Calcutta High Court
Pilani Investment And Industries ... vs Steel Authority Of India Limited on 7 October, 2015
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
Present:
The Hon'ble JUSTICE SOUMEN SEN
G.A. No.2900 of 2011
G.A. No.2904 of 2011
C.S. No. 74 of 2011
PILANI INVESTMENT AND INDUSTRIES CORPORATION LIMITED
VS.
STEEL AUTHORITY OF INDIA LIMITED
For the Plaintiff/Petitioner : Mr. Jayanta Kr. Mitra, Sr. Adv.,
Mr. Sabyasachi Chowdhury,
Ms. Nikita Jhunjhunwala.
For the Defendant/Respondent : Mr. Anindya Kr. Mitra, Sr. Adv.,
Mr. Abhrajit Mitra, Sr. Adv.,
Mr. Abhijit Gangopadhyay,
Mr. Supriya Dubey,
Ms. Shilpi Ganguli.
Heard on : 09.09.2015, 14.09.2015,
21.09.2015, 23.09.2015,
28.09.2015, 30.09.2015,
02.10.2015.
Judgment on : 7th October, 2015
Soumen Sen, J:- The plaintiff has filed this application under
Chapter XIIIA of the Rules of the Original Side praying inter alia for a
decree of eviction.
The plaintiff is the owner of a office space having an area
measuring about 8350 Sq. Ft on the 5th floor of the premises situated on
a industry House, 10 Camac Street, Kolkata 700017 (herein after
referred to as the suit premises). The defendant was a monthly tenant
under the plaintiff in respect of the suit premises paying monthly rent as
agreed by and between the parties from time to time along with service
charges at an agreed rate of 9.55 per Sq. Ft. for the tenanted premises as
also service tax as statutorily fixed from time to time. Over and above
the aforesaid charges the defendant also agreed to pay occupier's share
of corporation tax and surcharge thereon as levied from time to time. The
plaintiff used to raise consolidated bills on the defendant every month in
respect of charges on account of monthly rent, service charges and
service tax as agreed between the parties and the occupier's share of
corporation tax and surcharge there on. The last of such bills raised by
the plaintiff for the month of March 2010 dated 12th March 2010 was for
a sum of Rs. 1,31,965/-.
The particulars of the bill dated 12th March 2010 as disclosed in
the affidavit are indicated below:-
Being the rent for 5th Floor measuring Rs.
8350 Sq.ft. of Premises No.10, Camac
Street, Kolkata, @ Rs. 2.53 per Sq.ft.
For the month of March, 2010 21,125.50
Service Charge @ Rs. 9.55 per Sq.ft.
Measuring 8350 sq.ft. 79,742.50
..............................................
100,868.00 Service Tax @ 10.30% on Rs. 1,00,868.00 10,389.00 ..............................................................................
111,257.00 Occupier's Share of Corporation Tax @ Rs.
1.24 Paise per sq.ft. 10,354.00 Surcharge on Corporation Tax @ Rs.
1.24 Paise per sq.ft. 10,354.00 .................................................. 131,965.00 .................................................. The defendant agreed that the plaintiff would raise a consolidated monthly bill containing the aforesaid sums on account of monthly rent, service charges, service tax, occupier's share of Corporation Tax and surcharge thereon month by moth for payment by the defendant for the use and occupation of the suit premises by the defendant. The defendant agreed that all the aforesaid ingredients would from part of the rent. The plaintiff on the aforesaid basis raised bills and received payments till March 2010. The plaintiff however, did not accept any rent from the defendant thereafter as the parties could not reach any agreement as to the quantum of rent. The plaintiff thereafter 21st February, 2011, issued a notice under Section 106 of the Transfer of Property Act terminating the monthly tenancy of the defendant with the expiry of 15 days from the date of receipt of the notice and has claimed vacant and peaceful possession of the suit property. The defendant replied to the said notice on 21st March, 2011. The defendant however, did not hand over the possession of the suit premises and has remained in wrongful occupation on and from 21st March 2011.
Under such facts and circumstances the plaintiff has filed the instant suit for recovery of possession, arrears of rent and mesne profits at the rate of Rs. 150/- per sq.ft. the particulars of the claim are indicated in paragraph 10 of the plaint which is set out herein in below:
There is due and payable by the defendant to the plaintiff an amount of Rs. 14,51,615/- (Rupees fourteen lakhs fifty one thousand six hundred fifteen only) towards outstanding rent inclusive of corporation taxes and surcharge thereon from the month of April 2010 up to February 2011 as per the following particulars:-
PARTICULARS
a) Rent for the said premises from April 2010 @ Rs. 1,31,965/- for 11 months = Rs. 14,51,615/-
b) in the event it is held that the occupiers share of corporation tax and surcharge thereof are not part of the monthly rent, in such event, the amount dye by the defendant to the plaintiff are as follows:-
PARTICULARS
(i) Rent for the said premises inclusive of service charges and service tax per month being Rs.
1,11,257/- for 11 months = Rs. 12,23,827/-
(ii) Occupiers share of corporation tax and surcharge thereon @ Rs. 20,708/- per month for 11 months. = Rs. 2,27,788/-
...........................
Total= Rs. 14,51,615/-
The plaintiff thereafter has taken out this application under Chapter XIIIA for a final judgement for delivery of vacant possession of the suit premises.
The defendant has filed an affidavit disputing the claim of the plaintiff .
The defendant has alleged that the plaintiff was required and oblige to execute a deed of lease for a period of 5 years commencing from 1st April 2010. The defendant says that the plaintiff was agreeable to renew the lease for a lewd of 5 years from 1st April 2010, on enhancement of rent by 25% in order to consider the request of the plaintiff a committee was constituted by the defendant. Thereafter from time to time several discussions were held between the parties and an agreement reached whereby the defendant had agreed to enhance the rent by 25% with effect from 1st April 2010. In lieu of the plaintiff agreeing to execute a lease deed for a term of 5 years with effect from 1st April 2010 at the rate of rent of Rs. 3.16/- per sq. ft. per month. The defendant had also agreed that the service cheques would be at the rate of Rs. 9.55/- per sq. ft. per month while the Occupier's Share of corporation Tax would be at the rate of Rs. 1.24/- per sq. ft. per month and surcharge on corporation Tax would be at the rate of Rs. 1.24/- per sq. ft. per month. In addition Rules, service Tax would be paid (on rent and Service Charges) by the defendant at the applicable rate. The agreement pleaded by the defendant are summarized below:-
a) The rent would be at the rate of Rs. 3.16/- per sq. ft. per month with effect from 1st April, 2010;
b) Service charges would be at the rate of Rs. 9.55/- per sq. ft.
per month with effect from 1st April, 2010;
c) Occupier's share of corporation tax would be at the rate of Rs.
1.24 per sq. ft. per month and surcharge on corporation tax at the rate of Rs. 1.24 per sq. ft. per month with effect from 1st April, 2010;
d) Service tax (on rent and service charges) would be payable by the defendant at the applicable rate;
e) The plaintiff would execute and register at the cost of the defendant a lease deed for the period of 5 (five) years with effect from 1st April, 2010.
f) The defendant would be entitled to have the lease executed at its option for a further period of 5 years at an enhanced rent, such enhancement being 25% of the existing rent.
Mr. Jayanta Kumar Mitra, the Learned Advocate General, appearing with Sri Sabyasachi Chowdhuri, Advocate submits that having regard to the composition of rent the tenancy of the defendant is not coming within the purview of the West Bengal Premises Tenancy Act. As the monthly rent is more than Rs. 10,000/- the tenancy of the defendant is governed by the provisions of the Transfer of Property Act. It is argued that the tenancy was duly determined by serving a notice under Section 106 of the Transfer of Property Act. Since the statutory period of notice had expired and the defendant had failed to deliver vacant possession of the premises in question the plaintiff recovery of possession is entitle to mesne profits. It is submitted that in reply to the notice under Section 106 of the Transfer of Property Act the defendant did not dispute that the amount claimed in the notice was not the amount payable towards monthly rent and the cheques were issued by the defendant against the bills raised by the plaintiff clearly acknowledging that the amounts mentioned in each of the bills are the amounts due and payable by the defendant to the plaintiff for occupation of the premises in question. It is argued that the word "rent" although has not been defined the West Bengal Premises Tenancy Act there are sufficient indications in the Act inasmuch it has been recognised in various decisions of the Hon'ble Supreme Court as well as our High Court that all payments made for occupation of the property would constitute rent. The "rent" according to the Learned Advocate General, would mean and include the whole amount agreed to be paid for enjoyment of what is let out to a tenant irrespective of the description as rent or not. It is submitted that the term rent is comprehensive enough to include all payments agreed to be paid to the landlord by a tenant for the use and occupation of not only of the building and its appurtenances but also other amenities agreed between the parties. It is submitted that the maintenance and other charges mentioned in the said bills raised month by moth constitute rent and the defendant prior to the filing of the affidavit never disputed that such payments are not rent. The Learned Advocate General has referred to the two replies given by the defendant dated 05th March, 2011 and 02nd April, 2011 in response to the notice to quit and submitted that there was no whisper in the said letters that the amount claimed by the plaintiff towards rent which includes all other charges does not constitute rent.
In order to demonstrate that the various heads of claim mentioned in the bill raised every month would constitute rent Learned Advocate General has referred to the following decisions-
i) Karnani Properties Ltd. Appellatn v. Miss. Augastine and others reported at AIR 1957 S.C. 309;
ii) Abdul Kader v. G.D.Govindaraj (D) by L.Rs., reported at AIR 2002 SC 2442;
iii) Mayank Poddar and others, v. Development Consultant Ltd., reported at AIR 2005 CALCUTTA 246.
The Learned Advocate General has also referred to Sections 193 and Section 231 of the Kolkata Municipal Corporation Act, 1980 and submitted that the Municipal rates and taxes can be realised from the person primarily liable to pay Property Tax as if such sum were "rent" payable to him by the person from whom he is entitled to recover such sum.
The Learned Advocate General has referred to paragraphs 2,3,4,5 and 6 of the plaint and submitted that the agreement pleaded by the plaintiff with regard to the composition of the rent has not been disputed by the defendant. It is submitted that although monthly bill raised by the plaintiff refers to rent and various other heads of claim and thereby an aggregate amount was arrived at but for all intents and purposes it constitutes rent and the defendant paid such consolidated sum by one single cheque for use and occupation of the premises in question. The defendant never disputes its obligation to pay either the aggregate sum or any of the heads of claim forming part of the bill. The dispute raised in the affidavit-in-opposition is a clear afterthought, and does not disclose a bona fide defense the Learned Senior Counsel was quite critical about the subsequent suit filed by the defendant in the City Civil Court seeking specific performance of an oral agreement. It is submitted that the letters dated 08th May 2006, 16th October, 2009, and 15th March, 2010, on which much reliance have been placed in this proceeding would only show negotiation and discussion and not a concluded contract. It is submitted that there is nothing on record which would even remotely suggest that the plaintiff has ever agreed to accept the revised rent and on that basis a claim for specific performance could have been made.
Per contra Mr. Anindya Kumar Mitra Learned Senior Advocate appearing with Mr. Abhrajit Mitra Learned Senior Advocate submitted that the basis of the valuation of the suit is erroneous. It is submitted that the plaintiff has erroneously and mischievously included the other heads of charges in the composition of rent in as much as the quantification of mesne profit at the rate of 150 per diem was arbitrary and mala fide with the intention of attracting the jurisdiction of the City Civil Court. It is submitted that the claim in the suit has been purposely inflated and various other heads claim had been deliberately included and presented as rent in order to attract the jurisdiction of this court, so that the plaintiff could avail the provisions of chapter XIII-A. The Learned Senior Counsel has referred to various paragraphs of the affidavit-in- opposition and more particularly paragraphs 2,3,34 of the said affidavit and submitted that in the said affidavit the defendant has taken a preliminary objection as to the maintainability of the suit as the suit has been deliberately overvalued by the plaintiff. The accepted rent by the plaintiff was Rs. 21,125.50 per month which would appear from the bill raised by the plaintiff on the defendant. The plaintiff has filed a suit for eviction of a tenant.
The plaintiff would be required to value the suit in terms of Section 7(XIII)(d) of the West Bengal Court Fees Act 1970 and Section 8 of the Suits Valuation Act, 1887 and having regard to the nature of claim the court fees payable should be according to the amount of the rent of the immovable property to which the suit refers, payable for the year next before the date of presenting the plaint i.e. to say rent for twelve months should be the basis for valuation. Mr. Mitra has drawn a distinction between a statutory tenant, a tenant at sufferance and a trespassers. The Learned Senior Counsel has also referred to Section 7(vi) (a) of the Court Fees Act and the decision of the Hon'ble Supreme Court in Nellimarla Jute Mills Co. Ltd. vs. Rampuria Industries & Investments Ltd. reported (2004) 13 Supreme Court Cases 448 to argue that the possession of the respondent cannot be treated as trespasser since the trespasser would mean a person whose entry to the suit premises since inception was without authority of law and accordingly the plaintiff cannot take resort to Section 7 Sub-Section (vi) (a) of the Court Fees Act, 1970 to value the suit. It is submitted valuation of the suit premises for the purpose of invoking the jurisdiction of this court in an eviction suit of this kind is not the correct basis.
The learned Senior Counsel has relied upon a chart that even if it is assumed for the sake of argument that the mesne profit claimed by the plaintiff is just and fair even then the pecuniary jurisdiction of this Court is not attracted and has fallen short of about Rs.48,000/-. The chart relied upon by Mr. Mitra is reproduced below:-
Sl. Monthly (Rs.) Yearly (Rs.)
No.
1. Rent @ Rs.2.53/sq ft x 8350 sq ft 21,125.50 2,53,506.00
2. Service Charge @ Rs.9.55/sq ft x 79,742.50 9,56,910.00
8350 sq ft
Total 1,00,868.00 12,10,416.00
3. Service Tax 10.3% 10,389.40 1,24,677.48
4. Occupier's share of corporation Tax 10,354.00 1,24,248.00
@ Rs.1.24/sq ft x 8350 sq ft
5. Surcharge on Corporation Tax 10,354.00 1,24,248.00
Rs.1.24/sq ft x 8350 sq ft
1. Rent per month @ Rs.2.53/sq.ft.
X 8350 sq. ft. X 12 months .......... Rs. 2,53,506.00
2. Corporation Tax:
Rs.10,354 X 12 months
as claimed .......... Rs. 1,24,677.48
Total Rs. 3,78,183.48
3. Mesne Profit for 14 days
@ Rs. 150 per sq ft per day
as claimed (from 21.3.11 to 4.4.11)
but disputed Rs. 5,84,500.00
Total Rs. 9,62,683.48
Mr. Mitra has argued that w.e.f from 1st May, 2007 Section 171 (4) of KMC Act, 1980 has been omitted and therefore, Surcharge on the property tax cannot be included in the amount claimed monthly from the tenant.
Mr. Mitra has also given a separate chart to show that as on date a sum of Rs.82,94,848/- would be due and payable. This chart was handed over on the basis of a query raised by this Court with regard to the amounts due and payable since 1st April, 2010 till 31st August, 2015. The aforesaid amount is, however, exclusive of surcharge on corporation tax for 65 months amounting to Rs.6,73,010.25. The chart is reproduced below:-
OUTSTANDING AMOUNT (Period 1st April, 2010 to 31st August, 2015)
1. Rent @ Rs.3.16p per sqft X 8350 sqft X 65 months Rs.17,15,090.00
2. Service Charge @ Rs.9.55 per sq ft. X 8350 sqft X 65 months Rs.51,83,262.50
3. Service Tax @ Rs.10.3% of Rent & Service charge Rs.6,89,835.25
4. Occupiers share of Corporation Tax @ Rs.1.24 per sqft X 65 Months Rs.6,73,010.25
5. Surcharge on Corporation Tax @ Rs.1.24 per sqft X 8350sqft 65 months Rs.6,73,010.25
------------------------
Total Rs.89,67,858.25
-----------------------------
(Rupees eighty nine lakhs sixty seven thousand eight hundred fifty eight & twenty five paise only) It is submitted that it is the positive case of the defendant that the rent was never inclusive of corporation taxes and surcharge thereon. The particulars of the bill given in Paragraph 11 of the petition are created only to attract the jurisdiction of this Hon'ble Court. The amounts as has been shown are baseless and mischievous. The service charge at the rate of 9.55 p. per sq. ft. per month is separate and distinct from the rent.
Similarly, the occupier's share of corporation rates and taxes, surcharge as well as service charges are also separate and independent of the rent for the suit property. The rent, service charges, surcharge, service tax and corporation rates and taxes were at all material times paid separately and distinctly would also be evident from the bill dated 12th March, 2010. There was no agreement between the parties to treat the service charges, surcharge, service tax and corporation rates and taxes as part of rent. The defendant has at all material times treated the rent separately from the service charges, surcharge, service tax and corporation rates and taxes. Each of these payments are shown separately by this defendant and this defendant has all along paid tax on that basis. As far as this defendant is aware, the plaintiff also in its books of accounts as well as in its returns submitted the income tax and other Authorities and treated the service charge, surcharge, service tax and corporation rates and taxes as separate form rent. As far as this defendant is aware, the suit property is valued by the Kolkata Municipal Corporation without treating the service charge, surcharge, service tax and corporation rates and taxes as part of rent and that the plaintiff has also persuaded the statutory authorities to treat the rent as separate and distinct from the other charges and has taken advantage thereof by paying lesser income tax, corporation tax and surcharge.
The Learned Senior Counsel has referred an order passed by me in a Civil Revision arising out of an order passed by the City Civil Court in connection with an application under Section 10 of the Code of Civil Procedure and submitted that in disposing of the said application I have observed that the declaration as to the invalidity of the notice to quit would entitle SAIL to claim other relief inasmuch as SAIL would be entitled to plead as defense and counterclaim specific performance in the event SAIL is allowed to defend the suit in this high Court. It is argued that having regard to the observation made that the determination of the validity to quit is required to be gone into itself would show that triable issues exist and on that ground alone the defendant shall be permitted to deliver its defence. It is submitted that the plaintiff cannot at this stage argued that by reason of lapse of time of five years the defect to the jurisdiction would stand cured by taking into consideration the subsequent events. The Learned Senior Counsel has referred to the decision of the Hon'ble Supreme Court in Corona Ltd. v. Parvathy Swaminathan & Sons reported at 2007(8) SCC 559 to argue that for assumption of jurisdiction by a court or a tribunal, existence of jurisdictional fact is a condition precedent. Once such jurisdictional fact is found to exist, the court or tribunal only there has power to decide "adjudicatory facts" or "facts in issue".
The Learned Senior Counsel has referred to the observation made in paragraph 42 of the judgement which reads: "The basic rule is that the rights of the parties should be determined on the basis of the date of institution of the suit. Thus, if the plaintiff has no cause of action on the date of the filing of the suit, ordinarily, he will not be allowed to take advantage of the cause of action arising subsequent to the filing of the suit. Conversely, no relief will normally be denied to the plaintiff by reason of any subsequent event if at the date of the institution of the suit, he has a substantive right to claim such relief" and submitted that the court at the trial would be required to determine firstly, as to whether the other heads of claims could form part of rent and secondly, if the claim on account of mesne profits has been arbitrarily claimed in this proceeding with a view to attract the jurisdiction of this court.
It is argued that if it is held at the trial that at the relevant point of time when the notice was issued the defendant was entitled to a specific performance then the notice would be held to be invalid. Moreover, the plaintiff has pleaded an agreement to contend that all other charges payable for occupation would be treated as rent which the defendant disputes has denied. If a substantial question of law of this nature is raised, it is argued, on the strength of the decision of our court in Coal India Ltd. vs. Apeejay Private Ltd. reported at (2009) (4) CHN 192(Cal) leave to defend has to be allowed in favour of the defendant. Mr. Mitra has indicated during his argument the probable triable issues which are improvement on the issues pleaded in paragraph 25 of the affidavit-in-opposition. The issues indicated during submissions are:-
1. a) Do the averments in the plaint disclose cause of action or ground for exemption of the suit premises from West Bengal Premises Tenancy Act, 1997?
c) If not, is the notice of eviction dated 21.2.2011 valid and the suit maintainable?
2. a) Did the defendant agree that service charges, service tax, occupiers share of corporation tax and surcharge on corporation tax would form part of the rent as alleged in paragraph 5 of the plaint?
b) If not, are service charges and service tax recoverable in this suit?
3. Is the plaintiff entitled to claim any surcharge on corporation tax on and from 1st May, 2007 @ Rs. 10354 per month or at all?
4. Does the value of the suit exceeds Rs. 10 lacs on the bais of the monthly rent payable as alleged in paragraph 13 of the plaint. If not, does this Hon'ble Court have jurisdiction to pass a decree for eviction.
5. Would this Hon'ble Court have jurisdiction on the valuation of the suit premises and if no, would value of the suit premises exceed Rs. 10 lacs as alleged in paragraph 13 of the plaint?
6. Is the notice dated 21.2.2011 otherwise illegal and void for any of the reasons mentioned in Sub-paragraphs (a) to (f) of Paragraph 31 of the affidavit-in-opposition?
7. Is the plaintiff entitled to counted in this summary proceeding that the lease as alleged to have been agreed expired on 31st March, 2015 and claim summary judgement on that basis?
If so, what would be the effect and consequence of such contention?
8. a) Did the plaintiff agree to execute a lease deed in favour of the defendant for 5 years at a monthly rate of Rs. 3.16 per square foot per month and other agreed terms as alleged in paragraph 15 of the affidavit-in-opposition.
b) if so, was notice to quit dated 21.11.2011 valid and the suit maintainable.
9. Is the plaintiff entitled to mesne profit @ Rs. 12525.00 per month calculated at the rate of Rs. 150 per Square foot on and from 21.3.2011 as claimed in paragraph 12 of the plaint?
10. What reliefs, if any, parties are entitled to?
The Learned Senior Counsel has also referred to Section 171 Sub- Section 4 of the Kolkata Municipal Corporation Act, 1980 and submitted that by reason of amendment in 2006 the Sub-Section 4 was deleted with effect from 1st April, 2007 and by reason thereof no surcharge is payable after 1st May 2007. Accordingly the plaintiff in law is not entitled to claim surcharge after May 1, 2007. It is thus submitted that the plaintiff is not entitled to a summary decree.
The most essential incidence of a tenancy is payment of rent by the tenant and acceptance of the same by the landlord. However, the term 'rent' has not been defined in the West Bengal Premises Tenancy Act, 1997 nor it was defined in the Act of 1956. As the expression 'rent' has not been defined in the Act, it is, therefore, to be interpreted in its ordinary popular sense consistent with the context in which the expression is used. (See State Of Mysore & Ors vs. T. V. Sundaram Iyengar & Sons reported at AIR 1980 SC 148).
In its wider sense it means any payment made for the use of the land or building and it includes even payment made by the licensee for the use and occupation of any land or building. It is intended to be understood in the ordinary sense of a return of money or kind for the enjoyment of specific property by one person from or under another. It includes all payment made as consideration of incidence of tenancy. On such whole amount agreed to be paid by a tenant to his landlord in respect of its enjoyment of what is let to him whether described as rent or not. Even additional payments whether it is in the nature of service charges or maintenance or amenities or for furniture or fixtures or for rates and taxes, all such payments, if agreed to be paid by the tenant to the landlord would be part of rent. The decisive factor in determining whether the amounts represent rent is that the payment must be result of an agreement and it must be in consideration of the letting of the property.
Although, the West Bengal Premises Tenancy Act has not defined rent but there is sufficient indication of what rent would constitute in the Transfer of Property Act, 1882.
Whenever a tenant contends that the service charge is independent of rent, the true test would be to find out whether the services which are charged for rent are independent services rendered and enjoyed not as a part of the tenancy. Section 5(7) of the West Bengal Premises Tenancy Act, 1957, makes it obligatory for a tenant to "pay the charges relating to the maintenance and amenities of the premises at the rate of 10 per cent of the fair rent or agreed rent, as the case may be." The agreed rent may be inclusive of maintenance charge.
In M/s. Cooke & Kelvey Properties Vs. United Bank of India reported at 2013 (1) CLT 617, it was held that in a given circumstances maintenance and service charges would include the rent agreed to be paid for occupation of the premises in question. In Radhe Charan Vs. Golok reported at ILR 30, Calcutta 834, where a certain sum described as collection charge which was payable in addition to rent was held as part of rent.
In Kemchand Dayalji and Company versus Md. Bhai reported at (1965) 6 Gujarat Law Journal 829, where a lease provides that municipal taxes and electric charges are payable by the tenant, both items were held to form part of rent by the Gujarat High Court.
In Kings Motors (Oxford) Limited versus Lax reported at 1969 (3) All E.R. 665, it was held that what is required is that the rent must be certain. Rent sometimes is fixed at a lumpsum which includes payments in relation to certain amenities, services and advantages provided to the tenant by the landlord.
The question may arise where there is a distinction between a proper rent and other charges payable for occupation and enjoyment of the premises in question.
In Karnani Properties Limited versus Miss Augustine and others reported at AIR 1957 SC 309, the Hon'ble Supreme Court approved the observation of the English decision in Wilkes versus Goodwin, where it was held that the rent would include total payment made under the instrument of letting. In that case, it was held that additional payments although strictly speaking may not form part of the rent and are payable for additional amenities would also form part of the rent. The Hon'ble Supreme Court approved the views of the English Courts that rent included not only what is ordinarily described as rent in an agreement between a landlord and a tenant, but also payment in respect of special services and amenities provided by the landlord under the agreement between him and his tenant. The term 'rent' is comprehensive enough to include all payments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenances but also of furnishings electric installations and other amenities agreed between the parties to be provided by and at the cost of the landlord. The decision of the English Court in the case of Property Holding Company Limited versus Clark was also considered by the Hon'ble Supreme Court, where in an action for rent by the landlord at the rate of 140 pound a year, the tenant contended that the rent proper was only 110 pound and not the total sum of 140 pound a year payable on all counts. The Court of Appeal allowed the landlord's appeal and held that the standard rent was 140 pound and not 110 pound. In the course of his judgment Asquith L.J. adopted the language of younger L.J. in the case of Wilkes versus Goodwin 1923-2 KB 86 which was quoted by the Hon'ble Supreme Court with approval at paragraph 5 of the judgment. Although the Hon'ble Supreme Court was considering an issue relating to determination of standard rent but the said decision is an authority of the proposition that rent would include electrical energy and other services provided by the landlord to the tenant, although there may not be any express agreement for the same. The same would be evident from the observations made by the Hon'ble Supreme Court in this regard in paragraph 5, relevant portions whereof are reproduced below:-
"In order fully to give effect to the provisions of the statute, the Court has to give them the widest application possible within the terms of the statute. Having those considerations in view, we do not think that the supply of the amenities aforesaid would make any difference to the application of the Act to the premises in question. In this connection reference may be made to the decision of the Court of Appeal in the case of Property Holding Co. Ltd. v. Clark 1948 - 1 KB 630 (B) and the case of Alliance Property Co. Ltd. v. Shaffer 1948-2 KB 464 (C) which followed the earlier decision to the effect that if the stipulations between landlord and tenant include payment of rent for not only what may properly be characterized as premises within the ordinary acceptation of the term but also payment in respect of lighting, cooking, equipment, the furnishing and clearing of hall and staircase and certain other similar amenities, the sum total of the payments in respect of the building or part of the building and other services and amenities constitute rent. In the earlier case of Property Holding Co. Ltd. v. Clark (B) (supra) the facts, shortly stated, were that the agreement between the landlord and the tenant in writing provided for the payment of 110 pound a year as rent and an additional payment of 30 pound a year in respect of the additional amenities and conveniences like lighting and cooking equipments, furnishing and cleaning of hall and staircase, etc. In an action for rent by the landlord at the rate of 140 pound a year the teannt contended that the rent proper was only 110 pound and not the total sum of 140 pound a year payable on all counts as afroresaid. The Court of Appeal allowed the landlord's appeal and held that the standard rent was 140 pound and not only 110 pound. In the course of his judgment Asquith L.J. adopted the langauge of younger L.J. in the case of Wilkes v. Goodwin 1923-2 KB 86 at p.105(D) to the following effect -
"The first of these (considerations) is that the word 'rent' in this exception surely means not rent in the strict sense but the total payment under the instrument of letting. The exception assumes that 'rent' so called may include, for example, 'board', payment of which is not rent. I am here paraphrasing the statement of Shearman J. in Nye v. Davis 1922-2 KB 56 (E) with which I agree".
Their Lordships of the Court of Appeal repelled the contention that the additional payment was not part of rent and held that the payment in respect of the additional amenities aforesaid was also part of rent within the meaning of the English Act which corresponds to the Bengal Act. Those English decisions are authorities for the proposition that 'rent' included not only what is ordinarily described as rent in an agreement between a landlord and a tenant but also payment in respect of special amenities provided by the landlord under the agreement between him and his tenant. The term 'rent' has not been defined in the Act. Hence it must be taken to have been used in its ordinary dictionary meaning. If, as already indicated, the term "rent" is comprehensive enough to include all payments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenances but also of furnishing, electric installations and other amenities agreed between the parties to be provided by and at the cost of the landlord, the conclusion is irresistible that all that is included in the term "rent" is within the purview of the Act and the Rent Controller and other authorities had the power to control the same. In view of these considerations we overrule the first contention raised on behalf of the appellant."
Mr. Anindya Kr. Mitra, the learned Senior Counsel, however, has argued that the said decision would not help the plaintiff as in the said case it was found that the rent fixed in each case included payment for those additional amenities and services, though the amounts in respect of them have not been separately shown in the agreement. The rent fixed was a consolidated sum for all these amenities and services as is clearly indicated in clause 1 of the agreement being Exhibit J taken note of by the Hon'ble Supreme Court.
I am, however, unable to accept the said submission. The respondent did not contemporaneously raise any objection with regard to the various heads of charges mentioned in the bill as amounts payable for enjoyment and occupation of the premises in question. Even in reply to the statutory notice, the defendant did not raise any such objections and/or pleaded a separate agreement in respect of each of the heads of claim. Moreover, this decision and the other decisions on these points were considered by a Division Bench of our High Court in Mayank Poddar (supra). In the said decision, the Hon'ble Division Bench was considering whether municipal rates and taxes would form part of the rent. In view of the new Act, there cannot be any dispute that the tenant is statutorily required to pay its share of municipal taxes. The objection of the tenant in this regard was considered by the Hon'ble Division Bench in paragraphs 9, 11 and, thereafter, from paragraphs 13 to 24. The earlier decisions on this point were considered. For the sake of brevity and convenience paragraphs 9, 11 and paragraphs 13 to 24 are reproduced below:-
"9. The learned Counsel for the tenant/respondent however disputed the said contention and urged that from the agreement no fixed or ascertainable amount has been mentioned for the payment of Municipal rates and taxes and which is to be included within rent. According to the learned Counsel, clause 4 and various sub-clauses do not mention any fixed amount which is payable by way of municipal rates and taxes. Since the amount is not a fixed amount, it cannot be included within rent. The learned Counsel also submitted that only monthly charges can be included within rent. Admittedly, the Municipal rates and taxes are quarterly charges and not monthly charges, as such, the same cannot be included within rent. The learned Counsel also referred to paragraph 7 of the Tenancy Agreement and submits that under the said clause the lessor is responsible for common services including lift, water supply, passage, staircase etc. and this shows that Municipal rates and tax are not included within the rent. The learned Counsel also referred to paragraph 6 and 11 of the plaint and stated that both the two paragraphs referred to rent and do not mention that such rent would include payments of Municipal rates and taxes and the car parking fees. The learned Counsel further submitted that in view of the aforesaid pleadings in the plaint and clauses in the agreement, the learned Judge was right in holding that rent will not include Municipal rates and taxes. These are the rival contentions of the parties.
11. It is common ground that the instant case is governed under the provisions of the West Bengal Premises Tenancy Act (for short called the said Act). The word 'rent' has not been defined under the said Act. Nor has it been defined under the General Clauses Act. Therefore, the expression 'rent' to be understood in its ordinary popular sense and in the context of any existing agreement between the parties. In this case there is an agreement. Clause 4 and various sub-clauses in the agreement clearly point out the respondent's obligation in the payment of Municipal rates, taxes and surcharge and all other levies under the law.
13. Several decisions which were cited before this Court also affirmed that position.
14. In Karnani Properties (AIR 1957 SC 309) the question of fixation of standard rent and basic rent was the subject-matter of controversy. Apart from that a question was raised that the West Bengal Premises Rent Control (Temporary Provision) Act, 1950 does not apply to the tenancy in question. The Court repelled that contention and, in doing so, explained what is meant by 'rent' as that term was not defined under the Act. The learned Judges held at page 312 of the report as follows :-
"The term 'rent' has not been defined in the Act. Hence it must be taken to have been used in its ordinary dictionary meaning. If, as already indicated, the term "rent" is comprehensive enough to include all payments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenance but also of furnishing, electric installations and other amenities agreed between the parties...."
15. Relying on the decision in Karnani Properties, the Supreme Court in Puspa Sen Gupta v. Susma Ghose (1990) 2 SCC 651 came to the same conclusion while construing the provisions of the said Act. The relevant observations in paragraph 3, page 652 of the report are extracted below:-
"Although the expression 'rent' has not been defined, there are indications in the present Act to suggest that the word 'rent' includes not only what is strictly understood as rent, but also payment in respect of amenities or services provided by the landlord under the terms of the tenancy."
16. In Usha Ranjan Bhattacharjee v. Mahalaksmi Thacker (1975) (1) Cal LJ 204), a learned Single Judge of this Hon'ble Court came to the same conclusion and held that ordinary grammatical meaning must be given to the word 'rent'. Such meaning of 'rent' would mean the whole amount agreed to be paid by the tenant for the enjoyment of what has been let out to him irrespective of the fact whether the same amount has been described as rent or not.
17. Subsequently a Division Bench of this Court in Smt. Parul Banerjee v. Sri Anand Kumar Agarwalla (1979 (2) CLJ 297) relied on the ratio in Usha Ranjan and held that the term 'rent' is comprehensive enough to include all payments agreed to be paid by the tenant to the landlord for the use and occupation of not only the building and its appurtenances but also the furnishing, electric installations and other amenities agreed by the parties to be provided by the landlord. (page 299 of the report)
18. In Smt. Anita Das Gupta v. A.C. Sett (88 C.W. No.242) (SC) another Division Bench considered the ratio rendered in all these judgments in Karnani Properties. Parul Banerjee and Usha Ranjan and came to the conclusion that the term 'rent' should be interpreted rather widely to include all that is payable as consideration for tenancy.
19. In Anita Das Gupta, the landlord was realising two amounts separately under two separate receipts - one was rent and the other was service charges. Even then the Court held that the service charges are included within the wide connotation of rent as those charges were paid for services rendered and enjoyed in connection with fittings and fixtures which are all fixed in the tenanted premises. (page 246-247 of the report)
20. In an unreported decision of the Division Bench of this Court delivered in the case of Cycle Corporation of India v. Eveready Industries India Ltd. (decided on 13-10-1999 in APOT 737 of 1999) a specific contention was raised by the tenant that Municipal charges cannot be considered to be part of the rent. The learned Judge of the First Court while dealing with the application under 17(2) of the Act directed the tenant's share of municipal taxes to be paid. The Division Bench relying on the ratio in the case of Parul Banerjee (1979)2 Cal LJ 297 and Puspa Sen Gupta accepted the wider meaning of the expression 'rent' and refused to interfere with the finding and order of the learned Judge of the First Court.
21. While answering the legal principles laid down in the aforesaid judgments, the learned Counsel for the respondent relied on two judgments. He first relied on the judgment in Karnani Properties and sought to distinguish the same on the ground that in paragraph 5 of the judgment in Karnani Properties it has been stated that rent was inclusive of the owner's and occupier's share of Corporation taxes.
22. This Court is of the view that the aforesaid factual aspect is not a distinctive feature at all. In this case also the tenancy agreement shows that the tenant will have to share municipal rates, taxes, surcharge and other levies, if any is imposed under the law. This Court is of the considered view that the decision in Karnanai Properties does not at all support the case of the respondent.
23. The respondent also relied on a decision of the Division Bench of this Court in the case of Smt. Sikha Dutta v. Sri Prosanta Kumar Lahiri, reported in (1988) 2 Cal HCN 69.
24. In that case a Division Bench of this Court after considering the pleadings in the case and the tenancy agreement held that municipal rates and taxes were not a component of the rent. The Bench also held that payment of such charges was treated as independent of the rent liability."
The Hon'ble Division Bench negatived the argument of the learned Counsel for the respondent that as the respondent's share of municipal rates and taxes is a variable levy which is to be paid quarterly and not monthly and so it cannot form part of the rent. Since everything which is agreed to be payable for occupation of the tenanted premises comes under the concept of rent merely because the amount can be varied or the mode of payment is not monthly are not decisive factors at all. A mode of payment hardly relevant in deciding the character of the levy and that amount may vary as the quantum of rent may also vary.
Mr. Anindya Kumar Mitra, the learned Senior Counsel, however, submitted that the aforesaid decision is contrary to the earlier view expressed by another Division Bench inasmuch as the Hon'ble Division Bench has failed to take into consideration an earlier view of the Hon'ble Supreme Court in Chhotelal Vs. Kewal Krishan Mehta reported at AIR 1971 SC 987 which was taken note of in Sikha Dutt v. Prasanto Kumar Lahiri reported at 1988(2) CHN 69. It is submitted that although the subsequent Division Bench judgment has differed from its earlier view in Sikha Dutta (supra) having regard to the law laid down by the Hon'ble Supreme Court in Chhotelal (supra) it cannot be said that service charges would form part of rent in absence of a specific agreement between the parties.
In Chhotelal (supra) it was held that where the electric charges are not fixed and can only be ascertained at the end of each month, after the electricity consumed is known, while a rent is payable in advance, it is clear that the electric charges cannot be held to form part of the rent. It is also pertinent to mention that in the pleadings, all that was claimed was that the landlord was entitled to receive electricity charges from the tenant. It is nowhere stated that these arrears of electricity charges formed part of the rent. Consequently, no issue was framed in the trial Court on the question whether the electricity charges formed part of the rent or not. It was only before the appellate court that a plea was taken that the electricity charges formed part of the rent. The Hon'ble Supreme Court did not find any justification for accepting this new point when it was not pleaded at all in the original application.
The case in hand is clearly distinguishable on facts. Moreover, it appears that the earlier decision of the Hon'ble Supreme Court in Karnani Properties (supra) was not considered. Unless there is a specific plea taken by the defendant that the defendant had agreed to pay service charges and other heads of claim for their use and occupation not as an incidence of tenancy, the defence put forward is not acceptable.
Mr. Mitra, however, would not dispute that the Municipal rates and taxes would form part of the rent. It is submitted that the very fact that the plaintiff has applied for leave under Order 2 Rule 4 of the Code of Civil Procedure would show that the claim on account of municipal rates and taxes was not treated as rent inasmuch as the plaint does not say that such leave was obtained to include service charges and services taxes and it was only confined to municipal taxes. Mr. Mitra has referred to Order 2 Rule 4 of the Code of Civil Procedure which reads:-
"O.2.R.4. No cause of action shall, unless with the leave of the Court, be joined with a suit for the recovery of immovable property, except-
(a) claims for mesne profits or arrears of rent in
respect of the property claimed or any part
thereof."
It is submitted that in view of the aforesaid provision in a suit for immovable property, the plaintiff can only claim mesne profits or arrears or rent in respect of the property claimed and in absence of any specific leave obtained to include service charges, the plaintiff cannot take into consideration the service charges as part of rent for the purpose of attracting the pecuniary jurisdiction of this Court. The claim on account of mesne profits is absurd and highly inflated inasmuch as no evidence has been produced in this proceeding to justify such claim on account of mesne profits as the other defence raised by Mr. Mitra to resist the claim of the plaintiff.
This argument in any considered opinion is unacceptable.
The Division Bench of this Court in Anita Das Gupta v. A.C. Sett (C.O.3512 of 1983) relied upon a Supreme Court judgment held that service charge payable by the tenant is part of the rent because the services rendered by the landlord and enjoyed by the tenant is not independent of the tenancy. The Division Bench in the aforesaid case took the following view:-
"We have carefully considered the rival contentions put forward before us. In the case of Karnani Properties the Supreme Court pointed out that the term 'rent' had not been defined by the Act. It was further held that it should be interpreted rather widely to include all that is payable as consideration for the tenancy. In the present case no doubt the landlord realises two amounts separately and under two receipts. One amount is being realised as rent and there is no dispute that the same is rent. But the other amount is said to be the service charges. If such service charges are really independent of the tenancy independently provided and paid for then of course it may very well be said to be not a part of the rent even on its wider connotation as laid down by the Supreme Court. Therefore, in our opinion the true test for us is to find out whether the services which are charged for are the independent services rendered and enjoyed not as part of the tenancy. Applying this test to the facts of the present case, we cannot but accept the contention of Mr. Bagchi. Here, we find that service charges are payable for the fittings and fans which expressly include water taps, commodes, cisterns, water basin, sinks, electric fans etc. al fixed in the suit premises. It is obvious that these are really integrated part of the tenancy which cannot be separated therefrom. It is true that the tenant/ defendant offered to forego such services, but that is of no consequence because they were not the subject matter of an independent settlement and it was never intended to be so. Such services being integral part of the tenancy, whatever is payable on that account would be rent notwithstanding the fact that it is separately paid for. Such separation is more notional than real. In the case of Karnani Properties, it is no doubt what was payable was amount inclusive of all charges, viz-rent electricity etc. which in our case the amounts have been separately specified. But that in our opinion makes no difference. So long the sum or sums payable for all that is payable for tenancy, the same shall be rent in the wider sense. What really constitutes the tenancy is a matter of agreement between the parties to be determined with reference to their mutual intention. All things which are intended to be enjoyed as part of the tenancy would be part and parcel of the tenancy and all sums payable on that accounts would be rent. (See Sidney Housing Co. Ltd. Vs. Fishbury Borough Council 1962(1) All E.R. 460, R.G. Ram Chandran V. Royal & Co. All India Rent Control Journal 736 and Khemchand Dyalji Vs. Muhammabhai Chandbhai AIR 1970 S.C.
102)".
That the service charges provided by the plaintiff under an agreement forms part of the rent cannot be disputed on the basis of the decisions referred to and indicated above. The finer point raised by Mr. Mitra is that there is no averment in the plaint that the said service charge is an incidence of tenancy. Mr. Mitra submits that the Court cannot rely an oral submission of an agreement dehorse the pleading and the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. In absence of any amendment to the pleading to cure any defect in the pleading, the plaintiff cannot argue that the service charge is an incidence of tenancy. In this regard, Mr. Mitra has relied upon Messrs. Trojan & Co. Vs. RM. N.N. Nagappa Chettiar reported at AIR 1953 SC 235 Paragraph 22 and S.S. Sharma & Ors. Vs. Union of India & Ors. reported at AIR 1981 SC 588 Paragraph 6.
I would have accepted the submission on behalf of the defendant provided there is no pleading in the plaint that service charge was not paid for the use and occupation of the demised by the defendant and all the ingredients would form part of the rent. The necessary pleadings of the plaintiff in this regard are:-
2. At all material times, the defendant was a monthly tenant under the plaintiff in respect of the suit property paying monthly rent as agreed to between the parties from time to time. Along with the rent, the defendant, as per the agreement between the parties, had been paying service charges at an agreed rate of Rs.9.55p. per sq.ft. for the tenanted premises as also the service tax as statutorily fixed from time to time. Over and above the aforesaid charges, the defendant also agreed to pay occupier's share of corporation tax and the surcharge thereon as levied from time to time.
3. The plaintiff, in the usual course of business, used to raise consolidated bills on the defendant every month in respect of charges on account of monthly rent for the said premises, service charges and service tax as agreed between the parties and the occupier's share of corporation tax and surcharge thereon. The last of such bills raised by the plaintiff on the defendant was for the month of March 2010 and dated 12th March, 2010 for a sum of Rs.1,31,965/-. A copy of the said bill dated 12th March, 2010 is annexed hereto as part thereof and marked with the letter "B".
4. The defendant accepted the bills raised by the plaintiff on the defendant as aforesaid in respect of the said premises without objection, and duly made payment thereof month by month and every month.
5. The plaintiff states that the defendant agreed that the plaintiff would make a consolidated monthly bill containing the aforesaid sums on account of monthly rent, service charges, service tax, occupiers share of corporation tax and surcharge thereon month by month for payment by the defendant for the use and occupation of the said demised premises by the defendant. The defendant agreed that all the aforesaid ingredients would form part of the rent. ON the basis of such agreement and understanding the plaintiff raised the aforesaid bills on the defendant month by month and the defendant paid the bills without any demur.
6. The plaintiff has accepted rent at the aforesaid agreed rate from the defendant till March, 2010. The plaintiff has not accepted any rent from the defendant thereafter as the parties hereto could not reach any agreement as to the quantum.
Apart from the fact that in the first reply to the notice issued under Section 106 of the Transfer of Property Act, 1882, no challenge is thrown to the claim of the plaintiff even in the second notice there is no whisper that various heads of claim as particularized in the notice to quit is not payable for use and occupation of the premises in question. On the contrary, the defendant acknowledge that all subsequent payments made by cheques are "rent cheques" which clearly show that the defendant was under no misconception that all such amounts are payable as rents. In this regard reference may be made to Paragraph (b) of the subsequent reply dated 2nd April, 2011 which reads:-
"(b) That the aforesaid agreement has been acted upon. We have forwarded rent cheques at the enhanced rate in terms of the agreement for the period commencing from 1st April, 2010. However, your client did not encash such cheques but at the time did not initiate any eviction proceedings in terms of earlier notice issued under Section 106 of Transfer of Property Act Notice dated 31st October, 2008. Your client's stand has been that they would accept and encash all rent cheques only after a formal document is executed between your client and ourselves for lease of the said premises for five years at the enhanced rate as agreed."
The defendant does not say that such payments were independent of the tenancy and service charges are independently provided and totally unconnected with the tenancy. The test is to find out whether the services which are charged for are independent service rendered and enjoyed not as part of tenancy. The defendant does not say that such services are independent services unconnected with the tenancy. Under such circumstances, the decisions cited by Mr. Mitra does not assist the defendant.
In Abdul Kader (supra) which was held that the amount of taxes which was agreed to by a tenant to be paid to landlord forms part of rent. The Hon'ble Supreme Court valued the decision in Karnani (supra) which would be evident in paragraph 5 which reads:-
"5. The term `rent' not been defined in the Act and therefore, we shall have to go by the ordinary dictionary meaning of the term `rent'. As held in Karani Properties Ltd.v. Miss Augustine and others (AIR 1957 SC 309), the term `rent' is comprehensive enough to include, all payments agreed by the tenant to be paid to his landlord for the use and occupation not only of the building and its appurtenances but also furnishing, electric installations and other amenities agreed between the parties to be provided by and at the cost of the landlord. It was very fairly conceded by learned Counsel for the appellant that ever since the decision of this Court in the case of Karani Properties Ltd., the view of being taken consistently by the High Court of Madras is that in the event of taxes having been agreed to be paid by the tenant, the same forms part of the rent. (To wit. see Messrs. Raval and Company v. K.G. Ramachandran (minor) and others (1968 (2) MLJ
50)]. Thus, there is no doubt that the amount of taxes which was agreed to by the tenant to be paid to the landlord was a part of the rent and the word `rent' in Section 10(2)(I) of the Act has to be construed accordingly."
As I have indicated above, there is sufficient indication in the Transfer of Property Act, as to what `rent' would mean. Section 105 of the Transfer of Property Act defines `lease'. As to what constitutes rents could be found out from the provisions of Section 105 of the Transfer of Property Act wherein although the word `rent' has not been categorically mentioned but it is clearly discernable from the said decision what `rent' would mean. The said section says that money, share, service or other thing to be so rendered is called the `rent'. Thus apart from the money which is paid as rent if any service is rendered and any payment is made in respect of the same irrespective of the fact whether a separate bill is raised for the same or not the same is to be treated and included within the definition of `rent'.
Section 105 of the Transfer of Property Act reads:-
"A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms".
The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
As pointed out by the Supreme Court in Commr. of Income-tax v. Panbari Tea Co. reported at AIR 1965 SC 1871 Section 105 of the Transfer of Property Act brings out the distinction between a price paid for a transfer of a right to enjoy the property and in a lump sum or in instalments is the consideration paid by the tenant for being let into possession. Section 105 of the Transfer of Property Act thus brings out a distinction between the price paid to enjoy the property and the periodic payment to the lessor.
In Suparna Ghosh -Versus- Dr. Santanu Majumder reported at 2008 (1) Calcutta Law Journal 559, it was held that the rent includes service charge. The said case was decided on the basis that the tenancy was governed by the provisions of the Transfer of Property Act, the learned Single Judge considered Section 105 of the Transfer of Property Act which defines rent and held that the rent has been defined as a consideration of price paid or promised or of money, share of corps, service or any other thing of value so rendered. Thus the charge of maintenance payable along with the rent being agreed upon by the parties the same is also included as rent.
Although the argument on behalf of the defendant that surcharge by reason of the amendment of Kolkata Municipal Corporation Act, 1980 could not be payable since May 1, 2007 and prima facie it appears that the plaintiff could not have realized the said amount beyond May, 2007, even then having regard to the other heads of claim which form part of the rent I am of view that this Court has jurisdiction to try and determine the suit.
In J. Thomas & Co. Pvt. Ltd. & Another -Versus- Pawan Kumar Tebriwala reported at 1998 (II) CHN 503, the Hon'ble Division Bench considered the plea of fraudulent pecuniary valuation and stated that in order to succeed a plea based on fraudulent pecuniary valuation of the suit. It has to be demonstrated that the plaintiff's case is very bad. If it is found that the valuation is on a higher side and might be excessive that itself would not make valuation a fraudulent one. The same view was expressed by the subsequent Bench decision in Punjab & Sind Bank- Versus-Technoshop Pvt. Ltd. reported at 2012 (3) CHN (Cal) 225 and Coal India Ltd.-Versus- Apeejay House Pvt. Ltd., reported at AIR 2013 Cal.66 which reads:-
"In Punjab & Sind Bank (supra) it was held that the defendant has failed to establish that the valuation put by the plaintiff is demonstrably arbitrary and unreasonable. The Hon'ble Division Bench has also taken the view that the continuation of the suit in this Court would not cause any inconvenience to the defendant since filing of the suit before the City Civil Court would not make any such difference as the appeal would be ultimately heard by the High Court. This view finds place in paragraph 17 which reads:-
"17. If the suit is filed in High Court parties do not stand to lose a forum because from a decree passed by the City Civil Court also an appeal lies to a Division Bench of this Court. If a suit is overvalued High Court still has the jurisdiction to dismiss the same or pass a decree for less than rupees ten lacs but if on the contrary the plaint is directed to be presented before the City Civil Court that Court will lack jurisdiction to entertain the suit being valued more than rupees ten lacs. On that ground also the decree is liable to be upheld."
Even if the claim on account of mesne profit is ignored, then also the claim in the suit is more than Rs.10 lakhs on account of arrears of rent payable by the defendant to the plaintiff.
Accordingly I am unable to accept the submission of Mr. Aninda Kumar Mitra, learned Senior Counsel that this Court has no pecuniary jurisdiction to try and determine the suit.
In so far as the suit for specific performance is concerned I have considered two replies given by the defendant to the plaintiff in response to notices to quit issued under Section 106 of the Transfer of Property Act.
In none of the replies, the defendant has disputed its liability to pay of all the sums agreed to be paid for occupation of the property. The defendant has pleaded an oral agreement of renewal of lease for a further period of five years from 1st April, 2010 which has since expired. The letters disclosed would not show that the plaintiff had ever agreed to accept the terms and conditions put forward by the defendant. The defendant while forwarding the cheques by their letter dated 15th March, 2010 has stated that such cheques were forwarded on a presumption that the plaintiff is agreeable to accept increase of 25% upon the existing rent. Admittedly, there was no concluded contract between the parties inasmuch as as on date the lease, if any, had expired by efflux of time. Much emphasis was laid on Corona Limited (supra) for the proposition that in case of jurisdictional fact the Court would not take into consideration subsequent event.
In order to appreciate the said decision, it is necessary to refer to some of the facts:
The landlord by a notice to quit dated 23rd February, 2001 determined the tenancy with effect from 31st March, 2001. In spite of determination of tenancy, the tenant did not hand over vacant and peaceful possession of the suit premises to the landlord. The landlord thereafter filed a suit in the Small Cause Court, Bombay on 2nd April, 2001. In the written statement dated 1st August, 2001 the tenant disputed the averments made and allegations levelled by the landlord and contended that it was not liable to be evicted. The Small Cause Court, Bombay, however, passed a decree of eviction against the tenant on 16th December, 2002 which was confirmed by a Bench of that Court as also by the High Court.
A submission was made on behalf of the appellant/tenants that even if it is assumed that the provision of Maharastra Rent Control Act is legal, valid and intra vires, it would not apply to the case on hand inasmuch as the tenant's net worth/paid up share capital has been substantially eroded and it was not Rs.1 crore or more when the proceedings were initiated by the landlord. The provision of the Rent Act, therefore, applied to the suit premises and unless and until one of the grounds of eviction specified in the Rent Act had been made out, the landlord was not entitled to a decree for possession. It was argued that the fact as to "paid-up capital" of the Company was a "jurisdictional fact"
and in absence of such fact, the Court had no power, authority or jurisdiction to consider, deal with and decide the matter.
It was factually found that at the time of institution of the suit, the tenant company was having paid-up share capital of more than rupees one crore and the said set of fact continued even at the time of determination of such tenancy.
The Hon'ble Supreme Court while deciding the issue of subsequent events have referred to its earlier decision in Pasupuleti Venkateswarlu-versus- Motor & General Traders reported at (1975) 1 SCC 770 at paragraph 41 which reads:-
"41. ...
"4. We feel the submissions devoid of substance. First about the jurisdiction and propriety vis-à-vis circumstances which come into being subsequent to the commencement of the proceedings. It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceeding. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of moulding it, is brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fairplay is violated, with a view to promote substantial justice - subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial court. If the litigation pends, the power exits, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations for applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the court can, and in may cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed."
Following the said decision the opinion of the Court is given at paragraph 42 which reads:-
"42. In our judgment, the law is fairly settled. The basic rule is that the rights of the parties should be determined on the basis of the date of institution of the suit. Thus, if the plaintiff has no cause of action on the date of the filing of the suit, ordinarily, he will not be allowed to take advantage of the cause of action arising subsequent to the filing of the suit. Conversely, no relief will normally be denied to the plaintiff by reason of any subsequent event if at the date of the institution of the suit, he has a substantive right to claim such relief."
It was thereafter held that the Courts below was right in holding that the right in favour of the landlord got accrued on the date on which the tenancy was determined. Such right could not have been set at naught by the tenant by unilateral act by passing a resolution to reduce paid-up share capital of the company.
In the instant case it cannot be said that the plaintiff has no cause of action on the date of filing of the suit. The dispute raised with regard to an alleged oral agreement is a clear afterthought and not initially taken in the first reply to the statutory notice. Moreover, In Corona (supra) the Hon'ble Supreme Court has said that ordinarily the plaintiff would not be allowed to take advantage of the cause of action arising subsequent to the filing of the suit. It cannot be denied as on the date of filing of the suit, the plaintiff has a substantive right to claim such relief. The Court can always take into consideration the subsequent events and mould the reliefs accordingly.
At this stage the Court is required to find out whether the plea of an alleged oral agreement forming the basis of the City Civil Court suit is a bona fide and plausible defence in resisting this application for summary judgment. In my considered opinion the answer should be in the negative as the defendant has failed to bring on record any evidence or document to show that there is any agreement with regard to enhancement of rent by 25% as alleged by the defendant in its second reply to the statutory notice.
Under such circumstances, the plaintiff is entitled to a final judgment for recovery of possession of the suit premises. The plaintiff shall also be entitled to a decree for a sum of Rs.82,94,848/- being the amount due and payable by the defendant to the plaintiff as on August 31, 2015. This amount is arrived at on the basis of a statement furnished by the defendant acknowledging that the aforesaid sum is due and payable for use and occupation of the premises in question. The claim on account of mesne profits and surcharge are to be decided at the trial. The defendant is granted leave to file written statement within ten weeks from date.
G.A. No.2900 of 2011 is allowed in part. G.A. No.2904 of 2011 stands disposed of by giving leave to the defendant to file written statement as mentioned hereinabove. C.S. No.74 of 2011 is accordingly decreed in part.
The department is directed to draw up the decree as expeditiously as possible.
Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
(Soumen Sen, J.)