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Sarkar and Brothers (Properties) Ltd. Vs. Anil Kumar Dutta and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy;Property
CourtKolkata High Court
Decided On
Case NumberMatter No. 76 of 1950
Judge
Reported inAIR1952Cal56
ActsWest Bengal Premises Rent Control (Temporary Provisions) Act, 1948 - Sections 7 and 33; ;Constitution of India - Article 226
AppellantSarkar and Brothers (Properties) Ltd.
RespondentAnil Kumar Dutta and ors.
Appellant AdvocateSubimal C. Roy and ; A.N. Sen, Advs.
Respondent AdvocateR.C. Deb and ; S.C. Ghosh, Advs.
Cases ReferredR. v. City of London
Excerpt:
- .....in the months of june and july 1949 the respondents 1 and 2 instituted proceedings before the rent controller, calcutta, for refund of the said sums of rs. 2,500/-and rs. 1,000/- paid by each of them on the ground that they were salami moneys which the petitioner or its predecessor-in-interest was not entitled to receive in law. the two cases were heard together by the rent controller and by his judgment and order dated the 13th of january 1950 the rent controller came to the finding that the claims for the sums of rs. 2,500/- were barred but that the two sums of rs. 1,000/- paid by respondents 1 and 2 were salamis which the petitioner was prohibited from receiving under the provisions of the rent control act 1948 and directed the petitioner to refund the said amounts to respondents.....
Judgment:

Bose, J.

1. This is an application under Article 226 of the Constitution for a Writ in the nature of Certiorari and for other Writs mentioned in the petition, for cancellation or quashing of certain orders passed by the Judge, 4th Bench of the Court of Small Causes, Calcutta, and by the Rent Controller, Calcutta, dated the 4th of August 1950 and 13th of January 1950 respectively and also for direction calling upon them and the other-respondents to forbear from taking steps or from, executing or giving effect to the said orders.

2. On the 13th of January 1948, the respondent No. 1, Anil Kumar Dutta became a lessee under Messrs. Sarkar & Bros, a firm, under an indenture of lease in respect of a shop room situated at premises No. 2, Maharshi Debendra Road, in Calcutta. Under a similar indenture of lease of the same date the respondent Girish Chandra Daw & Sons also became a lessee under the said Messrs. Sarkar & Bros, in respect of another shop room situated in the said premises. Both the leases were for a, period of 30 years commencing from 1-1-1949. Under the said leases the respondents 1 and 2 agreed to pay a sum of Rs. 2,500/- each on or before the execution of the leases and a further sum of Rs. 1,000/- within one month from the date of commencement of the leases towards costs of repairs to the said premises for the purposes of development thereof. A sum of Rs. 2,500/- was. paid by each of the respondents 1 and 2 on or about the 30th of January 1948. On or about 22nd: April 1948 the petitioner company Sarkar Bros. (Properties) Ltd., was incorporated. On the 7th of September 1948 the said leases and all benefits and advantages thereof were assigned in favour of the petitioner company by the said firm of Sarkar & Bros, and the respondents 1 and 2. attorned to the petitioners as tenants in respect of the said shop rooms. On or about 1-1-1949 the respondents 1 and 2 paid the respective sums of Rs. 1,000/- each to the petitioners. In the months of June and July 1949 the respondents 1 and 2 instituted proceedings before the Rent Controller, Calcutta, for refund of the said sums of Rs. 2,500/-and Rs. 1,000/- paid by each of them on the ground that they were Salami moneys which the petitioner or its predecessor-in-interest was not entitled to receive in law. The two cases were heard together by the Rent Controller and by his judgment and order dated the 13th of January 1950 the Rent Controller came to the finding that the claims for the sums of Rs. 2,500/- were barred but that the two sums of Rs. 1,000/- paid by respondents 1 and 2 were Salamis which the petitioner was prohibited from receiving under the provisions of the Rent Control Act 1948 and directed the petitioner to refund the said amounts to respondents 1 and 2 and imposed a fine of Rs. 250/- in each of the cases on the petitioner. Being aggrieved by the said order and judgment of the Rent Controller the petitioner preferred appeals in the Courts of Small Causes, Calcutta. The respondent No. 3, the Judge presiding over the 4th Bench of the Court of Small Causes heard these- appeals and by his judgment and order dated the 4th August 1950 the learned Judge upheld the order and judgment of the learned Rent Controller. In the circumstances the petitioner has moved this Court for the reliefs stated above.

3. It is contended by Mr. Subimal Roy the learned counsel for the petitioner that the findings of the Rent Controller and the Judge of the Small Causes Court that the two sums of Rs. 1,000/-were received by way of Salami are erroneous and the Rent Controller and the learned Judge had no jurisdiction to direct refund of the said sums or to impose any penalty as they have purported to do. The learned counsel has referred me to Ayers Law Lexicon page 1144 and Wilson's Glossary page 730 for the meaning of the word 'salami.' In Mr. Ayer's book 'salami' is stated to be 'A free gift made by way of compliment or in return for a favour.' In Wilson's Glossary it has been pointed out that the word is used in different senses including its being used in the sense of gratuity or offering on receiving a lease or settling for the revenue or on receiving a favour real or implied. Reference was also made to the decisions of this Court reported in 'Birendra Kishore Manikya v. Secy, of State', 32 Cal L Jour 433 at pp. 444 (Bot. 445) and 'Emperor v. Probhat Chandra' : AIR1927Cal793 . These cases illustrate that the word 'Salami' has different connotations in respect of different subjects such as when it is used in case of transfer of holding from one tenant to another or in respect of leases or settlements of properties under the Bengal Tenancy Act or the Transfer of Property Act,

4. The learned counsel has also placed reliance on the case of 'King v. Earl Cadogan', (1915) 3 K B 485, in which it was held that where pursuant to an agreement for lease of licensed premises made before 1910 the lessee has expended a large sum in rebuilding the premises and surrendered un-expired lease of the premises and the lessor has then granted the lease neither the sums so expended nor the surrender value of the prior lease is a 'premium' payable by the lessee within the meaning of Section 2 of the Finance Act 1912. Warrington, L. J., observed as follows 'at page 492':

'The Legislature in expressing its intention has chosen to use two words 'Rent' and 'Premium' both of which in connection with leases have perfectly well-known legal meanings. I need not say anything about the meaning of the word 'rent', but premium as I understand it, used as it frequently is in legal documents, means a cash payment made to the lessor and representing or supposed to represent, the capital value of the difference between the actual rent and the best rent that might otherwise be obtained, It. is a very familiar expression to everybody who knows the forms and powers of granting leases. It is in fact the purchase money which the tenant pays for the benefit which he gets under the lease. Is it possible by any means to give to either of these items which the plaintiff seeks to bring in, the meaning of the word 'premium.' It seems to me that it is quite impossible. The expenditure on the house is not in any sense a premium and still less is the value of the surrendered lease, as to which it seems very doubtful whether, the landlord ever got the benefit of it at all.'

In 'King v. Earl Cadogan', (1915) 1 K B 821, Ridley, J., when dealing with the same case observer as follows '(page 826)':

'Premium means a consideration passing in lieu of rent from the tenant to the landlord, generally speaking upon the grant of a lease. In a sense it is capitalised rent, something that is payable, not as an annual rent, but as a payment down to take the place or part of what: otherwise would be calculated and paid as an annual rent.'

Later on, the same learned judge observed:

'I think it is impossible to say that the money which the tenant agreed to expend in pulling down and restoring and improving these primises is a premium. The landlord did not receive etc..........the tenant also is getting the benefit of that; he is having better premises instead of the old premises. That seems to me to be a totally different thing from a premium.'

5. Mr. Roy submits that the petitioner or its predecessor in interest had to pay under an order of Court a sum of Rs. 55,000/- to the Official Receiver for the purpose of effecting alterations and improvement to the premises in suit. The respondents 1 and 2 by agreeing to contribute Rs, 3,500/-each towards the said cost of repairs and by paying the said sum did not pay the sums by way of salami or premium but as price for purchasing an additional benefit, Viz.; a better and improved premises which they would not ordinarily get if they had simply taken a lease of the premises in. its original condition.

6. The observations made by Warrington L. J. were quoted with approval by Hilboery J, in R. v. Birmingham Rent Tribunal' (1951) 1 All E R 198 at pp. 202-203. and the learned Judge explained what the true legal sense of the word 'Premium' was.

7. Mr. Roy refers to Section 4 of the Rent Control Act 1948 and submits that in the Bengal Act the terms 'Premiums' and 'Salami' are used in the same sense in which the word 'Premium' is understood in the English Rent Control Acts. In my view this contention of the learned counsel is sound, and the payment of Rs. 3,500/- agreed to be paid by the tenants towards the costs of there-repairs and improvements which were in fact effected cannot be said to partake of the character of 'Premium' as the term is understood in it:-: strict legal sense. The words 'In consideration of' in the Indentures of Lease are not conclusive and cannot change the real nature of the payment of the two sums of Rs. 3,500/- by each of the respondents Nos. 1 and 2.

8. In the case of 'Regor Estates Ltd. v. Wright' (1951) 1 All E R 219, where the conditions of the grant of the lease were similarly worded (page 220 bottom) it was held that the payment stipulated was not a contravention of the Rent Control Act. It was pointed out quoting relevant passages from various decisions bearing on the subject that the Court should not confine not to the terms of the lease but is bound to look at the transaction as a whole and consider whether it is within the prohibition of the Acts. The Court is not bound by the vocabulary the parties have chosen to use. The parties may write the agreement in such terms as they please and, if so minded, may attach any label, they wish to the payments agreed to be made by the lease but no lable (can create a fact; a label?) may accurately describe a fact or it may misdescribe it or may help to the solution of a doubtful question of interpretation.

9. The stipulation for payments of Rs. 3,500/-i each by the respondents Nos. 1 and 2 have no relation to the rent of the premises, but it was a personal obligation undertaken in order to secure a I better and improved property for the tenants which they would not otherwise have got by merely taking a lease of the property as it was in its original 'condition before the improvement. It may be that the respondents Nos. 1 and 2 would not have got the shops or the leases if they had not agreed to reimburse the landlord towards the costs of repairs but that does not change the character of the payments and convert them into Salami or premium in the strict legal sense and defined by War-rington, L.J. See in this connection 'R. v. Birmingham Rent Tribunal', (1951) 1 All E R 198 pp. 201 and 202. I hold that the sums of Rs. 3,500/-| paid by respondents Nos. 1 and 2 were not premium or Salami and were not payments in contravention : of the Rent Control Act 1948. Reference was made by Mr. R. C. Deb, to Section 105 of the Transfer of Property Act but it does not throw any further light on the point.

10. It was contended by Mr. R. C. Deb, the learned counsel for the Respondents 1 and 2 that as the Rent tribunal has jurisdiction to determine whether a certain payment was Salami or not and it has decided such question the fact that it has arrived at an erroneous conclusion that a Salami or premium had been paid, does not enable the Court to grant an order of Certiorari. Reliance is placed on 'The King v. Woodhouse', (1906) J2 K B 501 at pp. 514-518. It is clear however from, the provisions of the Rent Control Act (Sections 7 and 33) that the Rent Controller has no jurisdiction to direct refund of money or impose any penalty unless he decides that the money paid or (received was a Salami or premium. This condition precedent must be fulfilled before the Rent Controller can have any jurisdiction to direct refund or impose the fine.

11. In construing the English Rent Control Act 1949 where the jurisdiction was conferred in similar terms to determine the Rent Equivalent, the Courts in England have held that a Writ of Certiorari could be granted if the Rent Tribunal wrongly determined that a certain payment was in the nature of a 'premium', and both the Certificate as to the payment being a 'premium', and the determination as to Rental Equivalent, could be quashed by a Writ of Certiorari. See 'R. v. Pulham, Hammersmith and Kensington Rent Tribunal', (1950) 2 All E R 211 and 'R. v. Barnet Etc. Rent Tribunal', (1950) 2 All E R 216. The case of 'R. Pulham Hammersmith & Kensington Rent Tribunal', (1950-.2 All E R 211), has been explained and reaffirmed by Parker, J., in 'R. v. City of London, etc. Rent Tribunal Ex parte Honig', (1951) 1 All E R 195 at p, 198, while dealing with the question of jurisdiction of Rent tribunals to decide collateral facts in reference brought before the Rent tribunals.

12. In the result the petition succeeds and the Rule is made absolute. The orders of the Judge 4th Bench Small Causes Court, dated the 4th August 1950 in Appeals Nos. 337 and 338 of 1950 and the orders of the Rent Controller dated the 13th January 1950 in cases Nos. 2262A /49 and 2602- A/49 are quashed. The petitioners are entitled to costs of this application to be paid by the Respondents Nos. 1 and 2.


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