Calcutta High Court
Amit Tiwari & Ors vs Marco Polo Restaurant Pvt Ltd on 13 December, 2023
Author: Ravi Krishan Kapur
Bench: Ravi Krishan Kapur
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
IA NO. GA/7/2018
(Old No: GA/1210/2018)
In CS/221/2013
AMIT TIWARI & ORS.
Vs
MARCO POLO RESTAURANT PVT LTD
For the Applicants : Mr. Ratnanko Banerjee, Senior Advocate
Mr. Satadeep Bhattacharjee, Advocate
Mr. Rajesh Upadhyay, Advocate
For the Defendant : Mr. Hirak Mitra, Senior Advocate
Ms. Suchismita Ghosh, Advocate
Mr. P. Naskar, Advocate
Judgment : 13.12.2023
Ravi Krishan Kapur J.:-
1.This is an application seeking leave to bring on record the applicants pursuant to a devolution of interest in the suit premises during the pendency of the suit. The suit premises is situated in a building commonly known as "Anuj Chambers" at premises no.24, Park Street, Kolkata-16 comprising of an area of 2371 sq. ft. where the defendant has been running a restaurant in the name and style of "Marco Polo".
2. Premises no.24, Park Street is owned by Magma Leasing Ltd. (presently known as Poonawala Fincorp Ltd.). In or about September, 2003, Magma 2 Leasing Ltd. had granted leasehold rights in respect of an equal, undivided and undemarcated 1/20th share in favour of 20 separate private trusts for a period of 99 years commencing from 22 September, 2003 with an option for renewal for another 99 years. Thereafter, by a single unregistered document dated 22 April, 2004, the 20 trusts had inducted the defendant as a monthly tenant. The tenancy was in the nature of a single tenancy and not separate tenancies under the said 20 trusts. The defendant has always paid the rent by a single cheque in favour of one of the trusts namely Mayank Poddar Family Trust who has throughout been collecting the rent for and on behalf of the remaining trusts.
3. By a notice dated 16 May, 2013 the tenancy in favour of the defendant was determined and the suit was filed claiming eviction and mesne profits. Pursuant to the filing of the suit, in an application filed under Chapter XIIIA of the Original Side Rules, a summary decree dated April 12, 2016 was passed in favour of the plaintiffs and the defendant was directed to continue to make payment of occupational charges. Being aggrieved by the decree, the defendant preferred an appeal wherein the Division Bench by an order dated August 23, 2017 set aside the decree. By an earlier order dated 29 October 2014, the Division Bench had directed the defendant to continue to make payment of a sum of Rs.1,98,375/- per month as was done prior to the litigation.
4. Out of the twenty trusts in whose favour the lease had been granted, six of them had only one beneficiary each. In the remaining fourteen trusts 3 there was more than one beneficiary, in twelve of them other beneficiaries had renounced and disclaimed their interest and share in favour of one of the beneficiaries. In two of remaining trusts after disclaiming and renouncement by the other beneficiaries, only two beneficiaries remain. The aforesaid arrangement has been unconditionally accepted by all the trustees. All such relinquishments have been made by way of written instruments. The dissolutions have also been effected by registered deeds of dissolution. Mayank Poddar has also transferred his interest in Premises no.24, Park Street by executing a deed of gift dated 4 September, 2017. The owner of Premises No.24, Park Street has also unconditionally accepted all the beneficiaries as their lessees and confirmed the same by letters dated 18 May, 2015, 17 November, 2016, 20 February, 2017 and 21 June, 2017 respectively.
5. Pursuant to such dissolution, the legal rights of the trustees merged with the beneficial interest of the beneficiaries and the beneficiaries have become absolute and exclusive holders of the leasehold interest under the owner. As a consequence, the applicants have become joint landlords of the defendant. This suit was filed by the trustees of the 20 trusts. In this background, during the pendency of the suit, there has been a devolution of interest in favour of the applicants and the present application is to record the same and for consequential reliefs.
6. This is not a case of joint tenancy but one of separate monthly tenancies having been created by the 20 trusts in favour of the defendant. In view of the fact that the rent in respect of each of the separate tenancies is 4 less than the statutory limit of Rs.10,000/- in favour of each of the trusts, the same is governed by the West Bengal Premises Tenancy Act, 1997 and this Court has no jurisdiction to entertain this suit.
7. In any event, there can be no automatic substitution as claimed since there has been no devolution of interest in law. It is contended that the 20 trusts were formed by the settlor with funds for named beneficiaries at the time of creation of the trust. It is also contended that the deeds expressly excluded immovable properties and the suit premises could not have vested in the beneficiaries. Moreover, the whole exercise of the creation of the trusts and their dissolution was designed only to transfer the property to the beneficiaries without paying proper stamp duty. There is also no deed of conveyance assigning the leasehold interest by the trustees in favour of the beneficiaries. In order to effect any transfer, an instrument duly stamped and registered was necessary and this has not been done.
8. Order 22 Rule 10 of the Code of Civil Procedure, 1908 provides as follows:
"10 . Procedure in case of assignment before final order in suit-- (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. (2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1)."
Order I Rule 10 of the Code of Civil Procedure 1908 provides as follows: 5
10. Suit in name of wrong plaintiff.--(1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just.
(2) Court may strike out or add parties.--The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added. (3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent.
(4) Where defendant added, plaint to be amended.--Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant (5) Subject to the provisions of the [Indian Limitation Act, 1877], section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons.
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9. Order 22 Rule 10 contemplates continuation of a suit by or against the persons who have by devolution, assignment or creation acquired any interest during the pendency of a suit by leave of Court. The Rule is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject matter of the suit has devolved upon another during the pendency of the suit but that such a suit may be continued with leave of Court by or against the person acquiring the interest. Ordinarily, such persons or entities are added as parties to enable effective and complete adjudication of all questions involved in the suit. Under Order 22 Rule 10, the assignee or the person on whom any interest in the property has devolved or is created during the pendency of the suit has to be impleaded. The Rule confers a discretion on a Court to grant leave to the person in or on whom such interest has vested or devolved to be brought on record. As such, no detailed enquiry at the stage of granting leave under Order 22 Rule 10 is contemplated. A Court is only to be prima facie satisfied before exercising its discretion in granting leave for continuation of the suit by or against the person on whom the interest has devolved. The question about existence, validity of the assignment or devolution can always be considered at the final hearing of the suit. [See: Raj Kumar v. Sardari Lal, (2004) 2 SCC 601, Amit Kumar Shaw & Anr. vs. Farida Khatoon & Anr. (2005) 11 SCC 403, Vidur Impex & Traders (P) Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384 and Chandra Bai v. Khandalwal Vipra Vidyalaya Samiti, (2016) 12 SCC 534].
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10. On merits, even prima facie the defendant has not been able to raise any contention which warrants dismissal of this application. Section 78(a) of the Indian Trust Act, 1882 permits all the beneficiaries of a trust to revoke the trust. As a result of such dissolution, the legal right of trustees merges with the beneficial interest and the beneficiaries become the holders of the leasehold interest under the head lessor. The dissolutions have been effected by way of registered deeds of dissolution after payment of the applicable stamp duty. Thereafter, Mayank Poddar has also transferred his interest by way of a deed of gift dated 4 September 2017 in favour of the beneficiaries. The landlord has also unequivocally accepted all the applicants as lessees. The beneficiaries of the Trusts already held the beneficial interest in the immovable and movable properties of the Trusts and therefore vesting of the legal interest would prima facie not require a further registered deed of conveyance to be executed by the Trustees in favour of the beneficiaries. There is also the question of whether the defendant is estopped under section 116 of the Indian Evidence Act, 1872 from denying the title of the landlord without first surrendering possession of the suit premises.
11. Admittedly, the defendant was inducted by way of a single unregistered document dated 22 April, 2004 executed by the said 20 trusts. The share of the said 20 trusts in the suit premises was undivided and undemarcated. The defendant had throughout paid a single cheque in favour of one trust which has been collected for one and on behalf of the other trusts. Though, by an order dated 12 April, 2016 passed by the 8 Division Bench this issue has been held to be a triable issue but that fact per se cannot be a ground to oppose the prayers made for in this application. In any event, all these issues have to be finally decided at the time of trial and cannot be a ground to frustrate the suit.
12. There is also no merit in the defence that the entire exercise for devolution and assignment of the interest in favour of the applicants has been undertaken to circumvent the case of separate tenancies. On the other hand, it prima facie appears that the aforesaid arrangement in substance, is more in the nature of an internal arrangement and there is no third party interest adverse to the members of the Poddar family which has been created. In any event, in an application for amendment, the merits of the controversy are not to be gone into at this stage of the proceedings. (See Rajesh Kumar Aggarwal v. K K Modi & Ors. (2006) 4 SCC 385 @ Paras 18, 19 and 28 and Lakha Ram Sharma v. Balar Marketing Private Limited (2008) 17 SCC 671 @ Para 4.)
13. Significantly, no occupational charges have been paid by the defendant to the plaintiff since September, 2017 (save and except a sum of Rs.20 lacs which was directed be deposited with the Registrar Original Side pursuant to an order dated 18 May, 2022). In fact, by a subsequent order dated 4 July, 2022, the defendant had been further directed to deposit a sum of Rs.25 lacs on account of rental arrears but the same has not been complied with inter alia on the ground of financial constraints and an application has been filed for recalling of the same. There is also an aggregate amount in excess of Rs.1 crore which has 9 become due and payable on account of outstanding occupational charges. In such circumstances, the defendant cannot continue to commercially exploit the suit premises without making any payment and complain of a change in the constitution of the lessor or the superior lessor.
14. In the above circumstances, on a combined reading of Order 1 Rule 10 of the Code of Civil Procedure, 1908 read with Order 22 Rule 10 there are no grounds to disallow the prayers made for in this application. Accordingly, all the objections raised by the defendant are rejected. GA 7 of 2018 stands allowed. There shall be an order in terms of prayers (a) to
(d) of the Masters Summon. With the aforesaid directions, GA 7 of 2018 stands disposed of.
(Ravi Krishan Kapur J.)