Calcutta High Court
Shivani Properties Pvt. Ltd vs United Bank Of India on 20 February, 2014
Equivalent citations: 2014 AIR CC 1043 (CAL), 2014 (144) AIC (SOC) 24 (CAL), (2014) 2 ICC 723, (2014) 3 CALLT 465
Author: Ashim Kumar Banerjee
Bench: Ashim Kumar Banerjee
Form No. J.(2)
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
Present :
The Hon'ble Mr. Justice Ashim Kumar Banerjee
And
The Hon'ble Mr. Justice Arijit Banerjee
A.P.D. No. 304 of 2013
C.S. No. 31 of 1998
Shivani Properties Pvt. Ltd.
-Vs.-
United Bank of India
For the Appellant : Mr. Ahin Choudhury, Senior Advocate,
Mr. Sabyasachi Choudhury, Advocate,
Mr. Avinash Kankani, Advocate,
Mr. Anil Dhar, Advocate
For the Respondent : Mr. Partha Sarathi Bose, Senior
Advocate,
Mr. Subrata Datta, Advocate
Heard On : January 13 and 20, 2014
Judgment On : February 20, 2014
ASHIM KUMAR BANERJEE, J.
I have the opportunity to read the well-versed judgment of Hon'ble Justice Mr. Arijit Banerjee. I fully agree with his Lordship's view on the cross-objection raised by the bank. In my considered view, Section 47 of the Code of Civil Procedure would have no application in the instant case. I do not wish to reiterate the reasons that the learned Single Judge discussed in detail and once again considered by His Lordship. I am in full agreement with them on the issue. I thus hold the cross-objection filed by the bank not tenable and, as such, is hereby dismissed.
On the aspect of fixation of rent, I am in full agreement with the learned Single Judge as well as His Lordship Hon'ble Mr. Justice Banerjee on the power of the Court to fix the rent in the circumstances involved herein. I am in full agreement. His Lordship upheld the decision of the learned Single Judge on the fixation of rent @ Rs.14.50 per sq. ft. , thus upheld the decision on the issue rendered by the learned Single Judge. With all humility, may I join issue.
Perusal of the evidence would depict, the parties relied on respective valuation reports from the expert. The Appellant/plaintiff produced the expert report from Talbot Company, a firm of repute, who would suggest the fair rent @ Rs.32.50 whereas other Valuer Sri Soumitra Dey suggested the rent @ Rs.15.50, at the instance of the bank. If I closely examine both the reports and the oral evidence of the Valuer. I would find, Talbot relied on premises in the nearby area, whereas Mr. Dey relied on a tenancy agreement from the same locality. To that extent, the report of Mr. Dey should be more specific and reliable. However, the basis on which Sri Dey assessed the rent I would join issue. I am aware, I do not have the expertise, yet, the perversity would definitely prompt me to intervene. Sri Dey relied on an agreement that the bank entered into in 1992 in the same locality. In 1992 the bank entered into agreement in respect of premises No.9, Old Post Office Street which would be hardly 25 to 30 meters from the suit premises. In that case, the bank agreed to pay Rs.7.50 with 20% increase in every five years. Sri Dey while adducing evidence on behalf of bank faced a question from the Appellant/plaintiff being Question No.102 appearing at page 106 of the Paper Book where he was specifically asked whether he considered the date of creation of the original tenancy. His reply was in the negative. He was of the view, the agreement entered into in 1992 should be considered as a parameter, I fail to reason. On close examination of the evidence and records I find, the bank initially took the tenancy for 4950 sq. ft. in the year 1969 @ 80 P. per sq. ft. The bank needed an additional space in 1982 and agreed to pay rent @ Rs.2.50. Ultimately in 1992 the bank agreed to pay Rs.7.50 with 20 % increase in five years interval. If I take the entire facts as discussed above, I would find distinctive features that would keep the present case out of the purview. In the present case the bank faced an eviction proceeding. To avoid eviction, the bank compromised. Keeping their eye wide open they agreed to review the rent in 1995. The parties also agreed, there would be 15 % increase in every five years interval. The bank compromised the suit in 1990. They could have easily agreed to have 15% increase applicable with five years interval commencing from 1990. The parties consciously did not do so. They kept the issue pending and agreed to have fresh terms in 1995. Mr. Dey did not consider these factors.
If we take the report of Talbot, I would find, the well-known Valuer adopted the formula applicable therefor. They applied their own mode that would be too technical and we are not competent to examine the veracity thereof. I would rather look at the said report from a different angle. When a rent is being fixed the locality would be the dominant factor. A premise in a locality might be attracting different rent from like premises from another locality despite proximity being close. Many special features would make the two premises distinctive from each other. The premises at R. N. Mukherjee Road are situated in a commercial place. There are offices both government and semi-government. There are private organizations too, carrying on their commercial activities. The present premises in question is situated in an area commonly known as High Court area. The Advocate Firms, the Advocate Chambers are situated in all the premises in and around including the suit premises. The Advocates may not need so much space as a bank would require. Hence, the bigger space, if divided into small cabins, would attract a magic figure that would have no resembles with any of the reports. These are special features, one should take note of and we cannot be a mere onlooker particularly sitting in High Court, in the same locality.
Question would thus arise, would it be an unending process to assess the rent? I would, in all humility, wish to add, a controversy, when brought to the court, must come to a logical conclusion at the earliest. It is very difficult to have expert opinion on the issue that would be unanimous. Each expert would have different out-look. They would have different modes of valuation. If I discard both the reports and direct another Valuer to value I do not know whether that would be conclusive and exhaustive. In the process, it would be an unending scenario. Learned Judge in page 255 considered the R.N. Mukherjee Road property and the 9, Old Post Office Street property considered by the respective valuer as discussed above and ultimately fixed the rent at Rs.14.50 that we find at page 257. His Lordship however did not spell out in detail as to the process to come to such magic figure. His Lordship observed, "On a fair assessment of the pleadings and evidence on record, I am of the view, that a fair and reasonable rent in 1995 would be Rs.14.50 per sq. ft. The said rent is, accordingly, determined at Rs.14.50 per sq. ft. in 1995 after taking into consideration the aforesaid factors as well as the basic rent in respect of R.N. Mukerhjee Road property, the letter dated August 22, 1982 of Indian Automobile Ltd. (1960) and the determination of the rent by the Valuer in respect of suit premises in 1985."
Significant to note, R.N. Mukherjee Road property was considered by Talbot, India. Automobile letter would relate to premises No.9, Old Post Office Street. Those two properties and the valuation done by both the Valuers are the four factors that His Lordship made the basis of fixation of rent. As discussed above, R.N. Mukherjee Road property would have little role to play because of the distinctive feature involved herein as discussed above. 9, Old Post Office Street property would definitely have a dominant role provided, the Valuer would have considered its original initiation of tenancy. To end the long standing impasse, I would rather suggest, let both the reports be taken into consideration and an average be drawn to fix the fair rent. The Talbot fixed at Rs.32.50 whereas Mr. Dey fixed at Rs.15.50, the average would come to Rs.24. I would fix the rent @ Rs.24 per sq. ft. in 1995.
ARIJIT BANERJEE, J:
1) This appeal arises out of a judgment and decree dated 14th May 2013 passed by the learned Single Judge in C.S. No. 31 of 1998 (Shivani Properties Private Limited-Vs.-United Bank of India).
2) Prior to 1994 one Dipali Mallick being the predecessor-in-
interest of the appellant, was the owner of Premises No. 5, Kiron Sankar Roy Road, Calcutta 700001. At all material times one Commilla Banking Corporation Limited was a lessee in respect of room nos. 1 to 7 measuring about 4,000 square feet situated in the ground floor of the said premises no. 5 Kiron Sankar Roy Road, Calcutta-01 (the leased out portion is hereinafter referred to as the 'Suit Premises'), pursuant to an indenture of lease dated January 8, 1947.
3) In or about 1950, the said Commilla Banking Corporation Ltd. merged with the respondent and since such merger the respondent has been carrying on business in the suit premises.
4) In the year 1990 the said Dipali Mallick filed an eviction suit against the respondent being Ejectment Suit No. 197 of 1990 before the City Civil Court at Calcutta. The said suit was decreed on compromise resulting in a consent decree dated August 6, 1990.
5) In 1994, by a registered deed of conveyance the said Dipali Mallick sold, transferred and conveyed the said premises no. 5 Kiron Sankar Roy Road, Calcutta including the suit premises to and in favour of the appellant. The respondent duly attorned its tenancy in favour of the appellant.
6) The aforesaid compromise decree contained, inter alia, the following clause:
"The defendant has agreed to review rates of rent in the year 1995 and, thereafter, at the instance of the plaintiff to be reviewed after every five years which will be not exceeding 15 per cent of the existing rent."
7) The respondent (the defendant in the suit) refused to review the rent in the year 1995 in spite of requests.
8) In the year 1998 the appellant filed the above suit praying for, inter alia, the following reliefs:
"(a) Decree for adjudication, determination and settlement of the monthly rent for the suit premises morefully described in Schedule 'A' to the plaint by the defendant from July 1, 1995 and decree for such sum as may be found due and payable upon enquiry and determination by this Hon'ble Court.
(b) Interest including interim interest and interest upon judgment on the amount on difference between the amount paid by the defendant and the account to be determined by this Hon'ble Court at the rate of 18 per cent per annum being the reasonable rate of interest or at such rate as this Hon'ble Court may seem fit and proper."
9) The aforesaid suit was disposed of by the judgment and decree which is impugned in the present appeal. The learned Judge fixed the fair and reasonable rent at Rs. 14.50/- per square ft. as in 1995, with effect from January 1996. The operative portion of the judgment and decree is set out herein below:-
"On a fair assessment of the pleading and evidence on record, I am of the view, that a fair and reasonable rent in 1995 would be Rs. 14.50/- per sq. ft.. The said rent is accordingly determined at Rs. 14.50/- per sq. ft. in 1995 after taking into consideration the aforesaid factors as well as the basic rent in respect of the R.N. Mukherjee Road property, the letter dated August 23, 1982 of India Automobiles Limited (1990) and the determination of the rent by the valuer in respect of the suit premises in 1995.
The plaintiff has claimed interests including interim interest and interest upon judgment on the differential amount being the amount paid by the defendant and the amount to be determined in the suit at the rate of 18 per cent per annum or at such rate as the Court may deem fit and proper. The plaintiff has approached the defendant for reviewing the rent in 1997 and the bank responded to the same on 3rd May, 1997 rejecting the request for fixing the rent at the rate of Rs. 50/- per sq. ft. on or after 1995. The defendant has given an interpretation to the said clause which is not accepted for the reasons recorded earlier in this Judgment. The rent is determined at Rs. 14.50/- on and from January 1996. The suit was pending for a considerable point of time. The defendant-bank was paying rent according to its own understanding of the terms of the agreement. In my view, the defendant shall pay simple interest at the rate of 7 per cent per annum on and from 1st January, 1998 till December, 2000 on sums that is due and payable on account of rent which has been determined at Rs. 14.50/- per sq. ft. per month on and from 1st January, 1996 excluding Municipal rates and taxes. In the event of increase in Municipal taxes the defendant has agreed to bear the proportionate increase in taxes. The plaintiff shall not be entitled to any interest between January 1996 and January 1998. In the event, the entire amount along with interest is paid by the defendant-bank within three months from date, the plaintiff shall not be entitled to any interest upon judgment. In default of payment of the entire decreetal sum along with interest within the aforesaid stipulated time, the plaintiff shall be entitled to interest at the rate of 6 per cent per annum from 1st January, 1998 till realization. The plaintiff is also entitled to the cost of this litigation assessed at Rs. 10,000/-."
10) Both parties are aggrieved by the judgment and decree under appeal. The respondent has filed a cross-objection. The plaintiff is aggrieved because according to it the rate of rent fixed is too low and not commensurate with the market rate of rent in the area where the suit premises is situated. The respondent is aggrieved because the Learned Court below rejected its contention that the suit is barred by Section 47 of the Code of Civil Procedure. It is pertinent to note, that the respondent urged only the point of Section 47 of CPC before the Learned First Court as also before us and advanced no argument on the propriety of the rate of rent.
11) In view of the aforesaid, two issues arise for consideration by us, which are as follows:-
(i) Whether the suit is barred by Section 47 of the CPC? If the suit is barred, whether the decree under appeal is a nullity?
(ii) If the suit is not barred by law, whether the rate of rent fixed by the learned First Court is fair and reasonable?
12) We will deal with the cross-objection first as the same would go to the issue of maintainability of the suit. Relying on Section 47 of the CPC, the respondent's learned Advocate has strenuously argued that the suit is barred by Section 47 of the CPC, since the subject-matter of the suit relates to the execution, discharge or satisfaction of the earlier compromise decree. Section 47 (1) of CPC is set out herein under:
"All questions arising between the parties to the suit in which a decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit."
13) In support of his contention Learned Counsel has relied on the following decisions:-
(i) Sadananda Saha & Ors.-Vs-Union of India: AIR 1956 Cal
317. In this case, the Division Bench of this Court held that a decree passed in a suit filed in contravention of the provisions of Section 47 of CPC would be a decree passed without jurisdiction and a nullity.
(ii) Rabindra Nath Roy Choudhury-Vs-Dhirendra Nath Roy Choudhury: AIR 1940 Cal 1982. In this case, a suit by A for declaration of its title to the extent of 8 annas in the property purchased by B was compromised. In the compromise it was declared that B was full owner of the property purchased by him but he was to execute lease of 8 annas share in favour of A. On B's failure to execute the lease, A brought a suit for specific performance of the contract. It was held that the acknowledgement by A of B's full title was conditional on B's executing a deed of lease in favour of A in respect of the same. The execution of the deed of lease was, therefore, the consideration for and a condition to the declaration of B's right. It became an integral part of the adjustment of the claim in suit and as such, came within its scope. Hence, the suit was held to be barred under Section 47 of CPC.
(iii) Nebubala Sardar-Vs-Abdul Aziz Baidya: AIR 1991 Cal 402. In this case, a title suit was compromised and a consent decree was passed accordingly. A subsequent suit was filed for specific performance of the contract which formed part of the compromise decree. It was held that a subsequent suit was barred under Section 47 of the CPC. The Learned Single Judge dismissed the suit and remanded it to the Court of the first instance with a direction to treat the plaint in the suit as an application for execution and proceed with the execution in accordance with law.
(iv) Parkash Chand Khurana-Vs-Harman Singh: AIR 1973 SC 2065. In this case, it was held by the Supreme Court that a Clause in a decree passed in terms of an arbitration award providing that on the happening of certain events the vendor shall be entitled to take back possession of the property does not make the award declaratory so as to make it incapable of execution. It was further held that it is never a pre-condition of the executability of a decree that it must provide expressly that the party entitled to a relief under it must file an execution application for obtaining that relief.
(v) Municipal Board, Kishangarh-Vs-Chand Mal and Co.: (1999) 9 SCC 198. In this case, a dispute arose between a lease holder and the Municipal Board since the lease holder wanted to raise construction on the suit land and the Board objected to the same. The lease holder filed a suit and succeeded. At the execution stage the Municipal Board filed objection under Section 47 of the CPC which was dismissed. During appeal the Board filed an application under Order 41 Rule 27 of CPC and submitted additional documents. The High Court held that subsequent events could not be looked into by the Executing Court. On appeal, the Supreme Court held on facts that in the interest of justice the whole case be remanded to the Executing Court for re-hearing of objections under Section 47 and consideration of the effect of the additional documents.
14) In our view, none of the aforesaid decisions comes to the aid of the respondent. None of the aforesaid decisions discuss as to whether or not the bar of Section 47 would apply even if the decree is in-executable. The learned Judge has come to a conclusion that the decree is in the nature of a declaratory decree and thus incapable of execution. Hence, the bar of Section 47 is not attracted.
15) We are inclined to agree with the view of the learned First Court. The decree in question merely declares the rights and obligations of the parties agreed to by and between them. Clause
(iii) of the decree obliged the defendant to review the rates of rent in the year 1995 and, thereafter, the plaintiff had the right to review the rent every five years which will not exceed 15 per cent of the existing rents. This, in our view, makes the decree declaratory in nature and incapable of execution. The Court cannot force the defendant to review the rate of rent by way of execution. Section 47 pre-supposes that the decree is capable of execution. If it is not so, obviously the bar of Section 47 will not apply.
16) In view of the aforesaid we hold that the suit is not barred by Section 47 of CPC. Accordingly, the cross-objection is dismissed,
17) Now we come to the second issue. Learned Counsel for the appellant has relied on three decisions, two of this Court and one of the Hon'ble Supreme Court, in support of his contention that the Court has the power and jurisdiction to fix fare rent. The decisions cited are:-
(i) Martin Burn Ltd.-Vs-Steel Authority of India Ltd.: 1988(2) CLJ 416.
(ii) Central Bank of India-Vs-Punalur Paper Mills (unreported judgment of a Division Bench of this Court delivered on 26th September, 1995 in Appeal No. 48 of 1995 arising out of Suit No. 239 of 1994).
(iii) Damodhar Tukaram Mangalmurti-Vs-State of Bombay: AIR 1959 SC 639.
18) We do not think it is necessary to discuss in detail the aforesaid three judgments with which we are in respectful agreement. Further it has also not been urged on behalf of the respondent that the Court does not have the power or jurisdiction to fix fare rent. The respondent's sole objection was based on Section 47 of CPC which has failed.
19) The Learned Judge has considered all the evidences placed before him regarding the fair market rent in respect of the suit premises. We have gone through the judgment impugned carefully and we find no reason to interfere with the quantum of rent fixed by the Learned Judge. His Lordship has taken into consideration the location of the property, the access to the property, the age of the property, the condition of the property and the expert reports placed before him and has increased the monthly rent from Rs. 1 per sq. ft.
to Rs. 14.50/- per sq. ft.. The Learned Judge has made this increased rent effective on and from 1st January, 1996 excluding Municipal rates and taxes. As has been pointed out on behalf of the appellant and not objected to on behalf of the respondent, the increase should take effect from July 1, 1995 as had been conceded by the respondent in its letter dated May 13, 1997.
20) In our view Rs. 14.50/- per sq. ft. is a reasonable and fair rate of rent considering the aforesaid factors and also considering that the respondent is an existing tenant and has been in occupation of the suit premises since about 1950. Accordingly, we are not inclined to interfere with the judgment impugned excepting to the extent indicated above i.e. the date from which the increased rent will become effective.
21) The appeal thus, fails and is disposed of without any order as to costs.
Present:
The Hon'ble Mr. Justice Ashim Kumar Banerjee AND The Hon'ble Mr. Justice Arijit Banerjee The cross-objection is dismissed. The appeal succeeds in part. The judgment and decree of His Lordship affirming the decision of the learned Single Judge of Section 47 of the Code of Civil Procedure and the power of court to fix the rent, is upheld. Since on the ultimate result on fixation of rent, we could not be ad- idem, the matter may be placed before the Hon'ble Chief Justice to refer it to a Third Judge to answer the following question :
What would be the actual rent in 1995 in respect of the suit premises? Is it Rs.14.50 as decided by the learned Single Judge and upheld by one of us (Arijit Banerjee J.) or Rs.24 per sq. ft. as decided by one of us (Ashim Kumar Banerjee J.) or any other rent that may be fixed by His Lordship.
[ASHIM KUMAR BANERJEE, J] [ARIJIT BANERJEE, J]