C.S. No.202 of 2011 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction Original Side Fortune Investors & Traders Limited & Ors. Vs. Punjab National Bank Appearance: Mr. Abhrajit Mitra,Sr.Adv., Mr. Jishnu Chowdhury, Sr. Adv., Mr. S.Roy Chowdhury, Adv., Mr.Soumabho Ghosh, Adv., Ms. Radhika Singh .. for the Plaintiff Nos. 1 to 3 Mr. Satadeep Bhattacharya, Adv., Mr. S. Biswas, Adv., Mr. A.K. Roy, Adv. …for the Plaintiff No.2 Mr. Joy Saha, Adv., Mr. Sourav Mukherjee, Adv., Mr. Shekhar B. Saraf, Adv., Mr. G,N. Jagodia, Ad. ... for the Defendant Judgement On: - 29.09.2014 I.P. MUKERJI, J.
By a document dated 25th October, 1990, claimed to be a lease, the plaintiffs, being the joint undivided owners of premises No.44 Park Street, Kolkata- 700016 ( hereinafter referred to as “the said premises”.) purported to demise 7241 square feet on the ground and mezzanine floors of it to the defendant for 21years commencing from 10th July, 1990. Admittedly the document is unregistered and appears to be deficiently stamped. All alleged rights of the parties under the document were extinguished on 09th July, 2011by efflux of time. So any discussion on its validity is purely academic. The defendant paid rent till June, 2011. On 10th July, 2011 either the bank was a trespasser or a monthly tenant or lessee. The plaintiffs treated the defendant as a monthly tenant or lessee by their notice dated 28th June, 2011, (exhibit I). It recited the earlier correspondence, by which the defendant was asked to vacate the said premises by 9th July, 2011. Thereafter it was stated that the letter was a notice under Section 106 of the Transfer of Property Act, 1882. The defendant was called upon to vacate the said premises by 31st July, 2011. Mr. Saha, learned counsel for the defendant contended that there was incongruity in the notice because treating the relationship as a monthly tenancy or lease, the defendant was asked under Section 106 of the said Act to vacate the premises on 09th July, 2011. Alternatively in the said notice there was a stipulation that the defendant had to deliver vacant possession by the expiry of July, 2011. The notice purported to determine the lease under Section 111(h) of the Transfer of Property Act, 1882. He submitted that there could not be different dates for determination of a tenancy or lease. The notice to determine the tenancy or lease was incongruous and gave no right to the plaintiff. He also submitted that if it was taken as determination of a monthly lease under Section 106 of Transfer of Property Act, 15 clear days’ notice was not given. The substantial point which in my opinion has been taken by Mr. Saha is that the notice to determine was waived or rendered inoperative or null and void by the subsequent conduct of the parties. Could it be said that the notice of determination of the tenancy or lease was waived under Section 113 of the said Act?. After the alleged determination of the lease or tenancy, Fortune Investors and Traders Limited, the first plaintiff and Victor Commercial Company Limited, the third plaintiff entered into negotiations with the defendant. On 06th September, 2012 Fortune wrote a letter to the bank. In the first paragraph of this letter it was clarified that it was written without prejudice to their rights and contentions. This letter is exhibit 1. Thereafter, there was a proposal to grant on lease to the bank 40% of the undivided area owned by Fortune in the said premises, on the terms and conditions mentioned in the said letter with effect from 10th July, 2011. On the same day Victor Commercial Company Limited having 20% undivided share in the said premises wrote an identical letter to the defendant which is exhibit 2. On receipt of this offer the bank on 1st November, 2013 wrote to the second plaintiff, being ext. 13, asking them to concur in the offer of the other plaintiffs. The bank also stated that the proposals of the first and third plaintiffs had been sent by them to their head office for approval. It appears from the evidence on record that the second plaintiff did not concur. The negotiations continued as would appear from the email dated 28th February, 2014(Exhibit
12) sent by the bank to [email protected] with a copy to [email protected] (the first and the third plaintiffs). The mail said the lease would be for 21 years from 10th July, 2011 till 9th July 2032 with the option of renewal every five years. Rent and “utility charges”. would be enhanced @20% on every renewal. The reply mail was dated 4th March, 2014 from [email protected] referring to the letters dated 6th September, 2012 of the first and the third plaintiffs. The email dated 10th March, 2014 of [email protected] to the bank referred to “our ongoing discussions without prejudice”.. The bank by their reply mail of 11th March, 2014 said they were awaiting final approval from their head office. These two emails constitute exhibit 11 Mr. Bikash Das witness for the defendant/bank deposed the following in cross examination:
“62. Shown DD-18 What is this document about ?./This is an email copy downloaded from computer.
63. How many emails are there ?./ This is a communication that Mr. Tapan Panda has conveyed to Punjab National Bank, Branch Corporate email ID.
64. [Question repeated].?./ In this case there are two emails.
65. Kindly tell the dates of the emails?./ First one is dated February 28, 2014. This was sent from the Punjab National Bank. The other one is dated 4th March, 2014.
66. How did you get hold of these two emails?./I have downloaded these emails from the PC.
67. Wherefrom the email dated 28th February, 2014 had been sent?./ It was sent from the Main Branch Corporate email ID.
68. Who February, had sent 2014?./ this Chief email 28th dated Manager, Punjab National Bank, Kolkata.
69. To whom this email was sent?./ This mail was sent to one of the Directors of the plaintiff no.1 and copy was endorsed to the Chief Financial Officer of the Plaintiff No.1.
70. What was the occasion for the Chief Manager to send this email?./ Because there was a negotiation regarding finalization of the offer given by them by their letter dated 6.9.2012, the communication we have received from the plaintiff no.1 and no.2. There was a negotiation for finalization. In between this period the question comes for the lease period to be finalized for a period of 21 years. Now, question comes negotiation if enhancement has to be made for each and every after five years then there is a fraction of one year. So, our authority has right to know how this bifurcation lie- 5,5,5 + 6 or 5,5,5+1. So, that communication we have asked from the company, i.e., the plaintiff, to know the exact bifurcation of 21 years lease period. In return, they have sent this email.
71. Was this email sent during the usual course of business?./ Yes, because time was also mentioned there.
72. Did the plaintiffs reply to this email?./ Yes.
73. When was this email replied?./ On 4th March, 2014.
74. Who was sent this email dated 4th March, 2014?./ It has been sent by the Chief Financial Officer of the plaintiff no.1 and they have sent to us and have endorsed a copy to other plaintiffs also, that means the company.
75. To who this email dated 4th March, 2014 was addressed ?./ It was addressed to Punjab National Bank, 44, Park Street Branch and the copy of the same was forwarded to Rahul Almal, the plaintiff no.2, one of the directors of the company and the second copy was forwarded to Shruti Saraogi, the plaintiff no.3.
76. Whether the query made by you had been replied to in the email dated 4th March, 2014?./Yes.
77. Whether the contents of the letter dated 4th March, 2014 are true and correct?./ Yes.
78. Where the computer is situated wherefrom you have stated to have downloaded the email?./ This computer is on my desk where I am sitting in the office.
79. Can you received this email during the usual course of business?./ Yes. To Court:
80. Is it a kind of centralized server of the Branch through which document can be downloaded by any officer?./ yes. To Advocate:
81. Whether this is a true copy of the email as appeared in the desktop received by the bank during the usual course of business?./ Yes. [The document being DD-18 is tendered and marked as Ext.12.].
“94. [Shown a copy of the letter dated 1st November, 2013 being DD-M]. What is this document about ?./ This is a letter sent to the plaintiff No.2 by Punjab National Bank, the defendant, giving the information that the plaintiff No.1 and No.3 are negotiating with us and they have given a written offer for renewal of the lease and they also held the major part of the space together and we have recommended their proposal for acceptance to our higher authority.
95. Who had sent this document shown to you ?./This was sent by me.
96. Was this letter written in the usual and normal course of business?./ Yes.
97. Are the contents of this letter true and correct ?./Yes.
98. [Shown a copy of another letter being DD15,dated 7.3.2014 together with annexure thereto]. what is this document about?. / This is a communication made to our Controlling Office, sent by the 44, Park Street Branch and this information contains the negotiation we had with the plaintiff No.1 and No.2 as well as some reply to the queries raised by the authority where one of the vital points is that what are the emails just before we had conveyed regarding bifurcation of the 21 years lease period.
99. Why was this letter written by the Branch to the Controlling Office and what are the contents of the annexure thereto?./ This letter was written to the authority based on their queries raised by an email dated 3rd March, 2014. The authority wanted to know some information about the proposal we had sent to them for finalization of the lease period.
100. Did the branch accept or recommend the rate of rent that was being sought by the plaintiff nos. 1 and 3 ?./ Yes, we had agreed and we had sent a proposal accordingly.
101. Who have you sent the proposal to ?./ Branch had sent the proposal to Howrah office through our Controlling office.
102. And where is this proposal or recommendation of the branch contained?./ Branch recommends that this is the rate asked by the party and we are recommending to accept this.
103. [Shown document being Annexure-M} Does this document contain any proposal or recommendation of the branch made to the higher authority?./Yes.
104. [Shown letter dated 6.9.2012 being Ext.1 in this proceeding, written by Fortune Investors and Traders Ltd.]. What is this document about?./This is the letter written by the plaintiff No.1 to the Punjab National Bank in response to the communication sent to them vide letter dated 13th June, 2012.
105. Did the plaintiff nos. 1 and 3 agree to extend the lease in favour of the Punjab National Bank?./Yes.
106. If the plaintiff nos. 1 and 3 had agreed to extend the lease in favour of Punjab National Bank as far back as on 6th September, 2012, why was no formal lease deed executed?./ Actually, this is due to the fact that whatever amount they have asked or claimed for renewal, bank has agreed and recommended also to our authority for approval. But due to one technical point from outsider, we could not convince our authority that we are occupying 100%possession recommending 60% of but the we are lease for execution. So, definitely third party should come for finalization. But actually though the two other parties will convince the third one, they could not do that and again we are also sending 2 or 3 communications to them to come forward in line with the plaintiff nos. 1 and 3 but they did not come forward with any written communication. That is why, this could not be materialized. On the above evidence Mr. Saha submitted that the notice of determination of the monthly tenancy or lease, dated 28th June, 2011, stood waived or nullified by the conduct of the parties. Mr. Mitra, learned senior advocate for the plaintiffs submitted that all negotiations were made without prejudice. The second plaintiff had not negotiated at all. No agreement had been reached to revoke the notice to quit. FINDINGS Now, I come to my findings. The document described as the deed of lease dated 25th October, 1990 w.e.f. 10th July, 1990 was not properly stamped or registered. There were some provisions in the document to suggest that it was an agreement to lease and that a formal lease deed would be registered later. For all intent and purposes, the document purported to be a demise. It cannot be recognised as such for lack of proper stamping and registration. The parties also acted on the basis that it was valid. Rent was paid from month to month upto June 2011. Respecting the intention of the parties expressed in the document, the plaintiffs did not issue any notice to quit to the defendant before expiry of the whole term. Then the notice dated 28th June, 2011 was issued giving the defendant the whole of July to quit and vacate the premises. This letter referred to the earlier letters of the plaintiffs to the defendant asking them to vacate the said premises on 09th July, 2011 according to the terms of the purported lease. I find nothing in the letter to suggest two dates of determination of the lease or tenancy. If the lease was valid, the bank became a trespasser on 9th July, 2011. No notice was required. Any issued was nonest. Realising that the bank might set up the defence of an invalid lease and a monthly tenancy or lease it was determined by the plaintiffs under Section 106 with effect from 31st July, 2011. Hence, I find nothing wrong in the notice dated 28th June, 2011. There is no merit in the submissions of Mr. Saha, on this point. The question of waiver or nullification of a notice of determination of a lease has been considered by our courts on several occasions. In Tayabali Jaffarbhair Tankiwala Vs. Messrs. Asha & Co. And Another reported in 1970 (1) SCC46the landlord issued a notice to the tenant terminating his tenancy on the ground of non-payment of rent. He issued the second notice treating the tenancy as subsisting. On these facts Mr. Justice Grover held that for operation of Section 113 of the Transfer of Property Act, 1882, it had to be proved that any act had been done by the landlord or lessor to show an intention to treat the lease as subsisting. Concurrently there must be an express or implied consent on the part of the tenant to such an act. Only then there could be proper waiver of the notice to quit. Similar was the ratio of the judgment delivered by Mr. Justice Shah in Calcutta Credit Corporation Ltd. & Anr. vs. Happy Homes (private) Ltd. reported in AIR1968SC471in relation to determination of a lease with reference to Sections 106 and 111(h) of the said Act.In M/s. Bungo Steel Furniture (Private) Ltd. Vs. Pulin Chandra Daw reported in (1987) 1 CHN116a Division Bench of our Court held on the facts of that case that a second notice had treated the lease as subsisting. The lessor was taken to have waived the forfeiture. Basudeb Chowdhury vs. West Bengal State Electricity Board reported in (2003) 1 CHN40and Amar Nath Pramanick vs. Sanjib Das Gupta & Ors. reported in 2008(3) CHN962said that where a notice was required to determine a lease or tenancy, the notice had to be valid. In the later case it was held that the effect of a notice may be nullified by conduct of the parties. The issuance of a second notice can have the effect of waiver of the first notice as held in Binoy Kumar Majumder & Anr. vs. Gopi Chand Pal & Ors. reported in (2009) 4 ICC251 Waiver of a right and estoppel by conduct may have the same consequences but they are not the same as held by the Hon’ble Supreme Court in Supdt. of Taxes vs. Onkarmal Nathmal Trust reported in (1976) 1 SCC766 What is more important, as noticed in the judgment is that waiver is a species of contract. On the other hand, the doctrine of estoppel operates when without a contract, one person by his words or actions, represents to another the existence of certain facts or makes a promise to him, on which the other person acts and alters his position. The person making the representation or promise is not allowed to contend anything which is contrary to the representation or promise. This is more a rule of evidence. Estoppel might prevent the lessor to sue on the notice to quit but does not nullify it. It appears from the above authorities that for reversing the effects of a notice to quit, there has to be waiver. In other words, there must be an express and implied contract between the parties not to give effect to the notice. In my opinion, there was no waiver of the notice to quit because there was no express or implied agreement between the parties to this effect. To constitute waiver there must be a certain conduct manifested by one party which has to be accepted by the other. There is no doubt that at least two of the three plaintiffs had entered into active negotiations with the defendant bank for renewal of the lease or tenancy. But these negotiations had been done without prejudice to their rights and contentions. No agreement was reached between them. There was no manifestation or intention on the part of the first and third plaintiffs that they had abandoned their rights arising out of the notice dated 28th June, 2011. Therefore, there was no waiver of the notice to quit or its nullification. Moreover, in my opinion the said premises is jointly held by the three plaintiffs. Any negotiation had to be joint. Any two co-sharers could not by themselves segregate the said premises and give it on lease to the bank. A formal partition had to be obtained, parties or from a court of law. by an agreement between the Therefore, the defendant bank is a trespasser from 01st August, 2011. The plaintiff had the premises valued by a valuer and surveyor. The valuer and surveyor gave evidence with regard to the valuation of the property. At the time of trial of the suit I indicated to Mr. Mitra, learned senior advocate for the plaintiffs that I did not want to rely on his evidence and if the plaintiffs were successful I would refer the determination of mesne profits to a Referee to be appointed by this court. At that point of time, Mr. Mitra submitted and he would be happy if the court granted as mesne profits occupation charges at the rate suggested by the defendant bank by their letter dated 13th June, 2012 which is PD30 (Exihibit-L). Therefore, I decree this suit in terms of claim (a) of the plaint. However, considering the fairness shown by the bank in the negotiations for renewal of the lease and increase of rent and the public service rendered by it, I grant them time upto 31st March, 2015 to vacate the subject premises, subject to the defendant making payment of occupation charge and other charges tabulated below to the plaintiffs from the date of the decree till they vacate the said premises. I also pass a decree for mesne profit at the following rates per month, in terms of the said exhibit, together with electricity charges. Service Tax and Municipal Tax and electricity charges will be reimbursed by the defendant to the plaintiffs.
1. Rent 2 Service Tax Rs. 9,05,125/- per month for 7241 sq.ft. +S.tax (Rs.125/- per sq.ft) Rs. 1,11,873/- 3 Maintenance + S. Tax Rs. 12,204/- 4 5 AC Charges + S. Tax Generator Charges + S. Tax Other Taxes (KMC) Electricity Charges Rs.38,646/Rs. 30,787/- 6 7. Rs. 70,962/- The defendant will pay such mesne profit from 1st August, 2011 till the date of their vacating the premises after making deduction of the amount already paid. Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (I. P. MUKERJI, J.)