Calcutta High Court
Mayank Poddar And Ors. And Magma Leasing ... vs Development Consultant Ltd. on 16 February, 2004
Equivalent citations: AIR2005CAL246, (2004)2CALLT290(HC), 2004(2)CHN399, AIR 2005 CALCUTTA 246, (2005) CAL WN 182, (2004) 2 RENCR 154, (2004) 2 CALLT 290, (2004) 2 CAL HN 399
Author: Asok Kumar Ganguly
Bench: Asok Kumar Ganguly
JUDGMENT Asok Kumar Ganguly, J.
1. Both the appeals were heard together as common questions of fact and law are involved.
2. The subject-matter of challenge is a judgment and order dated 22nd May, 2003 passed by a learned Single Judge of the First Court holding, inter alia, that municipal rates and taxes as well as commercial surcharges and parking charges do not form part of the rent and the respondent is not liable to pay the same with the rent.
3. The learned Judge in the judgment, under appeal, has recorded that at the ad interim stage, by an order dated 4th May, 2001, the Court directed the tenant to deposit admitted arrears of monthly rent in twenty equal monthly instalments along with the current rent to be paid on or before 7th of each month. The said order was passed in a suit filed by the plaintiff/appellant for a decree of eviction of the sole defendant on the ground of the defendant's failure to pay monthly rent, car parking charges and the consolidated rates and taxes and commercial surcharges in respect of the tenancy. The tenancy consists of a portion of the 7th floor, the entire 8th floor of premises No. 24, Park Street, Kolkata (hereinafter referred to as the 'said premises').
4. The learned Judge, after considering facts and circumstances of the case and the decisions cited before His Lordship, held that the agreement between the parties will determine the quantum of rent and in the instant case, the agreement does not mention that the rent will be inclusive of such charges. As such, the learned Judge directed the petitioner to pay the rent month by month @ Rs. 1,78,128.39 paise after enhancement of the same in accordance with the agreement.
5. The learned Counsel appearing for the appellant, assailed the said judgment on various grounds and it was urged that the learned Judge of the First Court erred both on facts and in law. The learned Counsel submitted that the genesis of the dispute arose out of a letter dated 15th March, 2001 written on behalf of the appellant in answer to the letter dated 12th March, 2001 written by the respondents. In the letter dated 15th March written by Celica Developers on behalf of the appellant, it was made clear that in spite of the letter dated 16th February, 2001 written by the appellant returning therein the cheques of the respondents towards rent for the earlier period, respondents have again tendered the monthly rent which does not include municipal rates and taxes and commercial surcharges and car parking charges. In the said letter it was made clear that the suit has been filed for eviction of the respondent. In view of the said suit the appellants were unable to accept the cheques as tendered. The learned Counsel submitted that in the Plaint itself the said dispute has been highlighted in paragraph 19 where it has been stated that the last rent which was paid by the respondent was inclusive of municipal rates and taxes and car parking charges and the same was paid by the respondent in respect of the tenanted premises to Magma Leasing Ltd. through City Bank and the component of the said rate of rent was mentioned as follows :
a) Basic rent ... Rs. 1,54,894.26
(Upto June, 1999)
b) Car parking charges ... Rs. 1,983.75
c) Municipal taxes ... Rs. 1,14,848.00
(Upto March, 1998 quarter)
TOTAL: Rs. 2,71,725.91"
6. From a letter dated 24th April, 2001 written by the respondents to the Assessor/Collector (South) of the Calcutta Municipal Corporation, it was made clear by them that in respect of the 7th and 8th floor of the tenanted premises the rent which was paid included the municipal rates and taxes. As quarterly rates and taxes the amount which was mentioned in the said letter dated 24th April, 2001, was Rs. 1,14,848/-. The same amount tallies with the particulars given in paragraph 19 of the Plaint and which has been set out hereinbefore.
7. The said letter dated 24th April, 2001 was issued by the respondents in answer to the letter dated 20th April, 2001 issued by the Assessor/Collector (South) of Calcutta Municipal Corporation. In the said letter, the Municipal Corporation wanted to know from the respondents whether they pay any corporation tax to the owner of the premises in addition to the monthly rent. Therefore, the learned Counsel for the appellants very much relied on these documents. According to the learned Counsel reply of the tenant dated 24th April, 2001 contains a clear admission that municipal taxes are paid by the tenant as part of the rent. The learned Counsel also submitted that in para 2 of the Plaint there is a clear averment that in addition to basic rent, the tenant has to pay car parking fees and in addition thereto the tenant agreed to pay the balance of the municipal tax and surcharge for commercial use as part Of the rent. The learned Counsel also referred to the agreement between the parties.
8. According to the learned Counsel paragraph 4 of the agreement makes it clear that consolidated rates and taxes will be payable by the parties as mentioned in the said Clause and under Clause 4.2 the lessee's obligation to pay the balance of consolidated rates and taxes and surcharges is also mentioned and according to the learned Counsel it was also made clear that all increases in municipal taxes and new levies whether payable by the owner or occupier arising due to any change in law, shall also be borne by the lessee. According to the learned Counsel a reading of clauses 4, 4.1 and 4.2 will make it clear that the lessee will have to pay its share of the consolidated rates and municipal taxes to be paid in respect of the said premises. The learned Counsel further states that the same is made further clear by para 4.3 which says that the liability of the lessee shall be calculated in accordance with law and shall be payable by the lessee to the lessor within seven days of every quarter against bills raised by the lessor. The learned Counsel also submitted that there are also provisions for payment of car parking space. The learned Counsel for the appellants submitted that the entire consideration which is payable by the tenant to the landlord for parting with the position by the landlord must be considered to be the rent payable The learned Counsel referred to various provisions of the West Bengal Premises Tenancy Act, and Calcutta Municipal Corporation Act, as also various judgments of this Court.
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 taxes are not included within the rent. The learned Counsel also referred to paragraphs 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.
10. This Court is unable to accept the contentions of the learned Counsel for the respondent.
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' has 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 surcharges and all other levies under the law.
12. So this Court is of the view that by 'rent' what is meant in this case is the whole amount agreed to be paid by a tenant to his landlord for enjoyment of the demised premises which is let out to the tenant.
13. Several decisions which were cited before this Court also affirm that position.
14. In Karnani Properties 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, 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. Mahalakshmi Thacker, 1975(1) CLJ 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 Parul Banerjee v. 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 Anita Das Gupta v. A.C. Sett, 88 CWN 242, 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 Section 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 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, surcharges and other levies, if any is imposed under the law. This Court is of the considered view that the decision in Karnani 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 Sikha Dutta v. Prosanta Kumar Lahiri, reported in 1988 (II) CHN, 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.
25. But here facts, as discussed above, are totally different. The relevant clauses of the agreement relating to payment of municipal taxes and surcharges by the tenant is set out below :
"4. Consolidated rates and taxes in respect of the demised premises will be payable by the parties hereto as follows :
4.1. The lessor shall bear as its share of consolidated rates and taxes an amount of Rs. 46,059.63 per quarter.
4.2 The lessee shall bear as its liability the balance amount of consolidated rates and taxes and surcharges if any. As also all increases in municipal taxes and new levies whether payable by the owner or occupier arising due to change in any law, rules and/or regulations shall be borne by the lessee.
4.3. Inasmuch as the demised premises is in a portion of the large premises and the bifurcation of the lessee's liability is uncertain it is settled and agreed as follows :
a) The aforesaid liability of the lessee shall be calculated in accordance with the law and shall be payable by the lessee to the lessor within 7 days of every quarter against bills raised by the lessor and if there be any delay interest at the rate of 15% per annum will be further payable to the lessor by the lessee.
b) The lessee shall not require the lessor to produce any assessment years' bill before every payment provided however, under no circumstances will the lessee be liable to pay and the lessor be entitled to realize from the lessee more or less than the lessee's actual liability that is the proportionate share of the actual municipal rates and taxes as assessed by the Calcutta Municipal Corporation in accordance with law for the actual areas occupied by the lessee".
26. Apart from that the respondent themselves admitted by their letter dated 24.4.2001, that they were paying municipal taxes to the landlord. This was admitted by the respondents in reply to a query raised by the Calcutta Municipal Corporation. So the respondents have actually paid the amount of municipal taxes along with the rent. There is a clear averment to that effect in para 19 of the Plaint. Paragraphs 19 and 20 of the Plaint clearly aver that municipal rates and taxes are clearly components of rent to be paid by the respondent.
27. In paragraph 13 of the application filed by the defendant/tenant being G. A. 1771 of 2001 there is a clear admission that the defendant had paid a sum of Rs. 52,76,8.61-96 paise and such payment would include the payment towards the Calcutta Municipal Corporation's consolidated rates and surcharges.
28. Thus the defendant was merely disputing the correct apportionment of the amount of such payment. But on principle, the defendant did not dispute that the payment of municipal rates and taxes and surcharges was included within the payment of rent.
29. Therefore, the factual aspect in this case is totally different. And the decision in Sikha Dutta does not apply to the present case.
30. Apart from that in Sikha Dutta, the learned Judge made it clear in paragraph 11, page 74 of the report that the Court was not called upon to "decide the question as to whether in law municipal tax can form part of the rent or not". Therefore the decision in Sikha Dutta must be confined to the facts of that case and the same need not be treated as a binding precedent. In fact, in Sikha Dutta, the attention of the Court was not drawn to two previous Division Bench judgments of this Court rendered in Anita Das Gupta and Parul Banerjee. That is why a learned Single Judge, while taking a contrary view in Puspa Devi Gourisaria, 1990(2) CLJ 310, held that the decision in Sikha Dutta was rendered 'per incuriam'. (para 25, page 318 of the report).
31. 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, is not a tenable proposition. 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 is hardly relevant in deciding the character of the levy and that amount may vary as the quantum of rent may also vary. But these are not material consideration in deciding the nature of the levy.
32. For me reasons aforesaid, both the appeals succeed, the orders of the learned Judge are set aside. The respondent, in both these appeals, is to pay the rent by including in the same its share of municipal rates and taxes and surcharges. The Court does not pass any order for payment of parking charges as part of the rent in view of the fact that the same is not mentioned in the tenancy agreement. This Court is not called upon to make any calculation of the quantum of rent payable on this basis. The learned Judge of the First Court is at liberty to do the same in the light of the conclusions reached in this judgment.
33. No order as to costs.
Soumitra Sen, J.
34. I agree.
Later:
35. The prayer for stay is considered and rejected. If urgent xerox certified copy of the judgment and order is applied for, the same may be granted as early as possible.
Asok Kumar Ganguly & Soumitra Sen, JJ.: