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2007 DIGILAW 789 (CAL)

R. P. AGARWALLA AND BROS. PVT. LTD. v. NATIONAL INSURANCE COMPANY

2007-10-11

ALOK KUMAR BASU, TAPAN KUMAR DUTT

body2007
( 1 ) ALOK Kumar Basu, J. Respondent National Insurance Company as plaintiff filed Title Suit No. 148 of 1981 which was subsequently numbered as T. S. No. 2 of 1984 for a decree of specific performance of contract in respect of suit premises being flat No. 25 of premises No. 5b, Sarat Bose Road, Kolkata against the appellant R. P. Agarwalla and Bros. , while R. P, Agarwalla and Bros. filed title Suit No. 49 of 1980 which was subsequently numbered as T. S. No. 3 of 1984 in respect of self-same suit premises for eviction of National Insurance co. as well as respondent Nos. 2 and 3. Both the suits were taken up together for disposal by the learned Assistant District Judge, 6th Court, Alipore and by a judgment dated 22nd December, 1984, the learned Judge decreed Title Suit no. 2 of 1984 on contest and dismissed Title Suit No. 3 of 1984 on contest. The learned Judge in his order dated 22nd December, 1984 held that National insurance Co. as plaintiff was entitled to get a decree for renewal of the lease in respect of the suit premises for a further period of 25 years commencing from April, 1980 and R. P. Agarwalla and Bros. was directed to execute and register a deed of lease in favour on National Insurance Co. in respect of the suit premises for a further period of 25 years from April, 1980 on the same terms and conditions of the original lease deed dated 20th November, 1956. ( 2 ) R. P. Agarwalla and Bros being aggrieved by and dissatisfied with, the order of the learned Trial Court dated 22nd December, 1984 subsequently preferred these two appeals being 206 and 207 of 1987 challenging the judgment and decree of the Trial Court. ( 3 ) FROM the pleadings of the parties we find that originally M/s. Property development Trust was the sole and absolute owner of the suit premises being flat No. 25 at premises No. 5b, Sarat Bose Road, Kolkata and by a registered deed of lease dated 20th November, 1956 executed between M/s. Property development Trust and National Insurance Co. , National Insurance Co. came to possess and occupy the suit premises for a period of 25 years as per terms of the registered deed of lease. , National Insurance Co. came to possess and occupy the suit premises for a period of 25 years as per terms of the registered deed of lease. It is pertinent to mention that the lease deed was operative on and from 5th April, 1955 for a period of 25 years and lessee National insurance Co. was to pay a sum of Rs. 225 per month for use and occupation of the suit property for the said period of 25 years. R. P. Agarwalla and Bros. subsequently by a registered deed of sale dated 12th October, 1972 executed by m/s. Property Development Trust became owner of the suit property and national Insurance Co. continued to be a lessee under R. P. Agarwalla and Bros. on the basis of the previous lease deed dated 20th November, 1956. ( 4 ) R. P. Agarwalla and Bors. filed the Title Suit No. 3 of 1984 for eviction of national Insurance Co. and other defendants mainly on the ground of subletting, non-payment of enhanced municipal taxes, making unauthorized addition and alteration in the suit premises and finally on the ground of expiry of the lease through efflux of time and after serving a notice of eviction, the suit in question was filed for a decree of eviction with other consequential reliefs. ( 5 ) NATIONAL Insurance Co. in its turn filed title Suit No. 2 of 1984 for a specific performance of contract against R. P. Agarwalla and Bros. on the ground that although the lessee as per'terms of the original lease deed had the first option for renewal of the lease on same terms and conditions and while National insurance Co. much before expiry of the lease period exercised that option of renewal, R. P. Agarwalla and Bros. in clear violation of terms and conditions of , lease refused to renew the lease for a further period of 25 years and hence, the suit was filed for a decree of specific performance regarding renewal of the original lease for a further period of 25 years ending April, 1980. ( 6 ) SINCE the suit property was common and parties were identical and so also the issues involved in both the suits, the learned Trial Court took up both the suits for analogous hearing and disposal. ( 6 ) SINCE the suit property was common and parties were identical and so also the issues involved in both the suits, the learned Trial Court took up both the suits for analogous hearing and disposal. ( 7 ) IT appears from the judgment of the learned Trial Court impugned in these appeals that after considering pleadings of both T. S. No. 2 of 1984 and t. S. No. 3 of 1984, issues were framed separately for consideration of the respective cases of the parties. ( 8 ) THE learned Trial Court with reference to the plaint of the present appellants filed in connection with Title Suit No. 3 of 1984 observed that appellants as plaintiffs sought for eviction of the respondent National Insurance co. on four specific grounds and those were sub-letting of the suit premises in respect of defendant Nos. 2 and 3, non-payment of enhanced municipal taxes and charges in violation of the lease deed, raising of unauthorized construction in the suit premises in violation of the terms of the lease deed and finally, termination of the tenancy on expiry of the lease deed. ( 9 ) THE learned Judge after considering oral as well as documentary evidence adduced by the appellants during trial observed that appellants as plaintiffs, in fact, did not produce any evidence to substantiate the first two grounds namely non-payment of enhanced municipal charges and taxes and that of allegation of unauthorized construction in the suit premises. ( 10 ) AS regards eviction on the ground of sub-letting, the learned Judge observed with reference to the evidence of PW. l that nothing was produced during trial either through oral testimony or through any corroborative evidence to show that National Insurance Co. ever sub-let the suit premises and in this respect, the learned Judge relying on the testimony of PW. l came to the conclusion that plaintiffs, in fact, gave up this ground of eviction during trial. ( 11 ) NOW, coning to the suit filed by respondent National Insurance Co. through T. S. No. 2 of 1984, the learned Judge found that as per the clause 2 (10)of the lease deed, the lessee had the option of renewal of the lease and if the lessee exercise that option, lessor had to renew the lease for a further period of 25 years on the same terms and conditions. through T. S. No. 2 of 1984, the learned Judge found that as per the clause 2 (10)of the lease deed, the lessee had the option of renewal of the lease and if the lessee exercise that option, lessor had to renew the lease for a further period of 25 years on the same terms and conditions. The learned Judge after going through the terms and conditions of the lease deed and the correspondences entered between the parties in connection with the renewal clause came to the decision that since the National Insurance Co. exercised their option much before expiry of the lease period and when the lessor R. P. Agarwalla and Bros. accepted the said renewal offer, but, imposed the condition regarding enhancing of existing rent, R. P. Agarwalla and Bros. , in fact, travelled beyond the terms and conditions of the lease and hence, relying on the terms and conditions of the lease, the learned Judge held that R. P. Agarwalla and Bros. was legally bound to renew the lease for a further period of 25 years ending April, 2005 and accordingly, he decreed the suit of specific performance of contract brought by the respondent National Insurance Co. ( 12 ) MR. Gupta appearing for the appellants of both the appeals submits before us after placing the entire pleadings of the parties, evidence on record both oral and documentary and the judgment of the learned Trial Court that the learned Trial Court was totally wrong in shifting the onus on the R. P. Agarwalla and Bros. to prove the allegation of sub-letting. Mr. Gupta contends that from the deposition of the witnesses examined on behalf of the respondent insurance company and other respondents during trial it was very much clear that although on paper National Insurance Co. was the lessee in respect of the suit premises, respondent Nos. 2 and 3 were in physical possession of the suit premises and naturally, from the mere fact of possession of those respondents it was clearly proved that National Insurance Co. was guilty of sub-letting and thereby it violated the specific terms and conditions of the lease deed, because, national Insurance Co. never sought for permission from the lessor while subletting the suit premises in favour of respondent Nos. 2 and 3. Mr. was guilty of sub-letting and thereby it violated the specific terms and conditions of the lease deed, because, national Insurance Co. never sought for permission from the lessor while subletting the suit premises in favour of respondent Nos. 2 and 3. Mr. Gupta in this respect after referring the decisions reported in 1986 CWN page 938, AIR 1974 SC page 280, AIR 1975 Delhi 117 and AIR 1984 SC page 1447 submits that on proper reading of those reported decisions it would appear that the learned Judge misread those decisions and erroneously shifted the burden on the appellant-plaintiffs to prove sub-letting. ( 13 ) MR. Gupta contends that admittedly the lease deed which came into operation from April, 1955 expired on 14th April, 1980 and the plaintiff appellants as per terms of the lease deed was entitled to recover possession of the suit premises covered under the lease deed on expiry of the same and in the eye of law even no notice for termination of lease was necessary since the lease expired by efflux of time and in this context Mr. Gupta has relied on a decision reported in AIR 1981 SC page 1550 at para 4. Mr. Gupta contends that to be on the safe side the plaintiff-appellants issued a termination notice and that notice was duly received by the respondent National Insurance Co. and on the expiry of the lease deed by efflux of time, National Insurance Co. was legally bound to vacate the suit premises and to hand over the same to the lessor. ( 14 ) MR. Gupta contends that lessee National Insurance Co. sent a letter in 1979 for renewal of the lease for a further period of 25 years taking advantage of clause 2 (10) of the lease deed and its plea was that since under that clause of the lease deed lessee was given the first option for renewal of the lease for a further period of 25 years and since that option was exercised before expiry of the original lease deed, the appellants were duty bound to renew the lease on the same terms and conditions. ( 15 ) MR. ( 15 ) MR. Gupta submits that reading of the covenants of the lease deed as a whole it would appear that there was no obligation on the part of the lessor to renew the lease on the same terms and conditions, more so, when the existing rent was far below the prevailing market rate and when there was offer from other party to give more reasonable rent to the lessor and in such circumstances, the learned Judge was not justified by placing reliance on the decision reported in 20 CWN page 948 and 66 CWN page 338. Mr. Gupta by making a distinction of the facts and circumstances of those reported decisions from the facts and circumstances of the case of the respondent National Insurance Co. submits before us that the lease deed contained several rights and obligations of both the parties and renewal clause would corne into operation only when lessee would fulfill all of its obligations as contained in the lease deed. Mr. Gupta submits that it was never the intention of the lessor while executing the original lease to let out the suit premises on same terms and conditions for a further period of 25 years having regard to the location and market value of the suit premises. ( 16 ) MR. Gupta, therefore, submits that the learned Judge was not justified in dismissing the suit of the appellants and passing a decree of specific performance in favour of the respondent National Insurance Co. on a totally wrong interpretation of the terms and conditions of the lease deed. ( 17 ) MR. Gupta finally submits before us that even if it is accepted for arguments' sake that the appellants were under legal obligation to renew the lease deed that renewal period also expired in 2005 during pendency of these appeals and at present there is no existence of any lease agreement between the appellants and respondents National Insurance Co. and having regard to the location of the suit property and the prejudices suffered by the appellants taking recourse of the provisions of the Order 41 Rule 24 of the Code of Civil procedure and in this context Mr. Gupta has referred to a decision of the allahabad High Court reported in AIR 1957 Allahabad page 25 para 5. Mr. and having regard to the location of the suit property and the prejudices suffered by the appellants taking recourse of the provisions of the Order 41 Rule 24 of the Code of Civil procedure and in this context Mr. Gupta has referred to a decision of the allahabad High Court reported in AIR 1957 Allahabad page 25 para 5. Mr. Gupta also submits that since it is a well-settled proposition of law that Appeal is a continuation of suit, this Court should take into consideration the circumstances that took place between the date of decree of the Trial Court and the decision to be rendered by the Court of Appeal and Mr. Gupta in this connection has referred to a decision of the Hon'ble Supreme Court reported in air 1991 SC page 1654 para 34. Mr. Gupta has also relied on another decision reported in AIR 2000 SC page 2587 in support of his contention. ( 18 ) MR. Surajit Mitra represented respondent National Insurance Co. before us and at a later stage of hearing of this appeal Mr. Subrata Banerjee also made his submission in support of the case of respondent National Insurance co. Mr. S. Ghosh made his submission on behalf of respondent No. 3. ( 19 ) MR. Mitra has submitted before us that from paragraphs 5 to 8 of the plaint of T. S. No. 3 of 1984 brought by the present appellants it is clear that appellants sought for eviction of respondent National Insurance Co. mainly on two grounds first on the ground of sub-letting and finally, on the ground of expiry of the period of lease through efflux of time. Mr. Mitra contends that the present appellants stepped into the shoe of original lessor and it is very much clear from the evidence of main witness of the appellants during trial PW. 1 that appellants never personally visited the suit premises and it was their case that through their authorized agent they used to collect rent of the suit premises and appellants as plaintiffs clearly indicated in the day of the plaint that only in the April, 1980 they came to know that National Insurance Co. sub-let the suit premises in favour of respondent Nos. 2 and 3. ( 20 ) MR. sub-let the suit premises in favour of respondent Nos. 2 and 3. ( 20 ) MR. Mitra submits that there are some indications to prove the allegations of sub-letting and one of such indications is to prove passing of consideration between the lessee and the persons alleged to be sub-tenants and in this particular case neither through oral evidence nor through any document this passing of consideration has been proved. Mr. Mitra contends that the learned trial Court rightly relied on the evidence of PW. l to come to the conclusion that plaintiffs in Title Suit No. 3 of 1984 during trial totally abandoned their case of sub-letting and the learned Advocate for the appellants now cannot reopen that issue by merely referring to the evidence of National Insurance Co. given during trial to show that respondent Nos. 2 and 3 were in physical possession of the said flat and thereby National Insurance Co. was guilty of sub-letting. ( 21 ) MR. Mitra Submits that to consider the second ground of eviction of the appellants which was expiry of the lease through efflux of time, one is to take into consideration the suit of the National Insurance Co. filed through Title suit No. 2 of 1984 where National Insurance Co. prayed for a decree of specific performance regarding renewal of the lease. Mr. Mitra contends that it was specifically mentioned in the lease deed itself that lessee National Insurance co. had the first option for renewal of the lease after expiry of 25 years and the point came up for consideration before the learned Trial Court as to whether the lease was to be renewed on any fresh terms and conditions or on previous terms and conditions. ( 22 ) MR. Mitra submits that before the Trial Court after explaining all the terms and conditions of the original lease reliance was placed on behalf of the respondent National Insurance Co. ( 22 ) MR. Mitra submits that before the Trial Court after explaining all the terms and conditions of the original lease reliance was placed on behalf of the respondent National Insurance Co. on two decisions, one reported in 20 CWN 948 (supra) and another 66 CWN 338 (supra) and in both the decisions it was held in most unambiguous terms that when the original lease deed was silent about the terms and conditions of renewal and where the lessee would be given the first option of renewal, it would be presumed that the lease deed shall be renewed provided the lessee exercises the option before expiry of the lease deed and such renewal would be on previous terms and conditions except for further renewal clause. ( 23 ) MR. Mitra submits that there is no merit in the submission of the appellants that since there are some violations of the obligations on the part of the National Insurance Co. , the renewal clause would not be effective and the learned Trial Court rightly rejected this contention and relying on the decision reported in 20 CWN page 948 (supra) and 66 CWN page 338 (supra) and after taking into consideration all the terms and conditions of the original lease deed, the Trial Court rightly decreed the suit of National Insurance Co. and dismissed the eviction suit brought by the appellants. ( 24 ) MR. Banerjee also appearing for the respondent National Insurance Co. while refuting the submission of appellants for grant of relief in the changed circumstances submits that after expiry of the lease deed if the lessee remains in occupation of the suit premises, the status of the lessee would be that of tenant by sufferance and his interest as regards the suit property is protected till he is evicted through due process of law and naturally, while deciding the fate if both the appeals on the basis of available materials and submissions made by the contesting parties, there is no scope to grant any relief to the appellants. ( 25 ) MR. Ghosh appearing for respondent No. 3 has supported the submission of both Mr. Mitra and Mr. Banerjee made on behalf of the respondent National insurance Co. ( 25 ) MR. Ghosh appearing for respondent No. 3 has supported the submission of both Mr. Mitra and Mr. Banerjee made on behalf of the respondent National insurance Co. ( 26 ) WE have heard and considered submissions of the learned Advocate for the appellants as well as the learned Advocate for the contesting respondents in connection with both the appeals. We have already observed that R. P. Agarwalla and Bros. filed Suit No. 3 of 1984 for eviction of respondent National insurance Co. and Ors. on several grounds including expiry of the lease through efflux of time. We have found from the materials on record that respondent national Insurance Co. filed its Title Suit No. 2 of 1984 of a specific performance of contract and for a decree regarding renewal of the lease deed by R. P. Agarwalla and Bros. pursuant to the terms and conditions of the lease deed. ( 27 ) THE learned Trial Court while disposing of both the title suits filed by the respective parties, dismissed the title suit of R. P. Agarwalla and Bros. by holding inter alia that R. P. Agarwalla and Bros. could not establish the grounds of eviction taken in the plaint and at the same time the learned Trial Court decreed the suit brought by National Insurance Co. holding inter alia that under the terms and conditions of the lease, lessor R. P. Agarwalla and Bros. was legally bound to renew lease deed for a further period of 25 years ending in April, 2005 without imposing any further condition. ( 28 ) WE have already recorded submissions of the learned Advocate appearing for the appellant R. P. Agarwalla and Bros. in support of both the appeals and we have also recorded submissions of the learned Advocate for the contesting respondents. ( 29 ) NOW, after going through the pleadings of the parties and also the evidence adduced during trial before the learned Trial Court, we are of the view that the main ground for eviction of respondent National Insurance Co. was that of expiry of the lease through efflux of time and since the learned trial Court came to the conclusion while considering the pleadings and evidence of Title Suit No. 2 of 1984 filed by National Insurance Co. was that of expiry of the lease through efflux of time and since the learned trial Court came to the conclusion while considering the pleadings and evidence of Title Suit No. 2 of 1984 filed by National Insurance Co. that as per terms and conditions of the lease deed, the lessor was legally bound to renew the lease and since the lessee National Insurance Co. made the offer much before expiry of the original lease period, the learned Trial Court dismissed the suit for eviction and decreed the suit for specific performance in favour of the respondent national Insurance Co. ( 30 ) AFTER considering submissions of the learned Advocate of the appellants and the contesting respondents and after going through the judgment of the learned Trial Court impugned in these appeals and on examining all the terms and conditions of the lease deed, we are of the considered view that having regard to the ratio of decision of the case reported in 20 CWN page 948 (supra)and 66 CWN page 338 (supra), the learned Trial Court rightly observed that as per terms and conditions of the lease deed when lessee was given the first option for renewal of the lease deed and when lessee National Insurance Co. exercised that option much before the expiry of the lease period, lessor R. P. Agarwalla and Bros. was legally bound to renew the lease deed till April, 2005 and on such finding when the learned Trial Court did not find sufficient material for passing a decree of eviction against National Insurance Co. , the learned trial Court rightly dismissed the suit of R. P. Agarwalla and Bros. for eviction of the respondents. ( 31 ) BUT, in this particular case one thing is very much clear both from the materials placed before us as well as from the submissions of the learned advocate of the respective parties that as per the terms and conditions of the original lease deed which were binding both against appellant R. P. Agarwalla and Bros. and respondent National Insurance Co. that the original lease deed made a provision for one-time renewal of the original lease on existing terms and conditions and there was no stipulation in the original lease deed for second time renewal and that was never the pleadings of either of the parties at any stage. and respondent National Insurance Co. that the original lease deed made a provision for one-time renewal of the original lease on existing terms and conditions and there was no stipulation in the original lease deed for second time renewal and that was never the pleadings of either of the parties at any stage. ( 32 ) WE find from the lease deed itself that the original lease deed expired sometime in April, 1980 and on renewal the lease deed ultimately expired sometime in April, 2005 during pendency of both the appeals and now, when we are finally disposing of both the appeals we find that after April, 2005, in fact, there was no existence of any lease deed in the eye of law and hence, the respondent National Insurance Co. had no legal authority to continue its possession in respect of the suit premises after April, 2005. ( 33 ) MR. Banerjee relying on a decision reported in Indian Decisions, New series page 1178 submits before us that under such a situation the status of the lessee would be that of a tenant by sufferance and such a lessee cannot be evicted without following the process of law. Mr. Gupta representing the appellant R. P. Agarwalla and Bros. submits with reference to the ratio of decision reported in AIR 1991 SC page 1654 para 34 (supra) that the Appeal Court may very well take into consideration the change of situation taken place after filing of the appeal till the disposal of the appeal and in view of this ratio of decision when in the present case after April, 2005, there was no lease agreement between the parties, National Insurance Co. does not have any legal authority to continue its possession in respect of the suit premises and when the original suit of the appellant was for eviction on the ground of expiry of the lease and when the lease has already expired in April, 2005, this Court of Appeal being a court of both fact and law can very well pass a decree of eviction on the basis of the original plaint of Title Suit No. 3 of 1984. ( 34 ) AFTER considering submissions of the learned Advocate of the respective parties we find that the original suit of R. P. Agarwalla and Bros. was for eviction of the respondents including National Insurance Co. ( 34 ) AFTER considering submissions of the learned Advocate of the respective parties we find that the original suit of R. P. Agarwalla and Bros. was for eviction of the respondents including National Insurance Co. in respect of the suit premises mainly on the ground of expiry of lease and when after April, 2005 no lease deed is subsisting between the parties and when in the eye of law the occupation of the suit premises by the respondents had no legal sanction after april, 2005, we are of the view that following the principle of equity and without asking for any amendment of the original plaint, we can pass a decree of eviction against the respondents on the ground of expiry of the lease agreement entered by and between appellant R. P. Agarwalla and Bros. and respondent National insurance Co. ( 35 ) THUS, after considering the submissions of the learned Advocate of both the parties and after considering the materials placed before us, we are of the view that F. A. No. 206 of 1987 should be dismissed and F. A. No. 207 of 1987 should be allowed and we, accordingly, confirm the decree of the learned Trial court passed in Title Suit No. 2 of 1984 and we set aside the order of dismissal of the learned Trial Court passed in Title Suit No. 3 of 1984. We further direct that plaintiffs of Title Suit No. 3 of 1984 are entitled to get a decree for recovery of khas possession in respect of flat No. 25 of premises No. 5b, Sarat Bose road, Kolkata after evicting all the respondents and all the respondents are hereby directed to deliver vacant and peaceful possession of the said flat No. 25 to the plaintiffs of Title Suit No. 3 of 1984 within a period of three months from passing of this order failing which the plaintiffs shall be entitled to recover such possession through Court in execution of the decree. ( 36 ) HAVING regard to the facts and circumstances of this case, we do not, however, pass any order regarding recovery of rent or occupation charges and we also do not pass any order as regards cost of these appeals. F. A. No. 206/87 dismissed. F. A. No. 207/87 allowed. .