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2007 DIGILAW 473 (CAL)

ESAB INDIA LIMITED v. BOARD OF TRUSTEES FOR THE PORT OF KOLKATA

2007-06-29

ALOK KUMAR BASU, JYOTIRMAY BHATTACHARYA

body2007
JYOTIRMAY BHATTACHARYA, J. ( 1 ) REJECTION of the plaintiffs application for temporary injunction under Order 39 Rules 1 and 2 of the Code of Civil Procedure by the Civil Judge (Senior Division), 6th Court, Alipore by an order being No. 26 dated 13th November, 2006 passed in Title Suit No. 125 of 2005, is under challenge in this appeal at the instance of the plaintiff/appellant herein. ( 2 ) THE plaintiff/appellant filed a suit for specific performance of the agreement for lease entered into between the parties in respect of the land as mentioned in the schedule of the plaint. Apart from the said relief, the plaintiff also claimed various other incidental reliefs by way of declaration and injunction in the said suit. A decree for compensation of loss and damages in the alternative form has also been prayed for by the plaintiff/appellant in the said suit. ( 3 ) FOR the sake of convenience of understanding, brief history of the litigation leading to the filing of the suit, is set out hereunder. ( 4 ) ADMITTEDLY, the Kolkata Port Trust is the owner of the suit property. Initially, Kolkata Port Trust leased out about 39009. 45 sq. mt. of land including the suit property to I. O. L. Limited with effect from 1st June, 1963 for a period of 30 years with two options of renewal for further 30 years each. ( 5 ) DURING the continuation of the said lease, I. O. L. Limited sometime in 1990, sold their factory consisting of its Equipment Division to the appellant. The factory of the Equipment Division of I. O. L. Limited comprised of 19505. 25 sq. ft. of land out of the said leasehold property of I. O. L. Limited. The appellant/ petitioner negotiated with the Kolkata Port Trust for obtaining a lease of the said 19505. 25 sq. ft. of land. The Kolkata Port Trust authority agreed to grant a fresh lease in respect of the said land in favour of the appellant for a period of ten years without any option for renewal. After finalization of the terms of letting, the Port Trust authority on 9th December, 1997 executed a lease in respect of the said land in favour of the appellant for a period of ten years with effect from 16th October, 1995. The said lease was due to expire on 15th October, 2005. After finalization of the terms of letting, the Port Trust authority on 9th December, 1997 executed a lease in respect of the said land in favour of the appellant for a period of ten years with effect from 16th October, 1995. The said lease was due to expire on 15th October, 2005. ( 6 ) DURING the continuation of the said lease, the Port Trust authority granted permission to the appellant to mortgage the land and factory to ICICI Bank limited for obtaining loan of Rs. 50 millions and Rs. 25 millions respectively. Such permission was granted conditionally on the basis of request made by the appellant in this regard. Thereafter in September, 2003, the appellant by its letter dated 22nd September, 2003 again approached the Port Trust authority for grant of a fresh lease for a further period of 15 years on existing terms by way of renewal of the lease. ( 7 ) PORT Trust authority, however, agreed to grant a fresh lease for a period of 15 years without any option of renewal but only upon prior determination of the existing lease provided the appellant is agreeable to pay the rent, non-refundable and non-adjustable premium and security deposit as mentioned in its letter dated 4th February, 2004. In the said letter, the Port Trust authority demanded rent at the rate of Rs. 1375/- and Rs. 1101/- per sq. ft. per month for the first and second belta respectively. Port Trust authority also demanded Rs. 1,03,97,893/- being equivalent to four years rent as non-refundable and non-adjustable premium, and a further sum of Rs. 31,25,866/- as security deposit. ( 8 ) THE appellant did not agree to the said terms, as according to the appellant, those terms of the Port Trust authority, were unconscionable. The appellant, by its letter dated 20th April, 2004, intimated its unwillingness to accept the said terms and made two alternative counter-offers which are as follows: "1. an amendment of the proposed fifteen year lease terms so as to:- increase the rent payable by no more than 10% of the amount payable currently;-exclude the proposed annual escalation of primary rental and the five-yearly rental review, and- exclude all existing restrictions on use, sub-leasing early termination and lease assignment; or 2. an amendment of the proposed fifteen year lease terms so as to:- increase the rent payable by no more than 10% of the amount payable currently;-exclude the proposed annual escalation of primary rental and the five-yearly rental review, and- exclude all existing restrictions on use, sub-leasing early termination and lease assignment; or 2. an unfettered hundred-year lease term at an upfront premium approximately equal to the current open market value of the land, which we have estimated at Rs. 22. 5 million. " ( 9 ) PENDING consideration of the said proposal, the appellant sought for permission from the Port Trust authority for erection of certain structure. Such permission was granted by the Port Trust authority on 16th December, 2006 subject to acceptance of the conditions as mentioned in its letter dated 16th december, 2004. ( 10 ) THE Port Trust authority, however, did not accept the counter-offer of the appellant and accordingly conveyed its decision to the appellant by its letter dated 23rd March, 2005. By the said letter, the offer which was earlier given to the appellant by the Port Trust authority for grant of fresh lease of 15 years, was withdrawn. The appellant was also called upon to hand over the peaceful possession of the suit land on expiry of the lease period. ( 11 ) EVEN thereafter, the appellant by its letter dated 30th June, 2005 made a further request to the Kolkata Port Trust authority for grant of fresh lease for another 15 years with renewal clause on reasonable and acceptable terms, as mentioned in its earlier letter dated 20th April, 2004. ( 12 ) IN response to the said letter, the Kolkata Port Trust authority by its letter dated 24th/26th September, 2005 intimated the appellant about its intention to grant a fresh lease for 15 years without any option for renewal from a prospective date on the following terms: " (i) You have to pay annual rent to be computed @ Rs. 1976/- per 100 sqm. per month which is duly escalated accepted rate of rent, for the entire plot plus usual municipal taxes on land and structure. The rate is effective from 19. 9. 2005. The annual rent and taxes for the entire lease period have to be deposited in the form of post dated cheques at the beginning of new lease. per month which is duly escalated accepted rate of rent, for the entire plot plus usual municipal taxes on land and structure. The rate is effective from 19. 9. 2005. The annual rent and taxes for the entire lease period have to be deposited in the form of post dated cheques at the beginning of new lease. (ii) The lease will contain a clause reserving to the Trustees right to enhance rent @ 5. 1% p. a. every year with additional provision of review and refixation of lease rent every five year up to the then prevailing schedule rent if the same is found to be higher than the rent payable at that time. (iii) You will have to deposit Rs. 1,85,00,349/- which is equivalent to 4 years' rent at the above rate plus Rs. 28,66,956/- which is equivalent to 1 years rent at the current updated schedule rate of rent as non-refundable and non-adjustable premium and Rs. 55,61,668/- which is equivalent to 1 years' rent and taxes as security deposit. 2. Apart from the above all standard lease terms, as contained in Trustee's long-term lease form will also be applicable. 3. If your are agreeable to the above terms and conditions please convey your acceptance within fifteen days from the date of receipt of this letter so that the matter can be placed before the appropriate authority for approval. " ( 13 ) THE appellant by its letter dated 3rd October, 2005 intimated the Kolkata port Trust authority that although the appellant principally accept the offer of the Port Trust authority for grant of lease of 15 years, but did not accept the aforesaid terms of the Port Trust authority, as according to the appellant, those terms are not proper, legal and valid. By the said letter, the appellant further requested the Port Trust authority to give the details regarding the break-up and/or basis of the calculation of the rate of rent etc. at an earliest for its further consideration. The Port Trust authority by its subsequent letter dated 13th October, 2005 gave the details of the financial terms and asked for confirmation of the same by the appellant within 15 days from the receipt of the said letter. at an earliest for its further consideration. The Port Trust authority by its subsequent letter dated 13th October, 2005 gave the details of the financial terms and asked for confirmation of the same by the appellant within 15 days from the receipt of the said letter. ( 14 ) THE appellant did not answer to the said letter thereafter, but continued to remain in possession even after the expiry of the lease period on payment of damages for such wrongful occupation. The Port Trust authority, however, assured the appellant that the said amount will be appropriate towards the rent if ultimately fresh lease is granted in favour of the appellant. ( 15 ) SINCE the appellant did not answer to the said letter of the Port Trust authority, the Port Trust authority by its subsequent letter dated 8th November, 2005 called upon the appellant to show cause on or before 22nd November, 2005 as to why an order of eviction should not be made against the appellant as the appellant is in wrongful possession of the said property since expiry of the lease period by efflux of time. ( 16 ) A proceeding for recovery of possession was filed by the Port Trust authority against the appellant under the Public Premises (Eviction of unauthorised Occupants) Act, 1971. Immediately thereafter, the appellant has filed this suit and prayed for an interim injunction against the respondent Nos. 1, 2 and 3, their servants, agents and/or assigns from evicting and/or taking any step or further step for eviction of the appellant/petitioner from the said premises till the hearing of the suit. An ad interim injunction in similar terms was also prayed for in the said suit. ( 17 ) THE defendants/respondents contested the said application for injunction by filing objection denying the material allegations therein. In the said objection, the maintainability of the suit because of the bar imposed under section 15 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 was questioned. The maintainability of such a suit for want of service under section 80 of the Civil Procedure Code as well as section 120 of the Major Port Trusts act, 1963, was questioned in the said objection. The defendants/respondents prayed for dismissal of the said application for injunction, as there was no concluded contract for grant of further lease in favour of the appellant between the parties. The defendants/respondents prayed for dismissal of the said application for injunction, as there was no concluded contract for grant of further lease in favour of the appellant between the parties. ( 18 ) THE defendants/respondents further alleged that the appellant being the unauthorised occupier of the suit property, cannot claim any equitable right by way of injunction against the rightful owner. The said respondents further claimed that since the eviction proceeding is still pending at the initial stage, there is no immediate threat of eviction and as such, the interim order of injunction as prayed for, cannot be granted to stall the legal and valid proceeding for eviction. ( 19 ) UNDER such circumstances, the defendants/respondents prayed for dismissal of the appellant's application for temporary injunction. ( 20 ) THE learned Trial Judge by the order impugned, rejected the petitioner's application for temporary injunction by holding, inter alia, that there was not concluded contract between the parties which is capable of enforcement by way of a decree of specific performance of contract. The learned Trial Judge held that the rate of rent and the other consideration for grant of lease such as premium and security deposit, provision for subsequent escalation of rate of rent as proposed by the Port Trust authority were not accepted by the appellant who invited this Court to determine the rent at which the suit property can be let out to the appellant. ( 21 ) CONSIDERING the said pleading of the appellant, the learned Trial Judge held that prima facie case has not been made out for grant of injunction. The learned Trial Judge further held that the possession of an unauthorised occupier cannot be protected by grant of injunction of an unauthorised the rightful owner. Holding as such, the learned Trial Judge rejected the appellant's application for temporary injunction. ( 22 ) MR. Mitra, learned Senior Counsel, appearing on behalf of the appellant, challenged the legality and/or propriety of the said order of the learned Trial judge by contending that when the appellant principally agreed to the respondents' proposal for grant of a fresh lease for 15 years, it cannot be said that there was no valid agreement for grant of such lease between the parties. Mr. Mitra submitted that the Port Trust authority cannot behave like an ordinary litigant in setting the terms of such letting. ( 23 ) MR. Mr. Mitra submitted that the Port Trust authority cannot behave like an ordinary litigant in setting the terms of such letting. ( 23 ) MR. Mitra further submitted that the rates of letting of the various properties of the Port Trust including the area where the suit property situates, was notified in the Calcutta Gazette in its extraordinary issue dated 19th september, 1996. According to Mr. Mitra, when such notification prescribing the rate of rent for letting of the suit property was prescribed by the appropriate authority under the provision of section 52 of the Major Port Trusts Act, 1963, the Port Trust authority cannot demand higher rent and/or any other consideration in excess of the rate as prescribed in the said schedule of rent charges. ( 24 ) IN support of such submission, Mr. Mitra relied upon the following decisions of the Hon'ble Supreme Court: (ii) AIR 1989 SC 1642 ( Dwarkadas Marfatia and Sons vs. Board of Trustees, bombay Port Trust), (ii) 2006 (11) J. T. (SC) 144 (Board of Trustees, Port of Kolkata vs. Efclon Tie-up Pvt. Ltd. and Ors.) ( 25 ) BY referring to the said decisions, Mr. Mitra pointed out that the Hon'ble supreme Court in those decisions not only held that the schedule of rent which was notified in the Calcutta Gazette on 19th September, 1996, was valid and enforceable but also directed the Port Trust authority to lease out its land in favour of the respective proposed lessees at the rate as prescribed in the said schedule of rent. Mr. Mitra thus tried to impress upon this Court that when the Port Trust authority basically agreed to lease out the said land in favour of the appellant, the Court can very well direct the respondents, viz. , the Port trust authority to grant such lease in favour of the appellant at the rate as prescribed in the schedule of rent charges of 1996. ( 26 ) MR. Mitra further contended that if the agreement is otherwise legal and valid, but if some of the terms of such agreement are found to be illegal and unenforceable, the Court by applying the blue pencil rule, can severe the illegal part of the contract from the legal part thereof and can direct the parties to enforce the remaining part of the contract which is legal and enforceable in law. Mr. Mr. Mitra further submitted that the enforcement of the contract by use of this blue pencil rule between the parties to the contract is not an unknown law in our country. Mr. Mitra referred to various decisions of this Court to support his such contention. Those decisions are as follows: (i) Prag and Anr. vs. Sital Prasad and Anr. , reported in 36 Indian Law Reports allahabad Series page 155, (ii) Bansidhar Dobey vs. Budangal Das, reported in AIR 1928 Cal. 763, (iii) Arvind Kumar Dhanuka vs. Board of Trustees and Ors. , reported in AIR 1977 Cal. 377 . ( 27 ) BY referring to those decisions, Mr. Mitra invited us to consider the enforceability of the agreement for lease by applying the said blue pencil rule. ( 28 ) MR. Mitra further contended that the suit for declaration injunction and/or specific performance of contract is not barred under the provision of section 15 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. According to Mr. Mitra, Civil Court's jurisdiction to entertain such suit under section 9 of the Civil Procedure Code, cannot be questioned in view of the decision of this Court in the case of Surendra Chandra Majumdar vs. Panchi bibi reported in 83 CLJ 328. ( 29 ) MR. Mitra further submitted that in view of the initiation of the proceeding for revocery of possession against his client, the learned Court below ought not to have held that Mr. Mitra's client is not under immediate threat of eviction, ( 30 ) MR. Mitra thus contended that under such circumstances, the learned trial Judge ought not to have held that there was no concluded agreement between the parties and the appellant has failed to make out any prima facie case in support of its prayer for temporary injunction. ( 31 ) THUS, Mr. Mitra challenged the propriety of the impugned order and prayed for grant of interim injunction to protect the possession of the appellant till the disposal of the suit. ( 32 ) MR. Kar, learned Advocate, appearing on behalf of the respondents, refuted such submission of Mr. Mitra and supported the findings of the learned court below by contending, inter alia, that since the plaintiff/appellant admittedly did not accept the terms for grant of such lease as proposed by the defendants/respondents, no valid, legal and enforceable contract was arrived at between the parties. Kar, learned Advocate, appearing on behalf of the respondents, refuted such submission of Mr. Mitra and supported the findings of the learned court below by contending, inter alia, that since the plaintiff/appellant admittedly did not accept the terms for grant of such lease as proposed by the defendants/respondents, no valid, legal and enforceable contract was arrived at between the parties. ( 33 ) THOUGH Mr. Kar did not dispute the enforceability of the schedule of rent as notified in 1996 in the Calcutta Gazette, but at the same time he submitted by referring to section 49 (3) of the Major Port Trusts Act, 1963 that the power of the Port Trust authority to let out its property at a route higher than that as prescribed under section 49 (1) of the said Act is recognised in sub-section (3) thereof by virtue of the non-obstante clause which provides that notwithstanding anything contained in sub-section (1), the Board may, by auction or by inviting tenders, lease any land or said belonging to it or in its possession or occupation at a rate higher than that provided in sub-section (1 ). ( 34 ) MR. Kar further submitted that the decision of Dwarkadas Marfatia and sons (supra) which was cited by Mr. Mitra to support his contention that the port Trust authority cannot demand any rent at a rate higher than the prescribed rate, has no application in the facts of the instant case, because of the subsequent introduction of the provision of sub-section (3) of section 49 in the said Act by way of amendment in 1982. ( 35 ) MR. Kar further submitted that even the other decision which was referred to by Mr. Mitra in the case of Board Trustees, Port of Kolkata (supra)has no application in the instant case, as the said decision was given by the hon'ble Supreme Court in the light of social justice demand. Mr. Kar pointed out that even the application for review of the said judgment is still pending for consideration before the Hon'ble Supreme Court at the hearing stage after issuance of notice. ( 36 ) MR. Kar further submitted that when the plaintiff/appellant itself admitted that settlement could not be arrived at with regard to the rate of rent and/or the other consideration of letting such as unadjustable premium, security deposit etc. ( 36 ) MR. Kar further submitted that when the plaintiff/appellant itself admitted that settlement could not be arrived at with regard to the rate of rent and/or the other consideration of letting such as unadjustable premium, security deposit etc. and when the appellant itself invited the Court to settle the rate of rent in the suit property, the learned Court below did not commit any illegality by holding that any comment on this point as to the legality of the demand of rent, unadjustable and non-refundable premium and security money, will be pre-trial judgment. ( 37 ) BY referring to the note appended to the schedule of rent, Mr. Kar pointed out that the proposal which was made regarding the rate of rent, non-refundable premium, the security deposit, escalation of rent etc. were all proposed as per the said note. ( 38 ) MR. Kar further submitted that when the appellant is in possession of the suit property unauthorisedly after the expiry of the lease period, the learned court below rightly held that such possession of a trespasser, cannot be protected by way of grant of injunction against the lawful owner. ( 39 ) ON the basis of such submission, Mr. Kar prayed for dismissal of the appeal, as according to him, the appellant has failed to make out even the prima facie case for grant of such temporary injunction. ( 40 ) MR. Kar further submitted that even the balance of convenience and/or inconvenience is in favour of his clients as uncertainties in realising the damage for wrongful use and occupation of the suit premises from the appellant in case of its winding up, cannot be ruled out altogether. ( 41 ) LET us now consider the submission of the learned Counsel of the respective parties in the facts of the present case. ( 42 ) ADMITTEDLY the plaintiff/appellant did not acquire any interest in the suit property on the basis of transfer of the Equipment Division of IOL from i. O. L. Limited. The plaintiff/appellant became a lessee in respect of the suit property by virtue of the lease deed dated 9th December, 1997 whereby the suit property was let out to the appellant/petitioner by the Port Trust authority for a period of ten years with effect from 16th October, 1995. The term of the said lease expired by efflux of time on 15th October, 2005. The term of the said lease expired by efflux of time on 15th October, 2005. As such, the appellant's right to remain in the suit property as legal occupier thereof stood terminated with effect from 15th October, 2005. The appellant thus became an unlawful occupier of the suit property with effect from 16th October, 2005. ( 43 ) EVEN before the expiry of the lease period, the plaintiff/appellant negotiated with the Port Trust authority for grant of a fresh lease for 15 years. But, ultimately the said negotiation did not mature, as the offer for grant of fresh lease which was made by the Port Trust authority by its letter dated 22nd september, 2003 was withdrawn on 23rd March, 2005. ( 44 ) EVEN the subsequent negotiation for grant of lease which was initiated on the basis of the request made by the appellant by its letter dated 30th June, 2005 did not mature ultimately as the appellant, though principally agreed to the proposal of the Port Trust authority for grant of fresh lease for 15 years with prospective date, but the parties could not come to a consensus as to the terms and conditions for such proposed lease. The plaintiff/appellant did not accept those terms, as according to the plaintiff/appellant those proposed terms and conditions relating to rate of rent, non-refundable premium, security deposit, provision for escalation of rent etc. are unconscionable. ( 45 ) THUS, this Court has no hesitation to hold that there was no concluded contract between the parties. This conclusion also finds support from the pleadings of the plaintiff/appellant in the plaint wherein the plaintiff/appellant admittedly prayed for determination of the reasonable rate of rent for letting out the suit property in favour of the plaintiff/appellant by the Court. ( 46 ) IN our prima facie view, Court can neither act as a mediator for setting the terms between the parties in a suit for specific performance of contract nor can the Court impose its own terms upon any of the parties to such a suit. In fact, the Court cannot proceed on the presumption that the parties will accept the terms which will be ultimately determined by the Court based on the principles of equity and good conscience. ( 47 ) MR. Mitra contended that the Calcutta Port Trust being a statutory authority should not be have like an ordinary litigant. Mr. In fact, the Court cannot proceed on the presumption that the parties will accept the terms which will be ultimately determined by the Court based on the principles of equity and good conscience. ( 47 ) MR. Mitra contended that the Calcutta Port Trust being a statutory authority should not be have like an ordinary litigant. Mr. Mitra further contended that when the competent authority determined the rate of rent for letting out the property owned by the Port Trust authority in terms of the provision of section 49 (1) of the Major Port Trusts Act, the Port Trust authority ought not to have demanded rent at a rate higher than the prescribed rate. ( 48 ) MR. Mitra further contended that when the statute does not authorise the authority to demand any other monetary consideration apart from the prescribed rate as a consideration of letting out its property, the Port Trust authority, cannot demand any other monetary consideration either by way of non-refundable premium or by way of security deposit pursuant to the notes appended to the prescribed rate. According to Mr. Mitra, the notes which were appended to the notification declaring prescribed rate of rent, has no legal sanction as such notes were framed in excess of the rule framing authority of the State. ( 49 ) THIS Court is not, however, concerned about the legality of such notes at this stage, inasmuch as apart from the notes, section 49 (3) of the Major Port trusts Act authorizes the Port Trust authority to let out its property at a rate higher than the rate of rent as prescribed in the notification of 1996. But still then, we want to mention here that while accepting the lease earlier, the appellant paid the unadjusted non-refundable deposit and security money etc. apart from the lease rent. ( 50 ) MR. Kar rightly pointed out that sub-section (3) of section 49 was added in the Statute in 1982, i. e. after the delivery of the judgment by the Hon'ble supreme Court in the case of Dwarkadas Marfatia and Sons (supra) and as such the Hon'ble Supreme Court, while delivering the said judgment, had no occasion to deal with the amended provision of the said Act. ( 51 ) ACCORDINGLY we hold that the principle laid down in the said decision has no application in the facts of the case. ( 51 ) ACCORDINGLY we hold that the principle laid down in the said decision has no application in the facts of the case. ( 52 ) WE have considered the other decision cited by Mr. Mitra in the case of board of Trustees, Port of Kolkata (supra), wherein the Hon'ble Supreme Court maintained the order of the High Court regarding its direction for letting out the property by grant of fresh lease in favour of the lessee, viz. , Efclon Tie-up pvt. Ltd. at the prescribed rate of rent as notified in the Calcutta Gazette on 19th September, 1996. While delivering the said judgment, the Hon'ble Supreme court made it clear that the said decision was taken in the light of social justice demand. ( 53 ) THE said principle cannot be applied in the present case, firstly for the reason that here in the instant case there is no concluded contract between the parties and secondly for the reason that the decision which was passed on a sympathetic consideration, cannot be accepted as a judicial precedence. When section 49 (3) of the Major Port Trusts Act authorises the Port Trust authority to demand rent at a rate higher than the prescribed rate, this Court cannot hold, even prima facie, that the demand for higher rent of the Port Trust authority as a consideration of letting, is unreasonable and unlawful. ( 54 ) THAT apart, the point for consideration in the said case before the Hon'ble supreme Court was completely different. Two issues were involved therein; (i) whether the proposed lessee can exercise its right of renewal of the lease pursuant to the renewal clause contained in the earlier lease, notwithstanding the fact that the lessee failed to fulfil its obligation for exercising its option for renewal and (ii) whether fresh lease can be granted in favour of the erstwhile lessee at the rate of rent which was mentioned in the renewal clause of the earlier lease or upon acceptance of the rate of tent as prescribed in the schedule of rent of 1996. ( 55 ) THE first question was answered in the negative by the Hon'ble Supreme court. ( 55 ) THE first question was answered in the negative by the Hon'ble Supreme court. With regard to the second question, the Hon'ble Supreme Court held that since the schedule of rent of 1996 was lawfully framed and the said schedule is still in operation, lease should be granted on acceptance of the rent as prescribed in the schedule of rent of 1996 as the Port Trust authority agreed to grant such lease on acceptance of said rate of rent. Thus the Court did not impose any new term upon the parties; rather the agreement was enforced. ( 56 ) THAT apart, we cannot be unmindful of the fact that, that was a case where Port Trust authorities agreed to grant fresh lease to Efclon Tie-up Pvt. Ltd. as per the prevailing rates in the schedule of rent. Thus, we find that the hon'ble Supreme Court did not alter the term which was agreed upon by the port Trust authority while issuing such direction upon the Port Trust authority. ( 57 ) BUT, here in the instant case, the subject-matter of dispute is completely different. Here the question is as to whether the rate of rent demanded by the port Trust authority which is higher than the rate as prescribed in the schedule of rent of 1996, is legal and enforceable or not? ( 58 ) OUR prima facie view is that such demand is legal and lawful in view of the provision contained in section 49 (3) of the Major Port Trusts Act, 1963. ( 59 ) BE that as it may, the plaintiff/appellant never replied to the letter written by the Port Trust authority on 13th October, 2005, wherein the justification for demand of the rent at a rate higher than the prescribed rate of rent, non-refundable premium and security deposit etc. was given by the Port Trust authority and the appellant was called upon to signify its consent for such proposal within 15 days from the date of receipt of such letter. The plaintiff/ appellant never intimated the Port Trust authority about its intention to accept the lease on payment of the rent as prescribed in the schedule of rent. On the contrary, the appellant prayed for determination of the rate of rent by the Court. Such determination cannot be made at the initial stage of the trial of the suit. The plaintiff/ appellant never intimated the Port Trust authority about its intention to accept the lease on payment of the rent as prescribed in the schedule of rent. On the contrary, the appellant prayed for determination of the rate of rent by the Court. Such determination cannot be made at the initial stage of the trial of the suit. Even if the Court determines the reasonable rent at the time of disposal of the suit, still then there is no certainty regarding acceptance of such determination by the plaintiff/appellant. In a suit for specific performance of contract, the court cannot compel the plaintiff to accept the lease on payment of the consideration to be determined by the Court. ( 60 ) UNDER such circumstances, this Court does not find any illegality in the order impugned, wherein the Court below held that such pre-trial judgment, cannot be passed at this initial trial of the suit. ( 61 ) THE blue pencil rule, in our view, can be applied only when, subsequent to the agreement between the parties it is found that some of the terms are incapable of performance because of their illegality. The Court under such circumstances can direct the parties to perform the legal terms by striking out the illegal terms. But here is the case where no agreement has been arrived at between the parties till date and as such the blue pencil rule, cannot be applied in this case. ( 62 ) THUS, we hold that the plaintiff/appellant has failed to make out any prima facie case in support of its prayer for injunction. ( 63 ) THAT apart, it is settled law of the land that the possession of an unauthorized occupant cannot be protected by way of injunction against the rightful owner. Unauthorized occupation has been defined in section 2 (g) of the public Premises (Eviction of Unauthorized Occupants) Act, 1971 which says that unauthorized occupation in relation to any public premises, means the occupation, by any person of the public premises without authority for such occupation and includes the continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined by any reason whatsoever. ( 64 ) THE term of the lease which was granted in favour of the appellant by the lease deed dated 9th December, 1997 expired by efflux of time on 15th October, 2005. It is not the case of the plaintiff/appellant that subsequently possession was given to the plaintiff/appellant in pursuance to the alleged agreement for lease. If that be so, then there is no other way but to conclude that the possession of the plaintiff/appellant in the suit property is unauthorised and illegal. Payment of rent by the plaintiff/appellant even after the expiry of the said lease to the Port Trust authority cannot make its illegal occupation legal, as the Port Trust authority accepted the same without prejudice to its rights by making it clear that such acceptance of such payment will be adjusted towards damages for unlawful occupation of the plaintiff/appellant in respect of the suit property. ( 65 ) THE possession of unlawful occupier cannot be protected by grant of injunction against the rightful owner. We find support of this principle from the following decisions: (i) AIR 1985 Karnataka page 77 (Kuvarp Industries, Bangalore vs. State bank of Mysore); (ii) 1994 (5) SCC 547 (Premji Ratansey Shah vs. Union of India ). ( 66 ) IT is no doubt true that during the continuance of the earlier lease, the permission to mortgage the leasehold interest in the suit property with the bank for obtaining loan and to erect some construction, were granted by the port Trust authority pursuant to the request made by the appellant. Permission to mortgage was granted at a point of time when no proposal for extension of the lease and/or renewal was pending for consideration before the Port Trust authority. Such permission was granted before 4th August, 2001 and the proposal for extension of lease and/or renewal came from the appellant for the first time on 2nd September, 2003. ( 67 ) THE appellant involved its finance for the aforesaid purpose by keeping its eyes open that its lease will expire on 15th October, 2005 and there is uncertainty about its renewal as the appellant's request for lease for a larger period was not accepted by the Port Trust authority earlier. ( 67 ) THE appellant involved its finance for the aforesaid purpose by keeping its eyes open that its lease will expire on 15th October, 2005 and there is uncertainty about its renewal as the appellant's request for lease for a larger period was not accepted by the Port Trust authority earlier. The appellant involved its finance in the said business for convenient carrying of its business on more profit-earning basis and as such the respondents cannot, under any circumstances, be made responsible for the expenses incurred by the appellant for such construction. ( 68 ) THUS, involvement of finance in the said business by the appellant during the continuance of the lease, cannot be a factor for considering of balance of convenience and inconvenience between the parties. ( 69 ) UNDER such circumstances, this Court has no hesitation to hold that the plaintiff/appellant is in unauthorised occupation in the suit premises. Such possession of the plaintiff/appellant cannot be protected by way of grant of injunction as prayed for by the plaintiff/appellant. Principles of part performance of contract as contained in section 53a of the Contract Act, cannot be applied here, as the plaintiff/appellant admittedly did not receive possession of the suit premises pursuant to the agreement for lease. ( 70 ) THUS, although we are of prima facie view that the suit is not barred under the provision of section 15 of the Public Premises (Eviction of unauhtorised Occupants) Act, 1971, but still then we are unable to hold that the plaintiff/appellant has succeeded in making out a prima facie case in support of its prayer for interim injunction. We have not found any apparent illegality in the order impugned requiring this Court to interfere with the said order. ( 71 ) THE appeal along with CAN 9546 of 2006, thus, stand dismissed on contest. The impugned order of the learned Court below thus stands affirmed. ( 72 ) THERE will be, however, no order as to costs. Appeal dismissed.