IN THE COURT OF DISTRICT JUDGE,

(NEW DELHI DISTRICT), PATIALA HOUSE

COURT, NEW DELHI

SINGER COUNSULTANTS PVT. LTD.

(Plaintiff)

Vs.

WINSOFT TELECOMMUNICATION PVT. LTD.

(Defendant)

Arguments on behalf of the Defendant

Counsel on behalf of the Defendant: Ritesh Tripathi

Semester 5th, Section A, Roll no. 459

Law Centre-1

[Type text] Page 1

ISSUES ON FACTS

 Whether there was any provision of penalty or liquidated damage in the lease deed for
terminating the lease within the lock-in period?
 Whether the Plaintiff has committed breach of contract by not maintaining the property in
question?
 Whether the Defendant has send the legal notice dated 26th April Yr-2 regarding
maintenance of the property with malicious intention?
 Whether Plaintiff have suffered any actual loss because of Defendant terminating the
lease within lock-in period?
 Whether the Lease deed was registered?

ISSUES ON LAW

 Is the Defendant liable to pay compensation for termination of lease under lock-in period
in case there is no penalty or liquidated clause in the lease deed?
 What are the effects of non- registration of lease deed?
 Is the Defendant liable to pay compensation under Section 73 of Indian Contract Act,
1872?
 Is the Defendant liable to pay compensation under section 74 of Indian Contract Act,
1872?

[Type text] Page 2

CASE THEORY

Plaintiff Mr. Varun Singer in the present case knowing that the defendant Ms. Neena Elizabeth is
in hurry made her rent a property for a lock-in period of 3 years which had some permanent
maintenance issues with the structure itself like water logging in the common area. As these
things are difficult to notice until there comes a situation where water starts entering the office,
and this is reason why the defendant got to know about this after few months.

The reason why defendant Ms. Neena Elizabeth deliberately negotiated that there should not be
any penalty or damage clause in the lease deed in case of termination within lock-in period.is
because his manager Mr. Sooraj Krishan had a doubt about the property and stated this to her
that property does not look fine to him and also that he had a doubt about the intentions of Mr.
Varun Singer.

ARGUMENT ON FACTS

 That the Plaintiff knowing that the Defendant is in hurry and willing to take the property
even without visiting the property as stated in the written statement of Mr. Varun Singer
(Page-189, Para- 2) rented the property in question to the defendant which had some
permanent structural issues at a high cost.
 That there is no provision of penalty of liquidated damages in the lease deed in case of
termination of lease deed within the lock-in period and this was done deliberately after
with the consent of Mr. Varun Singer and his company, this can be clearly established by
the written statements of Ms. Neena Elizabeth (Page-192, Para-3) and Mr. Varun Singer
(Page-190. Para-9) as well as cross-examination of Mr. Varun Singer.
 That there is a clause in the lease deed about forfeiture of security deposit (3 Month’s
Rent= Rs 6 Lakh) in case of breach of contract as stated by Mr. Varun Singer in his
written statement (Page-189, Para-3), this security deposit have been already forfeited by
the Plaintiff when Defendant left the property on 30th March Yr-2.

[Type text] Page 3

  That the responsibility of maintaining the property was of Plaintiff as per the lease deed
which was duly accepted by Mr. Varun Singer in his statement (Page-189, Para-3) as well
as in his cross-examination and this duty was given to Mr. Sunny Singh, employee of
Singer Consultant Pvt. Ltd. Mr. Sunny Singh behaving very irresponsibly did not do
anything to resolve the issues faced by the Plaintiff regarding maintenance of property
like water logging, Air-conditioner not working.
 That because of Plaintiff Mr. Varun Singer being not directly communicating with the
defendant and being indirectly connected with the maintenance issue through Mr. Sunny
Singh, the problem of maintenance did not reached him as accepted by Mr. Varun Singer
in his cross-examination.
 That the maintenance issues with the property had caused huge financial loss to the
defendant in his business and also damaged the reputation of the company in the market,
as stated by Ms. Neena Elizabeth in her written Statement (Page-193. Para-8).
 That the very purpose of sending three month advance notice of leaving the possession of
the property to the Plaintiff by the Defendant is to make the plaintiff aware of the
consequences and to work in order to mitigate the loss that can be suffered.
 That the Plaintiff has already found a new client for the property in question by February-
1-Yr-1 and also have been accepted by the Plaintiff in the cross-examination that the
amount of time the property was vacant is very usual to find any new client for a
property. Therefore it can be established by the above-mentioned arguments that the
Plaintiff had not suffered any loss by the termination of lease within the lock-in period.
 That the Defendant after giving possession of the property to the Plaintiff have been
suffering from immense mental harassment by the Plaintiff to pay the entire rent till the
lock-in period and have been also taunted by the Plaintiff as per the statement of Mr.
Sooraj Krishan (Page-194, Para-6) and also as per the cross-examination of Ms. Neena
Elizabeth.
 That the Defendant after understanding that the issue at hand is not being handled
amicably by the Plaintiff resorted to sending legal notice to the Plaintiff on 26th April Yr-
2.Therefore, the one month gap between the three month advance notice and legal notice
is not because of any ill intention but because of the above-mentioned reason.

[Type text] Page 4

  That as per the cross-examination of Plaintiff Mr. Varun Singer, the lease deed was not
registered.

ARGUMENT ON LAW

 That the provisions of the Registration Act, 1908 (“Registration Act”) and the Transfer
of Property Act, 1882 (“TOPA”) set out the law governing registration of lease
deeds.[3] Section 17 of the Registration Act states that leases of immovable property
from year to year, or for any term exceeding one year, or reserving a yearly rent must be
registered compulsorily. Further, section 107 of the TOPA states that a lease of
immoveable property from year to year or for any term exceeding one year or reserving a
yearly rent can only be made by a registered instrument.
 That Section 106 of the Transfer of Property Act states that in the absence of a written
contract or local law or usage to the contrary, a lease of immovable property (except for
agricultural and manufacturing purpose) shall be deemed to be a lease from month to
month, terminable, on the part of either lessor or lessee, by 15 (fifteen) days’
notice.[6] Therefore, reading sections 106 and 107 of the Transfer of Property Act
together, an unregistered lease deed will not create a valid lease. However, if there has
been a delivery of possession, payment and acceptance of rent, the same will deem to be
a lease between the parties on a month to month basis which can be terminated by giving
15 (fifteen) days’ notice.

 In Burmah Shell Oil Distributing now known as Bharat Petroleum Corporation Ltd. v.
Khaja Midhat Noor & Ors (AIR 1988 SC 1470), the Supreme Court held that a lease for
a period exceeding one year can only be created by a registered instrument. In the
absence of a registered instrument, the lease shall be a month to month lease. The
Supreme Court held:

[Type text] Page 5

 “since the lease was for a period exceeding one year, it could only have been extended by
a registered instrument executed by both the lessor and the lessee. In the absence of
registered instrument, the lease shall be deemed to be “lease from month to month”. It is
clear from the very language of section 107 of the Act which postulates that a lease of
immovable property from year to year, or for any term exceeding one year, or reserving
a yearly rent, can be made only by a registered instrument. In the absence of registered
instrument, it must be a monthly lease.”

 That the prerequisite for applying section 74 of Indian Contract Act, 1872 are as follows:

1. There must be a valid contract.

2. That the contract must have a certain sum stipulated as compensation or penalty
which would be effectuated on breach of contract.
3. There must be a breach of contract by the other party.

In the present case, Firstly, there is a doubt about the validity of the contract as the lease
deed is itself not registered. Secondly, there is no penalty or liquidated damage clause in
the lease deed itself as accepted by the Plaintiff in his statement as well as in the cross-
examination. Lastly, the breach of contract has happened at the point of time when the
property was not maintained properly by the Plaintiff and in the reaction of which the
Defendant terminated the lease deed.

Therefore, as per the above-mentioned situation Section 74 of Indian Contract Act, 1872
is not applicable in the present case.

 That Section 73 of Indian Contract Act, 1872 provides that the party, who breaches a
contract, is liable to compensate the injured party for any loss or damage caused, due to
the breach of contract. For compensation to be payable, Two things should be taken into
consideration (i) The loss or damage should have arisen as a natural consequence of the
breach, or (ii)It should have been something the parties could have reasonably expected
to arise from a breach of the contract. This section, however, provides that compensation
shall not be awarded for any remote or indirect loss sustained by the parties. Therefore,
Damages under Section 73 of the Act are compensatory and not penal in nature.

[Type text] Page 6

  That the Principle of Mitigation of loss with regard to compensation for loss of damage
caused by breach of contract, as envisaged by section 73 of the indian contract act, 1872
have been explained by the Supreme Court in Murlidhar Chiranjilal v. Harishchandra
Dwarkadas, AIR 1962 SC 366, as follows: (i) that there is a duty on him of taking all
reasonable steps to mitigate the loss consequent on the breach and debars him from
claiming any part of the damage which is due to his neglect to take such steps.
 That in the present case the Plaintiff Mr. Varun Singer in the Cross-Statement have
accepted that for the time the property was vacant is the usual amount of time for any
peoperty to get occupied again and therefore no actual damage have been caused to the
Paintiff from the termination of lease by the defendant.
 That as Section 73 of Indian Contract Act is compensatory and not penal in nature and
there is no actual damage caused to the Plaintiff and therefore Section 73 will not be
applicable here.

PRAYER

It is most humbly prayed that the Hon’ble Court may be please to:
1. Dissmiss the suit with no compensation awarded
2. Pass any other order as this hon’ble court may deem fit,

[Type text] Page 7