Calcutta High Court
Canara Bank vs Mpmc Pvt. Ltd on 8 January, 2020
Author: Sanjib Banerjee
Bench: Sanjib Banerjee, Kausik Chanda
OD-9 & 10
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
GA No.3 of 2020
In
APO No.173 of 2019
GA No.2672 of 2019
CS No.270 of 2006
EC No.287 of 2011
CANARA BANK
Versus
MPMC PVT. LTD.
And
GA No.5 of 2020
In
APO No.174 of 2019
GA No.2674 of 2019
CS No.270 of 2006
EC No.287 of 2011
CANARA BANK
Versus
MPMC PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
And
The Hon'ble JUSTICE KAUSIK CHANDA
Date : January 8, 2020.
Appearance:
Mr. Sakya Sen, Adv.
Ms. Sharmi Dutta, Adv.
Ms. Aparajita Ghosh, Adv.
...Appellant
Mr. Utpal Bose, Sr. Adv.
Mr. R.R. Sen, Adv.
...Respondent
2
The Court : In view of the good grounds shown, the order dated December 11, 2019 dismissing the appeals and the connected stay applications are recalled. The two appeals are re-admitted and the connected applications are restored to the file.
The restoration applications, GA No. 3 of 2020 and GA No. 5 of 2020, are allowed as above.
These two appeals arise out of the orders dated January 8, 2019 and July 10, 2019 passed in execution proceedings. There is no dispute as to the entitlement of the respondent lessor. Terms of settlement executed in appeal between the parties clearly provide for the respondent herein being entitled to "50% of the municipal taxes and 100% of the surcharge allowance in respect of the tenanted portion" from the period September 1, 2006 till March 31, 2016. The terms of settlement of August 3, 2016 contemplated the appellant bank to continue in occupation of the premises in question till March 31, 2016 and provided for lease rent at the rate of Rs.50/- per sq.ft per month for the period September, 2006 to March, 2009; at the rate of Rs.50/- per sq.ft per month for the period April, 2009 to March, 2010; at the rate of Rs.55/- per sq.ft per month for the period April, 2010 to March, 2013; and at the rate of Rs.60/- per sq.ft. per month for the period April, 2013 to March 2016.
It is the undisputed position that by or about September 30, 2011, the appellant bank removed itself from the premises in question and, thus, the liability of the bank to pay rent and municipal taxes and surcharge in respect of the leasehold premises was till the end of September, 2011.
The execution case came to be launched upon the bank not paying its share of municipal taxes and surcharge notwithstanding the terms of settlement of August 3, 2016 specifically requiring the bank to bear 50% of the municipal taxes and 3 the entirety of the surcharge. It appears that there was a previous dispute as to whether there was any service tax which was levied; but that was resolved before the execution was launched and, in the execution proceedings, the only dispute was as to the quantum that was payable by the appellant bank on account of municipal taxes and surcharge.
It is evident from the records that the amount claimed to be due in the tabular statement filed by the respondent herein was not supported by requisite calculations in the affidavit accompanying the tabular statement. A supplementary affidavit came to be filed by the respondent in January, 2017 which indicated a different basis. A further supplementary affidavit was filed by the respondent in March, 2017 and such further supplementary affidavit gave another figure as the amount due and owing from the appellant herein to the respondent on account of municipal taxes and surcharge. For completeness, it is also necessary to record that the executing court appointed a special referee and objections were taken to the special referee's methodology of calculating the quantum payable by the appellant on account of municipal taxes and surcharge. Ultimately, both the court and the parties ignored the special referee's report and proceeded on the basis of the calculations furnished by the respondent and the response thereto by the appellant herein. By an order dated June 13, 2017, the executing court held that in an affidavit filed by the appellant herein, it was admitted that a sum of Rs.26,85,623/- was payable towards municipal taxes and surcharge for the period April, 2006 to September, 2011. On such perception that the amount was admitted, the appellant herein was directed to make payment of such amount without prejudice to the respondent decree-holder's claim that a much large amount was due.
4
The order dated June 13, 2017 was carried in appeal. The appellate court observed that since the order was based on the statement of the appellant, the order could not be appealed against. However, while disposing of the appeal, the following was said in the appellate order of August 3, 2017.
"Accordingly, APO No.360 of 2017 is dismissed without going into the merits thereof and by leaving the appellant free to take what steps may be available to the appellant if the appellant perceives a calculation or arithmetical mistakes to have been made in arriving at the aforesaid figure."
Pursuant to such liberty granted by the said appellate order, the appellant filed an application furnishing fresh calculations which, according to the appellant, ought to have been accepted by the executing court. The appellant contends that even though the order dated August 3, 2017 did not enter into the merits of the matter as the appellate court perceived the order impugned in the appeal to have been made on the basis of an admission by the appellant, there was no such admission in the appellant's relevant affidavit. The appellant refers to the entirety of the relevant affidavit to point out that the appellant had objected both to the methodology or the basis of the calculations furnished by the lessor and to the arithmetic in support of such methodology or basis. The appellant refers to paragraph 9 of its relevant affidavit to suggest that what was said therein was that even if the erroneous basis adopted by the lessor were to be accepted by the executing court as the appropriate methodology, the amount due would have been Rs.26,85,623/- and not the larger sum in excess of Rs.53 lakh as claimed by the lessor. It is irrelevant to go into such aspect of the matter, particularly, since the relevant appeal has been disposed of. However, there is substance in the appellant's suggestion 5 that the appellate order of August 3, 2017 should not have recorded the amount of Rs.26,85,623/- to be an admission on the part of the appellant herein in the context of the entire affidavit.
Equally, it is evident that the finality as to the admission or the quantum alleged to have been admitted was robbed by the appellate order of August 3, 2017 in permitting the appellant herein to indicate appropriate calculations or point out any arithmetical mistakes. However, in deference to the appellate order finding that the sum of Rs.26,85,623/- had been admitted to be due by the appellant herein, the subsequent application of the appellant furnishing fresh calculations stood dismissed by the first of the orders impugned passed on January 8, 2019. The subsequent order of July 10, 2019 was really a consequential order upon the calculations furnished by the appellant being disregarded.
What is apparent from the terms of settlement of August 3, 2016 is that the appellant herein was liable to pay municipal taxes at the rate of 50% in respect of the area occupied by the appellant at the relevant premises and the entirety of the surcharge relatable to the area. On the other hand, in one of the earlier claims relied upon by the lessor in its execution application, it sought to make the appellant lessee liable for two- third of the proportionate amount despite the clear use of the figure "50%" in the terms of settlement of August 3, 2016. Even later, particularly, in the supplementary affidavits filed by the lessor in January, 2017 and in March, 2017, the lessor tried to interpret proportionate with reference to the quantum of rent paid by the appellant against the total quantum of rent received for the entirety of the premises in question. Clearly, this was contrary to the terms of settlement since such terms provided for the area occupied by the appellant herein and indicated that the proportionate 50% of municipal taxes and 100% of surcharge would be payable by the appellant herein.
6
Thus, if the municipal taxes are assessed in respect of the premises in question in entirety, the area under the occupation of the appellant would be the basis for determining the proportion of the municipal taxes and surcharge that the appellant would be liable to pay for the entire period. In such context, the appellant refers to Section 178 of the Kolkata Municipal Corporation Act, 1980 and says that sub-section (6) thereof permits both an owner and a lessee in respect of any premises to apply to the Corporation for the Corporation to indicate the proportionate share of the relevant party regarding the municipal rates and taxes.
In view of such provision, the parties are left free to apply to the Corporation for the Corporation to determine what would be the proportionate share of municipal taxes and surcharge for the area at the premises under the occupation of the appellant herein during the period April, 2006 to September, 2011. Upon such determination being arrived at, the appellant herein will be liable to pay 50% of the municipal taxes and the full complement of the surcharge that is indicated by the Corporation, subject to the right that both the appellant and the respondent may have to apply to the Corporation for correction of any error perceived to have been made in the relevant determination.
Let this appeal now appear in the monthly list of April, 2020. The exercise of determining the appellant's liability on account of municipal taxes and surcharge for the relevant period should be conducted by the Corporation at the instance of either party. It is hoped that either of the parties makes an appropriate application under Section 178(6) of the Act of 1980 within a fortnight from date whereupon the Corporation should ensure that the appropriate determination is concluded within a period of four weeks after affording both parties an opportunity to be heard by the concerned officer who undertakes the exercise.
7
It is recorded that a sum of Rs.19,81,723/- has been paid by the appellant to the respondent herein. Such payment will be regarded as a deposit made without prejudice to the rights and contentions of the parties herein and will be subject to the amount determined by the Corporation and further orders in these two appeals.
In view of the above, let no further steps be taken in terms of the orders impugned or in the execution proceedings.
Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) (KAUSIK CHANDA, J.) sg.