Calcutta High Court
Soumitra Sen & Ors vs Indian Oil Corporation Limited on 25 August, 2023
IN THE HIGH COURT AT CALCUTTA
(Ordinary Original Civil Jurisdiction)
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
IA No: GA 2 of 2023
In CS 265 of 2018
Soumitra Sen & Ors.
Versus
Indian Oil Corporation Limited
Mr. Ishaan Saha
Mr. A. K. Awasthi
Mr. Aishwarya Kumar Awasthi
... For the plaintiffs.
Mr. Joydip Kar, Sr. Adv.
Mr. Amit Kr. Nag
Mr. Partha Banerjee
... For the defendant.
Hearing Concluded On : 18.07.2023
Judgment on : 25.08.2023
Krishna Rao, J.:
1. The defendant has filed the present application under Order VII Rule 10 read with Section 151 of the Code of Civil Procedure praying for return 2 of the plaint on the ground that the suit filed by the plaintiff is not in the nature of commercial dispute.
2. The plaintiff has filed the suit against the defendant for recovery of vacant and peaceful possession of the suit premises, occupational charges, interest and damages/mesne profit.
3. Mr. Joydip Kar, learned Senior Advocate representing the defendant submitted that the defendant was inducted as a lessee in the suit premises on the basis of the lease deed executed on 12th November, 1971 for a period of 10 years with the option of renewal for two more terms of 10 years each. The lease deed expired by efflux of time on 4th April, 2001 but the defendant thereafter continued to occupy the premises as a monthly tenant and the plaintiffs accepted the rent between December' 2001 till February' 2018.
4. Mr. Kar, learned Senior Advocate submitted that a plain reading of the plaint will suggest that the suit has been filed primarily for recovery of possession of the immovable property under Section 106 of the Transfer of Property Act, 1882. He submits that the cause of action in the suit does not arise out of any agreement relating to immovable property and thus there is no commercial dispute between the parties as defined under Section 2(1)(c) of the Commercial Courts Act, 2015.
5. Mr. Kar, learned Senior Advocate submitted that no cause of action for filing the present suit arose from the termination of lease on the ground of forfeiture or violation of any of the clause of the lease agreement. He 3 submits that there is no commercial dispute between the parties and thus this Court has no jurisdiction to entertain the suit in the Commercial Division of this Court.
6. Mr. Kar, learned Senior Advocate relied upon the judgment passed by this Court in the case of Jaspal Singh Chandhok reported in 2023 SCC Online 361 and submitted that this Court in a similar matter held that the dispute between the parties is not covered under the Commercial Courts Act, 2015. Mr. Kar further relied upon the unreported Judgment passed by the Coordinate Bench of this Court in C.O. No. 759 of 2021 in the case of Deepak Polymers Private Limited and submitted that notice issued by the plaintiff under Section 106 of the Transfer of Property Act, 1882, which is based on a statutory right independent and irrespective of any clause of the lease agreement.
7. Mr. Ishaan Saha, learned Advocate representing the plaintiffs submitted that although upon the expiration of the term of lease deed, the defendant ought to have deliver the possession of the suit premises to the plaintiffs but the defendant is in continuous occupation of the suit premises at the pleasure of the plaintiffs and the defendant started paying occupational charges of Rs. 4,235/- per month as per lease deed and the defendant promised and assured that the defendant shall obtain a fresh lease deed of the suit premises after assessing the present market rent.
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8. Mr. Saha submitted that the defendant has wrongfully and unlawfully attempted to mis-characterise the notice dated 5th January, 2018 issued by the plaintiffs to the defendant, calling upon the defendant to handover vacant and peaceful possession of the suit premises to the plaintiffs as notice under Section 106 of the Transfer of Property Act, 1882. He further submits that the said notice cannot be regarded as notice under Section 106 of the Transfer of Property Act, 1882.
9. Mr. Saha submitted that the plaintiff has filed the suit arising out of the agreement relating to the immovable property and the deed of lease is a registered document and thus the plaintiffs have rightly filed the suit before this Commercial Division as the dispute between the parties are commercial in nature.
10. Heard the learned Counsel for the respective parties, perused the materials on record and the judgments relied by the Counsel for the defendant. Admittedly, a deed of lease was entered between the parties on 12th November, 1971 for a period of 10 years with the option of renewal for two more terms of 10 years each and due to efflux of time the deed of lease expired on 4th April, 2001. Even after the expiry of the lease deed, the defendant continued with the possession of the premises as monthly tenant and paid monthly rent to the plaintiff till February, 2018. In the meantime, the plaintiffs have issued letter on 18th October, 2017 but inspite of issuance of notice the plaintiffs have accepted monthly rent from the defendant till February' 2018 and in 5 the mean time, the plaintiffs have again issued a notice to the defendant on 5th January, 2018.
The notice issued by the plaintiffs to the defendant dated 5th January, 2018 reads as follows :
"From, Dated: January 05, 2018
1. Soumitra Sen:
3A, Urbashi,
12C, Camac Street,
Kolkata - 700017.
2. Shamasree Sen:
291, Tower 1,
South City,
375, Prince Anwar Shah Road,
Kolkata - 700068.
3. Shiladitya Sen:
407, Valley Road,
3rd Floor, Apt - 3, Montclair,
New Jersey - 07043,
USA.
4. Rajyasree Sen:
House no: 176, National Media Centre,
Nathopur,
Gurgaon - 122010,
Haryana.
To,
Indian Oil Corporation Limited,
14A, Nirmal Chandra Street,
Kolkata - 700013.
Kind Attention: Dy, General Manager
(Retail Sales), Kolkata Divisional Office. 6 In Re: Your letter No. KDO/R/Fill-In-
Centre dated 18.10.2017 written in relation to the premises no. 12B, Camac Street, Kolkata-700017.
Dear Sir, You are aware that by an indenture of lease dated November 12, 1971 made between our predecessors Samarendra Chandra Sen and Sachindra Chandra Sen as the lessors and yourself as lease, you were granted lease of a piece and parcel of land or ground at premises no. 12B, Camac Street, Kolkata-700017 for a period of 10 Years commencing from April 05, 1971 with option for renewal of two terms of 10 years each at an enhanced lease rents of Rs. 8,850/ and Rs. 4,235/- per month respectively. Upon the exercise of such option by you by paying lease rent at the enhanced rates of Rs. 3,850/- and thereafter Rs. 4,235/- per month, the lease was extended for the full term of 10 years, which expired on or about April 05, 2001.
Although upon the expiration of the term of the lease you became bound and obliged to deliver vacant and peaceful possession of the demised premises to us by removing the building, structures, fixtures and fittings installed there at by you and restoring the said premises to its original state and condition. You continued to occupy the said premises against payment of occupation charges of Rs. 4,235/- per month, on your promise and assurance that you would seek renewal of the lease upon assessing the market rental of the said premises. Despite such promise and assurance you, however, took no steps to seek renewal of the lease at the current market rate of rent of the said premises on diverse pleas. Although upon the death of the original lessors we repeatedly called upon you to either renew the 7 lease of the said premises against payment of the current market rate of rent of the same or to vacate the premises you purported to take some steps in that direction, the rent assessed by you for the property, particularly considering its size and location, was so abysmally and unconscionably low, that it became clear to us that your purported interest in renewing the lease was eyewash. In such circumstance we decided to stop and stopped accepting further occupation charge of the said premises from you after the month of June, 2017.
Contrary to your assertion, at no point of time did we agree to renew the lease of the said premises in your favour on the terms proposed by you. Consequently, your representation in your letter under reference that your management has approved for taking the subject RO land on long term lease is of no consequence. You will appreciate that execution of any lease at the 'approved' rate will not only be unfair but completely unconscionable, and will irreparably prejudice our rights and interest. We are as such also unable to accede to your request to apply for vacating the status quo order dated April 24, 2014 passed in Suit no. 483 of 2014 pending in the City Civil Court at Calcutta and execute a lease of the said premises in your favour.
Please be informed that in the circumstances as aforesaid, you have no right to continue to occupy the said premises and must forthwith deliver vacant and peaceful possession of the same to us in the same condition in which the same was handed over to you by our said predecessors-in-interest, and should do so no later than by 31st of January, 2018, failing which we shall be constrained to initiate appropriate legal proceedings for recovery of the said premises from you and for other reliefs and 8 to hold you responsible for the costs and consequences thereof.
Yours faithfully (SOUMITRA SEN) (SHAMASREE SEN) (SHAMASREE SEN) Constituted Attorney of Shiladitya Sen) (SHAMASREE SEN) Constituted Attorney of Rajyasree Sen)."
11. It is admitted by the defendant that the defendant has received the notice dated 5th January, 2018 and on the basis of the said notice, the plaintiffs have filed the present suit. The defendant has filed the present application for return of plaint on the ground that the plaintiffs have filed the suit on the basis of the notice dated 5th January, 2018 and the notice is under Section 106 of the Transfer of Property Act, 1882 which is based on a statutory right independent and irrespective of any clause of the lease agreement.
12. In paragraph 11 of the suit the plaintiff has categorically mentioned that"On or about 5th April 2001, the lease stood determined by efflux of the time limited thereby." Even after determination of the contract, the plaintiffs allowed the defendant to continue with the possession and the defendant started paying monthly rent/occupational charges of Rs. 4,235/- per month. By a notice dated 5th January, 2001, the plaintiffs have called upon the defendant to vacate the premises and to handover 9 the vacant possession of the premises to the plaintiffs and also refused to accept the monthly rent/occupational charges.
13. It is not the case of the plaintiffs that the defendant has violated any terms and conditions of the deed of lease. The deed of lease expired long back on 4th April, 2001. The plaintiff has filed the suit on the basis of the notice dated 5th January, 2018.
14. In the case Deepak Polymers Private Limited (Supra), the Coordinate Bench of this Court held that :
"28. A plain reading of the said provision indicates that Section 2(1)(c) defines "commercial dispute" to be a dispute "arising out of" the subsequent sub-clauses, including several aspects. Sub-clause (vii) is the only basis of argument of the plaintiffs/opposite parties. The said sub-clause stipulates that a dispute arising out of "agreements relating to immovable property used exclusively in trade or commerce" come within the ambit of "commercial dispute". The judgments cited by the plaintiffs are distinguishable on their respective facts with the present case. Most of the cases, as mentioned above, pertain directly to agreements from various perspectives. Suits for specific performance of agreements, suits relating renewal clauses in agreements and other similar contexts gave rise to the proceedings which culminated in the said reports. Thus, the proceedings were "arising out of" the respective agreements.
30. However, the cardinal question which has not been addressed but is pivotal to the present adjudication is the expression "dispute" which precedes the expression "arising out of" as appearing in Section 2(1)(c) of the 2015 Act. Reading sub-clause (vii) in conjunction with the starting words of Clause (c), it is seen that the expression "agreements relating to immovable property...." qualifies the term "dispute"
arising out of such agreements.
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31. A "dispute" can only be determined by the cause of action of the suit and not the preceding backdrop. Even if Section 106 of the Transfer of Property Act deals with termination of the jural relationship of lessor and lessee, pre-supposing a prior lease agreement, the bundle of facts comprising the cause of action of the suit is the sole determinant of the "dispute" involved in the suit.
32. In the event the suits, in the present case, had been filed for recovery of possession in respect of immovable property on the ground of forfeiture for contravention of any of the terms and conditions of the 13 respective agreements-in-question, it might have been argued that the suits pertains to disputes "arising out of" such agreements.
33. However, the dispute itself, in the present case, arises out of refusal by the defendants to comply with the notices issued by the lessor under Section 106 of the Transfer of Property Act, 1882, which is based on a statutory right independent and irrespective of any clause of the lease agreements.
34. Hence, the suits squarely arise out of a statutory right conferred by Section 106 of the Transfer of Property Act, having no direct nexus with the lease agreements in respect of the immovable properties concerned. Thus, the pre-condition of the applicability of Section 2(1)(c)(vii), that is, the emanation of the dispute out of the lease agreement, is not satisfied in the present suits. Thus, the secondary question as to whether the immovable properties are used exclusively in trade or commerce, pales into insignificance."
15. The plaintiffs have filed the suit against the defendant for recovery of possession, occupational charges and mesne profit after issuance of notice dated 5th January, 2018. Though in the affidavit-in-opposition the plaintiffs have denied that the said notice is not under Section 106 of the Transfer of Property, 1882 Act but it is also not the case of the plaintiff that the plaintiffs have filed the suit for violation of any terms 11 and conditions of the deed of lease. It is also the admitted case of the plaintiffs that the defendant has not come forward for execution of any new lease deed after the determination of the lease deed on 5th April, 2001.
16. Considering the above facts and circumstances of the case, this Court finds that the dispute involved in the suit is not of commercial dispute as contemplated in the Commercial Courts Act, 2015.
17. In view of the above, the plaint along with all the documents in connection with C.S. No. 265 of 2018 (Soumitra Sen & Ors. -vs- Indian Oil Corporation Limited) be returned to the plaintiff to present the same before the appropriate Court having jurisdiction to adjudicate the issue.
18. G.A. No. 2 of 2023 is thus disposed of.
(Krishna Rao, J.) Later :
The Counsel for the plaintiff prays for stay of the order. Counsel for the defendant opposes the submission made by the Counsel for the plaintiff.
Considered the submissions made by the respective parties. Prayer for stay is refused.
(Krishna Rao, J.)