 Crores.
No additional taxes will be payable by the LICENSEE on the
above amount. LICENSEE will pay Stamp Duty and Government
Charges for registration of the buy-back agreement of the
constructed property on Gat No. 782, LICENSOR will be liable
to pay the tax to be deducted at source as per new IT provisons.
After the acquisition of the entire constructed property on Gat
No. 782 by the LICENSEE, LICENSOR will cease to get any
licence fee as per this agreement.
LICENSOR will also pay back the entire deposit amount paid to
him by LICENSEE as per Clause No. 7 below.
After buy-back, LICENSEE will transfer electricity bill, property
tax etc in LICENSEE’S name at the appropriate Govt and local
bodies and LICENSOR will assist with this process.
ARS 16/29
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After expiry of 20 years lease agreement between LICENSOR
and Landowner, one of the following three options will be
invoked:
1) Lease agreement between LICENSOR and Landowner will be
continued at terms mutually agreed between them. In this case,
the LICENSEE will continue to use the premises by paying the
License Fee for the leased land at 20% premium over the fee
paid by LICENSOR to Landowner.
2) LICENSEE will sell the constructed property to LICENSOR
at mutually agreed price.
3) In case Lease agreement LICENSOR and Landowner is
not continued, or price in above option is not agreed, LICENSEE
will vacate the premises by moving all possible assets.”
20.The dispute between the parties revolves around the question as
to whether the Petitioner-licensee has exercised the buy-back option
and is entitled to the specific performance of the aforesaid contract. The
thrust of the submission on behalf of the Petitioner was that the
Petitioner having exercised the option to purchase the subject
structures, the licensor-licencee relationship came to an end and thus
the Petitioner is not liable to pay the licence fee. Emphasis was laid on
the stipulations in the Buy-back Agreement that the licence will be
entitled to, at its discretion, to purchase the subject structures and after
the acquisition of the subject structures, the licensor will cease to get
any licence fee as per the said Agreement. It was submitted that, the
jural relationship between the parties altered after the expiry of the
ARS 17/29
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term of licence and the parties were thereafter governed by the terms
of the Buy-back Agreement alone.
21.The aforesaid submission in a sense proceed on an assumption
that the suit for the specific performance of the contract is bound to be
decreed. Specific performance is an equitable relief. Its genesis is in
equity. In the suit for specific performance of contract, instituted by the
Petitioner, a number of issues would warrant adjudication. The proof of
existence of a subsisting legal and valid contract, the enforceability of
such contract, the readiness and willingness on the part of the Plaintiff
to perform its part of the contract, was there a breach on the part of the
Plaintiff, was there a such conduct as would disentitle the Plaintiff from
seeking specific performance of the contract and whether, in the
attendant facts and circumstances of the case, the Court ought to grant
a decree for specific performance of the contract are the material
questions which the Court may be required to adjudicate.
22.Even if one were to proceed on the premise that the existence of
the contract is indubitable, yet, the determination on the other aspects
cannot be said to be a matter of forgone conclusion. From this
standpoint, in the considered view of this Court, the learned District
Judge was justified in observing that in the ultimate analysis, the decree
for specific performance is in the discretion of the Court and at this
ARS 18/29
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stage it cannot be presumed that the Petitioner would succeed in the
suit.
23.At this juncture, the nature and object of the provisions contained
in Order XV-A is required to be noticed. Order XV-A of Code, Bombay
Amendment, reads as under:
“ORDER XV-A
STRIKING OFF DEFENCE IN A SUIT BY A LESSOR
(1) In any suit by a lessor or a licensor against a
lessee or a licensee, as the case may be, for his
eviction with or without the arrears of rent or licence
fee and future
mesne profits from him, the defendant
shall deposit such amount as the Court may direct on
account of arrears up to the date of the order (within
such time as the Court may fix) and thereafter
continue to deposit in each succeeding month the
rent or licence fee claimed in the suit as the Court
may direct. The defendant shall, unless otherwise
directed, continue to deposit such amount till the
decision of the suit.
In the event of any default in making the deposits, as
aforesaid, the Court may subject to the provisions of
sub-rule (2) strike off the defence.
(2) Before passing an order for striking off the
defence, the Court shall serve notice on the
defendant or his Advocate to show cause as to why
the defence should not be struck off, and the Court
shall consider any such cause, if shown in order to
decide as to whether the defendant should be
relieved from an order striking off the defence.
(3) The amount deposited under this rule shall be
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paid to the plaintiff lessor or licensor or his Advocate
and the receipt of such amount shall not have the
effect of prejudicing the claim of the Plaintiff and it
shall not also be treated as a waiver of notice of
termination.
Explanation.—The suit for eviction shall include suit
for mandatory injunction seeking removal of licensee
for the purpose of this Rule.
24.The text of Rule (1) of Order XV-A makes it abundantly clear that,
few prerequisites need to be fulfilled before the power therein can be
resorted to. First, there ought to be a Suit by lessor or licensor against
the lessee or licencee for eviction of the latter. Second, the prayer for
eviction in such Suit may be with or without the prayer of rent or
licence fee and future mesne profits. Third, the Defendant in such a Suit
is obligated to deposit such amount as the Court may direct on account
of arrears up to the date of the order. Fourth, the Defendant is also
obligated to continue to deposit in each succeeding month the rent or
licence fee claimed in the Suit as the Court may direct. Fifth, unless
otherwise directed, the Defendant is obligated to continue to deposit
such amount till the decision of the Suit.
25.Rule (2) of Order XV-A deals with the striking off the defence of
the Defendant who commits default in making the deposits as ordered
by the Court.
26. The object of Order XV-A, which came to be inserted by the
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Bombay High Court amendment, with effect from 1
st
October 1983, as is
evident, appears to be to secure the interest of the landlord as the
occupation of the Suit premises by the lessee or licencee after the
termination of the lease or licence, as the case may be, without payment
of any rent or licence fee would cause grave prejudice to the landlord.
Often the Suits for eviction await adjudication years together. A
determination of mesne profits after long lapse of time from the
termination of tenancy and the institution of the suit for eviction, is not
a solace for the landlord. Conversely, the lessee or licencee who
continues to occupy the suit premises should not be permitted to use
the same without payment of the rent or licence fee.
27.The validity of the Order XV-A came up for consideration before
the Bombay High Court immediately, in the case of Shyam Liladhar Paul
Vs Ghanshyamdas Tharumal & Anr.
2
In the said case, the validity of
Order XV-A was assailed on the ground that it was not a procedural
power and thus outside the rule making power of the High Court under
Section 122 of the Code. A learned Single Judge of this Court negatived
the challenge. In the process, the object of introduction of Order XV-A
was expounded as under:
“3. … … …
The purpose of rule is very clear. It had been the
experience that in a suit between the landlord and the
tenant after the tenancy was determined by the
21984 SCC OnLine Bom 253.
ARS 21/29
-WP-12914-2025-J.DOC 3
landlord, no payment was made by the tenant at the
agreed rate and it was only when the decree for mesne
profits was passed that the landlord could get the
compensation or money for use and occupation by the
tenant of his premises after the decision in the suit and
after the enquiry into the mesne profits was
completed. It is in order to mitigate the agony of the
landlord in not receiving the payment for use and
occupation by the tenant at least at the agreed rate of
rent for a long period till the decision of the suit, that
the power to pass an interlocutory order in the nature
of Order XV-A Rule 1 was conferred upon the Court, so
that till the tenant is using the premises of the
landlord, he should continue to pay him the rent at the
agreed rate. Otherwise due to the procedural delays
caused in the final adjudication of the suit, the interest
of the landlord was adversely affected. The power to
direct the tenant to deposit the arrears of rent and to
direct him to continue to make the payment to the
landlord at the agreed rate is, therefore, a procedural
power conferred upon the Court to do justice looking
to the nature of the lis.”
(emphasis supplied)
28.In the case Gautamchand B. Dige Vs Dhondiram D Gurav,
3
the
learned Chief Justice, observed that though his Lordship had serious
doubts as to how far, in the absence of Order XV-A , the Court could
direct deposit of arrears of rent and future mesne profits pending a suit
for eviction of the tenant and recovery of mesne profits in exercise of its
31985 Bombay Law Reporter 5.
ARS 22/29
-WP-12914-2025-J.DOC 3
powers either under Order XX Rule 12 or under Order XXXIX Rule 10 or
under Section 151 of the Code, his Lordship did not think that it was
necessary to enter into that discussion, having regard to the specific
provision contained in Order XV-A where tenancy was admitted and the
dispute was only as regards whether the tenancy was monthly tenancy
or yearly tenancy. In such situation Order XV-A applied.
29.Rule (1) of Order XV-A uses the word, “may”, consciously. This
emphasizes the fact that the power to direct the Defendant or the tenant
or lessee or licensee to pay the rent or licence fee is discretionary. It is
well neigh settled that, whenever the legislature confers discretion in
the Court, such discretion must be exercised in a judicious manner. The
duty to exercise discretion in a judicious manner, after being informed
of all the attendant circumstances, assumes even more significance
while exercising the power under Rule of Order XV-A on account of the
drastic consequence the failure to comply with the order of deposit
entails, under Rule (2) of Order XV-A.
30.The failure to deposit the amount as directed by the Court under
Rule (1) is at the pain of striking off the defence of the Defendant.
Undoubtedly, Rule (2) of Order XV-A envisages an opportunity of
hearing and again exercise of discretion by the Court in ordering
striking off the defence. Yet, the necessity to exercise the judicious
discretion in determining the questions as to whether a direction for
ARS 23/29
-WP-12914-2025-J.DOC 3
deposit be made and, if so, at what rate, cannot be ever emphasized.
Nor the Court can loose sight of the fact that, save in cases of
indisputable rate of rent or licence fee, the determination at an interim
stage often does not have the benefit of the evidence to equip the Court
to decide the issue.
31. It would be contextually relevant to note that Rule (1) of Order
XV-A came to be substituted by the Notification dated 11
th
January
1990.
Inter alia, the expression, “In a Suit by a lessor or a licensor
against a lessee or licencee as the case may be” came to be substituted
for the expression “In a Suit by a lessor for eviction of a lessee”. Rule
making authority thus, found it necessary to empower the Court to
direct a licencee as well to deposit the licence fee in a Suit instituted by
the licensor for eviction, with or without arrears of licencee fee. The
term licencee covers in its fold even a gratuitous licencee. If the
landlord succeeds in demonstrating that the Defendant was a gratuitous
licencee and licence has been duly terminated and, yet, such licencee
continues to occupy the subject premises, as a matter of principle, the
Court cannot be precluded from directing such licencee to deposit the
amount towards licence fee as the Court may find appropriate in a
given case.
32. Reverting to the facts of the case, as noted above, the initial jural
relationship of lessor-licensor between the Plaintiff and Defendant No.1
ARS 24/29
-WP-12914-2025-J.DOC 3
in Commercial Suit No. 1 of 2024 is incontrovertible. Nor there is
dispute between the parties over the quantum of the lease rent and
licence fee which the Petitioner was required to pay. Therefore, the
prerequisites for the exercise of the power under Order XV-A, as
enumerated above, are satisfied in the case at hand.
33.The resistance on the part of the Petitioner was premised on the
purported cessation of the initial jural relationship and creation of the
new relationship of promisor and promisee, under the Buy-back
Agreement only. As noted above, that is a matter for adjudication at the
trial. An inference cannot be drawn at this stage that in view of the
Buy-back Agreement and the purported exercise of option by the
Petitioner, the jural relationship between the parties stood altered, as
claimed by the Petitioner.
34.Mr. Godbole submitted with a degree of vehemence that the
Petitioner has already deposited a sum of Rs. 24,00,00,000/-, the entire
agreed consideration and thus performed his part of the contract to the
fullest. Therefore, the learned District Judge was in error in not
factoring in the said deposit while exercising the discretion to direct the
Petitioner to pay the arrears of licence fee.
35.I am afraid to accede to this submission. It is well-recognized that
in order to show readiness to perform the contract, the person seeking
the specific performance need not have ready cash. Nor is it obligatory
ARS 25/29
-WP-12914-2025-J.DOC 3
on such person to make deposit of the agreed/balance consideration in
the Court. In the case at hand, as rightly pointed by Mr. Khandeparkar,
the Petitioner had voluntarily deposited the consideration in
Commercial Suit No. 2 of 2022. The deposit of the said amount cannot
necessarily bring about the result of cessation of the liability to pay the
licence fees for the occupation of the subject structures.
36.It is imperative to note that in a suit for specific performance, the
Court is empowered to grant compensation in addition to the
performance. If the Court decides that the specific performance ought
not to be granted and yet finds that there is a breach of the contract, the
Court can award compensation to the Defendant. Even in a case where
the Court finds that specific performance ought to be granted but that is
not sufficient to satisfy the justice of the case, it may also award
compensation for breach of the contract apart from the specific
performance. The Petitioner, therefore, cannot be said to be without
remedies in the event the Petitioner succeeds in the suit for specific
performance, even if the Petitioner is made to pay the licence fee till the
Petitioner occupies the subject structures at the last agreed rate of the
licence fee.
37.It must be noted that during the course of the arguments, the
Petitioner was given an option to appropriate the amount of
Rs.24,00,00,000/- along with the interest accrued thereon towards the
ARS 26/29
-WP-12914-2025-J.DOC 3
arrears of the licence fee, as ordered to be paid by the impugned order,
without in any manner diluting an inference of “readiness” emanating
from the deposit of the said amount in Court.
38.Mr. Khandeparkar, the learned Counsel for Respondent No.1, on
instructions, made a statement that Respondent No.1 will not question
the “readiness” of the Petitioner to perform its part of the contract even
if the said amount is appropriated towards the payment of the arrears of
the licence fee and the licence fee which may fall due.
39.Suffice to note that, the Petitioner has demonstrated its
“readiness” by making the deposit of Rs.24,00,00,000/- in the Court in
Commercial Suit No. 2 of 2022. Even if the Petitioner now opts to
appropriate the said amount towards the arrears of the licence fee, it
would not impinge upon the “readiness” of the Petitioner to perform its
part of the contract evidenced by the said deposit.
40.For the forgoing reasons, this Court is inclined to grant liberty to
the Petitioner to elect to appropriate the said deposit towards the
payment of the arrears of the licence fee, and clarify that such election
would not impinge upon the “readiness” of the Petitioner.
41.Subject to the aforesaid clarification, the Petition deserves to be
dismissed.
ARS 27/29
-WP-12914-2025-J.DOC 3
WRIT PETITION (STAMP) NO. 16617 OF 2026:
42. As noted above, Mr. Godbole, the learned Senior Advocate for
the Petitioner, submitted that the Petitioner has no qualms over
depositing the lease rent as that is the contractual obligation of the
Petitioner under the Lease Agreement executed on 30
th
May 2017.
43.In view of the aforesaid submission and consideration in Writ
Petition No. 12914 of 2025, no separate consideration is required in this
petition. In any event, the learned District Judge was well within his
rights in declining to pass a separate order permitting the deposit of the
component of lease rent only, and that too in Commercial Suit No. 2 of
2022, in the face of an order already passed in Commercial Suit No. 1 of
2024 directing the Petitioner to deposit the lease rent as well as the
licence fee.
44.This Court is, therefore, inclined to dispose of this petition in
view of the dismissal of Writ Petition No. 12914 of 2025.
45.The conspectus of aforesaid consideration is that Writ Petition
Nos. 12035 of 2025 and 12914 of 2025 deserve to be dismissed, and
Writ Petition (St) No. 16617 of 2026 is liable to be disposed.
46. Hence, the following order:
: O R D E R :
(I) Writ Petition No. 12035 of 2025 stands dismissed.
(II) (i) Writ Petition No. 12914 of 2025 stands dismissed.
ARS 28/29
-WP-12914-2025-J.DOC 3
(ii) The Petitioner-Defendant No.1 in Commercial Suit No. 1 fo 2024 is
at liberty to file a pursis before the Commercial Court in Commercial
Suit NO. 2 of 2022 that the amount of Rs.24 Crores and the interest
accrued thereon may be appropriated towards the lease rent and licence
fee directed to be paid by the impugned order in Commercial Suit No. 1
of 2024
(iii) In the event the Petitioner makes such election the Defendants in
Commercial Suit No. 2 of 2022 shall not be entitled to question the
“readiness” of the Petitioner-Plaintiff in Commercial Suit No. 2 of 2022
to perform its part of the contract.
III In view of the dismissal of the Writ Petition No. 12914 of 2025,
Writ Petition (Stamp) No. 16617 of 2026 stands disposed.
IV. Rule discharged.
V No costs.
[N. J. JAMADAR, J.]
ARS 29/29
The Bombay High Court recently delivered a significant ruling concerning the application of commercial dispute resolution and interim payment mechanisms in real estate transactions. This judgment, Benninger India Pvt Ltd v. First Space Infra LLP, extensively analyzes the scope of the Commercial Courts Act, 2015, and the powers under Order XV-A of the Code of Civil Procedure (Bombay Amendment), making it a pivotal reference for specific performance of contracts in commercial settings. The detailed analysis of this case is now readily available on CaseOn, offering legal professionals and students invaluable insights.
This common judgment addresses three writ petitions arising from a property dispute between Benninger India Pvt Ltd (the Petitioner/Licensee) and First Space Infra LLP (Respondent No.1/Licensor), along with landowners (Respondent Nos. 2-4). The core of the dispute involves a sub-lease and a leave and licence agreement, coupled with a buy-back option for industrial structures.
Respondent Nos. 2-4 owned a large property (Gat No. 782) which they leased to Respondent No.1. Respondent No.1 then constructed industrial structures, including a factory shed, office building, and canteen. On May 30, 2017, Respondent No.1 sub-leased a portion of this land and granted a leave and licence for these structures to Benninger India Pvt Ltd for five years, starting June 1, 2017. Crucially, the agreement included a 'Buy-back Agreement,' giving Benninger India the discretion to purchase these structures for an agreed consideration of INR 21 Crores at the end of the term (May 1, 2022), or earlier for a premium. The agreement stipulated that after acquisition, Respondent No.1 would cease to receive any licence fee.
Upon the expiry of the lease and licence term on April 30, 2022, disputes arose. Benninger India claimed to have exercised its buy-back option, but Respondent No.1 refused to perform its part of the contract. This led to two cross-suits:
Section 2(1)(c)(vii) of the Commercial Courts Act, 2015, defines a 'commercial dispute' to include disputes arising out of "agreements relating to immovable property used exclusively in trade or commerce." The Supreme Court in Ambalal Sarabhai Enterprises Limited vs. K.S. Infraspace LLP and Another clarified that the immovable property must be "actually used" for trade and commerce for this sub-clause to apply.
Benninger India sought to reject Respondent No.1’s plaint, arguing the dispute was not commercial and fell under the Small Causes Court's jurisdiction. However, the High Court noted that the licensed property consisted of industrial structures like a factory shed, office building, canteen, etc. Both parties' pleadings confirmed the premises were intended for and used for industrial and commercial purposes. Benninger India itself stated it entered the agreements because the premises met its industrial and commercial needs.
The High Court affirmed the District Judge’s decision, holding that the dispute clearly falls within the ambit of a "commercial dispute" as defined by Section 2(1)(c)(vii) of the Commercial Courts Act, 2015. Thus, Writ Petition No. 12035 of 2025 was dismissed.
Order XV-A of the Code of Civil Procedure (Bombay Amendment) empowers courts in suits by a lessor or licensor for eviction to direct the defendant (lessee or licensee) to deposit arrears of rent/licence fee and continue depositing future payments until the suit's decision. Failure to comply can lead to the striking off of the defence. The provision, as interpreted in cases like Shyam Liladhar Paul Vs Ghanshyamdas Tharumal & Anr., aims to mitigate the landlord's/licensor's agony by ensuring continuous payment for use and occupation during prolonged litigation. The power to direct such payment is discretionary but must be exercised judiciously.
Benninger India argued that by exercising the buy-back option and depositing INR 24 Crores, the licensor-licensee relationship ceased, and its possession became attributable to the agreement for sale. Therefore, it claimed it was no longer liable to pay licence fees. The High Court, however, observed that this argument prematurely assumes the success of the specific performance suit, which is an equitable and discretionary relief. Many issues, such as the contract's validity, enforceability, readiness and willingness, and breach, would require full adjudication at trial.
The Court highlighted the purpose of Order XV-A: to protect lessors/licensors from prejudice due to lengthy eviction proceedings without receiving payment for the occupant's use of premises. The deposit of INR 24 Crores, while demonstrating readiness, was voluntary and did not automatically extinguish the liability to pay licence fees, especially since the specific performance claim was still contested. The court noted that in a specific performance suit, compensation can be awarded in addition to or in lieu of performance, ensuring the Petitioner is not without remedies if successful.
Legal professionals analyzing complex rulings like Benninger India Pvt Ltd v. First Space Infra LLP often find CaseOn.in's 2-minute audio briefs incredibly helpful for a quick yet thorough understanding of the court's rationale and implications for specific performance of contracts and commercial litigation. These concise summaries distill the core arguments and judicial pronouncements, aiding busy practitioners in staying updated and informed without having to deep-dive into lengthy documents.
Importantly, the High Court granted Benninger India the liberty to appropriate the deposited INR 24 Crores (plus interest) towards the arrears of licence fees without it being construed as diluting its "readiness" to perform its part of the contract in the specific performance suit.
The High Court upheld the District Judge’s order directing Benninger India to pay arrears of lease rent and licence fees at the agreed rates. Writ Petition No. 12914 of 2025 was dismissed with the aforesaid clarification regarding appropriation of the deposited amount.
Courts generally aim to avoid overlapping orders and ensure judicial efficiency, especially when comprehensive directions have already been issued in related proceedings.
After the District Judge directed payment of both lease rent and licence fee in Commercial Suit No. 1 of 2024, Benninger India filed another application in Commercial Suit No. 2 of 2022, seeking permission to deposit only the lease rent. The District Judge rejected this, stating that a comprehensive order for both lease rent and licence fee had already been passed.
The High Court found the District Judge’s decision to be proper, as entertaining a separate application for only lease rent in another suit would have created an overlap with the existing comprehensive order. Writ Petition (Stamp) No. 16617 of 2026 was thus disposed of in light of the dismissal of Writ Petition No. 12914 of 2025.
The Bombay High Court dismissed Writ Petition Nos. 12035 of 2025 and 12914 of 2025, thereby upholding the District Judge’s findings that the dispute was a commercial dispute and that Benninger India was liable to pay the arrears of lease rent and licence fees under Order XV-A CPC (Bombay Amendment). The Court clarified that Benninger India could appropriate the INR 24 Crores deposited in its specific performance suit towards these arrears without jeopardizing its claim of readiness. Writ Petition (Stamp) No. 16617 of 2026 was consequently disposed of.
This judgment offers crucial insights for anyone involved in commercial litigation and property law:
All information provided in this article is for informational purposes only and does not constitute legal advice. Readers should consult with a qualified legal professional for advice on specific legal issues.
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