M/S. Musthafa & Almana International ... vs Smartcity (Kochi) Infrastructure Pvt. ... on 5 November, 2024

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Kerala High Court

M/S. Musthafa & Almana International ... vs Smartcity (Kochi) Infrastructure Pvt. ... on 5 November, 2024

1. Present petition is directed against the order of the Rent Controller in I.A.No.4/2023 dated 30.08.2024 for determination of arrears of rent under Section 12(1) of the Kerala Building (Lease and Rent Control) Act, 1965, in pending RCP No.134/2020 filed by the respondent - landlord against the petitioner - tenant seeking eviction on the ground of arrears of rent.

2. The case set out by the respondent - landlord before the Rent Controller was that by virtue of the permission granted by the Government of India, Ministry of Commerce and Industry, Department of Commerce, dated 21.04.2008, a sector specific Special Economic Zone for information technology and information technology enabled services (IT/ITES) was set up at Block No.9 at Kakkanad Village. A lease deed dated 23.02.2011 was executed containing certain conditions including Condition No.3 2024:KER:82602 OP (RC) NO. 162 OF 2024 4 whereby lessee, ie. respondent - landlord, was granted liberty for sub leasing of the leasehold land to any third party for the purpose of development in accordance with the development plan. In lieu thereof, respondent - landlord had entered into an agreement of sub-lease, Ex.P8 dated 25.01.2017 with the petitioner - tenant containing certain recitals and conditions, thereafter a settlement deed, Ext.P9 dated 01.09.2018 whereby respondent - landlord had in Clause 2 waived off rent and maintenance charges for certain period.

3. The contention of the petitioner - tenant before the Rent Controller for determination of the application filed by the respondent - landlord under Section 12(1) of the Act was that in view of the provisions of Sections 23, 42 and 51 of the Special Economic Zones Act, 2005, the remedy to seek eviction would not lie before the Rent Controller but under the Public Premises (Eviction of Unauthorized Occupants)Act, 1971 or decided through arbitration in the absence of constitution of any special court by the State 2024:KER:82602 OP (RC) NO. 162 OF 2024 5 Government. Learned Rent Controller did not agree with the aforementioned contentions, allowed the application and decided RCP is maintainable.

4. Sri.Sreekumar, learned senior Counsel assisted by Sri.M.R.Sasi, learned counsel appearing on behalf of the petitioner submitted that the pith and substances of the judgment/order of the Rent Controller was based upon the ratio decidendi culled out by the Supreme Court in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. [(2011) 5 SCC 532] as well as in Vidya Drolia and Others v. Durga Trading Corporation [2020 KHC 6711]. But the fact remains that the Court/Rent Controller ought to have framed a preliminary issue in terms of the provisions of Order XIV of the Code of Civil Procedure by giving chance to the parties to lead evidence as to certain conditions of lease, sub- lease and settlement deed, much less the provisions of law to arrive at a just and fair decision regarding the applicability of the Rent Control Act or other provisions of the Act. Having failed to do so, there is an abdication.

2024:KER:82602 OP (RC) NO. 162 OF 2024 6

5. Sri.Varghese.K.Paul, learned counsel appearing on behalf of the respondent - landlord emphatically relied upon the averments in the rent petition with regard to the permission dated 21.04.2008 granted by the Ministry of Commerce and Industry, Department of Commerce, Government of India, to contend that since it is a private property, though the provisions of the Act is applicable, but in view of the ratio decidendi culled in the judgment cited (supra), it is a settled law that eviction proceedings cannot be adjudicated by way of an arbitration even if the parties with their eyes wide open, set their hands together for an alternative mechanism. There is no illegality or perversity in the order under challenge for, petitioner - tenant had not adhered to the terms conditions of the lease deed much less the settlement deed, was liable to be evicted on the ground stated therein.

6. We have heard the learned counsel for the parties and appraised the paper book.

7. There is no quarrel to the ratio decidendi 2024:KER:82602 OP (RC) NO. 162 OF 2024 7 culled out in the judgment of Booz Allen (supra) as well as Vidya Drolia (supra), particularly paragraph No.21 of the Vidya Drolia (supra). Paragraph No.21 of the Vidya Drolia (supra) reads as under:

21. Booz Allen & Hamilton Inc. draws a distinction between actions in personam, that is, actions which determine the rights and interests of parties themselves in the subject matter of the case, and actions in rem which refer to actions determining the title of the property and the rights of the parties not merely amongst themselves but also against all the persons at any time claiming an interest in that property. Rights in personam are considered to be amenable to arbitration and disputes regarding rights in rem are required to be adjudicated by the courts and public tribunals. The latter actions are unsuitable for private arbitration. Disputes relating to subordinate rights in personam arising from rights in rem are considered to be arbitrable. Paragraph 36 of the judgment in Booz Allen & Hamilton Inc. refers to certain examples of non- arbitrable disputes and reads:

"36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offenses; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration 2024:KER:82602 OP (RC) NO. 162 OF 2024 8 and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes."

8. But the fact remains that the references of various provisions of the lease deed executed between the respondent - landlord and Government of Kerala - State as well the provisions of Special Economic Zones Act are required to be referred and proved on record by way of an evidence for arriving at a finding qua applicability of rent law/jurisdiction of the Rent Controller. In other words, Rent Controller ought not to have decided the application summarily, but should have given an opportunity by fixing a time line to place on record the material to wriggle out of the objection of the other side and sustainability.

Thus we set aside the order, allow the revision petition and remit the matter to the Rent Controller leaving the parties to bring on record the material in support of their respective stands to make out the cause qua maintainability 2024:KER:82602 OP (RC) NO. 162 OF 2024 9 or otherwise of the rent petition. Order passed consequent to the order impugned also is set aside and rent petition is ordered to be restored to its original number. However, we put a caveat that the learned Rent Controller would give three-three(3-3) effective opportunities to the parties, in a span of one and half month each and decide the matter within four(4) months commencing from 25.11.2024. Parties through their counsel are directed to appear before the Rent Controller on 25.11.2024.

Sd/-

AMIT RAWAL JUDGE Sd/-

EASWARAN S. JUDGE nak 2024:KER:82602 OP (RC) NO. 162 OF 2024 10 APPENDIX OF OP (RC) 162/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE RENT CONTROL PETITION DATED 17.08.2020 Exhibit P2 TRUE COPY OF THE I. A. NO. 04/2023 DATED 11.02.2023 IN R. C. P. 134 OF 2020.

Exhibit P3 TRUE COPY OF THE OBJECTION DATED 17.03.2023 IN I. A. NO. 4/2023 IN R. C. P. NO. 134/2020 Exhibit P4 TRUE COPY OF THE ABSTRACT OF G. O. (RT) NO. 576/2003/ID, DATED 17.6.2003 WITH READABLE COPY Exhibit P5 TRUE COPY OF THE OPERATION MANUAL (ALLOTMENT) ISSUED BY COCHIN SPECIAL ECONOMIC ZONE AUTHORITY.

Exhibit P6 TRUE COPY LETTER OF APPROVAL NO:

KL:19:11:SMARTCITY:2J/6271 OF DATED 21.12.2015 ISSUED BY GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUSTRY, DEPARTMENT OF COMMERCE.

Exhibit P7 TRUE COPY OF THE EXTENSION OF LETTER OF APPROVAL DATED 23.11.2016.

Exhibit P8 TRUE COPY OF THE SUB LEASE DEED DATED 25.01.2017 Exhibit P9 TRUE COPY OF SETTLEMENT AGREEMENT CUM AMENDED SUB LEASE DEED DATED 01.09.2018 Exhibit P10 TRUE COPY OF THE ACCOUNT STATEMENT SENT BY THE RESPONDENT VIDE E-MAIL DATED 08.08.2019 2024:KER:82602 OP (RC) NO. 162 OF 2024 11 Exhibit P11 TRUE COPY OF THE TERMINATION NOTICE DATED 24.01.2020.

Exhibit P12 TRUE COPY OF THE E-MAIL DATED 30.01.2020 ATTACHING STATEMENT OF ACCOUNTS WITH BANK TRANSFER RECEIPT DATED 31.01.2020 Exhibit P13 TRUE COPY OF THE LETTER DATED 11.02.2020 WITH THE ENDORSEMENT 'PERMANENT PASSES CANNOT BE PROCESSED AS THE LEASE HAS BEEN TERMINATED'.

Exhibit P13(a) TRUE COPIES OF THE TEMPORARY ACCESS CARDS WITH THE ENDORSEMENT 'LEASE TERMINATED,' ISSUED BY SMARTCITY (KOCHI) INFRASTRUCTURE PVT. LTD. TO THE STAFF OF PETITIONER Exhibit P13(b) TRUE COPY OF E-MAIL DATED 26.05.2021 FROM MS. SUSHAMA Exhibit P14 TRUE COPY OF THE INTERIM ORDER DATED 2ND MARCH 2020 IN W. P. (C) NO 6234/2020 OF THIS HON'BLE COURT Exhibit P15 CERTIFIED COPY OF ORDER DATED 30.08.2024 IN I. A. NO. 04/2023 IN R. C. P. NO. 134/2020 ON THE FILE OF RENT CONTROL COURT, ERNAKULAM

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