Skip to content


Remington Rand of India Ltd. Vs. Sohanlal Rajgharia and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 168 of 1979
Judge
Reported inAIR1984Cal153,87CWN922
ActsContract Act, 1872 - Section 29; ;West Bengal Premises Tenancy Act, 1966 - Sections 8, 8(1) and 17(2)
AppellantRemington Rand of India Ltd.
RespondentSohanlal Rajgharia and ors.
Appellant AdvocateP.P. Ginwala and ;Sankar Mitra, Advs.
Respondent AdvocateDipankar Ghosh, ;P.K. Mallick and ;Pratip Kumar Dutta, Advs.
DispositionAppeal dismissed
Cases ReferredM. M. Chawla v. J. S. Sethi
Excerpt:
- .....ground floor of the said premises by 1st april. 1972. it shall commence paying the then prevalent market rent.'3. it appears from the agreement between the parties as recorded in the letter quoted above that the defendant vacated the first floor of the said premises no. 5/a. mangoe lane. calcutta and continued to occupy the ground floor of the said premises as a monthly tenant under the plaintiffs on payment of a monthly rent of rs. 3,200/- with effect from dec. 1, 1970. it was also agreed that the tenancy of the defendant with regard to the ground floor would stand determined on the expiry of mar. 31, 1972. and that in the event the defendant did not vacate the ground floor by april 1, 1972. it would have to pay the prevalent market rent. the parties, however did not decide what the.....
Judgment:

M.M. Dutt, J.

1. This appeal is at the instance of the defendant in a suit for eviction, and it is directed against the judgment and order dt. April 21. 1978 of B. C. Basak. J passed on the implication of the defendant under Section 17 (2) of the West Bengal Premises Tenancy Act. 1956. hereinafter referred to as the Act.

2. The defendant. Remington Rand of India Ltd., was initially a lessee of a two storied building being premises No. 5/A, Mangoe Lane. Calcutta for a term of 16 years under the plaintiff under a registered deed of lease dt. May 1. 1953. After the expiry of the lease, the plaintiffs and the defendant entered into an agreement referred to in the letter dt. December. 4. 1970 addressed by the defendant to the plaintiffs. The relevant portions of the said letter recording the agreement between the parties are as follows:--

'(a) We have on 1st Dec. 1970 put you in vacant possession of the 1st floor of the premises No. 5/A. Mangoe Lane, Calcutta.

(b) We shall continue to be in occupation of the ground floor of the above premises as monthly tenant under you on the terms and conditions in the lease dated 14th Sept. 1953. granted by you to us in so far as the same shall be applicable to such monthly tenancy except that our monthly rent for the said entire ground floor shall be Rs. 3,200/-(Rupees Three Thousand and Two Hundred only) per month with effect from 1st Dec. 1970. and all common spaces and land spaces in the ground floor will be used by us in common with you and other occupants of the aforesaid premises and we will not be entitled to obstruct and/or block the same in any circumstances whatsoever.

(c) We will put you in quiet, vacant and peaceful possession of the said ground floor mentioned in Clause (b) hereof within 31st Mar. 1978. Please also note that our tenancy under you in respect of the ground floor will in any event stand determined with the expiry of 31st Mar. 1972. In the event the Company does not vacate the ground floor of the said premises by 1st April. 1972. it shall commence paying the then prevalent market rent.'

3. It appears from the agreement between the parties as recorded in the letter quoted above that the defendant vacated the first floor of the said premises No. 5/A. Mangoe Lane. Calcutta and continued to occupy the ground floor of the said premises as a monthly tenant under the plaintiffs on payment of a monthly rent of Rs. 3,200/- with effect from Dec. 1, 1970. It was also agreed that the tenancy of the defendant with regard to the ground floor would stand determined on the expiry of Mar. 31, 1972. and that in the event the defendant did not vacate the ground floor by April 1, 1972. it would have to pay the prevalent market rent. The parties, however did not decide what the prevalent market rent was. The defendant did not pay tent at the old rate, that is at the rate of Rs. 3,200/- per month, the reason being that the prevalent market rent was not decided. It appears from the letter dated Aug. 26, 1974 addressed by the defendant to the plaintiffs that a sum of Rs. 15,000/- was paid by the defendant to the plaintiffs on July 12, 1972 towards arrears of rent. In the said letter, the defendant called upon the plaintiffs to ascertain the market rate of rent of similar tenancies within seven days from the receipt of the letter, failing which, it was stated, the defendant would be constrained to move the Rent Controller in Accordance with law for fixing the rent payable by it. Thereafter, on Sept. 7, 1976 the plaintiffs instituted the suit being Suit No. 369 of 1976 in the Original Side of this Court praying for a decree for eviction of the defendant from and recovery of vacant possession of the suit premises, being the ground floor of the said premises no. 5/A. Mangoe Lane. Culcutta, on the ground of default in payment of rent. It was alleged that the defendant had paid rent at the rate of Rs. 15,000/- per month being the prevalent market rent for the month of April, 1972, but the defendant failed and neglected to pay rent from May, 1972. The plaintiffs also claimed mesne profits at the rate of Rs. 500/- per diem from April 1, 1976 until recovery of vacant possession of the suit premises. It was claimed by the plaintiffs that the prevailing market rent was Rs. 15,000/- per month. and that the defendant having failed to pay rent at that rate with effect from May. 1972, forfeited the protection against eviction under the Act. Accordingly, the plaintiffs determined the tenancy of the defendant by the service of a notice to quit dt. Feb. 26, 1976 on the defendant. As the defendant did not comply with the terms of the notice to quit, the suit was instituted by the plaintiffs.

4. The defendant entered appearance in the suit and filed an application under Section 17 (2) of the Act raising a dispute as to the amount of rent payable by it. It was claimed by the defendant that the prevailing market rent was Rs. 3,200/- per month. The defendant denied that it had paid the sum of Rs. 15,000/- on July 10, 1972 on account of rent for the month of April 1972. It was averred by the defendant that the said sum of Rs. 15,000/- was paid towards the arrears of rent and not for the rent of any month. Accordingly, in the said application under Section 17 (2). the defendant prayed for the determination of the rent payable by it.

5. The said application was opposed by the plaintiffs. It was claimed by the plaintiffs that the prevalent market rent was Rs. 15,000/- per month, and that the defendant was aware of the same. It was alleged that the defendant had paid rent of Rs. 15,000/- for the month of April, 1972 as the prevailing market rent.

6. The learned Judge, by the impugned order, fixed the rate of rent of the suit premises at Rs. 10,000/- per month and directed the defendant to deposit in court or pay to the plaintiffs at sum of Rs. 4.63.322.88 on account of arrears of rent calculated on the said rate of rent within four weeks from the date of the order. Being aggrieved by the said order of the learned Judge, the instant appeal has been preferred by the defendant.

7. As noticed earlier, under the agreement, the monthly tenancy of the defendant in respect of the ground floor continued up to Mar. 31, 1972 on the expiry of which it stood determined and, as the defendant did not vacate the ground floor of the said premises by April 1, 1972. it was to pay the then prevailing, market rent. It has been urged by Mr. Ginwalla. learned Counsel appearing on behalf of the defendant that as the monthly lease of the defendant is in writing as contained in the said letter dt. Dec. 4, 1970 but not registered, it is inoperative as a lease under Section 107 of the T. P. Act. although in view of the admitted fact of payment and acceptance of rent, the defendant holds the ground floor of the said premises as a monthly tenant under the plaintiffs without a lease in writing. In other words, it is submitted by the learned Counsel that the new lease of the ground floor referred to in the latter part of Clause (c) of the said letter at the prevalent market rent is inoperative as a lease and, as such, it is inadmissible in evidence, and the plaintiffs cannot insist on payment of prevailing market rent.

8. Under Section 107 of the Transfer of Property Act, a lense of immovable property from year to year, or for any term exceeding one year, or reserving an yearly rent, can be made only by a registered instrument and all other leases of immovable property may he made either by a registered instrument or by oral agreement accompanied by delivery of possession. Thus if a monthly lease be in writing, it has to be registered, otherwise it would be inoperative as a lease and will be inadmissible in evidence. We are, however, unable to accept the contention of the learned Counsel for the defendant that the lease at a prevailing market rent was created by the said letter dt. Dec. 4, 1970. The said letter is in the nature of a memorandum recording an oral agreement which was entered into between the parties and that is apparent from the opening words of the said letter: 'With reference to the discussions we have been haying with your Mr. Sohanlal Raigarhia and Mr. Umesh Kumar Raigarhia, we confirm that it has been agreed by and between you and us as follows :

'Therefore, the agreement was an oral agreement and, as the defendant was already in possession there was no question of delivery of possession of the ground floor. So, the lease was effected by an oral agreement, the defendant being already in possession and accordingly, there was no question of registration. This contention of the defendant, therefore, fails.

9. Another attack on the new tenancy at the prevailing market rent is that the agreement in that respect is void for uncertainty. It is submitted that rent agreed upon must be a specific amount and there must not be any uncertainty about the same. It is not disputed that the prevailing market rent can be ascertained, or in other words, it is not something which is completely unascer-tainable. Indeed, in its letters dt. May 5, 1972 and Aug. 26, 1974. the defendant requested the plaintiffs to ascertain the market rate of rent for similar tenancies. Further, in the first mentioned letter dt. May 5, 1972. the defendant informed the plaintiffs that it was making enquiries about the prevailing market rent for comparable premises. It is, therefore, apparent that when both parties agreed that the rent would be the prevailing market rent, it was quite known to both of them that the market rent was ascertainable. In Brown v. Gould (1971) 2 All ER 1505 a clause in the lease for 21 years provided that the landlord would, on the written request of the tenant made within 12 months before the expiration of the term, if there had been no breach or non-observance of the covenants in the lease by the tenant, grant him a lease of such part of the demised premises in his actual occupation for a further term of 21 years at a rent to be fixed having regard to the market value of the premises at the time of exercising this option taking into account the advantage of the tenant any increased value of such premises attributable to structural improvements made by the tenant during the currency of this present lease.' The clause provided no machinery for fixing the rent. It was contended that the lease was void for uncertainty, but that contention was overruled, in overruling the said contention. Megarry J observed that unless driven to it. the court was reluctant to hold void for uncertainty any provision that was intended to have legal effect, and that it was sufficient that someone genuinely seeking to discover its meaning was able to do so. In the instant case, it is not disputed that the prevailing market rent can be ascertained and, therefore, it is difficult to hold that the said stipulation to pay prevailing market rent is void for uncertainty as contended on behalf of the defendant.

10. It is next contended on behalf of the defendant that as it was already in possession of the suit premises being the ground floor of the said premises No. 5/A, Mangoe Lane, Calcutta, it would be held on a proper construction of Clause (c) of the letter that only the amount of rent was altered from Rupees 3,200/- to the prevailing market rent, and that such alteration of rent did not create a new tenancy. It is sub-milted that if the old tenancy is held to continue, the defendant is liable to pay rent at the rate at which it was last paid, that is to say, at the rate of Rs. 3,200/- per month, and that such payment is really contemplated by the provision of Section 17 (2) of the Act. It is urged that the learned Judge has, on a misinterpretation of the provision of Section 17 (2), directed the defendant to pay rent at the prevailing market rate which has been fixed by him at Rs. 10,000/- per month. We may at this stage set out the provision of Section 17 (2):--

'17 (2). If in any suit or proceeding referred to in Sub-section (1) there is any dispute as to the amount of rent payable by the tenant, the tenant shall, within the time specified in Sub-section (1), deposit in court the amount admitted by him to be due from him together with an application to the court for determination of the rent payable. No such deposit shall be accepted unless it is accompanied by an application for determination of the rent payable. On receipt of such application, the court shall--

(a) having regard to the rate at which rent was last paid, and the period for which default may have been made, by the tenant, make, as soon as possible within a period not exceeding one year, a preliminary order, pending final decision of the dispute, specifying the amount, if any, due from the tenant and thereupon the tenant shall, within one month of the date of such preliminary order, deposit in court or pay to the landlord the amount so specified in the preliminary order and

(b) having regard to the provisions of this Act, make, as soon after the preliminary order as possible, a final order determining the rate of rent and the amount to be deposited in court or paid to the landlord and either fixing the time within which the amount shall be deposited or paid or, as the case may be, directing that the amount already deposited or paid be adjusted in such manner and within such time as may be specified in the order.'

The expression 'amount of rent' may, in our opinion, relate to 'rate of rent' or 'arrears of rent'. In other words, there may be a dispute as to the rate of rent or the amount of arrears of rent due by the tenant to the landlord. Section 17 (2) also contemplates a dispute when the defendant takes the plea that no rent is payable by him to the plaintiffs inasmuch as there is no relationship of landlord and tenant between the parties. If, however, there is no dispute as to the amount of rent, the tenant shall deposit in court or with the Rent Controller or pay to the landlord an amount calculated at the rate of rent at which it was last paid in accordance with the provision of Sub-section (1) of Section 17. But where there is such a dispute, the tenant is not allowed to enjoy the tenanted accommodation without payment of any amount to the landlord pending the disposal of the ejectment suit. The legislature by enacting Sections 17 (1) and 17 (2) has protected the interest of the landlord so far as payment of rent by the tenant is concerned during the pedency of the suit for eviction. Accordingly, when there is a dispute as to the amount of rent, the provision of Section 17 (2) casts a duty upon the Court to determine such dispute, provided an application in that regard is made by the tenant together with the deposit of the admitted amount within the period of time, specified in Sub-section (1) of Section 17.

11. Sub-section (2) is divided into two parts. Clause (a) providing for the passing of a preliminary order and Clause (b) for a final order. The question, however, is whether the court under Section 17 (2) determines the contractual rent or 'fair rent' within the meaning of Section 8 of the Act. Fair rent has been defined in Section 8 (1) of the Act. Under Section 10 of the Act, it is the Controller alone who can fix the fair rent of a premises and not the Court under Section 17 (2) of the Act. Section 17 (2) has nowhere used the term 'fair rent', nor does it require the Court to determine fair rent. The rate of rent to be determined by the Court under Clause (b) of Section 17 is the contractual rent. In this connection, we may refer to a decision of the Supreme Court in M. M. Chawla v. J. S. Sethi, (1970) 1 SCC 14. In that case, some of the provisions of the Delhi Rent Control Act, 1958 came up for consideration before the Supreme Court. Section 15(1) and Section 15(3) of the Delhi Rent Control Act are to some extent similar to Sections 17 (1) and 17 (2) respectively of the Act with which we are concerned. Section 15(3) of the Delhi Rent Control Act authorises the Controller to fix an interim rent if there is any dispute as to the amount of rent payable by the tenant pending a proceeding for ejectment. It has been held by the Supreme Court that the dispute, referred to in Section 15(3). is the dispute about contractual rent payable. In view of the said decision of the Supreme Court as also of the fact that the provision of Section 17 (2) has not, either expressly or by necessary implication, authorised the determination by Court of fair rent of the suit premises, such determination, as stated already, being within the exclusive jurisdiction of the Rent Controller, there can be no doubt that under Section 17 (2) the Court determines only the contractual rent.

12. Our attention has, however, been drawn to the expression 'having regard to the provisions of this Act' in Clause (b) of Section 17 (2) by the learned Counsel for the defendant and It is urged that the Court is to determine the rate of rent in accordance with the provisions of the Act, in particular Section 8 (1) of the Act, including Clause (c) thereof. Section 8 (1) of the Act defines 'fair rent' in Clauses (a) to (e) thereof. It is not disputed that Clauses (a) to (d) are not applicable in the instant case. Clause (c) provides as follows:

'Fair rent in relation to any premises means -- (c) where the provisions of Clause (a) or Clause (b) or Clause (c) or Clause (d) do not apply, such rent as would be reasonable having regard to the situation, locality and condition of the premises and the amenities provided therein and where there are similar or nearly similar premises in the locality, having regard also to the rent payable in respect of such premises;

Provided that in fixing such rent, the Controller shall in no case allow an increase of more than 10 per cent over the existing rent, if any. of such premises.'

13. It has been already found that under Section 17 (2), the Court determines the contractual rent. In the instant case, the contractual rent or the rent agreed upon is the prevailing market rent. The Court is, therefore, to decide what the prevailing market rent is. Such decision will be made by the Court having regard to the provisions of the Act. The provision which the Court will have, regard to in determining the contractual rent, which is the. prevalent market rent, is Clause (e) of Section 8 (1) of the Act. Indeed, the learned Judge has decided the prevailing market rent which is the contractual or agreed rent by following the procedure laid down in Clause (e) by taking into consideration the rent payable in respect of similar or nearly similar premises in the locality. The learned Judge came to the finding that the rate of rent was Re. 1/- per sq. ft. and the area of the suit premises being 10,000/ sq. ft., the contractual rent was Rs. 10,000/- per month. On that basis, the learned Judge directed the defendant to pay the sum of Rs. 4,63,322.88 on account of arrears of rent after adjusting the amount deposited in Court by the defendant. In this connection, it is significant to notice that it has been recorded by the learned Judge that the learned Counsel appearing on behalf of the defendant did not seriously contest that having regard to the evidence recorded by the learned Judge, any rate less than Re. 1/- per sq. ft. should be fixed as the prevalent market rent in the area. The learned Counsel for the defendant has not also challenged before us the rate of rent as fixed by the learned Judge. It is, however, contended by him that, it is true the learned Judge has determined the rate of rent in the manner as laid down in Clause (e) of Section 8 (1). but he should have given effect to the proviso to Clause (e). that is to say, he should not have fixed the rent in excess of 10 per cent of the existing rent which is claimed to be Rs. 3,200/- per month. We are afraid, we are unable to accept the contention. The expression 'having regard to' as occurring in Clause (b), of Sub-section (21 of Section 17 of the Act upon which much reliance, has been placed by the learned Counsel for the defendant in support of his contention that the proviso should be given effect to does not, in our opinion, confer a special jurisdiction on the Court proceeding under Section 17 (2) which provision of Section 17 (2) itself does not so confer. If the proviso be given effect to, that will mean that the Court is to fix the fair rent and not the contractual rent. aS soon as it is admitted that the Court under Section 17 (21 does not fix the fair rent but only determines the contractual rent, it would be illogical and contrary to the provision of Section 17 (2) to give effect to the proviso to Clause (e) of Section 8 (1) of the Act. In our opinion, the expression 'having regard to' means that in determining the rate of rent the Court will keep in its mind the provision? of the Act and nothing more. A statutory requirement to 'have regard to' any existing terms or circumstances does not necessarily impose a duty to comply with them (Strouds' Judicial Dictionarv, 4th Edn., Vol. 2. Page 1214). By virtue of the said expression, therefore, the Court is not required to follow and give effect to the provisions of Section 8 of the Act particularly Clause (e) of Section 8 (1) thereof. In that case, the Court cannot be said to determine the contractual rent, but fair rent which, admittedly, is beyond the jurisdiction of the Court under Section 17 (2). In the circumstances, we overrule the contention of the defendant that the rent determined by the learned Judge should not have exceeded by 10 per cent of the existing rent. Further, the existing rent, in this case, is also the prevailing market rent and not Rs. 3,200/- which was the rent in respect of the tenancy that stood determined on the expiry of March 31, 1972. That rent cannot be taken into consideration in determining the contractual rent under the new tenancy even assuming, but holding to the contrary, that Clause (e) of Section 8 (1) is applicable. No other point has been urged on behalf of the defendant.

14. For the reasons aforesaid, this appeal is dismissed. The plaintiffs have also filed a cross-objection. but as it has not been pressed before us it is also dismissed. There, will, however, be no order for costs in the appeal or in the cross-objection.

15. On behalf of the appellant an oral prayer has been made for the grant of a certificate for appeal to the Supreme Court under Article 134A of the Constitution. In our view, the appeal does not involve any question of law of general importance nor do we think that any question needs to be decided by the Supreme Court of India. Accordingly, the prayer for a certificate is disallowed.

Monoj Kumar Mukherjee, J.

I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //