CASE 4: SINGER CONSULTANTS PVT. LTD. V.

WINSOFT
TELECOMMUNICATIONS PVT. LTD.
Prepared by Dr Aman Hingorani
Note for Participants
Please note that Yr-0 denotes the current year, Y-1 the previous year, Yr-2 two years ago and so
on so forth.

STATEMENT OF VARUN SINGER

1. I am Varun Singer, Managing Director of Singer Consultants Pvt. Ltd. having registered
office at 34 New Complex, Delhi. The company is the owner of Jubilee Plaza, 14 Old
Road, Delhi, the property in question. It is one of our most expensive and exquisitely
designed properties.

2. In June Yr - 4, I received a call from Ms. Neena Elizabeth who desired to take Jubilee
Plaza on rent for her office. She introduced herself as the Managing Director of WinSoft
Telecommunications Pvt. Ltd. and wanted to sign the lease deed as soon as possible
without even visiting the property. I insisted that she views the property as per our
company’s policy, and she reluctantly agreed. She visited the property on or around 15
July Yr – 4 with her manager, Mr. Sooraj Krishan. They found the property to be suitable
for their purposes.

3. We signed the lease deed on 12 September Yr-4, after a few rounds of negotiations, and
the property was leased out to WinSoft Telecommunications Pvt. Ltd. at a monthly rental
of INR 2 lakhs to be paid in advance by the 7th of every month for which the payment
was due. Ms. Elizabeth also wanted parking space for two cars which was leased out to
WinSoft Telecommunications Pvt. Ltd. at the monthly rent of INR 8,000/-. The lease
deed contained the standard clauses of payment of security deposit equivalent to three
months which was liable to be forfeited in case of breach of contract, and a lock-in period
of three years during which WinSoft Telecommunications Pvt. Ltd. could not terminate
the lease. We assured WinSoft Telecommunications Pvt. Ltd that the property would be
maintained by my company in the same habitable condition in which it was let out.

4. WinSoft Telecommunications Pvt. Ltd. shifted to the property by 15 September Yr - 4.

On 20 September Yr - 4, I went to the property to introduce Sunny Singh, my manager, to
Ms. Elizabeth. She seemed quite pleased with her new office and gave positive feedback.

5. I was shocked when, on 25 March Yr - 2, my company received three month notice from
WinSoft Telecommunications Pvt. Ltd. terminating the lease with effect from 30 June Yr
- 2. They cited limitation of space as the reason for the said termination and stated that
the place was too small to cater to their current and future requirements. Further, they
wanted us to adjust the rent for the months of April to June Yr -2 against the three months
security amount deposited with us. This is totally unacceptable as WinSoft
153
 Telecommunications Pvt. Ltd had illegally terminated the lease within the lock-in period
and, therefore, was required to pay rent for the three months.

6. Further, my company received a legal notice on 26 April Yr – 2, where WinSoft

Telecommunications Pvt. Ltd raised grievances regarding maintenance of the property
and alleging breach of contract by us. However, this was for the first time that I had heard
of these issues at the property. The allegation is absolutely false and baseless as the
property was repaired and maintained at regular intervals.

7. WinSoft Telecommunications Pvt. Ltd just left the property on 30 March Yr – 2. At their
request, we had a joint inspection on 1 September Yr – 2. The premises were in good
condition, just as when it was given to WinSoft Telecommunications Pvt. Ltd. The
property remained unutilized and unproductive of rent right upto 1 February Yr – 1, when
a new tenant approached us.

8. WinSoft Telecommunications Pvt. Ltd has unlawfully terminated the lease deed and
should duly pay all the liabilities arising out of the default. It is true that there is no
provision of penalty or liquidated damages in the lease deed should WinSoft
Telecommunications Pvt. Ltd. terminate the lease prior to the expiry of the lock-in
period. There was no need for any such provision since should WinSoft
Telecommunications Pvt. Ltd. terminate the lease prior to the expiry of the lock-in
period, it would assume the pre-existing liability to pay the rent for the unexpired lock-in
period. That would be its debt, regardless of whether my company sufferred any actual or
real loss. The very purpose of a lock-in period is to ensure that the tenant stays in the
property during that period or make good all losses incurred by the landlord in case it
wants to vacate earlier. Otherwise, why have a lock-in period.

9. Our claim against WinSoft Telecommunications Pvt. Ltd is, therefore, for rent from April
Yr – 2 onwards for the unexpired lock-in period, along with interest @ 18 % p.a. till date
of payment. Moreover, as WinSoft Telecommunications Pvt. Ltd breached the contract,
we have forfeited their security deposit.

STATEMENT OF SUNNY SINGH

1. I am Sunny Singh, aged about 35 years, resident of Flat No. 12, Medium Apartments,
Delhi. I am an employee of Singer Consultants Pvt. Ltd. for the last 8 years, working as
manager of their properties.

2. Presently, I am placed as the manager of their property at Jubilee Plaza, 14 Old Road,
Delhi. I have been working there since August Yr - 4. Generally, I manage around 2
properties at one time. However, as Jubilee Plaza is a huge complex, I am responsible for
only one property at the moment. Jubilee Plaza is one of the high-end properties of Singer
Consultants.

3. In September Yr - 4, the property was leased out to WinSoft Telecommunications Pvt.

Ltd. and they shifted to the property by the middle of the month. I met Ms. Neena

154
 Elizabeth, the Managing Director of the company, and Mr. Sooraj Krishan, her manager,
on 20 September Yr -4. Ms. Elizabeth was very stressed though excited about her new
office. Mr. Krishan seemed like a trouble maker to me as he went on complaining about
everyone to Ms. Elizabeth.

4. Around the month of December Yr - 4, Mr. Krishan told me that their business was
running very well and they had decided to employ more staff. He never made any
complaints regarding maintenance of the property. I also did not receive any intimation
from Ms. Elizabeth about any problem. I, in fact, always received positive feedback from
everyone and duly communicated the same to Mr. Singer.

5. I was astonished to hear about the termination of the lease deed from Mr. Singer. I have
seen the notice and can confirm that all the allegations therein are false. There have not
been any issues of water logging or poor lightning in the common area. We have not
received any such complaints from any of the occupants of the property. They only want
to shift to an alternative place as they have employed more staff whom they cannot
accommodate at this property.
STATEMENT OF NEENA ELIZABETH
1. I am Neena Elizabeth, Managing Director of WinSoft Telecommunications Pvt. Ltd.
having registered office at 202 Sea Lane, Mumbai.

2. I was looking at the prospects of expanding the business of my company and wanted a
spacious property to start my office in Delhi. After a long search and on strong
recommendation of ABZ Property Consultants, I met Mr. Varun Singer, the Managing
Director of Singer Consultants Pvt. Ltd. and owner of Jubilee Plaza, 14 Old Road, Delhi
in June Yr - 4 to discuss the prospects of leasing the said premises for my office. I visited
the property in July Yr – 4 and instantly had a liking for it. It had all the required facilities
which I wanted and also parking space, as a bonus. We signed the lease deed on 12
September Yr - 4.

3. The monthly rent of the property was INR 2 lakhs. We also agreed to pay INR 4,000/-
per car for parking space for two cars. The rent was to be paid in advance by the 7th day
of every month. WinSoft Telecommunications Pvt. Ltd. paid INR 6 lakhs, the equivalent
of monthly rent for three months as security deposit to Singer Consultants Pvt. Ltd. It was
the responsibility of Singer Consultants Pvt. Ltd to maintain the property, for which they
billed us the maintenance charges, and WinSoft Telecommunications Pvt. Ltd. has duly
paid all the charges s billed. The lease deed contained a lock-in period of 3 years. The
lock-in period clause did not provide for any penalty or liquidated damages in case
WinSoft Telecommunications Pvt. Ltd. Terminated the lease within the lock-in period.
This was done deliberately after negotiations, and with the consent of Mr. Singer and his
company.

4. I was personally present for setting up the new office, after which I left for Mumbai
leaving behind my employee, Mr. Sooraj Krishan, to manage and run the new office in
Delhi. Within few days of my return, I received calls from Sooraj about the problem with

155
 the central air conditioning of the premises, which was not working properly. He also
informed me about the poor state of the maintenance of the property which was having
issues of water logging and bad lighting in the common areas. He further informed me
that the maintenance department of Singer Consultants Pvt Ltd. was not sorting out the
issues, even after repeated requests.

5. Our clients frequently visit the office and such poor maintenance was creating
embarrassment to our company and was damaging the reputation of the business. We
could not hold business meetings at the premises or accommodate employees due to these
maintenance issues. So, my company decided to spend money out of its own pocket to
install air conditioning unit and to carry out other repair works, which were the
responsibilities of Mr. Singer and his company.

6. Being fed up with all these issues, WinSoft Telecommunications Pvt. Ltd. sent a three
month notice through courier on 25 March Yr-2 to Singer Consultants Pvt. Ltd.
terminating the lease deed with effect from 30 June Yr – 2. We requested Singer
Consultants Pvt. Ltd. to adjust the rent for the months of April – June Yr - 2 against the
security amount deposited in the beginning. The lease deed did not contain any provision
of penalty or liquidated damages for terminating the lease within the lock-in period and,
therefore, we are not required to pay anything to Singer Consultants Pvt. Ltd.. Moreover,
when it is they who committed breach of contract by not maintaining the property as
detailed in our legal notice of 26 April Yr - 2.

7. We handed over possession of the property to Singer Consultants Pvt. Ltd. on 30 March
Yr – 2, followed by a joint inspection on 1 September Yr -2. We returned the premises in
the same condition in which we got it. Singer Consultants Pvt. Ltd. has not given us any
proof that it has suffered any loss by the premature termination of the lease. It is true that
they had no tenant upto 1 February Yr – 1, but that was because they did not even try to
look for a tenant or take steps to mitigate the loss of rent. The very purpose of the three
months notice was for them to find a new tenant. We paid the rent till June 30 Yr-4
though we had vacated the property on 30 March Y-4 itself.

8. I have undergone immense mental trauma and financial loss during this time while
dealing with Singer Consultants Pvt. Ltd. We have already spent a lot of money on this
property with negative results and do not wish to spend anything more. Since it is they
who committed breach of contract by not maintaining the property, they have no right to
forfeit the security amount equivalent to three months rent. This amount constitutes the
rent for the months of April – June Yr -2. So, we do not owe them any money. Rather,
they should consider themselves lucky that we have not sued them for breach of contract.

STATEMENT OF SOORAJ KRISHAN

1. I am Sooraj Krishan, aged about 50 years. I am resident of 3 New Apartments, Delhi.

I have worked with WinSoft Telecommunications Pvt. Ltd. since its inception.

156
2. I was the manger of the Mumbai office of the company before coming to Delhi in
August Yr – 4 to manage our youngest branch. We took the property on rent from
Singer Consultants Pvt. Ltd. Before leasing out, I visited the property along with Ms.
Elizabeth. The property was too small for our purposes and the rent was too high. I
told this to Ms. Elizabeth, but she was in a hurry to start the Delhi branch and she got
carried away with the parking space.

3. After we shifted to the property, Ms. Elizabeth realized that the property was too
small to cater to our present and future requirements. Also, there was negligible
maintenance of the property. The common areas of the property always remained
water logged. In fact, water entered into the office in the first week of March Yr – 4.
Moreover, the problem was aggravated due to absence of proper lighting in those
areas. I repeatedly made complaints to the maintenance department of Singer
Consultants Pvt. Ltd. and to Mr. Sunny Singh, but to no avail. Moreover, the central
air conditioning of the property did not work which added to our woes. I also spoke to
other occupants and they shared similar concerns.

4. Due to maintenance issues, we received negative feedback from our clients and some
of them even refused to come to the office again for meetings. I communicated this
to Ms. Elizabeth and told her to get the problem sorted or else we would be forced to
shut the office. We had to get the air conditioning re-installed by paying out of our
own pocket. But the other maintenance issues continued.

5. It was becoming increasingly impossible to work from that office and I requested
Ms. Elizabeth to send notice to Singer Consultants Pvt. Ltd. to terminate the lease and
to look for alternate office.

6. We vacated the property on 30 March Yr - 2 and shifted to a new office. Singer

Consultants is raising bogus claims only to extort money from us. Mr. Sunny Singh
even taunted me by saying that they don’t need to even look for a tenant as we would
be forced to pay the rent upto September Yr – 1.

157