Summary: On February 3, 2026, the Madras High Court dismissed requests by Prime Store to re-examine their case against Sugam Vanijya Holdings about a lease agreement disagreement. The court confirmed the original decision, emphasizing the fairness of the agreed-upon compensation for breaking the lease early.
Prime Store, based in Tiruppur, had a lease agreement with Sugam Vanijya Holdings, located in Bangalore. The lease included a commitment to stay for 36 months, with specific terms for compensation if the lease was ended early.
On October 8, 2025, the court initially sided with Sugam Vanijya Holdings, allowing them to claim compensation without having to show they lost money. Prime Store asked for a review, arguing that the court ignored an important Supreme Court case, the Maula Bux case, which says you need to show a loss to claim damages.
Justice N. Anand Venkatesh looked at the arguments on January 27, 2026. The court reviewed past decisions, including the Maula Bux case and another case, ONGC v. Saw Pipes, which explained that proving a real loss isn't necessary if the compensation is a fair estimate agreed upon beforehand.
"The court can give reasonable compensation if a contract is broken, even if no real damage is shown," the court noted.
The court found no mistake in the original decision, stating that the lease agreement's Clause 4.3 was a fair estimate of damages. The court emphasized that Sugam Vanijya Holdings was hurt legally because the lease ended early.
The requests for a review were turned down on February 3, 2026, confirming the original decision. The court repeated that the compensation clause was fair and not a punishment, thus supporting Sugam Vanijya Holdings' claim.
