Electricity Disconnection and Lease Disputes: Supreme Court Ruling in Infinity Infotech Parks v. Shiva Jute Mills

The case of Infinity Infotech Parks Limited v. Shiva Jute Mills Private Limited revolves around a lease dispute where a tenant refused to pay lease rent, maintenance charges, and electricity charges for several years, leading to the disconnection of electricity services. The Supreme Court had to decide whether the electricity should be restored without payment and how much the tenant was liable to pay.

Infinity Infotech, the petitioner, leased out the 16th floor of the Infinity Benchmark building in Kolkata to Pearl Studios Pvt. Ltd., which sub-leased it to Shiva Jute Mills Pvt. Ltd. (Respondent No.1). However, the tenant failed to pay dues for more than seven years, leading to legal disputes.

Arguments by the Petitioner

The petitioner argued that the tenant occupied nearly 30,000 sq. ft. of space but did not pay any lease rent, maintenance charges, or electricity bills. The petitioner contended:

“The sub-lessee cannot claim that no amount is payable by it. It has not paid a single rupee to the petitioner despite occupying the premises for more than 7 years.”

They claimed dues of Rs. 7,29,240 for lease rent, Rs. 2,20,837.50 per month for maintenance, and Rs. 1,10,000 per month for electricity.

Arguments by the Respondent

The tenant (Shiva Jute Mills) argued that it was not liable for some of the charges, particularly the electricity bill, since air-conditioning services were not provided. They contended:

“The amount of Rs.15 per sq. ft. was payable only for the first year from commencement of the sub-lease, and thereafter, it was to be paid on actual basis plus 20% as management fees.”

The tenant also claimed that the lease deed was unregistered and should not be enforced.

Supreme Court’s Analysis

The Court held that the tenant could not occupy the premises without making any payments. It observed:

“We are, therefore, of the view that the High Court clearly misdirected itself in directing restoration of the electricity without ensuring payment of some amount to the petitioner.”

The Court ordered that maintenance charges be fixed at Rs. 7.50 per sq. ft., reducing the total monthly liability but ensuring fair payment.

Final Verdict

The Supreme Court set aside the High Court’s order and directed the tenant to pay Rs. 1 crore immediately and clear the remaining Rs. 2.24 crore in three installments. Only upon the first payment would electricity be restored.

Petitioner Name: Infinity Infotech Parks Limited.
Respondent Name: Shiva Jute Mills Private Limited.
Judgment By: Justice Deepak Gupta, Justice Aniruddha Bose.
Place Of Incident: Kolkata, West Bengal.
Judgment Date: 07-02-2020.

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