Facts
The Appellants (landlords) leased the ground floor and basement of property J-II/25, Lajpat Nagar II, to the Respondent via a registered lease deed dated 14.12.2017 at a monthly rent of Rs. 13 lakhs.
Source reference: p. 1-2Disputes regarding non-payment of rent arose in April 2020 during the COVID-19 pandemic.
Source reference: p. 2Despite a lock-in period until 05.01.2021, the Respondent vacated the premises on 05.11.2020.
Source reference: p. 2Earlier, the Trial Court had directed a provisional deposit of Rs. 50 lakhs toward arrears, which the Respondent deposited in two tranches (Rs. 30 lakhs in January 2021 and Rs. 20 lakhs in April 2023) after unsuccessful appeals.
Source reference: p. 2-3The Appellants eventually received this Rs. 50 lakhs on 10.07.2023.
Source reference: p. 3The Trial Court’s final judgment on 05.10.2023 decreed a balance of Rs. 3,23,597 but did not award interest on the delayed payment of the R. 50 lakhs deposit.
Source reference: p. 3-4Issues
1. Whether the Appellants are entitled to interest at the contractual rate of 18% per annum on the sum of Rs. 50,00,000 for the period between the Trial Court's direction to pay (27.10.2020) and the actual receipt of funds (10.07.2023).
Source reference: p. 5 / para. 6Law Applied
The Court applied the principle of contractual sanctity and the enforcement of agreed terms under the Indian Contract Act, 1872.
Source reference: p. 4-5Specifically, it upheld the provision in the registered lease deed which stipulated that any arrears of rent would carry interest at the rate of 18% per annum.
Source reference: p. 4-5The Court exercised its appellate jurisdiction under the Code of Civil Procedure (CPC) to modify a decree where the lower court failed to account for interest on delayed payments of admitted liabilities.
Source reference: p. 7Reasoning
The Court observed that the Respondent’s liability to pay Rs. 50 lakhs arose from admitted arrears of rent.
Source reference: p. 6Although the Trial Court ordered the deposit on 27.10.2020, the Appellants did not receive the funds until 10.07.2023 due to the Respondent's unsuccessful appeals and delayed deposits in tranches.
Source reference: p. 6Since the lease deed explicitly mandated 18% interest on rent arrears—a fact not disputed by the Respondent—the Court held that the Appellants were contractually entitled to interest for the nearly three-year intervening period.
Source reference: p. 6The Court calculated the interest on Rs. 50 lakhs for the period 07.11.2020 to 10.07.2023, adjusted for the nominal interest (Rs. 68,972) already earned on the court-monitored FDR.
Source reference: p. 6-7Holding
The Court allowed the appeal in part and modified the impugned judgment.
It held that the Respondent is liable to pay interest of 18% per annum on Rs. 50 lakhs for the delayed period.
Source reference: p. 6The Court directed the Respondent to pay the remaining balance of Rs. 24,06,028 (after adjusting for previous FDR interest) to the Appellants within six weeks.
Source reference: p. 7In the event of default, the Respondent shall be liable to pay a further 18% interest on this amount until realization.
Source reference: p. 7Original Court PDF
Ashwani Dewan & Anr.vsM/S Miniso Life Style Private Limited
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