Calcutta High Court (Appellete Side)
K.K. Saha & Co. Pvt. Ltd vs Ashok Agarwal on 6 October, 2016
Author: Harish Tandon
Bench: Harish Tandon
IN THE HIGH COURT AT CALCUTTA
CIVIL REVISIONAL JURISDICTION
PRESENT: HON'BLE MR. JUSTICE HARISH TANDON
C.O. 3777 of 2016
K.K. Saha & Co. Pvt. Ltd.
-Vs-
Ashok Agarwal
Mr. Suvasish Sengupta,
Ms. Subhra Das,
Mr. B. Sen.
... for the Petitioner.
Heard On: 28.09.2016
Judgment On: 06.10.2016
The Court:
Before proceeding to record my reasons on disagreement with the
judgment delivered by the Co-ordinate Bench in case of Kanak Projects
Limited-Vs- Oil and Natural Gas Corporation Ltd. reported in (2014) 2 CHN
(Cal) 405 it would be relevant to record the salient facts of the instant revisional
application.
The petitioner filed a suit for recovery of Khas possession, arrear rent and
mesne profit before the learned Civil Judge (Senior Division), 1st Court, Howrah
being Title Suit No. 490 of 2015. The case made out in the plaint are adumbrated
herein below:-
i) The defendant is a tenant in respect of a godown along with an office and a
staff quarter admeasuring 5000 sq. ft. at premise no. 14, Kartick Chandra Dutta
Road, Ramkrishnapur, Howrah at a monthly rental of Rs. 1800/- payable
according to English Calendar;
ii) The said premise was intended to be used for commercial purposes but the
tenant failed and neglected to pay the rent on and from the month of October,
2013;
iii) The defendant has wrongfully and illegally handed over the possession of
the godown to one Manish Seth for carrying on the business of manufacturing
pens and refills without the written consent of the plaintiff;
iv) In the year 2014, at the request of the plaintiff the said Manish Seth
handed over possession of the godown to the plaintiff and endorsed the factum
of surrender of possession in the letter dated 1st December, 2014;
v) The defendant started making attempt to wrongfully dispossess the
plaintiff from the said godown and ultimately succeeded in the last week of June,
2015 with the help of hooligans and anti socials;
vi) The tenancy of the defendant is duly terminated by issuing a notice dated
29th July, 2015 under Section 106 of the Transfer of Property Act. The defendant
thereafter neither handed over the possession nor paid the arrears rent and are
therefore in illegal occupation.
In the backdrop of the aforesaid facts, the suit is filed for recovery of
possession, decree for arrears rent and mesne profits assessed at Rs. 5,000 per
diem with effect from 21st August, 2015 till the recovery of possession.
An application for temporary injunction was filed by the plaintiff /
petitioner restraining the defendant / opposite party from transferring, alienating
and / or parting with possession of the suit premise and also changing in nature
of the character thereof till the disposal of the suit. The said application was
moved on 16.09.2015 when the Court directed both the parties to maintain
status quo as on that date in respect of nature, character, possession and
alienation of the suit property till 9th December, 2015. The injunction application
is still pending.
Amidst the pendency thereof, an application under Section 151 of the Code
of Civil Procedure is filed by the petitioner for an order upon the defendant /
opposite party to pay a sum of Rs. 2,00,000/- per month as occupational charges
in respect of the suit premises on and from 21st August, 2015 till the eviction.
The defendant / opposite party filed objection to the said application
stating that the decree for eviction has not been passed and the matter being
sub-judice he cannot be directed to pay the occupational charges.
The Trial Court kept the said petition in abeyance and fixed the date for
hearing of the receiver application which was subsequently filed.
Initially, this Court did not intend to interfere with the impugned order as
the Trial Court has not decided the application under Section 151 of the Code
but the moment the judgment rendered in case of Kanak Projects Ltd. (Supra)
is cited by the learned Advocate of the petitioner, this Court feels that it would be
just and proper that the ratio laid down therein should be decided by a Larger
Bench.
In Kanak Project Ltd., the Co-ordinate Bench in paragraph 25 observed
that if the Appellate Court can pass an order for stay of the execution proceeding
directing the defeated defendant to deposit the occupational charges at the
prevalent market rate, the same principle can be applied if the Trial Court finds
that there is absolutely no defence put forth by the defendant against the claim
for eviction.
The ratio laid down in Kanak Projects Ltd. (Supra) is that there is no
fetter on the part of the Trial Court to direct the tenant to deposit the
occupational charges at the prevalent market rate, if the defence appears to be
sham and illusory and there is high degree of probability of passing the decree in
favour of the landlord.
With all humility and respect I cannot persuade myself to agree with the
ratio laid down by the Co-ordinate Bench that the principles indicated in
Atmaram Properties Pvt. Ltd. -Vs- Federal Motors Pvt. Ltd. reported in
(2005) 1 SCC 705 can be extended during the pendency of a suit for eviction
filed against the tenant.
The Rent Control Act is a beneficial and welfare piece of legislature and
came to be enacted in social, legal response to historical developments.
Aftermath of the world war invited great influx of refugees through out the
country and the massive migration from the rural areas to the urban because of
rapid urbanization which happened in the country. The enormasity of the
migration to urban centers created an imbalance between supply and demand
and it was felt that to balance such inequality and abuse by the landlords in
demanding the exorbitant amounts on account of rent and lurching the tenant
with insecurity in event of eviction, some protection should be given. The
provisions of Transfer of Property Act, which was in vogue at that relevant point
does not provide any protection to the tenant and the eviction can be secured
after determination of tenancy. The legislatures intervened and every State
enacted the Rent Restriction Act in exercise of the powers conferred under the
Constitution of India. The legislative intent underlying the enactment of the West
Bengal Premises Tenancy Act was to protect such tenants against the eviction in
the hands of unscrupulous landlords.
The Act further promotes the fair rent to be determined and the landlords
were prevented from demanding exorbitant and astronomical amount on account
of rent from the tenant. The sense of protection was percolated by enacting the
Rent Restriction Act into the tenants by conferring right to approach the rent
controller to fix the fair rent in respect of the premises.
,
The definition of a tenant given under Section 2(h) of the West Bengal
Premises Tenancy Act, 1956 conveyed the definite message that any person by
whom or on whose account or behalf the rent of any premises is or but for
special contract would be payable and includes any person continuing in
possession after termination of his tenancy or in the event such persons death,
such of his heirs as or originally residing with him at the time of his death but
shall not include any person against whom any decree or order of eviction has
been passed by a Court of competent jurisdiction. It is, therefore, manifest that
the tenant shall continue to enjoy all the protection, facilities and rights
conferred under the said Act even after the termination of tenancy till the decree
for eviction is passed by a competent Court having jurisdiction. Though the
definition of tenant has undergone sea change in West Bengal Premises Tenancy
Act, 1997 but the legislature did not amend or bring changes in keeping the
tenant who suffered a decree for eviction outside the purview of the definition
except restricting the haritability of other heirs and legal representatives barring
the spouse for a limited period.
In case of Damadilal & Ors -Vs- Parashram & Ors. reported in (1976) 4 SCC
855 which arose under the Madhya Pradesh Accommodation Control Act, 1961,
an argument was advanced that on the death of the tenant during the pendency
of the Second Appeal whether the heirs of the deceased tenant had a right to get
themselves substituted. It was contended on behalf of the landlord that after the
termination of a contractual tenancy, the original tenant lost his right in the
estate and therefore his heirs or legal representatives cannot be substituted in
his place. Repelling the contention of the landlord, it is held:-
"11. We find it difficult to appreciate how in this country we can proceed on the basis that a
tenant whose contractual tenancy has determined but who is protected against eviction by the
statute, has no right of property but only a personal right to remain in occupation, without
ascertaining what his rights are under the statute. The concept of a statutory tenant having no
estate or property in the premises which he occupies is derived from the provisions of the English
Rent Acts. But it is not clear how it can be assumed that the position is the same in this country
without any reference to the provisions of the relevant statute. Tenancy has its origin in contract.
There is no dispute that a contractual tenant has an estate or property in the subject-matter of the
tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the
determination of the tenancy the estate must necessarily disappear and the statute can only
preserve his status of irremovability and not the estate he had in the premises in his occupation. It
is not possible to claim that the "sanctity" of contract cannot be touched by legislation. It is therefore
necessary to examine the provisions of the Madhya Pradesh Accommodation Control Act, 1961 to
find out whether the respondents' predecessors-in-interest retained a heritable interest in the
disputed premises even after the termination of their tenancy."
In case of Ganpat Ladha -Vs- Sashikant Vishnu Shinde reported in (1978) 2 SCC 573 which arose from Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the point arose whether the heir of a deceased tenant not residing at the time of the death of the tenant can be substituted in a proceeding upon the death of the original tenant. The definition of a tenant engrafted under Section 5(11) of the said Act was noticed wherein the heritability was restricted and it was ultimately held:-
"7. In these circumstances, the question arose for decision whether the present respondent, whose residence is given in the special leave petition as "Agakhan Building, Haines Road, Bombay", could possibly claim to be a tenant in respect of the shop which admittedly constitutes business premises by reason of Section 5(11)(c) of the Act. The High Court took the view that Section 5(11)(c) applies not only to residential premises but also to business premises and therefore, on the death of a tenant of business premises, any member of tenant's family residing with him at the time of his death would become a tenant. We do not think this view taken by the High Court is correct. It is difficult to see how in case of business premises, the need for showing residence with the original tenant at the time of his death would be relevant. It is obvious from the language of Section 5(11)(c) that the intention of the legislature in giving protection to a member of the family of the tenant residing with him at the time of his death was to secure that on the death of the tenant, the member of his family residing with him at the time of his death is not thrown out and this protection would be necessary only in case of residential premises. When a tenant is in occupation of business premises, there would be no question of protecting against dispossession a member of the tenant's family residing with him at the time of his death. The tenant may be carrying on a business in which the member of his family residing with him may not have any interest at all and yet on the construction adopted by the High Court, such member of the family would become a tenant in respect of the business premises. Such a result could not have been intended to be brought about by the legislature. It is difficult to discern any public policy which might seem to require it. The principle behind Section 5(11)(c) seems to be that when a tenant is in occupation of premises, the tenancy is taken by him not only for his own benefit, but also for the benefit of the members of the family residing with him, and, therefore, when the tenant dies, protection should be extended to the members of the family who were participants in the benefit of the tenancy and for whose needs inter alia the tenancy was originally taken by the tenant. This principle underlying the enactment of Section 5(11)(c) also goes to indicate that it is in respect of residential premises that the protection of that section is intended to be given. We can appreciate a provision being made in respect of business premises that on the death of a tenant in respect of such premises, any member of the tenant's family carrying on business with the tenant in such premises at the time of his death shall be a tenant and the protection of the Rent Act shall be available to him. But we fail to see what purpose the legislature could have had in view in according protection in respect of business premises to a member of the tenant's family residing with him at the time of his death. The basic postulate of the protection under the Rent Act is that the person who is sought to be protected must be in possession of the premises and his possession is protected by the legislation. But in case of business premises, a member of the family of the tenants residing with him at the time of his death may not be in possession of the business premises; he may be in service or he may be carrying on any other business. And yet on the view taken by the High Court, he would become tenant in respect of the business premises with which he has no connection. We are, therefore, in agreement with the view taken by one of us (Bhagwati, J.) in the Gujarat High Court about the correct meaning of Section 5(11)(c) in Parubai Manilal Brahmin v. Baldevdas Zaverbhai Tapodhan in preference to the view adopted in the subsequent decision of the Gujarat High Court in Heirs of Deceased Darji Mohanlal Lavji v. Muktabai Shamji which decision was followed by the Bombay High Court in the judgment impugned in the present appeal before us."
Subsequenly, in case of Gian Devi Anand v. Jeevan Kumar reported in (1985) 2 SCC 683, noticing the aforesaid decisions the question arose whether the heirs of the deceased tenant whose contractual tenancy was determined can get the protection against eviction under Delhi Rent Control Act, 1958. After noticing the judgment of Damadilal (Supra) and Ganpat Ladha (Supra), the Constitution Bench held that the expression "statutory tenant" used in the English Rent Act and the concept that such statutory tenant had no estate or interest in the demised premises has no basis in the provision of the Rent Acts of the different states of the country. Looking at the definition of a tenant embodied in the Delhi Rent Control Act, the Constitution Bench held:-
"25. This Court has very aptly observed in Damadilal case that it cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve the status of irremovability and not the estate he has in the premises in his occupation; and it is not possible to claim that the sanctity of contract cannot be touched by legislation. As already noticed, this Court in Damadilal case after referring mainly to the definition of tenant in Section 2(i) of the Madhya Pradesh Accommodation Control Act, 1961 came to the conclusion that the so-called statutory tenant had an interest in the premises occupied by him and the heirs of the statutory tenant "had a heritable interest in the premises". A tenant has been defined in Section 2(l) of the Delhi Rent Control Act, which reads as follows:
" 'tenant' means any person by whom or on whose account or behalf the rent of any premises is, or, but for a special contract, would be, payable, and includes--
(i) a sub-tenant;
(ii) any person continuing in possession after the termination of his tenancy; and
(iii) in the event of the death of the person continuing in possession after the termination of his tenancy, subject to the order of succession and conditions specified, respectively, in Explanation I and Explanation II to this clause, such of the aforesaid person's--
(a) spouse,
(b) son or daughter, or, where there are both son and daughter, both of them,
(c) parents,
(d) daughter-in-law, being the widow of his pre-deceased son, as had been ordinarily living in the premises with such person as a member or members of his family up to the date of his death, but does not include,--
(A) any person against whom an order or decree for eviction has been made, except where such decree or order for eviction is liable to be re-opened under the proviso to Section 3 of the Delhi Rent Control (Amendment) Act, 1976;
(B) any person to whom a licence, as defined by Section 52 of the Indian Easements Act, 1882 (5 of 1882), has been granted.
Explanation I.-- The order of succession in the event of the death of the person continuing in possession after the termination of his tenancy shall be as follows:
(a) firstly, his surviving spouse;
(h) secondly, his son or daughter, or both, if there is no surviving spouse, or if the surviving spouse did not ordinarily live with the deceased person as a member of his family up to the date of his death;
(c) thirdly, his parents, if there is no surviving spouse, son or daughter of the deceased person, or if such surviving spouse, son or daughter or any of them, did not ordinarily live in the premises as a member of the family of the deceased person up to the date of his death; and
(d) fourthly, his daughter-in-law, being the widow of his pre-deceased son, if there is no surviving spouse, son, daughter or parents of the deceased person, or if such surviving spouse, son, daughter or parents, or any of them, did not ordinarily live in the premises as a member of the family of the deceased person up to the date of his death.
Explanation II.-- If the person, who acquires, by succession, the right to continue in possession after the termination of the tenancy, was not financially dependent on the deceased person on the date of his death, such successor shall acquire such right for a limited period of one year; and, on the expiry of that period, or on his death, whichever is earlier, the right of such successor to continue in possession after the termination of the tenancy shall become extinguished.
Explanation III.-- For the removal of doubts, it is hereby declared that,--
(a) where, by reason of Explanation II, the right of any successor to continue in possession after the termination of the tenancy becomes extinguished, such extinguishment shall not affect the right of any other successor of the same category to continue in possession after the termination of the tenancy; but if there is no other successor of the same category, the right to continue in possession after the termination of the tenancy shall not, on such extinguishment, pass on to any other successor specified in any lower category or categories, as the case may be;
(b) the right of every successor, referred to in Explanation I to continue in possession after the termination of the tenancy, shall be personal to him and shall not, on the death of such successor, devolve on any of his heirs."
The definition of tenant as it stands at present in the Act, is after the amendment of the definition in Section 2(l) of the earlier Act, by the Amendment Act (Act 18 of 1976) which was introduced with retrospective effect. Prior to the amendment, the definition of tenant as it stood in the original Act, 1958 was in the following terms:
" 'tenant' means any person by whom or on whose account or behalf the rent of any premises is, or but for a special contract would be, payable and includes a sub-tenant and also any person continuing in possession after the termination of his tenancy but shall not include any person against whom any order or decree for eviction has been made;"
It is, therefore, clear from the definition of tenant, whether in the Original Act or in the Amended Act, that the tenant within the meaning of the definition of the term in the Act includes any person continuing in possession after the termination of his tenancy. It will be seen that the definition of tenant in Madhya Pradesh Accommodation Control Act, 1961 on which the decision in Damadilal case mainly turns, is similar to the definition of tenant as given in the Delhi Act in the sense that the tenant under both the Acts includes for the purpose of Rent Act any person continuing in possession after the termination of the tenancy."
In paragraph 31 thereof the Constitution Bench held that the termination of the contractual tenancy does not bring about any change in the status and legal position of a tenant, enjoins the same as an estate or interest therein in view of the definition of a tenant given in the said Act.
Paragraph 36 of the said Constitution Bench decision is a complete answer to the proposition whether the tenancy continues to have an estate or interest in the tenanted premises as it is an incident of heritability. The definition of a tenant was identical to the definition of a tenant given under the West Bengal Premises Tenancy Act, be it 1956 or 1997. The inclusive definition imbibed within itself the right as a tenant to a person whose tenancy is terminated until a decree or order for eviction is passed against him by a competent Court having jurisdiction. If the status of a tenant cannot be changed even after the termination of a tenancy and all rights available to the contractual tenant is extended to such statutory tenant, whether the Court can pass an order for deposit of the occupational charges at the prevalent market rate, which is much excess to the contractual rent is the question begging an answer. The support can be lent to another Constitution Bench decision of the Supreme Court in case of V. Dhanapal Chettiyar -Vs- Yesodai Ammal Reported in (1979) 4 SCC 214, wherein it is held:-
"without detaining ourselves on this aspect of the matter by any elaborate discussion, in out opinion, it will suffice to say that the various state Rent Control Acts make a serious encroachment in the field of freedom of contract. It does not permit the landlord to snap his relationship with the tenant merely by his act to certifying a notice to quit on him. In spite of notice, the law says that he continues to be a tenant and he does so enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of loan etc. in accordance with law."
The status of a tenant after termination of tenancy before a decree for eviction is passed by the competent Civil Court is succinctly answered in the following:-
"8. Before we embark upon a review of some of the decisions of this Court we think it necessary and advisable to briefly refer to the provisions of some of the State Rent Acts in support of the observations made by us above that on the question of notice no different result is possible on the language of any State Act. Section 10 of the Tamil Nadu Rent Act says : "A tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or Sections 14 to 16." In other words if a case is made out for his eviction in accordance with the provisions aforesaid, he can be evicted. Even after the termination of the contractual tenancy under the definition of the landlord in clause (6) and of the tenant under clause (8) of Section 2 the landlord remains a landlord and the tenant remains a tenant as clause (8) expressly says that tenant means "a person continuing in possession after the termination of the tenancy in his favour". Section 3 indicated that no landlord can treat the building to have become vacant by merely terminating the contractual tenancy as the tenant still lawfully continues in possession of the premises. The tenancy actually terminates on the passing of the order or decree, for eviction and the building falls vacant by his actual eviction. The giving of the notice, therefore, is a mere surplusage and unlike the law under the Transfer of Property Act it does not entitle the landlord to evict the tenant."
In Niyaz Ahmed Khan -Vs- Mahmood Rahmat Ullah Khan & Anr.
reported in (2008) 7 SCC 539 the eviction proceeding was dismissed by the Trial Court and the said order was carried in appeal. The Appellate Court affirmed the order, which was further, assailed in a Writ Petition before the Allahabad High Court under Article 227 of the Constitution. While admitting the Writ Petition, an interim protection was passed upon the tenant to pay an amount over and above the contractual rent. The said order was challenged before the Supreme Court. The Apex Court held that there is a distinction between a proceeding for eviction having dismissed and a decree for eviction being passed. It is held that in case where the Appellate Court passes an order of stay of the eviction decree passed in favour of the landlord, there is no fetter to put a condition but such principle cannot be extended when the eviction proceeding is dismissed. It would be relevant to quote paragraphs 9 and 10 of the said report, which runs thus:-
"9. We should however note the distinction between cases where a writ petition is filed by the tenant challenging the order of eviction and seeking stay of execution thereof, and cases where a writ petition is filed by the landlord challenging the rejection of a petition for eviction. What we have stated above is with reference to writ petitions filed by landlords. In writ petitions filed by tenants, while granting stay of execution of the order of eviction pending disposal of writ petition, the High Court has the discretion to impose reasonable conditions to safeguard the interests of the landlord. But even in such cases the High Court cannot obviously impose conditions which are ex facie arbitrary and oppressive thereby making the order of stay illusory. When a tenant files a writ petition challenging the order of eviction, the High Court may reject the writ petition if it finds no merit in the case of the tenant; or in some cases, the High Court may admit the writ petition but refuse to grant stay of execution, in which event, the tenant may be evicted, but can claim restoration of possession if he ultimately succeeds in the writ petition; or in some cases, the High Court finding the case fit for admission, may grant stay of eviction, with or without conditions, so that status quo is maintained till the matter is decided. Where the High Court chooses to impose any conditions in regard to stay, such conditions should not be unreasonable or oppressive or in terrorem. Adopting some arbitrary figure as prevailing market rent without any basis and directing the tenant to pay absurdly high rent would be considered oppressive and unreasonable even when such direction is issued as a condition for stay of eviction. The High Court should desist from doing so.
10. To sum up, in writ petitions by landlords against rejection of eviction petitions, there is no scope for issue of any interim direction to the tenant to pay higher rent. But in writ petitions by tenants against grant of eviction, the High Court may, as a condition of stay, direct the tenant to pay higher rent during the pendency of the writ petition. This again is subject to two limitations. First, the condition should be reasonable. Second, there should not be any bar in the respective State rent control legislation in regard to such increases in rent. Be that as it may."
What can be logically deduced therefrom that the imposition of conditions at the time of passing an order for stay of the eviction decree or the execution proceeding can be imposed by the Appellate Court but such directions cannot be passed if the eviction proceeding is dismissed by the Trial Court and the appeal is filed by the dissatisfied landlord. On the same analogy if the suit for eviction is still pending and no decree is passed, it is not open to the Court to direct the tenant to pay the occupational charges till the Court passes a decree for eviction. It would be opposed to the definition of a tenant engrafted under Section 2(h) of the West Bengal Premises Tenancy Act, 1997 which clearly provides that the tenant even after the determination of tenancy shall enjoy all the protections and the rights as that of a contractual tenant until a decree for eviction is passed.
In view of the above, I am unable to agree with the ratio laid down in Kanak Projects Ltd. (Supra).
Let the revisional application be placed before the Hon'ble the Chief Justice for constituting a Larger Bench to answer:-
"Whether the Civil Court can direct the tenant to pay the occupational charges, damages, mesne profits during the pendency of the eviction proceeding at the prevalent market rate in excess of the contractual rent."
(Harish Tandon, J.)