Calcutta High Court
Dina Nath Parolia & Anr vs Bhartia Steel & Engineering Co. Pvt. Ltd on 27 July, 2017
Author: Sankar Acharyya
Bench: Biswanath Somadder, Sankar Acharyya
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Original Side
Present :
THE HON'BLE MR. JUSTICE BISWANATH SOMADDER
AND
THE HON'BLE MR. JUSTICE SANKAR ACHARYYA
APD 44 of 2015
With
EOS No. 58 of 1987
DINA NATH PAROLIA & ANR.
-Vs.-
BHARTIA STEEL & ENGINEERING CO. PVT. LTD.
For the appellants : Mr. Jishnu Saha, Sr. Advocate,
Mr. Ishan Saha, Advocate,
Mr. Nikunj Berlia, Advocate.
For the respondents : Mr. Arindam Mukherjee, Advocate,
Mr. Ashok Kumar Awasthi, Advocate,
Mr. Aishwarya Kr. Awasthi, Advocate.
Heard on : 21.09.2016, 26.09.2016, 02.11.2016,
21.11.2016, 23.11.2016, 01.12.2016,
06.12.2016, 08.12.2016, 15.12.2016,
19.12.2016, 10.01.2017, 18.01.2017,
25.01.2017, 15.02.2017, 23.02.2017,
07.03.2017, 14.03.2017, 21.03.2017,
23.03.2017, 06.04.2017, 20.04.2017
& 25.04.2017.
Judgment on : 27.07.2017.
2
SANKAR ACHARYYA, J.
Defendants-appellants have preferred this appeal against the plaintiff-respondent challenging the judgment and decree dated 09.12.2014 of eviction of appellants from the suit property and recovery of possession in favour of plaintiff-respondent passed by the learned Single Judge in EOS 58 of 1987.
Initially the plaintiff company filed Title Suit No. 41 of 1986 in the Second Court of Assistant District Judge, Howrah for eviction of tenants and other reliefs in respect of the suit property as described in the plaint schedules. The said suit was transferred to this High Court and renumbered as EOS No. 58 of 1987 in the Original Side of this High Court. Appellants as defendants contested the suit and after full trial, the impugned judgment and decree have been passed.
The suit property is more or less seven bighas in area having house structures, tanks, plants and machinery surrounded by boundary walls of plaintiff's premises for running business of steel rolling mills, foundry, factory and workshop at 106 and 106/1, Dharmatolla Road, Salkia, Howrah.
Plaintiff/respondent company used to run a business in the suit property before 25.03.1970, due to want of funds and inability to manage the business, the plaintiff could not run the business and desired to let out the business in the suit property.
Defendant/appellant no. 1, who is a partner of defendant/appellant no. 2, i.e., partnership firm, agreed to take the same on lease.
3Accordingly, appellants took the suit property from respondent on lease by virtue of a registered deed of lease dated 25th March, 1970 for a period of ten years at a monthly rent of Rs.2001/- with an option of renewal of the lease for a further term of five years with an enhanced monthly rent of Rs.2101/- with a further option to extend for five years, on such terms and conditions as may be mutually agreed upon by the parties. In terms of the lease deed, the respondent rendered all assistance and amenities to the appellants so that appellants would be able to run the business receiving respondent's licences and quotas of iron, steel, coal etc. Appellants also paid rent to the respondent. No dispute relating to the suit property between the parties came to light till few months before the expiry of first ten years term of the lease. Appellants have been running the steel rolling mill business in the leasehold suit property and have been using the same for no other purpose. Since its inception, the lease is for a period of ten years and further renewable for a period of five years. In this case it was further extended by five years totalling the lease period to twenty years, which elapsed decades back. The lease commenced on and from 1st May, 1970 and the aforesaid period of twenty years expired on 30th April, 1990.
On 12th October, 1979, the respondent issued a letter (exhibit-F) to appellants to allow respondent's representative to inspect the rolling mills and factory to which respondents did not object against inspection by respondent and its staff.
By a letter dated 24th November, 1979 appellants informed the respondent that they intend to continue the lease on renewal 4 for five years commencing from 1st May, 1980 as per the terms laid out in the lease deed.
On 26th December, 1979, the respondent served a notice dated 24th December, 1979 upon appellant no.1 (exhibits G and H) to vacate the suit property and to deliver peaceful possession of the same in favour of the respondent on 30th April, 1980, further reaffirming the allegations of breach of terms of the lease deed at the instance of appellants. By a letter dated 11th January, 1980 (exhibit-I), the respondent in response to appellants' letter dated 24th November, 1979, declined to agree for renewal of the lease after expiry of the first term of ten years. There was neither any renewal nor any extension of the lease period from the respondent's side despite service of appellants' first letter dated 24th November, 1979 for 1st renewal of the lease for five years and second letter dated 21st March, 1985 (exhibit-N) for further renewal for a period of five years, in terms of the deed of lease dated 25th March, 1970 with an undertaking that appellants would abide by all the terms and conditions of the deed of lease.
Legal battle between the parties in court started with appellants' filing Title Suit no. 87 of 1980 in the Second Court of Subordinate Judge, Howrah for specific performance of contract for execution of a deed of lease for five years with effect from 1st May, 1980. They also obtained an order dated 26.03.1982 (exhibit-M) for maintaining status quo in the suit property. By that order, the respondent was not precluded from filing an ejectment suit. The said suit of the appellants was dismissed in 5 2002 (Answer to question no. 130 of the plaintiff's witness in witness box during trial) in this High Court as the suit was transferred from Howrah Court (vide answers to questions no. 131 and 132 of plaintiff's witness). The said answers were not challenged during cross-examination of the witness - Vishnu Narayan Kashyap albeit a series of questions were put to him beyond pleadings.
During the pendency of the suit for specific performance of contract, the respondent filed T. S. No. 41 of 1986 in Howrah Court for ejectment of appellants from the suit property which suit was subsequently transferred to this High Court and renumbered as E. O.S. no. 58 of 1987. The said suit was filed for ejectment claiming termination of lease/tenancy by efflux of time alleging breach of terms of the lease by the appellants. In substance, the respondent claimed the lease was for demise of the steel rolling business of the plaintiff company and reliefs were prayed under the Transfer of Property Act.
Contending the respondent's claim the appellants, inter alia, challenged the maintainability of the suit for want of service of notice under section 13 of the West Bengal Premises Tenancy Act, 1956 and claimed that their tenancy in the suit property was not terminated.
The pivotal question emerging from the arguments advanced by learned counsels for the parties is, whether the steel rolling business of the respondent was let out to the appellants as claimed by respondent, or the buildings with furniture and 6 fittings and tanks situated within more or less seven bighas at 106 & 106/1 Dharmatolla Road Salkia, Howrah were let out by respondent to appellants for other purposes as claimed by appellants. If it is found that the business was let out it will be governed as lease under the Transfer of Property Act but if the appellants' claim is found true it will be governed under the rent control law of the State. It may be noted that at the time of induction of the tenancy/lease in 1970 and filing of the suit by respondent, The West Bengal Premises Tenancy Act, 1956 was in force but during pendency of the suit in this High Court said Act of 1956 was repealed with saving clause in section 45 of The West Bengal Premises Tenancy Act, 1997.
The initial burden of proof lies with the plaintiff-respondent to prove that the business of the respondent company was let out by virtue of the registered deed of lease dated 25th March, 1970 (exhibit-A). In case of respondent's discharge of such initial burden, the onus of burden of proof will shift on the defendant- appellant.
At the time of hearing, learned counsel for both the parties referred to the admitted document of lease which has been marked exhibit-A in trial. In the impugned judgment, learned Single Judge also relied on the different clauses of that deed quoting certain portions of the deed.
The learned counsel for the appellants has argued that a document is required to be considered as an entirety and not in a piecemeal manner and to be read in the ordinary and natural 7 sense except where that would lead to an absurdity and that no part of a term or clause of a deed should be considered a meaningless surplusage when it is in consonance with the other parts of the clause and expresses the specific intention of parties. It is also his argument that once a control is reduced to writing, it is not open to any of the parties to seek to prove the terms of the contract with reference to some oral or other documentary evidence to find out the intention of the parties. He cited some judicial pronouncements in support of his arguments. Since we are convinced that the aforesaid arguments are based on settled principles of law we accept those principles. We like to consider as to whether learned Single Judge failed to follow those settled principles of law in the impugned judgment. It is also a settled principle that each case should be decided on its own merits.
On behalf of the appellants, drawing our attention to the exhibit-A it has been argued that the respondent described itself as monthly tenant under superior landlord and so the respondent could not have granted a long term lease of the same to the appellants because a person cannot give to another what he himself has not got. Perhaps, this argument is self- contradictory because if the entire exhibit is accepted, that part should not be excluded. More so, the appellants enjoyed the leasehold property for years together on the basis of exhibit-A including the aforesaid portion of the deed without challenging the authority of the lessor, i.e., the respondent. They also wrote letters to the respondent before the expiry of lease term of ten years, expressing their intention to continue the lease for five 8 years and again before expiry of said five years to continue for another five years as per the terms of the lease deed. Such conduct of the appellants cannot be overlooked, allowing them to enjoy the full usufruct and then to challenge the authority of the lessor. Such conduct of appellants, though established on events subsequent to the contract of lease, is relevant and creates circumstances fit for consideration. Here, it will not be out of place to mention that in exhibit-A the respondent has described itself as a monthly tenant but nowhere in the deed has the tenure of the respondent's tenancy right been stated. There is also no scope to interpret that the respondent's monthly tenancy period would expire any time before expiry of the right of appellants as tenants in the suit property created by exhibit-A. Monthly tenancy does not ipso facto make the tenancy month to month and not year to year with condition of payment of rent month by month, thereby excluding the ambit of Transfer of Property Act. The literal corollary of such description in exhibit-A for the sake of arguments technically may give the status sub-lessee to the appellants in the suit property, which is not a case of either party and if such inference is drawn it will be a third case which is not permissible in law.
In our view, according to the facts and circumstances of the case, the exhibit-A is required to be read in a harmonious way and for true interpretation of the deed it cannot be said that there is a legal prohibition in looking at the subsequent events which took place during implementation of the terms of exhibit-A deed. As such, it can safely be held that the respondent within its legal 9 capacity leased out the suit property in favour of the appellants, in accordance with the terms of the exhibit-A deed.
Learned counsel for the appellants has advanced his argument that the dominant purpose of the lease by virtue of exhibit-A deed and dominant intentions of the parties can only be gathered from the exhibit-A itself. He has laid emphasis on the words 'or otherwise', 'or for the other purposes' and 'or for any other purpose' used in exhibit-A deed and has argued that the purpose of the lease and intention of the parties is clear because the lease was granted for the purpose of running the steel rolling mill and foundry business of the respondent, which remained defunct for about three years or for any other purpose but learned Single Judge failed to take cognizance to the said words. He further argued that, in the absence of forfeiture clause for termination of the lease in case of appellants' use of the suit premises for any purpose other than running the steel rolling and foundry business, the lease cannot be considered as the lease beyond scope of application of the West Bengal Premises Tenancy Act, 1956. He has also argued that, occupation of the suit premises by the appellants beyond the fixed period of lease should have been considered by learned Single Judge as their holding over the tenancy. He prayed for setting aside the impugned judgment and decree and for the dismissal of the suit.
Learned Counsel for the respondent has argued that "or otherwise" "or for other purpose" and "or for any other purpose"
used in exhibit-A are ambiguous. Thus, for proper interpretation of exhibit-A deed in its entirety, extrinsic evidence is permissible.10
Referring to several judgments of this High Court and the Hon'ble Supreme Court he has advanced arguments that the lease of mills, factory etc. is a lease of 'business' and not that of 'premises' governed by the Rent Control Legislations. His further argument is that in case of any ambiguity owing to plurality of purposes in the lease deed, the recitals of the deed are required to be considered in light of the prime object of leasing out the property. Conduct of the parties after entering into a lease agreement is also relevant. Since the said arguments appear to us based on sound legal principles, we cannot brush aside the same. He has also argued that in the instant case of expiry of lease by efflux of time, no notice is required for determining the lease as the same stood determined under section 111(a) of the Transfer of Property Act, 1882 by expiry of the fixed term of the lease. On this argument, we are of the view that such proposition of law is applicable only if the tenancy is governed by the Transfer of Property Act and not under the Rent Control legislation where tenants are given some special protection. In any event, the arguments that the notice to quit determining tenancy of appellants is unnecessary after expiry of stipulated period of lease. The learned counsel for the respondent has claimed that a valid notice (exhibit-G) was served by the respondent before institution of the suit. He has submitted that the learned Single Judge rightly passed the impugned judgment and decree in the suit and therefore this appeal is liable to be dismissed and the impugned judgment and decree may be confirmed by this Court of appeal.11
Having gone through the pleadings of the suit and evidence adduced by the parties in the trial Court it appears to us that there was an attempt to introduce some extraneous matters for consideration in the suit in hand even involving some subjudice matters of separate suit of Howrah Court. We are not inclined to enter into such matters for consideration going outside the subject matter of the lis under our consideration.
In the impugned judgment, learned Single Judge elaborately discussed the relevant materials on records and arguments advanced before that court with reference to the precedents cited before him. After thorough discussion, learned Single Judge arrived at the conclusion that the plaintiff (respondent herein) is entitled to recover the suit properties as described in the schedules of the plaint with findings that plaintiff leased out its steel rolling mills, factory and workshop, situate at 106 & 106/1, Dharmatolla Road, Salkia, Howrah to the defendants and that said lease is not governed by the West Bengal Premises Tenancy Act, 1956 and that the plaintiff was not required to serve any notice under section 13 (6) of the West Bengal Premises Tenancy Act, 1956 and that notice dated December 24, 1979 (exhibit-G) of termination of tenancy does not have insufficiency.
Since this appeal is a continuation of the suit in the eye of law, this Division Bench is vested with fact finding jurisdiction in an appeal against a judgment of the Single Judge of this High Court, we have independently gone through the materials on record of the suit.12
For determination on the question, whether the lease in question was for the purpose of letting out a business attracting the provisions of the Transfer of Property Act or a premise under the West Bengal Premises Tenancy Act; exhibit- A is the substantive evidence.
Having gone through the exhibit- A deed, it appears that there are multiple plants and machinery affixed to the earth for running the steel rolling mill. There is also a foundry and workshop for that business. Iron, steel, coal and other raw materials are used in running that mill. The lessee was authorised to use the lessor's plants and machinery, structures, furniture and fittings for running the said mill, foundry and workshop. Lessee was also authorised to install new plants and machinery and erect structures for running the business or for other purpose but there is nothing in exhibit- A to authorise the lessee to remove any installed plants or machinery or foundry or workshop of the lessor from the suit property. The lessor agreed to allow the lessee to run the lessor's business using its licence and quotas. From all the recitals of exhibit- A, it is evident that the subjective purpose of granting the lease was to run the steel rolling mill business of the lessor which was being run by the lessor but the lessor became incapable of running the same, since a little while before the grant of lease for want of funds and inability to manage the business. No other specific purpose is evident for which the lessee had agreed to accept the lessor's offer of letting out the property under lease. It is true that as per the language of the deed, the demised property was given on lease for 13 the purpose of running the business of rolling mills, foundry and workshop or for any other purpose. In our view, the demised property was the business and was let out to the lessee with an alternative option for use of the lessor's property including plants, machinery, foundry, workshop, house structure, furniture and fittings with an authority to use the same for other purposes if not for running the steel rolling mill, as would have been used by the lessor. It is difficult to interpret it as said use of "other purpose" in the deed extended the scope of converting the factory premises into a residential complex or a hotel, or a school/college, or a play ground or a swimming pool etc. But at best it can be said on reading exhibit- A harmoniously that the lessee was given authority to use the equipments of the lessor's manufacturing business for manufacturing of products other than products of steel rolling mill. However, we accept the arguments advanced on behalf of the respondent, that said words "or otherwise" have drawn ambiguity about the purpose of the lease and therefore extrinsic evidence is permissible for corroboration or contradiction.
In paragraph 30 of AIR 1962 SC 1810 (Khardah Company Ltd. Vs. Raymon & Co. (India) Private Ltd.) the Hon'ble Supreme Court held:-
"..... We agree that when a contract has been reduced to writing we must look only to that writing for ascertaining the terms of the agreement between the parties but it does not follow from this that it is only what is set out expressly and in so many words in the document that can constitute a term of the contract between the 14 parties. If on a reading of the document as a whole, it can fairly be deduced from the words actually used therein that the parties had agreed on a particular term, there is nothing in law which prevents them from setting up that term. The terms of a contract can be express or implied from what has been expressed. It is in the ultimate analysis a question of construction of the contract. And again it is well established that in construing a contract it would be legitimate to take into account surrounding circumstances ........".
In paragraph 23 of AIR 1950 SC 15 (Abdulla Ahmed Vs. Animundra Kissen) the Hon'ble Supreme Court held:-
"...... The evidence of conduct of the parties in this situation as to how they understood the words to mean can be considered in determining the true effect of the contract made between the parties. Extrinsic evidence to determine the effect of an instrument is permissible where their remains a doubt as to its true meaning. Evidence of the acts done under it is a guide to the intention of the parties in such a case and particularly when acts are done shortly after the date of the instrument. (vide para 343 of Hailsham Edn. of Halsbury, p.274)".
There is not an iota of evidence to suggest that the appellants used the suit property for even a single day for any purpose other than running the steel rolling mill business in the suit property or in any portion of the same. Here we like to quote the befitting doctrine, "witness may lie, document may lie but circumstances do not". Considering the facts, circumstances and evidence, we are satisfied to hold that the respondent company 15 let out its steel rolling mill and foundry business in favour of appellants by virtue of exhibit- A, a registered lease deed dated 25.03.1970 giving effect from 1st May, 1970 and the said lease is governed by the Transfer of Property Act, 1882. As per exhibit- A, time limit is of essence in the lease.
It is crystal clear that, the final limit of the lease period expired on the 30th April, 1990 in any case. As such, obviously the lease was terminated on 30th April, 1990 at the latest and it would have been fair and proper for the appellants to vacate the suit property and deliver possession of the same in favour of the respondent by 12:00 mid night of the night of 30th April, 1990 and 1st May, 1990. It may be noted that in exhibit- N dated, 21st March, 1985 the appellants stated that they would abide by the terms of the lease deed dated 25th March, 1970. Interestingly, the appellants informed the respondent regarding the terms of exhibit- A before expiry of ten years from 25.03.1970 that they would continue the lease for five years on renewal basis. Since the respondent did not agree with such proposal, the appellants filed a suit for specific performance of contract and before expiry of said five years appellants informed the respondent by a letter dated 21.03.1985 that they intended to continue the lease for five more years in terms of the lease deed. However, even on or after 30th April, 1990 the appellants did not deliver vacant possession of the suit property in favour of respondent in terms of the exhibit- A deed. According to the facts and circumstances we are satisfied to hold that after expiry of the first term of the lease of ten years the appellants occupied the suit property as tenants 16 holding over under section 116 of the Transfer of Property Act, 1882 till the expiry of 30th April, 1990. Since the tenancy was terminated in any case by efflux of time, by reason of section 111
(a) of the Transfer of Property Act the appellants are not entitled to any statutory notice to quit. As such, the validity of earlier notice to quit served by respondent demanding vacant possession in the suit property on expiry of 30th April, 1980 becomes inconsequential. The suit was filed after more than five years from 30th April, 1980. It is significant to note that neither have the appellants denied the fact that the lease term was for several years nor have they claimed that it was terminable on any month before expiry of term.
In the light of the observations made above, we do not find any reason to differ with the decision of the learned Single Judge in the impugned judgment and decree. We find this appeal devoid of merits, deserving a dismissal with costs for the worthy cause of society to facilitate access to justice and deter such persons who bring frivolous litigation to Courts at their whim.
This appeal is, therefore, dismissed with costs of Rs.50,000/- (Rupees fifty thousand only) payable by the appellants to the State Legal Services Authority, West Bengal. The said amount shall be kept earmarked for its utilization by the Mediation and Conciliation Committee of this Court. Such costs shall be deposited by appellants within eight weeks from date and within three days of such deposit, an authentic copy of the receipt thereof must be filed before the learned Registrar General of this High Court in order to protect themselves from the rigours 17 of contempt. Interim order passed in this appeal stands automatically vacated.
Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis upon compliance with all requisite formalities.
I agree with the conclusion, (BISWANATH SOMADDER, J.) (SANKAR ACHARYYA, J.)