Tenant may renovate leased premises without structural changes but cannot claim reimbursement or rent adjustment.

Speciality Restaurants Limited, which operates a “Mainland China” restaurant from leased premises on Church Street, Bengaluru, claimed that its lease was valid until 2034.

After the premises were auctioned to respondents 2 and 3 in SARFAESI proceedings concerning the lessor’s loan default, the company filed Commercial O.S. No. 1443/2024.

The Commercial Court granted an interim order permitting the company to remain in occupation and operate its restaurant, but declined to permit repairs and interior works.

The company appealed, offering to fund the works itself, make no structural changes, and claim no equity or adjustment of the expenditure; it also undertook to deposit rent as required by the lease.

1. Whether the appellant should be permitted, while continuing to occupy the leased premises under the interim order, to carry out repairs, renovation, interior works and reinforcement of the building without structural changes.

2. Whether the appellant could carry out those works without acquiring any claim to equity or adjustment of the expenditure incurred.

The appeal was brought under Section 13(1-A) of the Commercial Courts Act, 2015, read with Order XLIII Rule 1(r) and Section 104 of the Code of Civil Procedure, 1908, challenging an order on an application under Order XXXIX Rules 1 and 2 read with Section 151 CPC.

The Court applied no cited precedent or separately stated legal test.

Its decision rested on the case-specific terms that the proposed works would be at the appellant’s own cost, would not involve structural changes, and would not give rise to any claim for equity or adjustment of the expenditure.

The Court considered that the appellant needed the works to continue operating its restaurant and that the premises were not in good condition.

It found no serious objection to allowing the works because the appellant would bear the expense, make no structural changes, and claim neither equity nor reimbursement or adjustment against rent.

These conditions addressed the respondents’ objections while permitting the appellant to maintain premises it continued to occupy under the interim order.

It permitted the appellant to carry out repairs, renovation, interior works and reinforcement, if required, without structural changes.

The appellant is not entitled to claim equity or adjustment for the expenditure incurred.