BENGAL CHEMICALS AND PHARMACEUTICALS LIMITED AND versus AJIT NAIN AND ANOTHER on 9 July 2019

BENGAL CHEMICALS AND PHARMACEUTICALS LIMITEDAND OTHERS

v.

AJIT NAIN AND ANOTHER

(Civil Appeal Nos. 5314-5315 of 2019)

JULY 09, 2019

[R. BANUMATHI AND A. S. BOPANNA, JJ.]

Public Premises (Eviction of Unauthorized Occupants) Act,1971: ss. 2(e), 5(1), 7(2) and (2A) – Eviction of unauthorizedoccupants – On facts, lease between the parties came to an end on31.05.2014 by efflux of time – Terms proposed by appellant forrenewal of lease not agreeable to respondent No.1 – RespondentNo.1 enjoying the property for commercial purpose without paymentof rent since 01.06.2014 – Respondent No.1 declared anunauthorized occupant by the Estate officer and order passed u/ss.5(1), 7(2) and (2A) – Said order quashed by the High Court andthe matter remitted to the Estate Officer for consideration afresh –On appeal, held: From 01.06.2014, respondent No.1 has not paidthe rent except the amount of Rs.25,00,000/- which he has depositedin compliance with the order of the High Court – In the proceedingbefore the Estate Officer, respondent No.1 has not put forth hisdefence; he was only taking adjournments on the ground ofpendency of the appeal before the High Court – Sufficientopportunity has to be given to respondent No.1 – Thus, the order ofthe High Court remitting the matter to the Estate Officer is maintained,however, subject to respondent No.1 paying the reasonable amountas damages by way of interim measure for use and occupation ofthe premises.

Disposing of the appeals, the Court

HELD : 1.1 The lease came to an end on 31.05.2014 byefflux of time. According to respondent No.1, the meeting washeld on 20.05.2014 in the office of appellant No.1 and there wasdiscussion on the question of renewal of lease. It is stated thatappellant No.1 has forwarded a letter on 30.05.2014 to respondentNo.1 for further renewal of lease subject to the acceptance of the

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Aterms, from June 20, 2014, the rent of the covered space as wellas the open space shall be at Rs.50/- per sq. ft. subject to increaseof 10% for every two years; and the tenure of the agreement willbe three years and thereafter, the agreement may be renewedfor further period upon mutual discussion between the parties.The terms proposed by appellant No.1 in the said letter datedB30.05.2014 was not agreeable to respondent No.1. According torespondent No.1, as per the terms of the lease, the rent payablewas only Rs.1,42,656/- per month. [Para 15] [1212-D-F]

1.2 From 01.06.2014, respondent No.1 has not paid the rentexcept the amount of Rs.25,00,000/– which he has deposited inCcompliance with the order of the High Court dated 17.01.2018.In the proceeding before the Estate Officer, respondent No.1has not put forth his defence; respondent No.1 was only takingadjournments on the ground of pendency of the appeal beforethe High Court. Sufficient opportunity has to be given toDrespondent No.1 and the order of the High Court remitting thematter to the Estate Officer therefore, is maintained, however,subject to respondent No.1 paying the reasonable amount asdamages by way of interim measure for use and occupation.Respondent No.1 is in occupation of land and building measuring 6500 sq. ft. consisting of three storied building plus open spaceEof 2575.13 sq. ft. Without prejudice to the contentions of boththe parties, respondent No.1 is directed to pay an amount ofRs.2,50,000/- per month as damages for use and occupation fromJune, 2014 till May, 2018. From June, 2018, respondent No.1shall pay an amount of Rs.3,00,000/- per month as damages andFcontinue to pay the same till consideration and disposal of thematter afresh by the Estate Officer. The arrears payable byrespondent No.1 (after deducting Rs.25,00,000/- alreadydeposited by respondent No.1 in the High Court) shall be paid toappellant No.1 in three equal installments. [Para 16, 17][1213-A-E]GCIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5314-5315 of 2019.

From the Judgment and Order dated 10.12.2018 and 19.12.2018of the High Court at Calcutta in M.A.T. No. 586 of 2018.

Sarad Kumar Singhania, Ms. Supriya R. Saha, Ms. RashmiHSinghania, Advs. for the Appellants.

BENGAL CHEMICALS AND PHARMACEUTICALS LIMITEDv. AJIT NAIN

Biswaroop Bhattacharya, Lokenath Chatterjee, Jaydeb Ghorai,Jeetender Gupta, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. BANUMATHI, J. 1. Leave granted.

2. These appeals arise out of the orders of the High Court ofCalcutta in MAT No.586 of 2018 dated 10.12.2018 and 19.12.2018 inand by which the High Court has quashed the order dated 01.10.2018passed by the Estate Officer under sub-section (1) of Section 5 and sub-sections (2) & (2A) of Section 7 of the Act, 1971 in the applicationbearing CAN 9489 of 2018 and remitted the matter to the concernedEstate Officer for consideration of the matter afresh.

3. Brief facts which led to filing of these appeals are as follows:- Appellant No.1 is the owner of a limited Company, Governmentof India Enterprises known as Bengal Chemicals and PharmaceuticalsLtd. situated at No.168, Maniktala Main Road, PS Phoolbagan,Kolkata – 700 054. The property in question is a public premiseswithin the meaning of premises as contemplated under the provisions ofSection 2(e) of the Public Premises (Eviction of Unauthorized Occupants)Act, 1971 (Act No.40 of 1971).

4. Respondent No.1 was a lessee under appellant No.1 in respectof 6500 sq. ft., a three storied building along with an open spacemeasuring 2575.13 sq. ft. in the said premises at No.168, ManiktalaMain Road in terms of the lease agreement dated 21.08.1995 commencingon and from 01.06.1993 at the initial lease rent of Rs.55,000/- per month.Respondent No.1 has been running a Montessori School in the saidbuilding known as Harvard House and the entire schedule premises wasleased out to respondent No.1-Ajit Nain in terms of the aforesaid leaseagreement for 21 years.

5. As per terms of the lease dated 21.08.1995, it was specificallylaid down that the lease rent will be enhanced at the rate of 10% everytwo years until expiry of the period of the lease. The aforesaid period oflease expired by efflux of time on 31.05.2014. Before expiry of leaseperiod at the request of the respondent, a meeting was held on 20.5.2014in the office of the appellant at Calcutta to consider the renewal oflease.

6. In response to letter dated 28.05.2014 of respondent No.1,appellant No.1 issued a letter dated 30.05.2014 proposing new terms A

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Aand conditions for the extension of lease period. The communicationbetween the parties led to the earlier round of litigation in WPNo.28002(W) of 2017 before the High Court of Calcutta and the samewas dismissed vide order dated 22.11.2017 by the Single Judge.

7. Respondent No.1 challenged the order dated 22.11.2017 in MATBNo.2023 of 2017 before the High Court of Calcutta. The DivisionBench disposed of the appeal by order dated 17.01.2018 with the directionthat Union of India will appoint other person as the Estate Officer inplace of the present Estate Officer and respondent No.1 to depositRs.25,00,000/- towards damages with appellant No.1 within five weeks.The court also directed respondent No.1 to pay the electricity charges.CIn compliance of the order of the High Court, respondent No.1 hasdeposited Rs.25,00,000/- and also arrears of electricity charges. Inpursuance of the order of the Division Bench dated 17.01.2018, ShriManotosh Bandhopadhaya, Assistant General Manager (QA) of appellantNo.1 was appointed as new Estate Officer vide Gazette NotificationDNo.58017/01/2018-PSU dated 09.03.2018 of Government of India.

8. The Estate Officer issued show cause notice to respondentNo.1 on 23.05.2018 in pursuance of clause (b)(ii) of sub-section (2) ofSection 4 of the Public Premises (Eviction of Unauthorized Occupants)Act, 1971 calling upon him to appear before the Estate Officer and alsoEcalled upon respondent No.1 to pay the damages with interest. The EstateOfficer granted number of hearings to respondent No.1 viz. 04.06.2018,15.06.2018.

9. Being aggrieved, respondent No.1 challenged the notice dated23.05.2018 and filed a second writ petition being WP No.7934(W) ofF2018 before the High Court of Calcutta. The Single Judge of the HighCourt vide order dated 19.06.2018 dismissed the writ petition by extendingthe time to file the show cause to the notices.

10. Being aggrieved by the dismissal of the writ petition, respondentNo.1 filed an appeal in MAT No.586 of 2018. No stay was granted byGthe Division Bench in the said appeal nor any direction was issued bythe High Court not to proceed with the hearing of the eviction proceedings.As there was no stay granted by the Division Bench in MAT No.586 of2018, the Estate Officer proceeded with the eviction proceedings. TheEstate Officer granted as much as five further hearings dated 29.06.2018,17.07.2018, 27.07.2018, 07.08.2018 and 21.08.2018. The Estate OfficerH

BENGAL CHEMICALS AND PHARMACEUTICALS LIMITEDv. AJIT NAIN [R. BANUMATHI, J.]

vide order dated 01.10.2018 passed the eviction order directing respondentNo.1 to vacate the premises within a week from the date of the evictionorder. By the said order dated 01.10.2018, the Estate Officer assessedthe damages and interest at Rs.4,61,63,624/- payable by respondent No.1(Damages Rs.3,30,33,000/- plus interest at Rs.1,31,30,624/-).

11. Being aggrieved by the order of eviction, respondent No.1filed an application being CAN No.9489 of 2018. The High Court videimpugned order set aside the order dated 01.10.2018 passed by the EstateOfficer and remitted the matter to the Estate Officer to consider thematter afresh in accordance with law. Being aggrieved, appellant No.1-Bengal Chemicals and Pharmaceuticals Limited has filed these appeals.Respondent No.1 entered appearance and filed a detailed counteraffidavit.

12. We have heard Mr. Sarad Kumar Singhania, learned counselappearing for the appellants and Mr. Biswaroop Bhattacharya, learnedcounsel appearing for respondent No.1. We have perused the impugnedjudgment and other materials on record and carefully considered thematter.

13. The learned counsel appearing for the appellants has submittedthat respondent No.1 is running a school in the premises comprising of6500 sq. ft. with open space measuring 2575.13 sq. ft. and respondentNo.1 is enjoying the property for commercial purpose of running theschool since 01.06.2014 without payment of any rent which is calculatedapproximately Rs.4.61 crores as assessed by the Estate Officer whichis payable to appellant No.1. It was submitted that since respondentNo.1 has not paid the rent, the Estate Officer rightly concluded thatrespondent No.1 is an unauthorized occupant and passed the order underSection 5(1) and sub-section (2) and (2A) of Section 7 of the Act. Itwas further urged that respondent No.1 has the right to file an appealagainst the order dated 01.10.2018 passed by the Estate Officer underthe provisions of Section 9 of the Act only before the Appellate Courtthat is the District Judge of the district and the writ petition filed is notmaintainable.

14. The learned counsel appearing for respondent No.1 hassubmitted that by taking judicial notice of the fact of involvement of theprevious Estate Officer in the eviction proceedings, the High Court hasrightly set aside the order of eviction dated 01.10.2018 passed by the A

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AEstate Officer. It was submitted that no sufficient opportunity wasafforded to respondent No.1 and the quantum of damages fixed by theEstate Officer is arbitrary and therefore, respondent No.1 is justified inchallenging the order of the Estate Officer before the High Court in thepending appeal. The learned counsel further submitted that a rent ofRs.21/- per sq. ft. cannot all of a sudden become Rs.50/- per sq. ft.Bwithout any rhyme or reason and respondent No.1 has always beenready to pay a reasonable rent and not a rent which is unilaterally imposedon him. It was further submitted that in compliance with the order of theHigh Court dated 17.01.2018, respondent No.1 has depositedRs.25,00,000/- and also paid the electricity charges which shows theCbona fide of respondent-tenant.

15. In the nature of the order which we propose to pass, we arenot inclined to go into the merits of the rival contentions of the parties.Admittedly, the lease has come to an end on 31.05.2014 by efflux oftime. According to respondent No.1, the meeting was held on 20.05.2014Din the office of appellant No.1 and there was discussion on the questionof renewal of lease. It is stated that appellant No.1 has forwarded aletter on 30.05.2014 to respondent No.1 for further renewal of leasesubject to the acceptance of the terms:- (i) from June 20, 2014, the rentof the covered space as well as the open space shall be at Rs.50/- persq. ft. subject to increase of 10% for every two years; (ii) the tenure ofEthe agreement will be three years and thereafter, the agreement may berenewed for further period upon mutual discussion between the parties.The terms proposed by appellant No.1 in the said letter dated 30.05.2014was not agreeable to respondent No.1. According to respondent No.1,as per the terms of the lease, the rent payable was only Rs.1,42,656/-Fper month.

16. Be that as it may, admittedly, from 01.06.2014, respondentNo.1 has not paid the rent except the amount of Rs.25,00,000/- whichhe has deposited in compliance with the order of the High Court dated17.01.2018. In the proceeding before the Estate Officer, respondentGNo.1 has not put forth his defence; respondent No.1 was only takingadjournments on the ground of pendency of the appeal before the HighCourt in MAT No.586 of 2018. In our view, sufficient opportunity has tobe given to respondent No.1 and the order of the High Court remittingthe matter to the Estate Officer therefore, has to be maintained, however,subject to respondent No.1 paying the reasonable amount as damagesH

BENGAL CHEMICALS AND PHARMACEUTICALS LIMITEDv. AJIT NAIN [R. BANUMATHI, J.]

by way of interim measure for use and occupation. As pointed outearlier, respondent No.1 is in occupation of land and building measuring6500 sq. ft. consisting of three storied building plus open space of 2575.13sq. ft. in Maniktala Main Road, Kolkata. Without prejudice to thecontentions of both the parties, we direct respondent No.1 to pay anamount of Rs.2,50,000/- per month as damages for use and occupationfrom June, 2014 till May, 2018. From June, 2018, respondent No.1 shallpay an amount of Rs.3,00,000/- per month.

17. The order of the High Court dated 10.12.2018 corrected bythe order dated 19.12.2018 passed in MAT No.586 of 2018 remitting thematter to the Estate Officer for consideration of the matter afresh inaccordance with law is affirmed. These appeals are disposed of withthe following directions and observations:-

(i) Respondent No.1 shall pay the amount of Rs.2,50,000/- permonth as damages for use and occupation of the premisesfrom June, 2014 till May, 2018. From June, 2018, respondentNo.1 shall pay the amount of Rs.3,00,000/- per month asdamages and continue to pay the same till consideration anddisposal of the matter afresh by the Estate Officer;

(ii) The arrears payable by respondent No.1 (after deductingRs.25,00,000/- already deposited by respondent No.1 in theHigh Court) shall be paid to appellant No.1 in three equalinstallments. The first installment is payable on or before31[st] August, 2019. The next two installments are payable bythe end of October, 2019 and December, 2019 respectively;

(iii) The damages stated above is tentative. The Estate Officerafter providing opportunity to both the parties shall determinethe appropriate quantum of damages and the paymentpresently made shall remain adjustable either way, dependenton the quantum to be decided;

(iv) After respondent No.1 deposits the entire arrears, the EstateOfficer shall take up the matter and afford sufficientopportunity to both the parties and determine the quantum ofdamages payable and pass appropriate orders in accordancewith law.

(v) The appellant is permitted to withdraw the amount ofRs.25,00,000/- (Rupees Twenty Five Lakhs Only) deposited A

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Aby respondent No.1 forthwith. Appellant No.1 is alsopermitted to withdraw the electricity charges deposited byrespondent No.1, if not already withdrawn.

(vi) On deposit of the first installment of arrears, appellant No.1shall ensure supply of water if it has been disconnected asBalleged by respondent No.1.

(vii) On failure to deposit any one of the installments of arrearsor the damages payable for use and occupation for everymonth, respondent No.1 shall forfeit the right of his defenceand consideration. In such an event, the Estate Officer shallCrestore the proceedings and shall pass an order of eviction inaccordance with law. Respondent No.1 shall in such eventnot be heard to make out any grievance relating to the evictionorder; and

(viii) Parties shall bear their respective costs.

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Nidhi Jain

Appeals disposed of.

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