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The State of Madhya Pradesh Vs. Khan Bahadur H.H.D.H. Bhiwandiwala and Co. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 72 of 1967
Judge
Reported inAIR1971MP65; 1970MPLJ805
ActsCode of Civil Procedure (CPC) , 1908 - Sections 100 and 101; Specific Relief Act, 1877 - Sections 42
AppellantThe State of Madhya Pradesh
RespondentKhan Bahadur H.H.D.H. Bhiwandiwala and Co.
Appellant AdvocateK.P. Munshi, Govt. Adv.
Respondent AdvocateN.C. Nihlani, Adv.
DispositionAppeal allowed
Cases ReferredRamaraghava Reddy v. Seshu Reddy
Excerpt:
.....in the appeal is that in a suit of this description, the conditions of sec, 42 of the specific relief act are not satisfied and the suit is, therefore, not maintainable. lala laxminarayan, air 1960 sc 335. in that case, their lordships stated as follows :a plea that the plaintiff asked for a bare declaration though he was in a position to ask for further relief within the meaning of section 42 and hence the suit should have been dismissed in limine should be raised at the earliest point of time, in which event the plaintiff could ask for necessary amendment to comply with the provisions of section 42. it is a well-settled rule of practice not to dismiss suits automatically but to allow the plaintiff to make necessary amendment if he seeks to do so. their lordships further state that..........from the plaint. the result of this deletion was that the suit was thereby converted into a suit for declaration simpliciter.6. the suit was contested by the defendant on different grounds. the learned judge has, however, decreed the suit and granted the declaration sought. the decision proceeds on the ground that the plaintiff was a tenant during the period in question on a rent of rupees 392.62 per month. he has held that the demand for payment of enhanced provisional rent of rs. 2071-81 per month was unjustified, being arbitrary and without basis. he further holds that the pre-existing rent could not be enhanced to such an enormous proportion and that if it was necessary to fix the provisional rent, it had to be fixed at a reasonable rent after affording an opportunity to the.....
Judgment:

A.P. Sen, J.

1. This appeal, filed by the defendant, is directed against a judgment and decree of the Third Additional District Judge, Bhopal, dated 29th November 1966, decreeing the plaintiff's suit for declaration simpliciter.

2. The material facts, shortly stated, are these. The dispute relates to rent of the Distillery buildings including office and residential quarters at Jahangirabad, Bhopal. On 26th March 1958, the plaintiff was granted a distillery contract for the wholesale supply of country spirit for the districts of Raisen and Sehore on the terms and conditions contained in the licence. It was permitted to occupy the distillery building for the manufacture of country liquor in terms of clauses 8 and 46 of the licence. The licence was in renewal of distillery contracts which the plaintiff had from the erstwhile Bhopal State right from the year 1916 onwards. For all these years, the then Government allowed the plaintiff to occupy the distillery building for execution of its excise contracts on payment of rent. The rent initially charged was Rs. 250/- per month and was finally enhanced to Rs. 392.62 with certain additions and alterations to the building. When the distillery contract was granted to the plaintiff by the State of Madhya Pradesh, the pre-existing rent of Rupees 392.62 was not adopted to be the basis for occupation of the distillery building. The renewal of the licence was subject to the condition that the plaintiff would be liable to pay such rent as was fixed by the Public Works Department under Fundamental Rule 45-B. Admittedly, there has so far been no final fixation of rent by that department.

3. Clause 8 of the licence provided that if warehouse building was supplied by the State Government the plaintiff shall be liable to pay such rent as was fixed by the Public Works Department. Clause 46 envisaged that it shalltake on lease the distillery building on such conditions as regards rent etc. as shall be determined by that department. The relevant clauses read as follows:--

'8. The warehouse building shall be arranged by the licensee himself under the directions from the Excise Department. If warehouse building is supplied by the State Government the licensee shall be bound to pay necessary rent of the building or buildings on the terms and conditions offered by the Public Works Department of the State.'

XX XX XX XX

'46. The licensee shall take on lease the distillery buildings and all other buildings and structures, etc., attached thereto at Bhopal on such conditions as regards term, rent and otherwise as may be prescribed by the Public Works Department of the State Government. It shall be a condition of the lease that it shall terminate on the termination of this licence.'

The fixation of rent had to be in accordance with Fundamental Rule 45-B which reads:--

'(i) The capital cost of all old buildings whose cost of construction or acquisition is not known shall be determined on plinth area basis at present day rates namely Rs. 10 per SQ. ft. of class I, Rs. 8 per sq. ft. of class II and Rs- 6 per sq. ft. of class III buildings and the value so assessed written down by 60 per cent (sixty per cent) on account of depreciation as the buildings are very old and lack amenities provided in modern constructions.'

4. On 1st January 1959, the Public Works Department informed the plaintiff that it had fixed provisional rent of the building at Rs. 2071-81 per month, inclusive of taxes, which was payable w.e.f. 1st April 1958 and asked the plaintiff to execute a draft lease as furnished, embodying the terms and conditions of the lease as envisaged by clause 46 of the licence and also to pay Rs. 40,300-56, being the difference between the provisional rent and the existing rent. Along with the letter of demand, the department sent to the plaintiff a statement showing the manner in which the provisional rent had been fixed. The plaintiff did not comply with the demand for payment of provisional rent, nor did it execute the formal deed of lease during the period of licence. The result is that the State Government has to rely on clauses 8 and 46 of the licence for enforcing its demand for payment of enhanced rent.

5. On 14th November 1961, the plaintiff brought the suit claiming a declaration that it was a tenant of the Bhopal Distillery during the period from 1st April 1958 to 31st March 1960 on arent of Rs. 392.62 per month and lor a consequential relief of injunction to restrain the State Government from realising the enhanced rent of Rupees 2071.81 for that period from the security deposit of Rs. 25m000/- lying with it or by any other manner- On an objection being raised, the learned Judge found that the plaint was deficiently stamped and, therefore, directed the plaintiff to pay ad valorem court-fee on Rs. 74,723-44 on the relief of injunction, that being the total amount of liability it was seeking to avoid. The plaintiff, instead of paying the requisite court-fee, had the relief of injunction deleted from the plaint. The result of this deletion was that the suit was thereby converted into a suit for declaration simpliciter.

6. The suit was contested by the defendant on different grounds. The learned Judge has, however, decreed the suit and granted the declaration sought. The decision proceeds on the ground that the plaintiff was a tenant during the period in question on a rent of Rupees 392.62 per month. He has held that the demand for payment of enhanced provisional rent of Rs. 2071-81 per month was unjustified, being arbitrary and without basis. He further holds that the pre-existing rent could not be enhanced to such an enormous proportion and that if it was necessary to fix the provisional rent, it had to be fixed at a reasonable rent after affording an opportunity to the plaintiff to object against such fixation. He also held that in the absence of a formal deed of lease, the defendant was not entitled to enforce the stipulation for payment of rent fixed under Clause 8 of the licence-deed by reason of Article 299(1) of the Constitution. Lastly, the provisional rent as fixed was not the real rent but was subject to scrutiny by the Accountant General and, therefore, the right to demand its payment had not accrued- He was of the view that the Court was entitled to enquire into the fairness of the calculations adopted by the Public Works Department and in the absence of any data the fixation of provisional rent at Rs. 2071.81 inclusive of taxes, would not be regarded as fair.

7. Only question urged in the appeal is that in a suit of this description, the conditions of Sec, 42 of the Specific Relief Act are not satisfied and the suit is, therefore, not maintainable. The contention proceeds on the ground that declaratory suits are governed exclusively by Section 42 of the Specific Relief Act- The defendant did not take this plea in the written statement nor was there any issue in respect thereof. The plaintiff accordingly contends that the plea cannot be allowed to be taken for the first time in appeal and reliance isplaced on Mst. Rukhmabai v. Lala Laxminarayan, AIR 1960 SC 335. In that case, their Lordships stated as follows :--

'A plea that the plaintiff asked for a bare declaration though he was in a position to ask for further relief within the meaning of Section 42 and hence the suit should have been dismissed in limine should be raised at the earliest point of time, in which event the plaintiff could ask for necessary amendment to comply with the provisions of Section 42. It is a well-settled rule of practice not to dismiss suits automatically but to allow the plaintiff to make necessary amendment if he seeks to do so.'

On that view, the plea was not allowed to be raised in the Supreme Court. That decision is, however distinguishable. That was a case where the requirements of the proviso had not been complied with. The contention here is not that the suit should be dismissed because the plaintiff had not asked for further relief within the meaning of Section 42, but that no suit of the present kind was maintainable. The question raised is a pure question of law. The defendant had denied that any cause of action had accrued in favour of the plaintiff and that it was not entitled to any relief. In appeal, the first ground taken is that the suit is not maintainable. That being so, we allow the defendant to urge the contention in appeal. There is no question here of the plaintiff removing defect by amendment, had the plea been taken at the proper time.

8. There was divergence of judicial opinion on the question of powers of the Courts to make a declaratory decree. The majority view was that Section 42 is exhaustive of the case in which a decree merely declaratory can be made and the Courts have no powers to make such a decree independently of that section. The other view was that Section 42 was not exhaustive. We need not cite the authorities in support of either view. Suffice it to say that the difference of opinion arose due to the observations of the Privy Council in Fischer v. Secretary of State, (1899) 26 Ind App 16 (PC), which appeared to imply that Section 42 is not exhaustive. There was apparent conflict of authority as their Lordships of the Privy Council in Sheoparsan Singh v. Ram-nandan Prasad Narayan Singh, 43 Ind App 91 = (AIR 1916 PC 78), stated :--

'The Court's power to make a declaration without more is derived from Section 42, Specific Relief Act, and regard must, therefore, be had to its preciseterms.'

Following that view, Niyogi and Sen, JJ. in Ratansingh v. Raghurajsingh, ILR (1945) Nag 975 = (AIR 1946 Nag 30) and Pollock and Bose, JJ. in Governor-General in Council v. Mulla Mohommad Bhai,ILR (1945) Nag 527 = (AIR 1944 Nag 382), stated that the section does not sanction every form of declaration, but only a declaration that the plaintiff is 'entitled to any legal character or to any right as to any property.'

9. Recently, their Lordships of the Supreme Court have, however, held in Ramaraghava Reddy v. Seshu Reddy, AIR 1967 SC 436, that the power of the Courts to make merely declaratory decrees is not entirely governed by Section 42, as 'that section is not exhaustive of the cases in which a declaratory decree may be made, and the Courts have power to grant such a decree independently of the section. Their Lordships further state that a declaration which falls outside the purview of Section 42 of the Specific Relief Act may be governed by the general provisions like Section 9 or Order 7, Rule 7 of the Code of Civil Procedure. We have, therefore, to examine whether the present suit falls within the purview of Section 42 of the Specific Relief Act, and if not, whether it is maintainable otherwise.

10. The requisites for a declaratory suit are well known. In order to obtain relief of this kind, the plaintiff must establish that (i) the plaintiff is at the time of the suit entitled to any legal character or anv right to any property; (ii) the defendant has denied or is interested in denying the character or the title of the plaintiff; (iii) the declaration asked for is a declaration that the plaintiff is entitled to a legal character or to a right to property, and (iv) the plaintiff is not in a position to claim a further relief than a bare declaration of his title. Even if all these conditions are fulfilled, the Court has still a discretion to grant or not to grant a declaratory relief depending on the circumstances of each case. Applying these principles to the facts of the present case, we have no manner of doubt that the plaintiff is not entitled to any declaratory decree. The plaintiff was not entitled to a legal character or to a right as to property at the time when the suit was instituted. The distillery contract had expired on 31st March 1960 and with that the occupation of the distillery building. As already stated, the demand for payment of Rs. 40,300.56 as the difference between the provisional rent and the existing rent was raised during the period of licence with a request that the plaintiff should execute a formal deed embodying the terms of the lease. The plaintiff did not comply with the demand for payment of provisional rent nor did it execute a formal deed of lease during the period of licence. Admittedly, the plaintiff has vacated the distillery building. The defendant has taken no steps for the realisa-tion of the amount claimed. In the absence of a formal deed, the amount claimed cannot be realised as arrears of land revenue. That was the stage when the suit was brought on 14th November 1961. On that day, the plaintiff was not entitled to a declaration that it was entitled to a legal character in or any right to any property. The defendant had also not denied, nor was it interested in denying, the character or title, if any, of the plaintiff.

11. There can be no cause of action for a declaration in respect of pecuniary liability, arising from contract or otherwise, for, Section 42 of the Specific Relief Act is limited to status and rights in property. The plaintiff was neither a lessee nor a licencee on the date of suit. The declaration which the plaintiff wants is not as to any 'legal character' nor is it as to 'any right to any property.' The prayer that it be declared that the plaintiff was not entitled to pay anything more than Rs. 392.62 per month by way of rent for occupation of the distillery building is in the nature of a Brutum Fulmen and no Court would sit solemnly to make such a declaration in the exercise of its judicial discretion. No party can claim a declaration as a matter oi right. The grant of a declaratory relief is in the discretion of the Court and the discretion must be exercised according to sound legal principles. On the merits, the declaration sought cannot be granted. The plaintiff seeks a declaration that it was a tenant of the distillery building during the period in question at a rent of Rs. 392.62 per month. Such a declaration cannot obviously be granted. Under the terms of the licence, the plaintiff was to become a tenant on a rent to be fixed by the Public Works Department. Admittedly, there has so far been no final fixation of that rent. When the quantum of the rent has not been fixed, the Court cannot sit in judgment and decide what the rent should be. That is a matter which the parties have, by agreement, left to be determined by the Public Works Department and its determination should be final provided it is not arbitrary or without any basis, i. e. not in conformity with Fundamental Rule 45-B. Until there is a final settlement of account between the parties, the defendant is within its right to withhold payment of the earnest money of Rs. 25,000/-. Looked from any point of view, the suit of the plaintiff is, in our opinion, premature.

12. We accordingly allow the appeal and dismiss the plaintiff's suit with costs throughout. Counsel's fee as per schedule.


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