S. K. G. Sugar Limited v. D. G. Mehta — 1963 DIGILAW 84 (PAT)

Judgment Tarkeshwar Nath, J. 1. This appeal under Clause 10 of the Letters Patent is directed against an order dated 13-11-1362 so tar it relates to the deposit of a sum of Rs. 75,000.00 by the appellant within a period of six weeks. The facts leading to this appeal are these. The appellant is a public limited company having its registered office in Calcutta. In Company Act Case No. 3 of 1951 with regard to the liquidation of Messrs. Gaya Sugar Mills Ltd. which has been pending in this Court, an order was passed on 7-11-1958 granting lease of the Sugar Mill at Guraru which then belonged to the Gaya Sugar Mills, to the appellant company for a period of seven years beginning from 1-10-1958 and up to 30-9-1965 on terms and conditions specified in the deed of lease dated 29-7-1959. It was provided that duration of the lease shall be subject to any order that would be passed in the reconstruction matter or in the liquidation proceedings and the properties demised in the following manner (vide Clause 3 of the said deed): Year Rent Payment 1958-59 ending 30th September,1959. Rs. 70,000Rs. 35,000 on 1-4-59. Rs.35,000 on 1-6-59. 1953-60 Do1960. Rs. 1,20,000 Rs. 60,000 on 15-1-60. Rs. 60,000 on 1-7-60. 1960-61 Do1961. Rs. 1,40,000 Rs. 70,00 on 15-1-61. Rs. 70,000 on 1-7-61. 1961-62 Do1962. Rs. 1,50,000 Rs. 75,000 on 15-1-62. Rs. 75,000 On 1-7-62. 1962-63 Do1963. Rs. 1,50,000 Rs. 75,000 on 15-1 63. Rs. 75,000 on 1-7-63. 1963-64 Do1964. Rs. 1,50,000 Rs. 75,000 On 15-1-64. Rs. 75,000 On 1-7-64. 1964-65 Do1965. Rs. 1,50,000 Rs. 75,000 On 15-1-65. Rs. 75,000 On 1-7-65 During the period of the continuance of the lease, the Government of Bihar intended to purchase Goraru Sugar Mills and this proposal having been communicated, the learned Judge dealing with this Company Act case directed the Advocate General on 25-10-1960 to indicate by 11-11-1960 the price which the Government was prepared to pay in respect of the said Mill. Later on, the Advocate General suggested that the Government of Bihar was prepared to offer a price for the Mill which would be fixed by the Official Liquidator, a representative of the central Government and a representative of the Bihar Government sitting together. Later on, the Advocate General suggested that the Government of Bihar was prepared to offer a price for the Mill which would be fixed by the Official Liquidator, a representative of the central Government and a representative of the Bihar Government sitting together. On 9-12-1960 an order was passed that the Government should proceed to fix a price but the question as to whether the said price was reasonable would be considered by this Court. On 7-4-1961 there was another order to the effect that the price offered by the Government or Bihar, if reasonable, would be taken into consideration, but meanwhile the Liquidator should proceed as expeditiously as possible with the liquidation proceedings. On 3-10-1961 the learned Judge accepted the offer of the State of Bihar to purchase the said Mill for Rs. 31,20000 but the completion of the transaction was postponed for 5 weeks as the heirs of one of the Directors of the said Company wanted to obtain an order from the appellate Court for staying the sale. After the final disposal of the appeal, the State of Bihar filed an application dated 4-1-1962 praying for a direction to the Official Liquidator to complete the transaction of sale and deliver possession of the Mill to the State by 15-1-1962 so that it would be possible to run the Mill during the current season (1951-62). This application was heard on 5-1-1962 and the learned Judge directed the Official Liquidator to proceed with the completion of the transaction of the sale of the Gaya sugar Mills to the State of Bihar and the lessee (the appellant) was directed to make over possession of the Mill to the State of Bihar before 15-1-1962. The State of Bihar, according to the appellant, commenced crushing of sugar-cane with effect from 25-1-1952. On 13-3-1962 the Official Liquidator submitted a report that the first instalment of the rent amounting to Rs. 75,000.00 which fell due on 15-1-1962 had not been paid and he made a prayer that the appellant should be asked to deposit this amount. The appellant objected to the payment on the ground that there was no crushing of the sugarcane at all either in December 1961 or January 1962 and as such, there was no liability to pay the instalment which fell due on 15-1-l962. The appellant objected to the payment on the ground that there was no crushing of the sugarcane at all either in December 1961 or January 1962 and as such, there was no liability to pay the instalment which fell due on 15-1-l962. This matter was heard by the learned Judge, but his Lord-ship overruled this objection by order dated 13-11-1962 (item 1) and held that the appellant was liable to pay the said instalment. Accordingly, the appellant was directed to deposit that amount along with interest at 1 p. c. p.m. from the due date upto the date of payment, in Court or pay the same to the Official Liquidator within 6 weeks failing which the question would be considered as to whether the appellant should be proceeded against for contempt of Court. Being aggrieved by this order, the appellant has preferred this appeal. 2 Learned counsel for the appellant submitted that it was true that the instalment of Rs. 75.000.00 which ten due on 15-1-1962 had not been paid, but according to him, on the facts and circumstances of the present case the appellant was not at all liable to pay that instalment. He pointed cut that the offer of the State of Bihar to purchase the said. Mill was accepted on 3-10-1961 and on 5-1-62 the Official Liquidator was asked to proceed with the completion of the transaction of sale and to give possession to the State of Bihar before 15-1-1962. In these circumstances, he urged that the appellant was not at all in use and occupation of the said Mill during the crushing season of 1961-62 and as such, the liability to pay the rent could not be fastened upon the appellant. According to the terms of the lease, the appellant agreed to pay a sum of Rs. 1,50,000 as rent for the year 1961-62 (commencing from 1-10-1961 and ending on 30-9-1962) and the responsibility to crush the sugarcane was on the appellant. It appears that at one time the appellant wanted to surrender the lease, but order No. 418 dated 3-10-1961 indicates that a prayer was made on the appellants behalf for per-mission to withdraw the petition, of the lessees for surrender of the Mill and the said permission was granted. It appears that at one time the appellant wanted to surrender the lease, but order No. 418 dated 3-10-1961 indicates that a prayer was made on the appellants behalf for per-mission to withdraw the petition, of the lessees for surrender of the Mill and the said permission was granted. For some reason or other, even if the appellant did not crush the sugar-cane in December 1961 or January 1962, the liability to pay the instalment due on 15-1-1962 remains intact and there is no stipulation in the deed of lease entitling the appellant to withhold the payment of rent. I thus do not find any merit in this contention of the learned counsel. 3. Learned counsel for the appellant next contended that rent had to be paid for the use and occupation of the properties and the lease in the present case having come to an end after the completion of the transaction of sale in favour of the State of Bihar the appellant could at best be held liable to pay rent proportionately for the months of October, November, December 1961 and a part of January 1962 only for the simple reason that we State of Bihar started crushing sugarcane on 25-1-1962. He urged that the instalment of RS. 75,000 which was to be paid on 15-1-1962 should be apportioned and the order to pay the entire amount was not sustainable in law in other words, there was a liability for rent only for the period the lease was not terminated and not for the whole year. According to him, even on equitable grounds the rent should be apportioned and in support of this he referred to the provisions of sec. 36 of the Transfer or Property Act. This section provides that in the absence of a contract or local usage to the contrary, all rents, annuities, pensions, dividends and other periodical payments in the nature of income shall, upon the transfer of the interest of the person entitled to receive such payments, be deemed as between the transferor and the transferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on the days appointed for the payment there-of. The apportionment contemplated by this section is one following the transfer of the interest of the person entitled to receive rent. The apportionment contemplated by this section is one following the transfer of the interest of the person entitled to receive rent. In the present case, there has been no transfer of the interest of the lessor who was entitled to receive rent and as such, the provisions of Sec.36 cannot be attracted. Apart from this, the lease between the lessor and the lessee in this case came to an end by an order of the Court and this fact also has to be kept in view before applying the provisions of Sec.36. I am, therefore, of the view that the rent in the present case cannot be apportioned according to Sec.36 of the Transfer of Property Act. 4. The question which arises for consideration in this appeal is as to whether the appellant was liable to pay the instalment of Rs. 75,000 which fell due on 151--1962. Clause 3 of the deed of lease mentions the various dates on which the various instalments had to be paid each year and the lessee agreed to pay Rs. 75,000 on 15-1-1962 and another Rs. 75,000 on 1-7-1962. The year 1961, for the purposes of payment of rent commenced from 1-10-1961. The terms of the contract are quite clear and precise and there is no ambiguity in it. It is not open to the Court to make a new contract for the parties. One lump rent was fixed for the whole year but it had to be paid on two dates, namely, 15-1-1962 and 1-7-1962. Rent means whatever is lawfully payable or deliverable on account of use and occupation. The heading of Clause 3 of the deed of lease is as follows: "That the lessee shall pay rent for the use and occupation of the properties hereby demised as follows." This heading could have contained the word "rent" only and that itself would have indicated the terms agreed upon by the parties with regard to payment. The word "rent" itself could have indicated that it was to be paid for the use and occupation and in this view of the matter the expression "for the use and occupation" in this heading was not at all necessary. The word "rent" itself could have indicated that it was to be paid for the use and occupation and in this view of the matter the expression "for the use and occupation" in this heading was not at all necessary. Rent does: not accrue from day to day (vide Ram Ranbijaya Prasadi Singh V/s. Harihar Prasad Singh, ILR 16 Pat 184 : (AIR 1937 Pat 237J.) The same view was taken in Satyendra Nath Thakur V/s. Nilkantha Singha, ILR 21 Cal 383. In that case the defendant had purchased the holding on 20-3-1889 but the sale was confirmed on 7-8-1889. The plaintiff instituted the suit on 13-6-1890 against the auction- purchaser, claiming the rent for the tenure for the whole of 1295 (13-4-1889 to 12-4-1890) with cesses and interest The defendant contended inter alia that he was liable to rent only from the date of the confirmation of the sale and not for the whole year. The Subordinate judge had taken the view that the defendant was liable far the arrears of rent from the date of the confirmation of the sale and on that footing he passed a decree in favour of the plaintiff. That decree was upheld on appeal by the District Judge. In second appeal, it was urged on behalf of the plaintiff that the title of the defendant who purchased the tenure at a sale in execution of a decree for rent was perfected by confirmation of the sale before the date when the Assin instalment of rent for the year 1296 fell due and as such, the Courts below ought to have decreed the claim for that instalment in full, instead of giving the plaintiff a decree only for a part thereof which was proportionate to the time intervening between the date of confirmation of the sale and the date when the instalment fell due. Their Lordships held that this contention was correct and it was true that the title of the defendant, the auction purchaser of the tenure in respect of which rent was claimed, became perfected only on the date of the confirmation of sale under Sec.316 of the Code of Civil procedure. Their Lordships held that this contention was correct and it was true that the title of the defendant, the auction purchaser of the tenure in respect of which rent was claimed, became perfected only on the date of the confirmation of sale under Sec.316 of the Code of Civil procedure. But the whole or the instalment in question fell due after that date, It was observed that rent should ordinarily be regarded not as accruing from day to day, but as falling due only at stated times according to the contract of tenancy, or the general law, in the absence of such contract, as laid flown in Section 53 of the Bengal Tenancy Act. The position in the present case, according to the terms of the seed, was that the instalment in question fell due on 15-1-1962, and the liability of the appellant has to be determined on this date, namely, 15-1-1962. I am, therefore, of the view that the learned Judge was quite correct in holding that the appellant was liable to pay a sum of Rs. 75,000 which tell due on 15-1-1962. 5. Learned counsel for the appellant referred to another term of the deed in Clause (3) which provided that in case the lease was cancelled at any time in the on season in accordance with the proviso of Clause 1, the lessee would be liable for the entire rent for the year ending the 30th September following in that off season. He contended that, according to this clause, if the lease was cancelled in the off season the lessee could not escape the payment of rent for the whole year ending on the 30th September. This term, according to him, indicated that the intention of the parties was that if the lease came to an end for some reason or other in the crushing season, then the lessee would not be liable for rent for the period after the termination of the lease. This question does not arise for determination in the present appeal as the lessor is not claiming anything for the period after 25-1-1962 The only question which is relevant for determination in this appeal is as to whether the appellant was liable to pay the instalment which fell due on 15-1-1962 and anything which happened subsequently cannot be the criterion for determining the liability in question. 6. 6. In the result, the appeal fails and is dismissed but without cost. H.Mahapatra, J. 7 I agree.