As per case facts, a lessor (respondent) leased property to a lessee (petitioner). After the initial lease expired, a new agreement was contemplated. Disputes arose over non-payment of lease amounts ...
CR-1545-2025 (O&M) [ 1]]
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CR-1545-2025 (O&M)
Reserved on: 22.08.2025
Pronounced on: 25.09.2025
M/s Spazeclub Pvt. Ltd. and another …Petitioners
Versus
M/s Venus Cotspin Pvt. Ltd. and another …Respondents
CORAM : HON’BLE MR. JUSTICE VIKRAM AGGARWAL
Argued by: Ms. Mehak Kalra, Advocate,
Mr. Nitesh Jhajhria, Advocate,
Mr. Vipul Sharma, Advocate and
Mr. Bhuvi Khatri, Advocate, for the petitioners.
Mr. Ramandeep Singh Gill, Advocate and
Mr. Manroop Singh Randhawa, Advocate,
for the respondents.
VIKRAM AGGARWAL, J
The instant revision petition, preferred under Article
227 of the Constitution of India, assails the order dated
07.12.2024 (Annexure P.22) passed by the Commercial Court,
Gurugram (hereinafter referred to as `the Commercial Court’),
vide which an application preferred by the respondent-plaintiffs
under Order 15 Rule 5 of the Code of Civil Procedure (for short
`the CPC’) was disposed of with a direction to the petitioner-
defendants to pay a sum of Rs.1,43,21,475/- within a period of
one month. Challenge has also been laid to order dated
CR-1545-2025 (O&M) [ 2]]
15.01.2025 (Annexure P.23), vide which the defence of the
petitioner-defendants was struck off.
2. The facts, as emanating from the revision petition,
are that respondent No.1-M/s Venus Cotspin Pvt. Ltd., is the
owner of property bearing plot No. 530, Udyog Vihar Phase-V,
Gurugram (hereinafter referred to as `the suit property’).
Respondent No.1 is stated to have raised construction over the
suit property consisting of a basement and four floors (ground,
first, second and third floors) apart from machine(s) room etc. A
lease deed dated 07.03.2018 (Annexure P.2) was executed
between the respondent-plaintiffs and the petitioner-defendants
vide which the suit property was leased out to the petitioner-
defendants for a period of five years i.e., from 07.03.2018 to
06.03.2023. The lease amount was fixed at Rs.8,50,000/- per
month and the payment of lease money was to commence on
01.04.2018.
3. An addendum to the lease deed was executed on
11.09.2019 (Annexure P.3) vide which the lease amount was
modified to Rs.6,50,000/- from Rs.8,50,000/- per month. A
rectification deed dated 26.12.2019 (Annexure P.4) was also
executed giving right to the petitioner-defendants to sublet the
demised premises.
4. Since the lease period was to end on 06.03.2023,
parties are stated to have executed a document (Annexure P.5)
with regard to a new lease agreement, which was to commence
from 01.04.2023 and was to continue till 31.03.2028. The rent is
said to have been fixed at Rs.6,50,000/- per month plus GST.
CR-1545-2025 (O&M) [ 3]]
There were other terms and conditions, including a clause that
except for air conditioning; carpet and miscellaneous work, the
remaining renovation expenses, would be borne by th e
petitioner-defendants.
5. It appears that certain differences cropped up
between the parties, as a result of which, certain
communications ensued. The petitioner-defendants claimed that
they had spent a huge amount of Rs. One crore on renovation,
whereas the respondent-plaintiffs, alleging non-compliance of
the terms and conditions of the lease deed, including non-
payment of lease amount, did not want to proceed ahead.
6. Legal notice dated 03.04.2023 (Annexure P.8) was
issued by the respondent-plaintiffs terminating the lease and
calling upon the petitioner-defendants to pay the lease amount
and to remove all their belongings from the suit property.
7. Reply dated 08.04.2023 (Annexure P.9) was given in
which, the claim of Rs. One crore having been spent on
renovation, was raised. Rejoinder dated 12.04.2023 to the reply
(Annexure P.10) was issued refuting the aforesaid claim leading
to issuance of another reply to the rejoinder (Annexure P.11).
8. Finally, a suit for recovery of Rs.1,17,52,263/ -
(Annexure P.15) was instituted by the petitioner-defendants
against the respondent-plaintiffs.
9. The respondent-plaintiffs instituted a suit for
possession and recovery of lease charges; mesne profits and
damages as also permanent and mandatory injunction against
the petitioner-defendants (Annexure P.17). They sou ght
CR-1545-2025 (O&M) [ 4]]
possession of the suit property along with permanent injunction
restraining the petitioner-defendants from creating third party
rights in the same. Mandatory injunction directing the
petitioner-defendants not to demolish/damage the suit property
or any part thereof and to give details of expenditure, was also
prayed for. Recovery of the balance lease amount of Rs.52 lakhs
along with interest @ 18% per annum; recovery of lease amount
for March, 2023 and payment of mesne profits w.e.f. April, 2023
to July, 2023 amounting to Rs.42 lakhs @ Rs.10,50,000/- per
month along with interest @ 18% p.a. along with future
damages, were sought.
10. During the pendency of the said suit, various
applications were initiated by the petitioner-defendants,
including an application under Order 7 Rule 11 CPC (Annexure
P.18) for rejection of the plaint, which was resisted by way of
reply (Annexure P.19) and an application under Order 7 Rule 10
CPC.
11. Notably, the application under Order 7 Rule 11 CPC
was dismissed by the Commercial Court, vide order dated
25.07.2024 (Annexure P.29). The petitioner-defendants filed CR-
5411-2024 against the said order, which was also dismissed by
a Coordinate Bench vide order dated 18.09.2024 (Annexure
P.30). The application under Order 7 Rule 10 CPC was also
dismissed by the Commercial Court on 05.11.2024 (Annexure
P.31).
12. The respondent-plaintiffs also instituted an
application under Order 15 Rule 5 CPC (Annexure P.20) for
CR-1545-2025 (O&M) [ 5]]
striking off the defence of the petitioner-defendants for failure to
deposit the admitted rent. It was averred that the lease deed
(Annexure P.1) had expired on 06.03.2023 after which,
petitioner-defendant No.1 became an unauthorized occupant of
the suit property and since that date, not even a single penny
had been paid towards the lease amount or user charges.
13. Keeping in view the enhancement clause in the lease
deed, a prayer was made seeking a direction to the petitioner-
defendants to deposit the lease amount @ Rs.7,90,080/- along
with interest @ 9% w.e.f. March, 2023. The application was
opposed by way of a reply (Annexure P.21) stating that the suit
was a counter attack by the respondent-plaintiffs to the suit for
recovery filed by the petitioner-defendants. The stand taken
again was regarding the amount spent on the renovation of the
suit property. Dismissal of the application was, therefore, prayed
for.
14. Vide order dated 07.12.2024 (Annexure P.22), the
petitioner-defendants were called upon to deposit rent for 21
months i.e., from March, 2023 to November, 2024 @
Rs.6,30,000/- per month amounting to Rs.1,32,30,000 /- along
with interest @ 9% per annum amounting to Rs.10,91,475/-.
The total amount, therefore, the petitioner-defendants were
called upon to pay within a period of one month, was
Rs.1,43,21,475/-. The case was adjourned to 15.01.2025. On
15.01.2025, counsel for the petitioner-defendants gave a
statement that he had no instructions to pursue the suit and
prayed that notice be issued to the petitioner-defendants. This
CR-1545-2025 (O&M) [ 6]]
request was declined by the Commercial Court. Under the
circumstances, the petitioner-defendants were proceeded against
ex-parte and their defence was struck off, leading to the filing of
the instant revision petition.
15. Another application under Order 38 Rules 1 and 5
CPC (Annexure P.24) had been moved by the respondent-
plaintiffs for attachment before judgment. Vide order dated
03.02.2025 (Annexure P.26), an interim order of attachment of
the premises in possession of the respondent-defendants was
passed, which led to the filing of CR-970-2025 titled as M/s
Spazeclub Pvt. Ltd. and another Vs. M/s Venus Cotspin Pvt. Ltd.
and another. The present revision petition was filed
subsequently. The reference of CR-970-2025 is being given since
both the revision petitions were being heard together, but
subsequently, CR-970-2025 was disposed of as having been
rendered infructuous vide order dated 22.08.2025 since there
had been a final decision on the application under Order 38
Rules 1 & 5 CPC. The proceedings, which took place in the said
revision petition may also be relevant for the purpose of the
decision of the instant revision petition and reference to those
proceedings shall be made at the appropriate stage.
16. Learned counsel for the parties were heard.
17. It was strenuously urged by learned counsel fo r the
petitioners that the Commercial Court has gravely erred in
calling upon the petitioner-defendants to pay the lease money
along with interest amounting to Rs.1,43,21,475/-. Learned
counsel, while referring to the agreement Annexure P.5,
CR-1545-2025 (O&M) [ 7]]
submitted that a sum of Rs. One crore had been spen t by the
petitioner-defendants on the renovation of the demised premises
and that under the circumstances, the said amount was
required to be adjusted before any assessment of the amount
due to be paid by the petitioner-defendants was made.
18. It was submitted that the Commercial Court had not
examined the matter from the correct perspective. It was
submitted that when counsel for the petitioner-defendants had
made a statement that he had no instructions from the
petitioner-defendants, the Commercial Court should have issued
a notice to the petitioner-defendants instead of proceeding
against them ex-parte and striking off their defence. Learned
counsel submitted that the said orders, being grossly illegal, are
not sustainable.
19. Learned counsel also submitted that subsequently,
vide order dated 30.04.2025 (Annexure P.34), an application
under Order 9 Rule 9 CPC moved by the petitioner-de fendants
had been allowed and the suit for recovery dismissed in default
on 15.01.2025, had been restored.
20. It was, therefore, submitted by learned counse l that
the impugned orders are not sustainable. In support of his
contentions, reliance was placed upon the judgments of the
Supreme Court in Bimal Chand Jain Vs. Gopal Agarwal, 1981
AIR SC 1657; S.P. Changalvaraya Naidu (dead) by LRs Vs.
Jagannath (dead) by LRs., (1994)1 SCC page 1 and the
judgment of Delhi High Court in Satish Khosla Vs. Eli Lilly
CR-1545-2025 (O&M) [ 8]]
Ranbaxy Ltd. and others, Crl. CP 8 of 1997 & FAO(OS) 50 of
1997 decided on 12.12.1997.
21. Per Contra, learned counsel for the respondent-
plaintiffs submitted that there was no illegality in the impugned
order. Reference was made to the orders passed in CR-970-2025
and it was submitted that the conduct of the petitioner-
defendants does not entitle them for any relief. It was submitted
that no illegality had been committed by the Commercial Court
in proceeding ex-parte against the petitioner-defendants and
striking off their defence. In support of his contentions, reliance
was placed upon the judgments of the Supreme Court in Ramjas
Foundation and another Vs. Union of India and others,
(2010)14 SCC 38 and a decision of this Court in Civil Revision
No. 932-2022 – M/s Beli Ram Sareen and another Vs.
Santosh Gosain, decided on 29.04.2025.
22. Learned counsel also referred to all the documents
placed on record as also the sequence of events leading to the
passing of the impugned order.
23. I have considered the submissions made by lear ned
counsel for the parties.
24. Before adverting to the merits of the case, it would be
essential to refer to the statutory provisions. Order 15 Rule 5
CPC (as it applies to the States of Punjab and Haryana), reads as
under:-
“Punjab- Order XV, after rule 4, insert the following rule
namely:-
“5. Striking off defence for failure to deposit admitted
rent: (1) In any suit by a lessor for the eviction of a lessee
CR-1545-2025 (O&M) [ 9]]
after the determination of his lease and for the recovery
from him of rent or compensation for use and
occupation, the defendant shall, at or before the first
hearing of suit, deposit the entire amount admitted by
him to be due together with interest thereon at the rate
of nine per cent per annum and whether or not he
admits any amount to be due, he shall throughout the
continuation of the suit regularly deposit the monthly
amount due within a week from the date of its accrual,
and in the event of the default in making the deposit of
the entire amount admitted by him to be due or monthly
amount due as aforesaid, the Court may, subject to the
provisions of Sub-Rule (2) strike off his defence.
Explanation 1.- The expression “first hearing” means
the date for filing written statement or for hearing
mentioned in the summons or where more than one of
such dates are mentioned, the last of the dates
mentioned.
Explanation 2.- The expression “entire amount admitted
by him to be due” means the entire gross amount
whether as rent or compensation for use and
occupation, calculated at the admitted rate of rent for
the admitted period of arrears after making no other
deduction except the taxes, if any, paid to a local
authority in respect of the building on lessor’s account
and the amount, if any, deposited in any Court.
Explanation 3. The expression “monthly amount due”
means the amount due every month, whether as rent of
compensation for use and occupation at the admitted
rate of rent, after making no other deduction except the
taxes, if any, paid to a local authority, in respect of the
building on lessor’s account.
CR-1545-2025 (O&M) [ 10]]
(2) Before making an order for striking off defence, that
Court may consider any representation made by the
defendant in that behalf provided such representation is
made within 10 days, of the first hearing or, of the
expiry of the week referred to in sub-section (1) as the
case may be.
(3) The amount deposited under this rule may at any
time be withdrawn by the plaintiff: Provided that such
withdrawal shall not have the effect of prejudicing any
claim by the plaintiff disputing the correctness of the
amount deposited:
Provided further that if the amount deposited
includes any sums claimed by the depositor to be
deductible on any account, the Court may require the
plaintiff to furnish the security for such sum before he is
allowed to withdraw the same.”
25. Reverting to the facts of the case, the factum of
execution of the lease deed, the addendum, the rectification deed
as also agreement executed on 15.02.2023 is admitted. The
lease amount was Rs.6,50,000/- per month. The dispute is as
regards the terms and conditions of the agreement dated
15.02.2023. There is no recital in the said agreement that the
renovation was to be done by the petitioner-defendants before
the execution of the lease deed. In any case, it would be a matter
of evidence and such claim could be decided only at the final
stage. The provisions of Order 15 Rule 5 CPC clearly lay down
that admitted rent has to be paid and only deduction is to be
made qua tax etc., meaning thereby that the petitioner-
defendants were bound to pay the admitted rent and the amount
CR-1545-2025 (O&M) [ 11]]
claimed to have been spent by them would have been adjustable
only at the final stage, if so proved by the petitioner-defendants.
26. The conduct of the petitioners has also been far from
satisfactory. In the application moved under Order 15 Rule 5
CPC, which was duly opposed by them, a direction wa s issued
vide order dated 07.12.2024 calling upon the petitioner-
defendants to pay a sum of Rs1,43,21,475/- within a period of
one month. When the date came i.e., 15.01.2025, their counsel
made a statement that he had no instructions. This was clearly
an attempt to delay the proceedings. No doubt, after if a counsel
makes a statement that he has no instructions, ordinarily the
Court would issue fresh notice to the party. However, here the
date was fixed only one month after the previous date and even
if counsel had no instructions, the petitioner-defendants were
duty bound to put in appearance before the Court through some
other counsel or through their authorized representative. The
intention becomes clear from another fact. The application under
Order 9 Rule 9 CPC moved for restoration of the suit for recovery
by the petitioner-defendants and the application for setting aside
the order vide which the petitioner-defendants had been
proceeded against ex-parte in the present suit, were filed by the
same counsel, who had given a statement that he had no
instructions. It is, therefore, manifestly clear that the said
statement had been given only with a view to buy time. The
Commercial Court, considering the attempt of the petitioner-
defendants to delay the proceedings, dealt with the matter from
CR-1545-2025 (O&M) [ 12]]
the correct perspective and rightly proceeded against them ex-
parte and struck off their defence.
27. At this stage, this Court is reminded of a Full Bench
decision in Anand Parkash Vs. Bharat Bhushan Rai and
another, 1981 AIR (Punjab and Haryana) 269, wherein it was
held that when costs had been imposed and the matter had been
adjourned for payment of costs, then on failure by the party to
pay the costs, the Court would disallow the prosecution of the
suit or defence as the case may be:-
“In accordance with the majority decision it is held that
in the event of the party failing to pay the costs on the
date next following the date of the order imposing costs,
it is mandatory on the Court to disallow the prosecution
of the suit or the defence, as the case may be and that
no other extraneous consideration would weigh with the
Court in exercising its jurisdiction against the
delinquent party. However, where the costs are not paid
as a result of the circumstances beyond the control of
the defaulting party then the court will be well within its
jurisdiction to exercise its power under section 148 of
the Code in favour of the defaulting party if a strong
case is made out for the exercise of such jurisdiction.
24. The revision petition is allowed and the order of the
trial Court dated 6th September, 1978, is set aside and
the defendants are debarred from prosecuting the
defence any further. In the circumstances of the case
the parties to bear their own costs. 25. The parties
through their learned counsel have been directed to
appear before the trial Court on 20th July, 1981.”
CR-1545-2025 (O&M) [ 13]]
28. In the instant case, despite a specific order having
been passed for payment of a specific amount by a specific date,
the same was not paid and an attempt was made to de lay the
proceedings by setting up a false plea. Under these
circumstances, the Commercial Court was fully justified in
striking off the defence of the petitioner-defendants. The
judgment in the case of the Full Bench in Anand Parkash’s case
(supra), would also be fully applicable in the present case,
though the said judgment pertains to payment of costs. Still
further, here it was not only payment of costs, but the entire
lease money along with interest. Still further, even in terms of
the provisions of Order 15 Rule 5 CPC, the defence is to be
struck off, if the admitted rent is not paid.
29. Another thing which needs to be noticed here i s that
when the order dated 03.02.2025 was passed ordering interim
attachment upon an application having been moved by the
plaintiff-respondents, the petitioner-defendants instituted CR-
970-2025 assailing the said order. Notably, at that time, the
petitioner-defendants did not assail the order dated 15.01.2025
vide which their defence had been struck off, though the said
order was subsequently assailed in the instant revision petition.
In the said revision petition (ibid), an order dated 17.02.2025
was passed by this Court, calling upon the petitioner-defendants
to deposit Rs.50 lakhs with the Commercial Court within a
period of four weeks and operation of the impugned order
therein was stayed, subject to deposit of the said amount. The
intent behind passing the said order was to test the bona-fides of
CR-1545-2025 (O&M) [ 14]]
the petitioner-defendants since they were claiming that they had
spent Rs. One crore on renovation. Even the balance amount
after deduction of the said amount would be at least Rs.50
lakhs. However, the said order was not complied with and no
amount was deposited. Eventually, order dated 07.05.2025 was
passed, wherein it was observed that since Rs.50 lakhs had not
been deposited, the stay would cease to operate. Orders dated
17.02.2025 and 07.05.2025 passed by this Court, read as
under:-
“Order dated 17.02.2025
Learned counsel for the petitioners inter alia
submits that once a suit for recovery filed by the
petitioner was pending, proceedings under Order 38
Rules 1 and 5 CPC could not have been initiated. He
further submits that the Commercial Court, Gurugram
proceeded in a manner unknown to law and passed an
interim order, thereby attaching the property and
articles in possession of the petitioners.
In support of his contentions, learned counsel for
the petitioners has placed reliance upon a judgment of
the Division Bench of this Court in the case of Nirmal
Textiles Pvt. Ltd. vs. Yaskawa India Pvt. Ltd. and
another, 2023 NCPHHC 126817 (Law Finder Doc Id #
2472356).
Notice of motion.
Mr. Gaurav Datta, Advocate accepts notice on
behalf of respondent No.1/caveator. He submits that
there is no illegality in the order and that keeping in
view the conduct of the petitioners since they failed to
pay the outstanding amount in terms of the order dated
07.12.2024, the impugned order was passed by the
CR-1545-2025 (O&M) [ 15]]
Commercial Court, Gurugram. He, however, prays for
some time to address arguments.
List on 22.03.2025.
In the meantime, on deposit of Rs.50 lakhs with
the Commercial Court, Gurugram, within a period of
four weeks from today, which shall be liable to be
released to respondent No.1, the operation of the
impugned order shall remain stayed.”
Order dated 07.05.2025
On request, adjourned to 11.08.2025 for
arguments.
It is clarified that since concededly, the sum of
Rs.50,00,000/- in terms of order dated 17.02.2025 was
not deposited, the interim order dated 17.02.2025 is no
longer in operation.
A photocopy of this order be placed on the file of
connected case.”
30. The aforementioned facts and circumstances clearly
show that the Commercial Court, committed no illegality in
passing the order dated 15.01.2025.
31. I have gone through the judgments relied upon by
learned counsel for the parties. In Bimal Chand Jain’s
case
(supra), the Supreme Court held that an order under Order 15
Rule 5 CPC is in the nature of penalty and Courts should not
exercise such power mechanically. There is no quarrel with the
aforesaid proposition. However, the aforesaid judgment was
passed on different facts, whereas the impugned orders have
been passed totally on different facts, which have been
discussed in the preceding paragraphs.
CR-1545-2025 (O&M) [ 16]]
32. The judgment in S.P. Changalvaraya Naidu’s case
(supra), deals with a fraud having been played upon the Court,
which is not the case here, as a result of which, the said
judgment is not applicable.
33. The judgment of the Delhi High Court in Satish
Khosla’s case (supra), deals with a totally different proposition
and has no applicability to the facts of the present case.
34. In CR-932-2022 – M/s Beli Ram Sareen and anoth er
Vs. Santosh Gosain, decided on 29.04.2025, this Court, has
taken a similar view, as has been taken in the instant revision
petition. SLP (Civil) Diary No.43452-2025 titled as Santosh
Gosain Vs. M/s Beli Ram Sareen and another, against the said
order was dismissed by the Supreme Court vide order dated
22.08.2025.
35. In view of the aforementioned facts and
circumstances, I do not find any merit in the present revision
petition and same is, accordingly, dismissed.
Pending application(s), if any, also stands disposed
of.
(VIKRAM AGGARWAL)
JUDGE
25.09.2025
ds
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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