Coal India Limited Vs. Apeejay House Private Ltd. - Court Judgment

Form not J.(2) IN THE HIGH COURT AT CALCUTTA Civil Appellate Jurisdiction Original Side Present : The Hon’ble Mr.Justice Ashim Kumar Banerjee And The Hon’ble Ms.Justice Shukla Kabir (Sinha) A.P.D.No.216 of 2009 C.S.No.42 of 2006 Coal India Limited -VSApeejay House Private LTD.Heard on : December 18 and 19, 2012 & January 4, 2013.

AND A.P.D.No.256 of 2009 C.S.No.72 of 2006 Coal India Limited -VSApeejay House Private LTD.Heard on : January 7 ”

2013.

For the Appellant : Mr.Pradip Kumar Dutta, Mr.Partha Basu, Senior Advocate Advocate For the Respondent : Mr.Anindya Mitra, Advocate General Mr.Sarbapriya Mukherjee, Advocate Ms.Swati Agarwal, Advocate Mr.Debanjan Mondal, Advocate Judgment on : January 16, 2012.

ASHIM KUMAR BANERJEE.J.FACTUAL SCENARIO THIRD FLOOR TENANCY (C.S.No.42 if 2006) Apeejay House Private Limited was the owner of premises no.15, Park Street, Calcutta.

Since 1975 Coal India Limited was occupying various portions of the said building as tenant and/or lessee.

The subject appeal would relate to tenancy in respect of third floor of the premises that was given to them.

Since 1980 they were occupying thirty thousand four hundred eleven square feet more or less at blocks A, B and C of the third floor at a rent that was increased from time to time, the last of such increase was made in April 2004 when the rent was fixed at rupees three lacs forty five thousand one hundred sixty-four and eighty five paise.

Coal India Limited duly paid rent up to December 2005.

On January 4, 2006 Apeejay terminated the tenancy and demanded vacant possession on expiry of fifteen days from the date of receipt of the notice.

Apeejay issued the said notice under Section 106 of the Transfer of Property Act 1882.

Considering the date of receipt, January 21, 2006 was the last date when they were supposed to hand over possession.

From the pleadings it appears that Coal India Limited kept the said premises under lock and key since then and declined to hand over possession.

Apeejay filed a suit for recovery of possession and on Coal India Limited entering upon appearance Apeejay made an application for summary judgment under chapter XIII-A of the High Court Rules, Original Side.

Coal India Limited contested the said application by filing Affidavit-in-Opposition.

According to them, the termination was wrongful as it was done contrary to the agreement.

They relied upon an agreement that would relate to sixth floor tenancy to expire on January 31, 2012.

The learned single Judge, upon hearing the parties, decreed the said suit by directing handing over of possession.

His Lordship also appointed a Special Referee to find out mesne profit that was to be paid by Coal India Limited to Apeejay for the period when the tenancy was determined and the possession was wrongfully withheld.

Being aggrieved, Coal India Limited preferred the appeal that we heard on the above mentioned dates.

SECOND FLOOR TENANCY (C.S.No.72 of 2006) Similar to the third floor, second floor tenancy was also given on rent on monthly basis.

The tenancy was created in January 1982 measuring about 4745 sqft.

of carpet area at an initial monthly rent of rupees7.50 per sqft.

that was subsequently revised from time to time by mutual consent.

Apeejay terminated the tenancy by notice dated January 4, 2006 issued under Section 106 of the Transfer of Property Act, 1882 and filed a suit for recovery of possession.

The suit was valued at Rs.6,64,680/- for recovery of possession that would constitute annual rent payable as on that date and a sum of Rs.6,99,917/- on account of mesne profit calculating the same at the rate of Rs.75 per sqft.

Coal India Limited took the identical defence.

In addition, they contended, the valuation of the suit was inflated to attract jurisdiction of this Court.

Hence, the suit was not maintainable, so was the application for summary judgment.

The learned Judge passed a decree similar to the decree passed in C.S.42 of 2006 that Coal India assailed in the second appeal that we heard subsequently on the dates mentioned above.

CONTENTIONS ON MERITS Mr.Pradip Kumar Dutta, learned senior counsel appearing for the appellant contended as follows :i) Although there were several tenancies the parties agreed, they would be bound by the terms and conditions as agreed upon in case of sixth floor tenancy that would expire on January 31, 2012.

Hence, prior termination that too, without any reason, was invalid in law and not enforceable.

ii) The appellant, being a tenant, was entitled to the protection given under the West Bengal Premises Tenancy Act, 1956.

Such act being repealed and the new tenancy law coming into force in 1997 the appellant being a tenant under the old law was entitled to the benefit of Section 8 of the General Clauses Act 1897 (Bengal Amendment).Hence, they were entitled to the protection under the provisions of the West Bengal Premises Tenancy Act, 1956.

iii) Tenancy being protected by the law as mentioned above, could not be determined save and except the eventualities prescribed therein.

Since there was no breach of any of the conditions the termination was wrongful and illegal and not liable to be enforced.

iv) The learned Judge was supposed to answer all the issues that were raised.

The factual issues were not answered by the learned Judge in the judgment and decree impugned.

Elaborating his argument Mr.Dutta contended, the application made under chapter XIII-A for summary judgment, was not maintainable in law as the recovery of possession could not be claimed without proving that there had been a valid termination of tenancy that would require a regular trial.

Since the termination was in dispute the Court should have allowed the tenant to contest the said suit by filing written statement and adducing oral and documentary evidence to sustain their defence.

Mr.Dutta cited the following decisions to support his contention :i) All India Reporter 1957 Calcutta Page-257 (Tarak Chandra Mukherjee & ORS.–versus Ratan Lal Ghosal & Ors.) ii) 1995 Volume-III Supreme Court Cases Page-709 (Parripati Chandrasekharrao & Sons –versus Alapati Jalaiah) iii) 2004 Volume-IV Calcutta High Court Notes Page-595 (Central Bank of India –versus P.K.Agencies Limited) iv) All India Reporter 2001 Supreme Court Page-490 (Makhan Lal Bangal –versus Manas Bhunia & Ors.) Per contra, the learned Advocate General appearing for Apeejay contended, the subject tenancy was guided under the provisions of West Bengal Premises Tenancy Act, 1956, the Act having been repealed, the landlord was entitled to terminate the tenancy under Section 106 of the Transfer of Property Act 1882 as there was no vested right to retain possession even after determination of tenancy.

The protection under the old tenancy law was no more available to the tenant in view of the provisions of Section 6(5) of the West Bengal Premises Tenancy Act, 1997 wherein the protection under the old law was continued for two years and on expiry of two years’ period such protection was no more available to those tenants whose protection was not preserved by the new law.

He referred to Section 3(f) of the said Act of 1997 to show that a commercial premises attracting rent more than rupees ten thousand would not enjoy any further protection under the new law.

Subject tenancy attracting rent more than rupees ten thousand, would no more enjoy the protection that was given under the old law.

Hence, the landlord was entitled to terminate the tenancy at any point of time.

The notice under Section 106 was thus served upon the tenant and on expiry of the period mentioned therein the landlord was entitled to the vacant possession.

He would contend, the defence so raised by Coal India Limited was no more tenable in law.

While distinguishing the cases cited by Mr.Dutta, the learned Advocate General rather relied upon the decision in the case of Parripati Chandrasekharrao & Sons (Supra) particularly paragraph 12 wherein the attempt by the tenant to challenge the fixation of limit of the rent to have protection under the tenancy law failed, the Apex Court observed, in case of an unsuccessful attempt such protection would not exist and the normal relation of the landlord and tenant would come to operation.

The theory of vested right would not be available to the tenant as such right being enjoyed by the tenant undoubtedly under the old law would no longer be available as the tenant lost the same the moment the protection was taken away.

He also distinguished the decision in the case of Tarak Chandra Mukherjee (Supra) wherein the Full Bench of the Calcutta High Court observed, “unless it thought that if the Act of 1950 was allowed to expire, no rights, liabilities or remedies under it would survive”.The learned Advocate General would rely upon paragraph 28 of the said decision to show, a protection available under an old law could only be continued in case the new law would preserve such protection.

In the instant case, the new tenancy law preserved the protection for a period of two years only.

Under the new law the class of tenancy crossing maximum limit of rent would no more be entitled to any protection under the new law beyond two years of the said law coming into force.

Hence, such specific period once fixed, the protection would no more be available after expiry of the said period.

On the factual score, the learned Advocate General contended, the documents referred to by Mr.Dutta would relate to sixth floor tenancy.

Hence, the same would not be relevant in the subject proceeding where third floor was involved.

He also referred to the deposition of the Coal India answering before the special Referee where they admitted, the tenanted portion was kept under lock and key and they were contesting the proceeding taking it as a “matter of prestige”.He lastly referred to the decision of the Apex Court in the case of Vishwant Kumar –versus Madan Lal Sharma & Another reported in All India Reporter 2004 Supreme Court Page-1887 and an unreported decision of the Division Bench in the case of State Bank of India –versus Bahubali Promoters PVT.LTD.(APD No.233 of 2007 dated 29th November, 2007) in which one of us (Ashim Kumar Banerjee,J.) was a party.

While arguing the Appeal No.256 of 2009, the learned Advocate General cited following three decisions :i) Calcutta Law Times 1991 Volume-II Page-304 (Smt.

Dalia Ghosh –versus Subramanian Rajamani) ii)1998 Volume-II Calcutta High Court Notes Page-502 (J.

Thomas & Company PVT.LTD.–versus Pawan Kumar Tebriwala) iii) 2012 Volume-III Calcutta High Court Notes (Calcutta) Page225 (Punjab & Sind Bank –versus Technoshop Private Limited) Citing those three decisions, he contended, a monthly tenancy can be terminated upon notice to the tenant and on such termination, the tenant would deserve no right to hold on to the tenancy.

However, under the tenancy law, protection was given to those tenants whose tenancy although terminated by notice was pending for consideration before a Court of Law and unless a decree for eviction was passed the tenant was entitled to continue to remain in possession as a statutory tenant provided he would comply with the requirements of law on such score.

protection.

In the present case, the tenant did not enjoy such The protection, if any, enjoyed under the Tenancy Law stood withdrawn on the repeal of the Tenancy Law and on termination of his tenancy under Section 106 of the Transfer of Property Act he would be considered to be illegal occupant attracting mesne profit to be awarded against him.

The calculation of mesne profit would depend upon the anticipated value of the commercial exploitation of the tenancy that the plaintiff could enjoy had the tenant been not in possession.

While replying, Mr.Dutta would rely upon the averments made in the affidavit appearing at pages 34 to 39 of the paper book to show, the parties agreed to be bound by the same terms and conditions that would govern all tenancies including the one at the third floor.

Hence, the Deed of Lease pertaining to sixth floor tenancy would also be applicable in the instant case.

This issue was not considered by the learned single Judge.

The learned single Judge failed to appreciate, there were triable issues to be decided at the appropriate stage and an application under Chapter XIII-A would not be maintainable.

VALUATION & JURISDICTION Mr.Dutta contended, Civil Suit No.72 of 2006 was not maintainable in this Court as the valuation was inflated that would be de hors the Suit Valuation Act and the Court Fees Act.

Hence, the application made for summary judgment was also not maintainable.

Mr.Dutta adopted his argument made in the other appeal on merits.

He separately argued this appeal principally on the issue of valuation and jurisdiction.

According to him, as per Section 7 of the Court Fees Act and the relevant provisions of the Suit Valuation Act the annual rent would be a guiding factor to value a suit for recovery of possession from the tenant in the case of termination of tenancy.

In the instant case, the plaintiff of his own valued it as rupees six lacs and odd by taking into account not only the rent but also the other charges, even then it was less than rupees ten lacs to attract the jurisdiction of this Court in its (Original Side).The plaintiff clubbed the mesne profit that too, at an exorbitant rate, far above the rent payable under the agreement that could not be the guiding factor.

According to him, a lawful tenant could not be evicted without due process of law after lawful termination of the tenancy.

invalid as argued by him in the other matter.

Notice was Hence, so long the termination was not held to be good by the Court he could not be said to be an illegal occupant and question of mesne profit at the rate over and above the rent, could not arise.

He relied on the following Apex Court decisions in this regard.

i) All India Reporter 1977 Supreme Court Page-2262 (Smt.

Chander Kali & ORS.–versus Jagdish Singh Thakur & Anr.) ii) All India Reporter 1979 Supreme Court Page-1214 (Lucy Kochuvareed –versus P.

Mariappa Gounder & Ors.) iii) All India Reporter 1988 Supreme Court Page-1150 (Abdul Hamid Shamai –versus Abdul Majid & Ors.) iv) All India Reporter 1998 Supreme Court Page-2317 (M/S.Sunil Enterprises & Anr.

–versus SBI Commercial & International Bank Ltd.) He lastly contended, the plaintiff themselves were not definite on the issue hence, prayed for appointment of Special Referee to decide the mesne profit.

Therefore, question of claiming mesne profit at the exorbitant rate of Rs.75 per square feet did not arise and the suit was improperly valued.

Per contra, the learned Advocate General contended, the decision in the case of Smt.

Chander Kali & ORS.(Supra) could not be relied upon as the said decision was rendered where the tenant had a statutory protection under the tenancy law.

Such protection was not available in the instant case.

More over the Court would always rely upon the valuation made by the plaintiff unless it was claimed to be ridiculous or absurd.

In absence of such pleading in the instant case, the proposition of law decided therein would have no application.

Similarly, the decision in the case of Lucy Kochuvareed (Supra) would be of no assistance to us as it was not rendered in a suit for eviction.

It was a case of wrongful possession of a property where plaintiff was dispossessed and the period of dispossession would attract mesne profit.

In the case of Abdul Hamid Shamai (Supra).in a suit for accounts the plaintiff improperly valued the suit as was found by the Apex Court.

The Apex Court observed, the plaintiff was not entitled to choose an “unreasonable”.

or “arbitrary”.

figure for the purpose of valuation of the suit.

In the instant case, the plaintiff contended, they were entitled to mesne profit at the rate of Rs.75 per square feet.

The defendant did not specifically plead, it was unreasonable or absurd.

application.

Hence, the decision would have no In the case of Sunil Enterprises & Anr.

(Supra).the claim was based on a transaction that was fraudulent.

Considering such issue the Court granted unconditional leave to defend.

OUR VIEW VALUATION AND JURISDICTION (APO NO.256) In the case of J.

Thomas & Company PVT.LTD.(Supra).the Division Bench observed, “mesne profits are claimed in the suit at the rate of Rs.60,000/- per month.

It may be high, it might be excessive but it is nowhere near fraudulent.

The matter is so clear that allowing the whole suit to go to trial on an issue of this nature would be improper and unjust.

The defence in this regard, therefore, was correctly ruled out summarily in the Court below and we abide by the fiRs.Court’s reasoning in this regard.”

In the case of Smt.

Dalia Ghosh (Supra).the Division Bench of our Court in paragraph 6 of the decision relied on an earlier decision of the Apex Court in the case of Nandita Bose reported in All India Reporter 1987 Supreme Court Page-1947 and observed, unless the valuation put by the plaintiff can be demonstratively shown to be arbitrary or unreasonable such valuation was not liable to be disbelieved.

In the case of Punjab and Sind Bank (Supra).our Division Bench rejected similar defence taken by the tenant and affirmed the summary judgment by dismissing the appeal.

Considering the decisions cited at the Bar we are of the view, plaintiff having the carriage of proceeding was entitled to put its own valuation.

Unless it was demonstrated to be ridiculous or arbitrary or unreasonable the Court would ordinarily rely on such valuation and entertain the suit if it was within its pecuniary limit on the basis of such valuation.

In the present case, as per the provisions of the Court Fees Act read with the provisions of Suit Valuation Act suit for recovery of possession could be valued on the basis of annual rent that would take care of prayer (a) of the plaint, mesne profit being the consequential relief was claimed in prayer (b) that could be assessed on the basis of the deprivation of the plaintiff of its usufruct.

Plaintiff in the instant case valued it at Rs.75 per square feet.

The defendant did not say, it was unreasonable, ridiculous or arbitrary.

Hence, the learned Judge was right in accepting such valuation.

Mr.Dutta’s contention based upon the decision in the case of Smt.

Chander Kali & ORS.(Supra) was possibly not correct.

He relied on paragraphs 8 and 12 where definition of tenant as per the tenancy law was considered.

In the present case, the tenancy law did not protect the appellants.

Hence, the argument advanced by Mr.Dutta on that score would automatically fail.

We gain support from our Division Bench decisions in the case of J.

Thomas & Company PVT.LTD.(Supra).Smt.

Dalia Ghosh (Supra) and Punjab & Sind Bank (Supra).ON MERIT We have considered the relevant provisions of the statute.

Identical issue was raised in Bahubali Promoters (Supra).The tenant, although a lessee under a Deed of Lease, enjoyed protection under the old tenancy law as the lease was for ten years being less than twenty one yeaRs.The new tenancy law being the West Bengal Premises Tenancy Act, 1997 coming into force with effect from July 10, 2001, the old law stood repealed under Section 65.

protection was allowed to continue for two yeaRs.The In 2003 such protection lapsed by efflux of time.

Hence, a suit of 2006 based on a notice under Section 106 was maintainable.

The learned single Judge passed a summary judgment.

The Division Bench allowed the appeal.

The Apex Court dismissed the Special Leave Petition however, extended the period of stay for some time so that the tenant could find an alternative accommodation.

In the present case whatever Mr.Dutta argued on the proposition of law would have been justified in case such protection would still be available to him.

The suits were filed in 2006 when the protection was no more available.

The General Clauses Act 1897 particularly Section 8 that was relied upon my Mr.Dutta, would be of no assistance to the tenant once the tenant did not enjoy any vested right to be in possession.

The protection was given to the tenant under a particular law that stood repealed by a new law and the new law specifically continued such protection for a particular period.

On expiry of such period the protection would no more be available.

In this regard, we get support from the decision in the case of Vishwant Kumar (Supra).In an identical situation the Apex Court observed, it was not a right accrued or vested under Section 6(c)of the General Clauses Act.

The Apex Court observed, “the mere right existing on the date of repeal to take advantage of the repealed provisions is not a right accrued within Section 6(c) of the General Clauses Act”.The Apex Court further observed, “there is a vast difference between rights of a tenant under the Rent Act and the rights of the landlord.

The right of the statutory tenant to pay rent not exceeding standard rent or the right to get standard rent fixed are protective rights and not vested rights.

On the other hand, the landlord has rights recognized under the law of contract and the Transfer of Property Act which are vested rights and which are suspended by the provisions of the Rent Act but the day the Rent Act is withdrawn the suspended rights of the landlord revive.”

Finding of the Apex Court is clear on the issue.

FACTUAL ISSUE Lot was said on factual score.

According to Mr.Dutta, learned Judge did not answer the factual issue raised by him.

If we have understood him correctly while hearing both the appeals, we would find, Coal India Limited from time to time took different portions of the premises no.15, Park Street, Kolkata on tenancy.

The tenancy of second floor and third floor are in issue in the present two appeals.

The tenancy in the sixth floor was created by an indenture annexed to the pleading.

Although Mr.Dutta termed it as a lease, it was not a registered one.

Even if we consider it as an agreement to lease that would only apply to sixth floor and not second or third floor.

The Coal India Limited relied on two agreements being dated January 22, 1992 covering Block-B, sixth floor and dated February 1, 1992 covering Block A and C sixth floor.

The said two agreements did not say anything about other portions of the premises.

Hence, question of applying terms and conditions of the said two agreements in respect of other part of the tenancy being second floor and third floor would not arise.

Coal India Limited in their affidavit pleaded an oral agreement that was entered into on a negotiation being had.

Mr.Dutta would contend, he should be given an opportunity to prove that agreement through oral evidence.

We fail to appreciate.

A defence that was not likely to succeed, cannot resist a summary judgment.

As observed hereinbefore, the tenant did not enjoy any support of tenancy law in view of 1997 Act.

Even if the conditions of these two agreements were applied those leases having expired in 2012 would have no impact as on date.

In any event the appellants miserably failed to sustain their defence as raised by them.

The appeals fail and are hereby dismissed.

We, however, observe, the occupation charges so long paid by Coal India Limited in terms of an interim order of this Court would be subject to the finding of the Special Referee on the issue of mesne profit.

There would be no order as to costs.

Urgent certified copy of this judgment, if applied for, be given to the parties on their usual undertaking.

Shukla Kabir (Sinha).J.I agree.

[ASHIM KUMAR BANERJEE,J.].[SHUKLA KABIR (SINHA),J.].