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2007 DIGILAW 69 (CAL)

CRESCENT PLASTICS PRIVATE LIMITED v. WEST BENGAL SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED

2007-02-08

ARUN KUMAR BHATTACHARYA, SEN GUPTA

body2007
( 1 ) THIS appeal is directed against a judgment and order of the learned single Judge dated 16th August. 2004 whereby and whereunder the learned single Judge has dismissed the writ petition. The writ petitioner's grievance before the learned Single Judge was that the respondent authorities without due recourse to law has evicted the petitioner from a plot of land at J-52, howrah Industrial Estate, Baltikuri, Howrah - 711105 (hereinafter referred as "the said premises" ). The admitted position in that case was that a registered deed of lease dated 27th January, 1973 had been executed between the Government of West Bengal on the one hand and the writ petitioner on the other in respect of the said premises. The said premises was let out and/ or demised to the petitioner for the purpose of carrying on business for a period of 99 years commencing from 1st January, 1973. One of the terms and conditions contained in the said lease deed was that the lease is liable to be terminated in the event of breach of terms and conditions contained therein. ( 2 ) THE relevant terms amongst others, which are necessary for the disposal of the present matter, are - to start manufacture and production as per sub-clause (f) (i) of this clause 2, (if not already started) within six months from the date of these presents or within any period which may be granted by Government under exceptional circumstances and to pay the reserved rents within the days and in the manner aforesaid. The petitioner lessee is to pay rent at the rate of rs. 395. 90 on account of pay rent at the rate of 9943. 31 per year apart from the aforesaid annual rents. The petitioner/lessee is obliged to pay other charges. The petitioner lessee is to pay rent at the rate of rs. 395. 90 on account of pay rent at the rate of 9943. 31 per year apart from the aforesaid annual rents. The petitioner/lessee is obliged to pay other charges. If the rent reserved or any part thereof shall remain unpaid for six months after becoming payable or if any covenant on the part of lessee herein contained shall not be used by the lessee for purposes mentioned in clause 2 (f) hereof for a continuous period of six months then and in such event, it shall be lawful for the lessor or the Government at any time thereafter to determine the lease and to re-enter upon the demised premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine without prejudice to the rights of the lessor or the Government in respect of breach of the lessee covenants herein contained. ( 3 ) THE writ petitioner/appellant contended that from time to time the rent was attempted to be paid, but their representatives were harassed and/or prevented from depositing the annual rent for the period from. July, 2000 till June, 2002 and thus compelled to deposit the lease rent in september, 2002 through Bank Draft for Rs. 9,943. 31 being No. 881727 dated 25th September, 2002 drawn on Vijaya Bank in favour of the respondent no. 2. It was the contention of the writ petitioner that the writ petitioner has been carrying on business of manufacturing by assembling the parts and there is no stoppage of business activity. In spite of there being no default or breach of any convenant the respondents on 20th January, 2003 at about 11. 30 a. m. all on a sudden entered the factory of the petitioner and pushed out the employees, men and labourer of the petitioner. According to the writ petitioner, this act and action on the part of the respondents is arbitrary, illegal and unauthorised. All the goods and articles were kept in the said factory under lock and seal of the respondents. As such the petitioner did not have any access to any of the documents to establish before the learned Trial Judge that there has been no fault or breach of the covenant of the said lease agreement. All the goods and articles were kept in the said factory under lock and seal of the respondents. As such the petitioner did not have any access to any of the documents to establish before the learned Trial Judge that there has been no fault or breach of the covenant of the said lease agreement. ( 4 ) THE version of the respondents before the learned Court below is otherwise. It was contended that there has been default in paying annual rent and there has been no business activity and in fact an inspection was conducted by the inspector and report was submitted. It was submitted by the respondents that from the report it appeared that at least from 1999 there was no business activity. The petitioner from time to time made representation to allow them to resume business activity and such time was allowed by the respondents and in spite of indulgence being given the petitioner did not resume business. As such the lease granted in favour of the petitioner stood terminated. Termination of the aforesaid lease as well as the eviction of the lessee is governed by the West Bengal government Premises (Tenancy Regulation) Act, 1976 (hereinafter referred to as "the said Act") and the rules framed thereunder. The respondents contended before the learned Single Judge that because of the breach of the terms and conditions of the lease, the same automatically stood terminated and no notice was required to be served. Therefore, taking possession of the demised premises by the respondent authorities was not unauthorised or illegal. ( 5 ) THE learned Single Judge having considered the respective contentions of the parties held that the act and action of the respondents were not unauthorised and the same had been done in accordance with the provisions : of the aforesaid Act. ( 6 ) MR. Dhar appearing for the appellant/ writ petitioner contends before us that his client is not disputing the applicability of the said Act. But the way the respondents have acted is not permissible by the provisions of the aforesaid Act. The allegation of default of annual rent is absolutely incorrect and the learned Trial Judge could have easily found such incorrect contention as the arrears of rent was deposited by pay order and the same was retained and accepted and after forcefully evicting the appellant/petitioner the said pay order was returned. The allegation of default of annual rent is absolutely incorrect and the learned Trial Judge could have easily found such incorrect contention as the arrears of rent was deposited by pay order and the same was retained and accepted and after forcefully evicting the appellant/petitioner the said pay order was returned. This shows mala fide act on their behalf. He further contends that his client was at least entitled to have a notice before the respondents took any action under the provisions of the said Act for physically eviction so as to enable the appellant/petitioner to move all articles lying therein. The provision of the said Act does not enjoin any power to keep or remove the articles and properties belonging to the appellant/petitioner. He further submits by taking us through various documents annexed to the paper Book that business activity could be found even at the time of taking action by the respondent authorities. As such the question of automatic termination under the provisions of the said Act does not and cannot arise. He further contends that even if it is assumed that there has been a default in payment of rent for three consecutive months, such default could have been regularised by virtue of proviso contained in sub-section (2) section 3 of said Act. He also contends that by virtue of provision of sub-section (3) (a) of section 3 of the said Act his client should have been given a hearing before physical eviction took place. His next contention is that the action taken by the respondents was not warranted on the facts and circumstances of the case as when there cannot be any termination of tenancy or there was no default as contemplated in section 3 of the said Act the question of failure to restore possession of the premises to the respondents by the appellant does not and cannot arise. Thus the respondent authorities have no jurisdiction to take action under sub-section (2) of section 4 of the said act. According to him, in substance all actions are ultra vires of the said Act and not in due process of law. ( 7 ) MR. Hirak Mitra, learned Senior Counsel appearing on behalf of the respondents contends that the provision of section 3 of the said Act is very clear in terms. According to him, in substance all actions are ultra vires of the said Act and not in due process of law. ( 7 ) MR. Hirak Mitra, learned Senior Counsel appearing on behalf of the respondents contends that the provision of section 3 of the said Act is very clear in terms. He contends that in the event there is a default of covenant in the lease deed the tenancy stands terminated automatically. Such automatic termination without any notice to quit can be said to have happened when there is violation of terms of the lease meaning thereby in the case when there is a default in paying the annual lease rent and further failure to resume the business activity within six months from the date of commencement of the lease. He has taken us through the various letters issued by the appellant to the respondent authorities asking for time to resume the business activity and the time was allowed by the respondent authorities. The lease was executed in the year 1973 and there is not a single document to show that from 1973 till 1999 there was any business activity. The lease was issued for the purpose of manufacturing plastic materials and goods. As such an inspection was carried out by the officials of the respondents and the said inspector has submitted a report showing that there has been no business activity. Moreover it is an admitted position that in violation of the lease deed the appellant failed to pay the annual rent reserved, and on their own showing it will appear that the appellant has committed default. Therefore, the provision of section 3 automatically comes into operation. Accordingly his client duly applied under the rules to the prescribed authority in a prescribed form for taking possession of the said premises. The prescribed authority on receipt of such application in prescribed form duly took action on termination of tenancy and/or failure on the part of the appellant to restore vacant possession to the prescribed authority. This is permissible under section 4 of the said Act read with the rules. Accordingly there is no illegality and infirmity in the well reasoned judgment of the learned Single Judge. ( 8 ) WE have carefully considered the respective contentions of the learned advocates for the parties and also the judgment and order passed by the learned Single Judge. This is permissible under section 4 of the said Act read with the rules. Accordingly there is no illegality and infirmity in the well reasoned judgment of the learned Single Judge. ( 8 ) WE have carefully considered the respective contentions of the learned advocates for the parties and also the judgment and order passed by the learned Single Judge. Since question of fact and law are before us we think it fit, although ordinarily Appeal Court does not go into the fact finding of the learned Single Judge, to examine once again the factual aspect of the matter. ( 9 ) ON the factual aspect we are in agreement with the learned Single judge. The appellant/petitioner committed default in not paying the annual lease rent reserved under the lease deed and such fact of failure is apparent from letter written to the respondent by the appellant/petitioner stating intention to deposit arrears of rent by pay order. Mr. Dhar contends that when such pay order has been received then alleged failure is deemed to have been waived by the respondents. We are unable to accept such argument simply because this case was not placed before the learned Single Judge. Still we have taken note of his submission afresh. We are of the view that until and unless the pay order is encahsed the question of acceptance of the same does not and cannot arise. According to us, if there is any untimely payment then mere tender of this amount to the respondent authorities does not absolve themselves from the rigour of provision of the law and it will be very clear from the proviso contained in sub-section (2) of section 3 that in the event of failure the tenant has to apply to the prescribed authority in a prescribed form and unless it is done non-payment constitutes a breach of the terms of the lease. Besides the aforesaid proviso applies only in case of the residential premises and does not have any application to any premises let out for industrial purpose. Mr. Dhar wants to take advantage of sub- section (3) (a) of section 3 of the said Act that his client should have been given a notice of hearing before eviction. Besides the aforesaid proviso applies only in case of the residential premises and does not have any application to any premises let out for industrial purpose. Mr. Dhar wants to take advantage of sub- section (3) (a) of section 3 of the said Act that his client should have been given a notice of hearing before eviction. We have checked up the said provision and we are of the view that this provision is applicable in case of residential premises let out to the tenant by the Government and this does not apply in case of the premises let out for commercial and industrial purpose. This particular letting out of the premises is governed by the written lease and the parties are governed, as far as the rights and obligation are concerned, by the terms and conditions contained therein. ( 10 ) WE, therefore, conclude that the appellant/writ petitioner though tendered the arrear rents does not dilute their failure to pay the rent for a period of more than three consecutive months. We are, thus, of the opinion that there is breach of terms of conditions of the lease for not paying the rent within time as mentioned therein. ( 11 ) THAT apart we find that the writ petitioner/appellant has not been able to produce any material to show that the writ petitioner/appellant has started manufacturing within six months from the date of commencement of the lease. Mr. Dhar of course wants to persuade us contending that all the documents in support of his submission could be found from the locked up premises. But the documents annexed to the writ petition show that even from 1999 till 2001 there is no business activity rather repeated requests and representations were made to allow them to restart the business, as the market condition was very adverse. It appears from the documents further that the electric consumption of the writ appellant/writ petitioner does not establish the fact of any business activity. Moreover we find that the report of the inspector deputed by the respondents reveals that there was no business activity. The appellant/writ petitioner has not been able to produce a single document annexing electricity bills or any document showing wages and salaries having been paid to the employees or telephone bills or income-tax returns or audited balance sheet etc. to establish business activity. The appellant/writ petitioner has not been able to produce a single document annexing electricity bills or any document showing wages and salaries having been paid to the employees or telephone bills or income-tax returns or audited balance sheet etc. to establish business activity. The appellant/petitioner could have asked for direction from the court for opening the factory premises for the necessary documents from which it could be established that business activity is there. The learned trial Judge has painstakingly found that there has been a breach so much so which called for the automatic' termination of the lease. ( 12 ) SINCE the question of authority of the respondents has arisen we feel to set out the relevant portion of the law which is as follows: 3. Termination of tenancy.- (1) Every tenancy held by a tenant in respect of a Government premises shall stand terminated upon the expiry of the period referred to in a notice to quit served upon such tenant in the prescribed manner. (2) A tenancy in respect of a Government premises shall stand automatically terminated without any notice to quit where the tenant has, - (i) violated the terms of the lease, or (ia) subsequently built a house or acquired (by purchase, gift, inheritance, lease, exchange or otherwise) a house or an apartment, either in his own name or in the name of any member of his family, within a reasonable distance from such Government premises. Explanation.- For the purpose of this section and section 3a, - (a) "apartment" shall have same meaning as in the West Bengal apartment Ownership Act, 1972 (West Bengal Act 16 of 1972); (b) "family" shall include parents and other relations of the tenant who ordinarily reside with him and are dependent on him; (c) "reasonable distance" shall mean any distance not exceeding twenty-five kilometers; or (ii) made default in payment or rent of three consecutive months; provided that where the tenancy has been terminated on account of default in payment of rent for three consecutive months the prescribed authority may, upon application made by the tenant within such time as may be prescribed and upon deposit of all the arrear of rent together with interest at the prescribed rate, grant renewal of the tenancy in favour of the tenant: Provided further that the prescribed authority may, on sufficient cause being shown, grant renewal of the tenancy in favour of the tenant on deposit of fifty per cent of the arrears of rent along with the application for renewal of tenancy and direct the tenant to deposit the balance of the arrears of rent with interest on the entire amount at the prescribed rate in twelve monthly instalments commencing from the month following the month of such renewal of tenancy, and if the tenant fails to deposit any such instalment the tenancy so renewed shall stand automatically terminated: provided further that the prescribed authority may, if it is satisfied that the tenancy has failed to pay rent due to circumstances beyond his control and is not in a position to deposit fifty per cent of the arrears of rent along with the application for renewal of tenancy, grant renewal of the tenancy in favour of the tenant on deposit of twenty-five per cent of the arrears of rent along with the application for renewal of tenancy and direct the tenant to deposit the balance of the arrears of rent with interest on the entire amount at the prescribed rate in such number of monthly instalments, not less then twelve and not more than thirty-six, as the prescribed authority may consider reasonable, commencing from the month following the month of such renewal of tenancy, and if the tenancy fails to deposit any such instalment, the tenancy so renewed shall stand automatically terminated: provided also that notwithstanding the termination of the tenancy the State Government or the Government undertaking, as the case may be, shall be entitled to recover an arrear of rent for the period for which the tenancy subsisted and mesne profits thereafter for so long as the tenant remained in occupation of the premises. (3) (a) Where any Government premises allotted to a tenant remains under lock and key for a period of more than three consecutive months or where the tenant or any member of his family is not ordinarily resident of such Government premises, the tenancy in respect of such government premises shall stand automatically terminated: provided that if the prescribed authority is satisfied that the circumstances, under which such Government premises remains under lock and key for more than three consecutive months or the tenant or any member of his family is not ordinarily a resident of such Government premises, are beyond the control of the tenant, it may allow the tenancy subsist: '[provided further that the prescribed authority shall give the tenant a notice and an opportunity of being heard before such termination: provided also that an appeal shall lie to the appellate authority against an order determining non-occupation for a period of three consecutive months or non-residence by the tenant or any member of his family under the above provisos within fifteen days from the date of the order passed by the prescribed authority and, in such case, the decision of the appellate authority shall be final. ] (b) A tenant shall be deemed to be ordinarily resident of a Government premises if he or any member of his family generally resides in such government premises for not less than ninety days in a period of four consecutive months. (c) The provisions of this sub-section shall have effect notwithstanding anything contained in this Act or in any law for the time being in force or in any instrument having effect by virtue of any law other than this Act, or in any decree or order of any Court, Tribunal or other authority, and nothing contained in the Transfer of Property act, 1882, or the Indian Contract Act, 1872, or the West Bengal premises Tenancy Act, 1956, had not been passed. 3a. 3a. Tenancy to be void if held by a tenant owning a house or apartment on the date of allotment of a Government premises.- A tenancy in respect of a Government premises shall be deemed to be void where on the date of allotment of such Government premises the tenant is, or had been, the owner of a house or an apartment, either in his own name or in the name of any member of his family, within a reasonable distance from such Government premises. ' ( 13 ) IN this case we record for repetition sake that the premises was let out for business purpose and not for residential purposes. Therefore, all the safeguards provided against the eviction on the ground of default in case of residential purposes are not applicable in this case. Thus it is clear that in this case when there has been a breach the termination is automatic. In case of termination the obligation of the tenants falls under the statute which is contained in section 4 of the said Act which provides as follows: "4. Restoration of possession.- (1) Upon termination of a tenancy under any of the provisions of section or upon a tenancy being void under section 3a the tenant shall forthwith restore vacant possession of the premises occupied by him in favour of the prescribed authority. (2) If the tenant fails to restore possession of the premises under sub- section (1), the prescribed authority or any officer authorised by him in this behalf may take such steps or use such force as may be necessary to take possession of the premises and may also enter into such premises of the aforesaid purpose. " ( 14 ) IT is clear from the aforesaid statute that it is the obligation of the appellant/petitioner to restore vacant possession on termination of the tenancy forthwith. It is contended by Mr. Dhar that when there is no breach the question of restoration of possession does not and cannot arise in this case. This argument, in our view, is absurd as it is the duty of the tenant to see that terms and conditions of the lease are fulfilled and it is their duty again under the statute to restore the vacant possession and under these terms and conditions the lease has been obtained. This argument, in our view, is absurd as it is the duty of the tenant to see that terms and conditions of the lease are fulfilled and it is their duty again under the statute to restore the vacant possession and under these terms and conditions the lease has been obtained. We hasten to add that the aforesaid provision of section 4 has not been challenged rather the applicability of the said Act has been accepted by Mr. Dhar. But this provision of law, according to him, is not applicable under the facts and circumstances of the case. We have already observed in agreement with the learned Single judge that factually there has been a breach of the terms of the lease. So the provision of section 4 will automatically apply. ( 15 ) THE rules have been framed indicating how the possession is to be obtained in the event of failure of tenant concerned. In this case we find that the respondent authorities applied in the prescribed form to the prescribed authority who thereafter took action. ( 16 ) ACCORDING to us, provision of sub-section (2) of section 4 has given the prescribed authority a draconian power and to take measure for taking possession of the premises. It is said "the prescribed authority may take such steps or use such force as may be necessary to take possession of the premises and may also enter into such premises for the aforesaid purpose". This provision, in our view, is not transparent and fair procedure. It leaves ample scope for taking arbitrary and whimsical action. But this question has not cropped up before us. So we are not giving any final opinion nor deciding anything. ( 17 ) WE quite understand the plea of the appellant that at least a chance should have been given upon serving prior notice for removing their articles and belongings and thereafter possession could have been taken. He is right is saying that in case of automatic termination when there is no provision for serving any notice for hearing then it is quite natural that arbitrary and high-handedness action may be taken by prescribed authority at any time. Unfortunately this provision has not been challenged. So we cannot say the action of respondents is wholly unauthorised. ( 18 ) UNDER such circumstances, we cannot but to accept the judgment and order of the learned Single Judge. Unfortunately this provision has not been challenged. So we cannot say the action of respondents is wholly unauthorised. ( 18 ) UNDER such circumstances, we cannot but to accept the judgment and order of the learned Single Judge. ( 19 ) WE are told that all materials and articles of the appellant/writ petitioner are lying in the factory premises. We, therefore, direct the respondent authorities and/or the prescribed authority to open the padlock and to allow the appellant/writ petitioner to remove all their articles and belongings after the same are inventorised. This shall be done within a period of three months from the date of receipt of this order. If there is any difficulty to any party or person liberty is given to mention before this Court. If anything is found missing then it would be open for the appellant to take steps in accordance with law as may be advised. During the delivery of the goods proper identification of the goods and materials are to be made by the prescribed authority and it shall make itself sure that the goods and articles are belonging to the appellant/writ petitioner. ( 20 ) THUS the appeal is disposed of with the aforesaid direction. There will be no order as to costs.