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1980 DIGILAW 303 (CAL)

Corporation of Calcutta v. Western India Theatres Ltd.

1980-08-01

PADMA KHASTGIR

body1980
JUDGMENT 1. This suit has been filed by the Corporation of Calcutta for a decree for possession of the premises in suit being No. 5A, Chowringhee Place, Calcutta by evicting the defendant therefrom and also for a decree for mesne profits, interest, cost and other incidential reliefs. 2. The plaintiff is the owner of the land and building comprising in the premises No. 5A, Chowringhee Place, Calcutta. The defendant under an agreement with the plaintiff carried on business of exhibiting Cinematographic Films at the said premises under the name and style of "Minerva Cinema" prior to 31st January, 1974. The defendant wanted a fresh lease of the said premises from the plaintiff and in consideration of such request of the defendant, the plaintiff by letter dated 24th January, 1974 signed by Officiating Chief Valuer and Surveyor of the plaintiff offered to the defendant a fresh lease of the said premises for a term of 5 years from the 1st February, 1974 on inter alia the following terms and conditions i.e. (a) that the defendant will have to pay the monthly rent of Rs. 5500/-. (b) That defendant will pay Rs. 33000/- equivalent to six months monthly rent (c) The defendant would be responsible for the fire Insurance of the building. d) The defendant would abide by other terms and conditions of the lease which may be stipulated by the Chief Law Officer in the instrument of lease to be executed by 1he parties. The defendant by letter dated 25th January and by telegram dated 24th January, 1974 agreed to accept the offer contained in the said letter of the plaintiff. In view of such acceptance the plaintiff allowed the defendant to continue in possession and carry on the said business subject to execution of the lease incorporating the terms acceptable by the plaintiff. The plaintiff also received a sum of Rs. 33000/- in terms of the said agreement on 24th January 1974. On 28th of March, 1974 the Chief Law Officer of the plaintiff forwarded to the defendant a draft agreement for approval in order that the same may be engrossed finally and executed by and between the parties and registered in accordance with the appropriate provision of law. 33000/- in terms of the said agreement on 24th January 1974. On 28th of March, 1974 the Chief Law Officer of the plaintiff forwarded to the defendant a draft agreement for approval in order that the same may be engrossed finally and executed by and between the parties and registered in accordance with the appropriate provision of law. But the defendant instead of approving the same sent back under a covering letter dated 26th May, 1974, the said draft lease with extensive alterations in the terms and conditions given by the plaintiff which completely charged the basic terms, which were not acceptable to the plaintiff. 3. Under the circumstances the plaintiff contended that there has been no valid lease by and between the parties, hence the defendant has no right to remain in possession of the property of the alternative it is the plaintiffs case that although rents have been accepted by the plaintiff and by reasons of that it is contended by the defendant that a monthly tenancy has been created or came into existence in favour of the defendant, then in that event the plaintiff has terminated the said tenancy by serving a notice dated May 10, 1978 whereby the Chief Law Officer on behalf of the plaintiff has called upon the defendant, to quit and vacate the said premises and to deliver unto the plaintiff vacant and peaceful possession after expiry of period of notice as mentioned in the letter. The defendant received the said notice on May, 1978 in its Calcutta Office and on May 23, 1978 at its Bombay Office. 4. It is a plaintiffs case theft as the defendant has failed to quit and vacate and deliver the vacant and peaceful possession of the said property after the expiry of the period as mentioned in the notice, the defendant has become a trespasser and is not entitled to any protection against the eviction under the law. As the defendant is continuing in wrongful possession the plaintiff claims to be entitled to mesne profits at the rate of Rs. 1000/- per diem from 4th of June, 1978 until recovery of possession is given or delivered up. 5. As the defendant is continuing in wrongful possession the plaintiff claims to be entitled to mesne profits at the rate of Rs. 1000/- per diem from 4th of June, 1978 until recovery of possession is given or delivered up. 5. It is the defendants case that the defendant has been carrying on the business under the name and style of ‘Minerva Cinema’ at the said premises for over 10 years and as a new lease was granted in favour of the defendant, the cinema stated functioning on and from 28th February, 1969 on the terms and conditions as contained in the said lease. The defendant also paid rent at the rate of Rs. 5000/- per month and the defendant paid a sum of Rs. 1,30,000/- for the period of 4 years between March, 1965 to February, 1969. The defendant, in addition, to that has spent a sum of Rs. 5,00,000/- of renovating the said Cinema and building. The said agreement and/or arrangement entered into by and between the parties came to an end on 31st January, 1974. During the pendency of the previous lease there was a discussion between Mr. B.C. Ganguly, the then Administrator of the plaintiff and Mr. D. Daruwalla on behalf of the defendant and the said discussion was put into writing and recorded in the letters dated 9th November, 1973 and 18th January, 1974 respectively. It would appear from the said letters that the period of lease agreed upon was for 10 years and not 5 years and the Administrator by his order dated 21st January, 1974 sanctioned a fresh lease in favour of the defendant for the period of 5 years with effect from the 1st February, 1974. The granting of the said lease was communicated by the Officiating Chief Valuer and Surveyor to the defendant Pursuant to the discussion which was held at the office of the Administrator, Corporation of Calcutta in November, 1973 and January, 1974, the defendant by its letter dated 28th May, 1974 proposed certain variations, modification and/or alteration to the provisions of the said draft lease. The plaintiff by its letter dated 4th of July, 1974 contended that they are not agreeable to accept any modifications and/or alterations. The plaintiff by its letter dated 4th of July, 1974 contended that they are not agreeable to accept any modifications and/or alterations. It is the defendant's case that in March 1975 the then Administrator, Corporation of Calcutta on behalf of the plaintiff agreed to grant lease for 5 years certain with an option for a further lease of 5 years, on the same term; and conditions. The Chief Valuer and Surveyor of the plaintiff by letter dated 31st July, 1975 informed the defendant the various terms and conditions on which such lease would be granted. The defendant contended that by letter dated 2nd September, 1975 the plaintiff has wrongfully rejected the proposals for modification and/or alterations of the terms and conditions of the lease which were only suggested on the basis of the agreement and/or understanding arrived at by and between the parties. According to the defendant there is a valid and binding lease in its favour, moreover the defendant has acquired an equitable right to remain in possession. Hence the defendant is not under any obligation to deliver vacant possession of the premises to the plaintiff. On the contrary it is plaintiffs who after agreeing to execute a lease in favour of the defendant for a period of 10 years have illegally purported to fall back from the said arrangement. It is the defendant's further case that by according the said sum of Rs. 1,30,000/-, and Rs. 33,000/- by allowing me defendant to renovate the said building at the cost of Rs. 5,00,000 and also by accepting monthly rent from the defendant, a tenancy has been created in favour of the defendant, Hence the purported notice to quit dated 10th May, 1978 is wrongful, illegal and invalid. Moreover, the said notice is invalid, illegal and contrary to the provisions of law. This suit has been filed against the defendant describing the defendant as ‘Western India Theatre Ltd.’ Whereas the defendant is a corporated body and firm carrying on business under the name and style of ‘Western India Theatres Ltd.’, so is not bound to comply with the notice and no decree can be passed against the defendant in the present name. The defendant is entitled to protection under S 53(A) of the Transfer of Property Act. The defendant is entitled to protection under S 53(A) of the Transfer of Property Act. In any event the defendant can not be treated as a trespasser hence it is the defendant's case that the suit should be dismissed with costs. 6. The following issues were raised and settled : - 1. Whether the notice dated 10/11.5.1978 is valid? 2. (a) Was a monthly tenancy created or come into existence by reason of payment of rent by the defendant to the plaintiff and acceptance of the same by the plaintiff? (b) If so, was it duly determined by the letter dated 10/11.5.1978 ? 3. Is the defendant entitled to protection under S. 53A of the Transfer of Property Act? 4. Is the suit maintainable ? 5. To what relief, if any, is the plaintiff entitled ? 7. The Corporation of Calcutta is not governed by the various provisions of the West Bengal Premises Tenancy Act as said Act has been specifically made not applicable to official bodies. A tenancy is a contractual relationship and after the lapses of such relationship the tenant remains as a statutory tenant under the West Bengal Premises Tenancy Act. Such protection is not available to the defendant as the Corporation of Calcutta is not governed by the provision by the West Bengal Premises Tenancy Act. It would appear from the facts of this case that it is an admitted fact that the lease that existed by and between the parties expired on 31st January, 1974. Thereafter no fresh formal lease has been executed in accordance with the provision of Ss. 110 and 111 of the Calcutta Municipal Act. Under those circumstances neither giving nor receiving of rent can create a fresh lease in favour of the defendant. It is the case of the Corporation of Calcutta that the rent if any, has been accepted in accordance with the terms and conditions as contained in the letter dated 24th January, 1974. The intention of he Corporation of Calcutta was to grant the lease for 5 years, strictly on the terms and condition, as offered by the Corporation of Calcutta and on that basis any rent given by the defendant has been accepted by the Corporation of Calcutta. The intention of he Corporation of Calcutta was to grant the lease for 5 years, strictly on the terms and condition, as offered by the Corporation of Calcutta and on that basis any rent given by the defendant has been accepted by the Corporation of Calcutta. When the said terms and conditions offered by the Corporation of Calcutta have not been accepted by the defendant, there could not be any fresh lease in favour of the defendant. Mere giving and acceptance of rent could not create a monthly tenancy favour of the defendant as the defendant is not entitled to take any advantage of the provisions of the West Bengal Premises Tenancy Act. So far the provision of the Transfer of Property Act is concerned no monthly lease has been created and even if, so created it could be terminated by giving 15 days notice, In fact such notice has been given to the defendant and on the expiry of the notice period the relationship between the plaintiff and the defendant as lessor or lessee has lapsed. The defendant is also not entitled to take any protection under s. 53A of the Transfer of Property Act, as the defendant has refused to accept the terms and conditions as made out by the Chief Law Officer of the Corporation of Calcutta. As it is often said that the provision of S. 53A of the Transfer of Property Act is always used as a shield and not as a sword. 8. Moreover if such monthly tenancy under the Transfer of Property Act has been duly terminated under the provision of Transfer of Property Act no protection can be given under S. 53A of the Transfer of Property Act. It is needless to point out that a body corporate must operate within the four corners of the statute under which such body corporate has been created, there could not have been any valid contract binding on the Corporation of Calcutta unless the contract was entered into strictly in accordance with the provision of Ss. 110 and 111 of the Calcutta Municipal Act 1951. Hence any arrangement that may have been arrived at by the then Administrator or the Chief Valuer on behalf of the Corporation of Calcutta without the confirming or following the provision of the said Act, is not binding on the Corporation of Calcutta. 110 and 111 of the Calcutta Municipal Act 1951. Hence any arrangement that may have been arrived at by the then Administrator or the Chief Valuer on behalf of the Corporation of Calcutta without the confirming or following the provision of the said Act, is not binding on the Corporation of Calcutta. In case of a body corporate like Corporation of Calcutta mere acceptance of rent would not be sufficient to create a tenancy in favour of the defendant until and unless the various provisions regarding entering into contract is complied with by the parties. Under s. 110(1)(a) of the said Act, the Commissioner alone can enter into a contract and no power has been granted for the same to the Administrator as also to the Valuer. Under S 111(4) it has been specifically mentioned that unless the contract is made as provided under the Act it shall not be binding on the Corporation of Calcutta. 9. A similar question for determination whether a contract is binding on the Corporation of Calcutta arose in the matter of Swapan Kumar Guha v. State of West Bengal, Matter No. 388 of 1978 where this Court held that as the provisions of the Calcutta Municipal Act had not been complied with, there was no valid and binding contract by and between the parties. From the facts as disclosed in this case, it would appear that it was the intention of the parties to enter info a tenancy for 5 years. There was no scope for creation of any tenancy on monthly basis. The payment of rent at the rate of Rs. 5000/- pet month as also payment of Rs. 33000/- as advance were made in terms of the offer made by the Corporation of Calcutta. Hence the defendant cannot be allowed to take advantage of the same and contend that they are not bound by the other terms of the offer made by the Chief Law Officer of the Corporation of Calcutta. 10. In the case report in AIR 1950 Calcutta, page 23 a Division Bench of this High Court held "so far as the transferee is concerned, S. 53A confers a right on him to the extent that it imposes a bar on the transferor. 10. In the case report in AIR 1950 Calcutta, page 23 a Division Bench of this High Court held "so far as the transferee is concerned, S. 53A confers a right on him to the extent that it imposes a bar on the transferor. But this is only a right to protect his possession against any challenge to it by the law contrary to the tenor of the contract of the instrument of transfer." 11. In the case reported in AIR 1977 Supreme Court page 2425 (M/s. Technicians Studio Pvt. Ltd. v. Smt. Lila Ghosh & Ors) it has been held: “it is well settled that S. 53A confers no active title on the transferee in possession, it only imposes a statutory bar on the transferor. Thus a person who is let into possession on the strength of a void lease does not acquire any interest in the property but gets under S. 53A only a right to defend his possession. As the section says, this right is subject to the condition that the transferee has performed or is willing to perform his part of the contract. This does not mean however that there cannot be a relationship of landlord and tenant in any case where the transferee has taken possession of the property under a void lease or in part performance of a contract and is entitled to protection under S 53A of the Transfer of Property Act. Such a view would be incorrect and encourage attempts to circumvent the protection of the Rent Acts given to the tenants. Whether the relationship of landlord and tenant exists between the parties depends on whether the parties, intended to create a tenancy, and the intention has to be gathered from the facts and circumstances of the case. It is possible to find on the fact of a given case that payments made by a transferee in possession were really not in terms of the contract but independent of it, and this might justify an inference of tenancy in his favour. The question is ultimately one of fact.” 12. From the facts indicated above it would appear that the defendant was in possession under a lease from the 28th February, 1969 upto 31st January, 1974 when the said lease expired. The question is ultimately one of fact.” 12. From the facts indicated above it would appear that the defendant was in possession under a lease from the 28th February, 1969 upto 31st January, 1974 when the said lease expired. Thereafter the parties agreed to enter into a fresh agreement for grant of a lease for a period of 5 years and in pursuance of the proposed agreement subject to finalisation and execution of the formal Deed of Lease, the defendant paid the rent at the rate of 5000/- which has been accepted by the plaintiff and also a sum of Rs 33.000/- as advance. However, it would appear that the defendant did not agree to the term, as offered by the Corporation of Calcutta through its Law Officer. Hence on 10th May, 1978 a notice to quit was served on the defendant which was received by the Calcutta Office of the defendant on 19th May, 1978 and by the Bombay Office on 23rd May, 1978. 13. Mr. S.K. Gupta, appearing on behalf of the defendant submitted that toe notice served on behalf of the Corporation of Calcutta is bad and not in accordance with the provision of S. 106 of Transfer of Property Act and the said notice also suffers from ambiguities. He further submitted that 15 clear days notice have not been given in that respect, he craved reference to the case reported in AIR 1965 Supreme Court page 101, he submitted that the notice is bad as it did not expire with the end of the month. Hence the said notice is bad in law, ineffective and could not put the relationship of the landlord and tenant to an end. According to Mr. Gupta the tendering and acceptance of rent has created a monthly tenancy in favour of the defendant which could not be terminated by an invalid notice. Hence the present suit is liable to be dismissed with costs. 14. It would appear that from the pleading as made out in the written statement no case of any monthly tenancy has been made by the defendant but the defendant has justified that it is entitled to a lease for the period of 5 years with adoption of a further period of tenancy for 5 years. Such pleading has been made in paragraph 10 of the written statement. Such pleading has been made in paragraph 10 of the written statement. Hence from the facts it would appear that the intention of the parties was to create a lease for 5 years and not a monthly tenancy. Moreover the various provision of the Transfer of Property Act more so S. 106 of the Transfer of Property Act is subject to the local laws. Hence the provision of the Calcutta Municipal Act are applicable in this case. Until and unless the various provision of the Calcutta Municipal Act are strictly complied with, no tenancy right exists by and between the parties, Section 106 of the Transfer of Property provides "in the absence of a contract or local law or usage to the contrary" in the opening words of the said section hence the defendant cannot take the advantage of that section. In view of the agreement that was proposed to be finalised by and between the parties, it was the intention of the parties to create a lease for 5 years and not monthly tenancy. Moreover as indicated earlier the local law i.e. West Bengal Premises Tenancy Act will (not?) apply in the case of Corporation of Calcutta. The various provisions of the Calcutta, Municipal Act make it abundantly clear that such tenancy could not be created by the Corporation of Calcutta in favour of the defendant by mere acceptance of rent. Hence I am of the view that the defendant is not entitled to take any advantage of the said provision. Hence in view of the fact that no monthly tenancy has been created in favour of the defendant under the provisions of Transfer of Property Act any notice purported to terminate the said monthly lease even if defective, in the sense that the tenant has not been given time to vacate the premises on the expiry of 15 days or on the expiry of the monthly tenancy at the end of month would not make any difference in this particular case. The presumption of monthly tenancy can always by rebutted by local law or express contract made to the contrary. The provision of this section regarding notice to quit can only apply to cases where the parties are not regulated by their agreement. 15. Hence the defendants submissions that the notice has been addressed to a wrong name is also of no avail to the defendant. The provision of this section regarding notice to quit can only apply to cases where the parties are not regulated by their agreement. 15. Hence the defendants submissions that the notice has been addressed to a wrong name is also of no avail to the defendant. It is also the defendant's case in the written statement that pursuant to the discussion between the then Administrator of the plaintiff and the defendant representatives it was agreed by and between the parties that the lease would be for a period beyond 5 years. The monthly tenancy was never in the contemplation of the parties. It is also the defendant's case that the then Administrator by order dated 21st January, 1974 sanctioned a fresh lease for a period of 5 years with effcct from 1st February, 1974. The defendant pleaded that there was an oral agreement and or understanding on the representations of the then Administrator that there would be an option of further lease for 5 years, such oral undertaking cannot be held to be binding on the Corporation of Calcutta. 16. The Corporation of Calcutta cannot act on any understanding or assurance given by any representatives of the Corporation of Calcutta. The acceptance of Rs. 1,30,000/- premia and Rs. 33,000/- was done on the definite agreement that the defendant would agree and abide by the terms agreed upon by and between the parties. It was never the intention of the patties that any monthly tenancy would be created by acceptance of such rent. The defendant by remaining in possession is not entitled to any protection under the law, as equitable protection under S. 53A of the Transfer of Property Act is only available to a party who complies on his part with the terms of the agreement. Even the documents on which the defendant has relied on i.e. the letter dated 24th January, 1974 speaks of a lease for 5 years and not of a monthly tenancy and under Clause 4 of the said letter it is specifically provided that the defendant will agree to the terms and conditions as would be stipulated by the Law Officer in the agreement. In the last paragraph of the said letter it has been mentioned that only if, the defendant agreed to the said terms the defendant could deposit the premium and the monthly rent. In the last paragraph of the said letter it has been mentioned that only if, the defendant agreed to the said terms the defendant could deposit the premium and the monthly rent. Hence such deposits as also acceptance of the premium and the monthly rent is subject to the conditions as laid down by Corporation of Calcutta. 17. From the correspondence that has been disclosed in this proceedings it would indicate that it is the defendant who tried to modify the terms and introduce new clauses which were unacceptable to the Corporation of Calcutta. Even in answer to the letter given by the Chief Law Officer, Corporation of Calcutta the defendant has admitted that he tried to modify the terms as given by the Law Officer of the Corporation of Calcutta. The draft lease which was forwarded to the defendant for execution speaks of lease for 5 years and not of any monthly tenancy. In view of all these facts and in view of the law governing the Corporation of Calcutta. I am of the view that the defendants are not entitled to the defence that have been taken in the written statement hence I answer the issues in the manner following:- 18. So far the issue No. 1 is concerned I answer the same in affirmative. So far Issue No. 2(a) is concerned in view of the cases and the facts as discussed above I answer same in the negative. In view of the finding of 2(a), answering 2(b) does not arise. I answer issue No. 3 in the negative as the defendant has not performed its part of the agreement more so in view of the fact that right of the defendant to remain in possession under the lease has expired by afflux of time. I answered Issue No. 1 in the affirmative. So far issue No. 5 is concerned I passed a decree in terms of prayer (a) and costs. There would, however, be a stay of operation of this order for two weeks from date. This order would not prevent the Corporation of Calcutta from filing any damage suit if the Corporation is entitled to and this order is passed without prejudice to the rights and contentions of the parties. Suit decreed.