Judgment:
IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL SIDE Present: The Hon’ble Justice Shivakant Prasad CS No.288 of 2007 Saraf Agencies Private Limited Versus Kanoria Jute and Industries Limited For the plaintiff : Mr. Maloy Ghosh, Advocate Mr. Aniruddha Mitra, Advocate Mr. Ajay Gaggar, Advocate Mr. A. Bose, Advocate Mr. S. Sarawgi, Advocate For the defendant : Mr. Sarathi Dasgupta, Advocate Mr. Sidhartha Sharma, Advocate Mr. Joydeep Dutta, Advocate Heard on :
22. 11.2016 C.A.V. on :
22. 11.2016 Judgment on :
22. 12.2016 This is a suit for eviction mesne profits valued at Rs. 17,51,804.64 p. Plaint case in brief is that by an agreement for tenancy dated April 17, 1979 Rahul Investment Ltd. let out the covered area measuring about 7500 sq. ft. at the Second and Ground Floor of the Premises No.4/1, Red Cross Place, Kolkata-700 001 to Gujarat Cotton Mills Pvt. Ltd. now known as Kanoria Jute & Industries Limited, being the defendant herein, was a monthly tenant of a portion of the ground floor and second floor of Premises No.4/1, Red Cross Place, Kolkata-700 001 (hereinafter referred to as the suit premises) under Rahul Investments Limited since the year 1979. The defendant accepted the plaintiff as its landlord in respect of the suit premises at a rental of Rs. 22,150/- per month which was paid lastly for the month of September, 2004. The corporation taxes for the demised portion was lastly paid at the rate of Rs. 13,456/- per quarter while the commercial surcharge for the demised portion was also paid at the rate of Rs. 13,456/- per quarter lastly for the quarter April, 2004 to September, 2004. No rent or corporation tax or commercial surcharge was paid for any period after September, 2004 against the arrears of rents and taxes for the prior period aggregating to Rs. 9,65,098/-. So, the plaintiff by a notice dated 22nd May, 2007 terminated the tenancy of the defendant with effect from expiry of one month from the date of receipt of the said notice by the defendant which was duly served upon the defendant by Registered Post on 29th May, 2007 calling upon the defendant to quit and vacate the suit premises but the defendant failed to vacate the suit premises. Hence, the suit. Defendant contested the suit by filing a written statement and contended inter alia, that the Hon’ble Court has no pecuniary jurisdiction to try the suit. The suit has been valued at Rs. 17,51,804.64 p., on the basis of rent, service charges, corporation taxes and commercial surcharges which were allegedly outstanding and payable by the defendant. Specific contention, is that the defendant is a sick industrial company within the meaning of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, in respect of which a Scheme as referred to under Section 17 of the said Act. As the instant suit has been instituted without obtaining consent of the concerned authority, the instant suit for recovery of money from the defendant is barred by law and as such, the instant suit to be dismissed in limine with costs. The management of the defendant changed in the year 1991. After such change of management, the plaintiff started claiming from the new management of the defendant municipal taxes and the new management of the defendant paid such municipal taxes to the plaintiff believing that the same was payable by the defendant over and above the monthly rent which the defendant is not liable to pay under the alleged agreement of tenancy dated 17th April, 1979. It is further contended that purported notice dated 22nd May, 2007 terminating the monthly tenancy of the defendant is not legal, valid and sufficient and was not duly served on the defendant. The defendant further stated that even after issuance of the purported notice dated 22nd May, 2007, the plaintiff has raised bills on the defendant for the monthly rent for the months of August and September, 2007 and the defendant has accepted such bills. In view of such issuance and acceptance of rent bills as aforesaid, the purported notice dated 22nd May, 2007 was waived by consent of the parties. The defendant has counter claimed for a decree for Rs. 61,81,107.89 paisa as pleaded in paragraph 17of written statement and further interest, interim interest and interest on judgement on the aforesaid sum from the respective due dates thereof until realization @ 18% per annum. Accordingly, the defendant has prayed for dismissal of the suit with cost. On the above pleadings following issues have been framed:
1. Has the Hon’ble Court pecuniary jurisdiction to receive, try and determine the suit?.
2. Is any portion of the alleged claim of the plaintiff barred by the laws of limitation as alleged in paragraph 1(a) of the written statement?.
3. Is the suit barred under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 as alleged in paragraph 1(b) of the written statement?.
4. Was the notice dated 22nd May, 2007 served properly on the defendant as alleged in paragraph 7 of the written statement ?.
5. Is the defendant liable to quit the demised portion of premises No.4/1, Red Cross Place, Kolkata-700 001 and deliver vacant possession thereof to the plaintiff?.
6. Is the defendant liable to pay the plaintiff any municipal taxes and Commercial Surcharge as alleged in the plaint?.
7. Was the last paid rent by the defendant to the plaintiff for the demised premises Rs. 22,150/- as alleged in paragraph 10 of the plaint?.
8. Did the defendant pay rent till September, 2005 as alleged in paragraph 6 of the written statement?.
9. Was the notice dated 22nd May, 2007 waived by the parties as alleged in paragraph 7 of the written statement?.
10. Is the plaintiff entitled to claim Rs. 17,51,804.64 from the defendant or any other sum as alleged in paragraph 14 of the plaint?.
11. Is the plaintiff entitled to claim any mesne profit and if so, at what rate and to what extent?.
12. Is the suit bad for misjoinder of causes of action as alleged in paragraph 13 of the written statement?.
13. Is the defendant entitled to claim from the plaintiff a sum of Rs. 61,81,107.29 and interest as alleged in paragraph 17 and 18 of the written statement?.
14. What further reliefs, if any, are the parties entitled to?. Issue nos. 1: Mr. Sarathi Dasgupta, the learned Advocate for the defendant has submitted that the suit is below the lower limit of the pecuniary jurisdiction of this Hon’ble High Court and that this Court has no jurisdiction to entertain this suit in view of admitted rate of rent @ Rs. 22,150/- per month payable at least till May, 2007 as per averments in paragraph 10 of the plaint. It is categorical statement of the plaintiff that last paid rent for the suit premises is at the rate of Rs. 22,150/- per month paid for the month of September, 2004 and the corporation taxes for the demised portion was lastly paid at the rate of Rs. 13,456/- per quarter while the commercial surcharge for the demised portion was also paid at the rate of Rs. 13,456/- per quarter lastly for the quarter April, 2004 to September, 2004 thus, the aggregate sum of Rs. 9,65,098/- was payable by the defendant. According to defendant, twelve months’ rent at the said rate comes to a sum of Rs. 2,65,800/- and the fact that the plaintiff had received rent from the defendant even much after September, 2004 as claimed in paragraph 10 of the plaint would be apparent from the fact that Exhibit –‘H’ contains only rent bills from the month of January to June, 2007. It is submitted that calculating the rent at such rate from October, 2004 till May, 2007 comes to a sum of Rs. 7,08,800/- only. The calculation given at paragraph 14 of the plaint shows a sum of Rs. 10,32,100/- as outstanding rent for the said period which according to the defendant is ex facie wrong. It is also submitted that corporation rates and taxes and commercial surcharges and outstanding electricity charges cannot be included in rent for the purpose of valuation of the suit. It is also argued that the order passed by the Hon’ble Supreme Court on 27th August, 2013 recognized that the occupation charges for the premises has to be tried separately from the other charges and taxes and the same cannot be clubbed together as per the terms No.(vii) of the said order. But I do not find any such observation passed by the Hon’ble Apex Court in respect of the pecuniary jurisdiction of this Court. It would appear from the letter of the defendant dated 03.1.2008 Exhibit‘G’ that defendant gave proposal to the plaintiff to liquidate the entire dues of Rs. 19,91,206.82 against outstanding rent and other costs up to 31.12.2007, details of the rent and other charges described in the separate sheet shows that outstanding rent and taxes is to the tune of Rs. 9,65,098/- and rent from October, 2005 to May, 2007 is Rs. 4,43,000/- and rent from June 2007 to December, 2007 is Rs. 1,74,214.18. The plaintiff has filed suit for eviction and mesne profit. The tenancy was terminated by notice dated 22nd May, 2007 calling upon the defendant to quit and vacate the premises within one month from the date of service of notice. Therefore, considering outstanding dues on account of rent at the rate of Rs. 22,150/- per month and mesne profit after the termination of the tenancy calculated at the rate of rent would exceed the pecuniary limit of Rs. 10,00,000/-and it cannot be held that this Court has no pecuniary jurisdiction to entertain the suit inasmuch as the Hon’ble Apex Court by order dated 27th August, 2013 passed in Special Leave to Appeal (Civil No.15524 of 2011) by the Hon’ble Supreme Court requested the Court to decide the suit expeditiously. Thus, the issue is decided in favour of the plaintiff. Issue No.2 : This issue relates to the averment made in paragraph 1(a) of the written statement. It is contended that a perusal of the plaint and annexure thereto would reveal that substantial claim of the plaintiff is barred by law of limitation. But from evidence of the defendant witness namely Upendra Prasad Singh, Executive Officer of the defendant company, I do not find any material on record to hold the issue of limitation against the plaintiff. This is a suit for eviction and mesne profits. The defendant has admittedly defaulted in payment of rent in respect of the suit premises which is apparent from the answer to question No.30 put to Mr. Singh who has unequivocally stated that defendant has been defaulting because the Mill has been closed down and has made a proposal to the plaintiff to clear their dues in instalments. This apart, this issue is not pressed during trial. Accordingly, it is held that the suit is not barred by limitation. Issue No.3 : The defendant have proved a letter No.3(K-1)/BC/2016 dated 19th April, 2016 of Ministry of Finance, Board for Industrial and Financial Reconstruction, Government of India, Exhibit-4 to show that reference under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 in respect of the defendant company has been registered on 16.2.2016 before the Board for Industrial and Financial Reconstruction as BIFR case No.63/2016. Thus, Mr. Dasgupta submitted that the suit is barred under the said Act. Per contra, Mr. Ghosh submitted on behalf of the plaintiff that as per Notification dated 25th November, 2016 the said Act has been repealed with effect from 11.2.2016. Therefore, the bar under Section 22(1) of SICA does not subsist anymore and the plaintiff is entitled to decree for eviction and mesne profit against the defendant directing them to deliver up peaceful vacant possession of the suit premises unto the plaintiff. The Gazette Notification dated November 25, 2016 of the Ministry of Finance is reproduced hereunder— “NOTIFICATION New Delhi, the 25th November, 2016 S.O. 3568(E).—In exercise of powers conferred by sub-section (2) of section 1 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (1 of 2004), the Central Government hereby appoints the 1st day of December, 2016, as the date on which the provisions of the said Act shall come into force.”
. “NOTIFICATION New Delhi, the 25th November, 2016 S.O. 3569(E).—In exercise of powers conferred by clause (b) of section 4 of Sick Industrial Companies (Special Provisions) Repeal Act, 2003(1 of 2004), the Central Government hereby notifies the 1st day of December, 2016, as the date for the purpose of clause (b) of section 4 of the said Act.”
. Now it conclusively follows that the suit cannot be held to be barred under the provision of Sick Industrial Companies (Special Provisions) Act, 1985 as alleged in paragraph 1(b) of the written statement, that the plaintiff being a Sick Industrial Company cannot be sued without obtaining consent of concerned authority under the Act for recovery of money from the defendant. Thus, this issue is decided in the negative against the defendant. Issue nos. 4 & 5 : The legality, validity and sufficiency of the notice under Section 106 of Transfer of Property Act (Exhibit-‘A’) has been questioned by inviting my attention to the agreement dated April 17, 1979 disclosed by the plaintiff in Judges brief of documents appearing at pages 23 to 32A which has not been marked on proof in evidence inasmuch as the same has not been admitted by the defendant in the trial. However, Mr. Dasgupta adverted to the deposition of plaintiff witness Ajitraj Mehta who has deposed about the said agreement of tenancy between Rahul Investment and New Gujrat Cotton Mill in respect of the portion let out to them. The witness has stated that original of this document is untraceable. Since, the said agreement was not admitted in evidence by the defendant company, I am unable to persuade myself with the submission of Mr. Dasgupta that the plaintiff having run a case that there was a contract under which the property was let out to the defendant, the plaintiff was required to aver as to the effect of such agreement on the notice of termination and that plaintiff having not made any averment, the said notice of termination is not legal, valid and sufficient, in view of the terms of the contract and such notice is non est in the eye of law and the termination of tenancy is invalid. Such submission could have been considered, had the defendant admitted the agreement of tenancy by and between the parties during trial. On the other hand, Mr. Ghosh submitted that the issuance of the notice under Section 106 of the Transfer of Property Act, 1882 and service of the same upon the defendant is concerned both the witnesses on behalf of the plaintiff have adduced evidence proving the notice under Section 106 of T.P. Act, postal receipt and acknowledgement card due by which the tenancy of the defendant has been lawfully terminated. Admittedly, the suit premises in question was let out for non-residential purpose. The tenancy of the defendant is not protected under Section 3(f) of the West Bengal Premises Tenancy Act, 1997 being the local Rent Act, as the monthly rent is above Rs. 10,000/-. So, the provisions of Transfer of Property Act, 1882 applies. Having perused the evidence of Ajitraj Mehta a director of the defendant company and the copy of the notice dated 22nd May, 2007 Exhibit-‘A’ collectively marked with Postal Receipt and the A.D. Card, this Court holds that legal, valid and sufficient notice under Section 106 of the T.P. Act was duly served upon the defendant. Therefore, submission that defendant has not received purported notice of termination as per the evidence of the defendant witness in his answer to questions 18, 19 and 62 that he has never seen such notice and was not received by the defendant cannot be accepted. It is submitted that there is no seal or emblem of the defendant put on the acknowledgement due card. In answer to question 147, the first witness of the plaintiff has stated that the rent bills were not acknowledged by the defendant. Thus, answer to question 147 related to the rent bills and not in respect of the notice served on the defendant. It is clenched position of law that it is not for the sender of the letter/notice to see that it reaches the addressee. It is sufficient if it is put to the Post Office under Registered Post with A.D. as presumption arises as per the provision of Section 27 of the General Clauses Act. The plaintiff has proved notice under Section 106 of Transfer of Property Act Exhibit-‘A’ collectively with the Postal Receipt and the Postal Acknowledgement Card wherefrom it is revealed that a notice to quit was issued upon the defendant company dated 22nd May, 2007 and the same was duly served on the defendant on 29.5.2007, calling upon the defendant to quit, vacate and deliver peaceful and ‘khas’ possession of the tenanted premises to the plaintiff within one month from the date of service of the notice. The tenanted premises as described in the notice is same as in the Schedule ‘A’ to the plaint. I am of the opinion that when the tenant has neither paid nor tendered whole of the arrears of rent legally recoverable from the tenant the landlord shall be entitled to an order of eviction upon termination of tenancy by a proper notice under Section 106 of the T.P. Act. (see. AIR1995SC985. Therefore, I hold that a legal, valid and sufficient notice was duly served on the defendant determining the tenancy of the defendant in respect of the suit premises Thus, the above issues are decided in favour of the plaintiff. Issue No.9 : Mr. Dasgupta submitted that the rent bills were raised by the plaintiff even after the alleged notice of termination of tenancy for three consecutive months. The plaintiff witness has sought to explain issuance of such rent bills by the mistake of Accounts Department as reflected from answer to question No.149 given by Ajitraj Mehta, the first witness of the plaintiff. The witness has also stated that the bills were automatically generated and delivered to the defendant which has been signed by S. K. Soni, an official of the plaintiff, Exhibit-‘H’. It is submitted that it shows an intention of the plaintiff, no further to terminate the tenancy and intended that the defendant should continue as a tenant/lessee. In this context, Mr. Dasgupta has pointed out that issuance of said three rent bills amounted to waiver of notice to quit under Section 113 of T.P. Act which reads thus—
“113. Waiver of notice to quit.—A notice given under section 111, clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting. Illustrations (a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B tenders and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived. (b) A, the lessor, gives B, the lessee; notice to quit the property leased. The notice expires, and B remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived.”
. Now, in support of such contention he has relied on a decision in case of A.E.G. Carapiet vs. A.Y. Derderian reported in 1960 SCC On Line Cal. 44: AIR1961Cal. 359, in which an appeal by the propounder against the judgement and decree of dismissal of application of probate of the Will was dismissed. This case in my humble opinion is not on the question of waiver of notice to quit. It is further submitted that plaintiff is accepting the rent and other charges from the defendant obtained an order dated August 27, 2013 of the Hon’ble Supreme Court without reservation as to its right of waiver of notice to quit and further relied on the reported judgment in case of Ganga Dutt Murarka vs. Kartik Chandra Das and others reported in (1961) 3 SCR813: AIR1961SC1067wherein by a letter dated 15.5.1957 respondent being the landlord had called upon the appellant tenant to vacate and deliver possession on the expiry of the period of tenancy. Possession was not delivered by the appellant tenant and he continued to pay stipulated amount and the same was accepted by the respondent. The High Court had held that merely accepting rent from the appellant and by failing to take action against him, the appellant did not acquire the rights of a tenant holding over. It was observed in paragraph 6 of the cited case thus— “It is true that in the notice dated 10.10.1950 the appellant is described as a “monthly tenant”., but that is not indicative of conduct justifying and inference that a fresh contractual tenancy had come into existence. Within the meaning of the West Bengal Premises Rent Control Act, 1950, the appellant was a tenant and by calling the appellant a tenant the respondents did not evince an intention to treat him as a contractual tenant. The use of the adjective “monthly”. also was not indicative of a contractual relation. The tenancy of the appellant was determined by efflux of time and subsequent occupation by him was not in pursuance of any contract express or implied, but was by virtue of the protection given by the successive statutes. This occupation did not confer any rights upon the appellant and was not required to be determined by a notice prescribed by Section 106 of the Transfer of Property Act.”
. With the above observation the Hon’ble Apex Court dismissed the appeal by the appellant tenant. In my respectful consideration of the decision cited above the same is distinguishable from the facts of the instant case and is no help to the defendant’s case of waiver of notice to quit as required under Section 113 of T.P. Act. Had the defendant paid the rent to the plaintiff in respect of the bills spread over three months as issued by the plaintiff after termination of notice, the defendant could maintain his stand for the waiver of notice to quit as under Section 113 of the T.P. Act. Therefore, it is not a case of waiver of notice to quit rather in default on the part of the defendant in not complying with the conditions embodied in the order of the Hon’ble Apex Court plaintiff shall be entitled to a decree of eviction of the defendant from the suit premises. So, I am unable to accept the submission of Mr. Dasgupta that the order dated 27th August, 2013 passed in Special Leave to Appeal (Civil No.15524 of 2011) by the Hon’ble Supreme Court to meet the ends of justice, the payment and acceptance of rent in compliance thereof amounted to waiver of notice to quit under Section 113 of the said Act. Therefore, the notice dated 22nd May, 2007 cannot be treated as waiver of notice to quit as alleged by the defendant in paragraph 7 of written statement, ergo, the issue is decided in the negative against the defendant. Issue nos. 6, 7, 8, 10, 11, 13 &14 : The above issues are taken up together for the sake of convenience in discussion. Mr. Malay Ghosh, learned counsel for the plaintiff has contended that the defendants were occupying the suit premises without payment of rent, Municipal Taxes, Commercial Taxes etc. since 2005 and a Special Leave Petition was preferred by the plaintiff and heard by the Hon’ble Supreme Court, wherein a claim of more than 50 lakhs on behalf of the plaintiff was made which was due on account of various heads. The Hon’ble Apex Court was of the opinion that for non-payment of the legitimate dues of plaintiff since 2005 it was necessary for the ends of justice that the defendant pays all the arrear dues of the plaintiff and accordingly, directed the defendant to deposit an amount of Rs. 1 crore out of which Rs. 45 lakhs would be adjusted towards the rent/occupational charges, service charges, service tax, corporation tax and electricity charges up to the month of August, 2013 and the balance amount of Rs. 55 lakhs to be retained by the plaintiff as interest free deposit subject to adjustment as per the decree that may be passed by the Hon’ble Court in the Civil Suit. It is reflected from the order dated 27th August, 2013 passed in Special Leave to Appeal (Civil No.15524 of 2011) by the Hon’ble Supreme Court that to meet the ends of justice following terms were embodied in the said order, inter alia— “ (i) The respondent— Kanoria Jute & Industries Ltd. shall pay an amount of Rs. 1 crore to the petitioner- Saraf Agencies P. Ltd. – by way of demand draft or pay order or banker’s cheque. (ii) The above amount shall be paid in four monthly instalments of Rs. 25 lakhs each. The first instalment shall be paid on or before 15th September, 2013 and the remaining three instalments shall be paid on or before 15th October, 2013, 15th November, 2013 and 15th December, 2013. (iii) On payment of the above amount by the respondent to the petitioner, the amount of Rs. 45 lakhs shall be adjusted against the rent/occupation charges, service charges, service tax, corporation tax, corporation tax and electricity charges up to the month of August, 2013. (iv) The petitioner shall have no claim under any of the above heads against the respondent up to the month of August, 2013 after the adjustment of Rs. 45 lakhs. (v) The remaining amount of Rs. 55 lakhs shall be retained by the petitioner by way of interest free deposit. This amount shall be subject to adjustment as per the decree that may be passed by the High Court in Civil Suit No.288 of 2007 and the balance, if any, shall be refunded by the respondent to the petitioner. (vi) In case respondent discharges its entire liability and no amount is payable to the petitioner under the decree the amount of Rs. 55 lakhs shall be refunded by the petitioner to the respondent. (vii) The respondent shall pay occupation charges for the month of September, 2013 at the rate of Rs. 24,470/- and in addition to that amount, the respondent shall also pay service charges, service tax, corporation tax and electricity charges on or before 10th day of October, 2013 and continue to pay the above occupation and other charges for the subsequent months on or before 10th day of each succeeding month. (viii) If the respondent commits default of any of the above, then its defence shall be struck off and the decree of eviction may be passed by the High Court forthwith. (ix) Water connection for the premises, if not restored so far, shall be restored by the petitioner at the earliest. (x) The respondent shall not transfer or create any third party rights or interest or encumbrance in the subject property in any manner whatsoever.”
. As such, for compliance of the above terms an undertaking was to be filed by the petitioner through an officer duly authorised by its Board of Directors within 15 days from the date of the order. It further reflects vide term (viii) of the said order, if the respondent commits default of any of the terms then defence shall be struck off and the decree of eviction may be passed by the High Court forthwith. This Court finds from the documents Exhibit-‘C’ collectively marked on behalf of the defendant that defendant is complying with the Hon’ble Supreme Court direction aforesaid in its letter and spirit. In the context above, issues are decided and disposed of. Issue No.12 : This issue is not pressed during trial. Thus, disposed of. In the result, suit succeeds. Hence, ordered that C.S. 288 of 2007 is hereby decreed on contest against the defendant with costs. The plaintiff do get a decree of eviction and mesne profit against the defendant in delicto of non-compliance of any of the terms of the solemn order dated 27th August, 2013 passed in Special Leave to Appeal (Civil No.15524 of 2011) by the Hon’ble Supreme Court. Department and all parties to act on the certified copy of this judgement. (SHIVAKANT PRASAD, J.)