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2008 DIGILAW 179 (CAL)

Gulab Chand Bhora v. Punjab National Bank

2008-02-08

B.Bhattacharya, Rudrendra Nath Banerjee

body2008
JUDGMENT 1. THIS first appeal is at the instance of the defendants in a suit for recovery of money and is directed against the judgment and decree dated 11th February, 1999 passed by the learned Civil Judge, Senior Division, 1st Court, Midnapore, in Money Suit No. 143 of 1994 thereby passing a decree in part by directing the appellants to pay arrears of rent at the enhanced rate with effect from 1st July, 1989 to 30th June, 1994. The learned Trial Judge further directed the parties to renew the lease dated 17th August, 1979 immediately. The respondents, however, were, directed to renovate the building after the receipt of money from the defendants. The appellants were further directed to pay the enhanced rent at the rate of Rs. 2. 90p. a sq. ft: from 1st july, 1994 to 30th June, 1999. Prayer for interest, however, was, refused. 2. BEING dissatisfied, the defendants have come up with the present first appeal. The facts giving rise to filing of the present appeal may be precised thus : (a) The appellant-Bank was a monthly tenant in the premises mentioned in schedule to the plaint from the year 1978. There was an unregistered agreement for tenancy between the parties with effect from 1st June, 1978 for a period of six years with a condition of option for continuing the tenancy for a further period of five years with the stipulation that the rate of rent would be Rs. 2,200/- a month. (b) The period of tenancy expired on 30th June, 1989 as per the terms of the said agreement between the parties and thereafter, the respondents demanded the enhancement of monthly rent of the suit premises at the rate of Rs. 3/- a sq. ft. A letter claiming such demand was received by the Bank on 13th May, 1989. (c) The area of the tenanted portion is 2,950 sq, ft. on the ground floor, 2,795 sq. ft. o. n the first floor and 1,840 sq. ft. on the second floor and thus, the total area was 7,565 sq. ft. For the convenience of the business of the Bank, the plaintiffs- landlords made a strong room and currency-chest and dug tube-well on the belief that the bank would enhance the rate as claimed by the plaintiffs. ft. o. n the first floor and 1,840 sq. ft. on the second floor and thus, the total area was 7,565 sq. ft. For the convenience of the business of the Bank, the plaintiffs- landlords made a strong room and currency-chest and dug tube-well on the belief that the bank would enhance the rate as claimed by the plaintiffs. (d) The Bank did not take any tangible step for renewal of lease as well as payment of arrears of rent with retrospective effect at the rate of Rs. 2/- a sq. ft. from 1st July, 1989 till 5th July, 1993 when the defendant No. 2 informed that the Regional Building Committee accepted and agreed to pay at the rate of Rs. 2/- a sq. ft. from 1st july, 1989 and the enhancement of rent for the optional period for five years at the rate of 45% but the defendant-Bank neither paid the arrears agreed upon by the parties nor did take any steps for renewal of lease. (e) Ultimately, on demand of the learned Advocate on behalf of the plaintiffs in writing, the defendants replied the said letter through the learned Advocate wherein the defendants denied the claim and made some allegations, which were against the acceptance of the Regional Building Committee's recommendation. (f) The claim of arrears from 1st July, 1989 till November, 1994 in terms of recommendation of the Regional Building Committee of defendants came to Rs. 9,46,892. 50p. and the defendants also were legally liable to pay interest at the rate of 12 percent per annum. The cause of action arose on the expiry of 15 days from the notice dated 21st October, 1994 and the refusal to pay 3. THE suit was contested by the defendants by filing written statement thereby denying the material allegations made in the plaint and the defence taken by the Bank may be summarised thus. 4. THE proposal for enhancement of rent was under the consideration of the higher authority and there was no commitment of Bank as claimed by the plaintiffs. Further, the defendants had been forced to shift to better premises, as the plaintiffs could not provide further space for proper banking business. There was no scope of enhancement of rent with retrospective effect. THE proposal for enhancement of rent was under the consideration of the higher authority and there was no commitment of Bank as claimed by the plaintiffs. Further, the defendants had been forced to shift to better premises, as the plaintiffs could not provide further space for proper banking business. There was no scope of enhancement of rent with retrospective effect. The proposal for enhancement of rent was under active consideration of the higher authority of the Bank and they were sincerely trying to look into the difficulties of the plaintiffs and the final decision on the above fact would be communicated to the plaintiffs. However, the plaintiffs could not wait for such time and had filed the suit for a speculative manner. At the time of hearing, the plaintiff No. 1 gave evidence in support of the claim while the Manager of the defendant-Bank deposed in opposing the claim. Various documents were produced by the plaintiffs, which were marked Ext.-1 to Ext.-20. 5. THE learned Trial Judge on consideration of the materials on record came to the conclusion that in view of Exbt.-20, the recommendation of the regional Building Committee, plaintiffs were entitled to get the enhanced rate of rent subject to the renewal of the earlier lease and accordingly, decreed the suit in part, as indicated earlier. 6. BEING dissatisfied, the defendant-Bank has come up with the present first appeal. Mr. Mondal, the learned Advocate appearing on behalf of the appellants submitted before us that the learned Trial Judge, in spite of specific finding that there was no concluded agreement between the parties, erred in law in relying upon Exbt.-20 which was the recommendation of the Regional building Committee of the Bank given to the Zonal Manager by treating the same as if the Zonal Office accepted the recommendation. Mr. Mondal contends that it would appear from the Exbt.-15 that such resolution was sent to the Zonal Office for approval and such fact was also communicated to the plaintiffs as would appear from the Exbt.-15 itself, which was filed by the plaintiffs themselves. According to Mr. Mondal, so long there is no concluded contract between the parties, the plaintiffs are not entitled to get the enhanced rate of rent and must be satisfied with the old rate of rent. He, therefore, prays for setting aside the judgment and decree passed by the learned Trial Judge. 7. MR. According to Mr. Mondal, so long there is no concluded contract between the parties, the plaintiffs are not entitled to get the enhanced rate of rent and must be satisfied with the old rate of rent. He, therefore, prays for setting aside the judgment and decree passed by the learned Trial Judge. 7. MR. De, the learned Advocate appearing on behalf of the plaintiffs-respondents, has, on the other hand, opposed the aforesaid contention of Mr. Mondal and has contended that it would appear from the Exbt.-20 that the regional Building Committee of the appellants recommended the proposal of enhancement and there was no wrong on the part of the learned Trial Judge in relying upon such evidence. Mr. De contends that even the learned Advocate for the defendant-Bank at the time of hearing before the Trial Court agreed to pay the enhanced rate of rent as would appear from the statement recorded by the learned Trial Judge and as such, this is a case where decree should be passed on the basis of admission. 8. AFTER hearing the learned Counsel for the parties and after going through the materials on record we find that the tenancy was created by virtue of an unregistered deed of lease in the year 1978. In the said deed, there was a specific clause of renewal and the total period after such renewal was found to be 11 years. However, there was no stipulation for increase of rent during the subsistence of tenancy. The learned Trial Judge came to the conclusion that the tenancy had come to an end and, thus, passed a direction upon the parties to execute a new lease-deed. 9. ALTER going through the materials on record we find that the suit property, as it appears from the schedule given to the plaint, is situated within kharagpur Municipality in Ward No. 13 and at the relevant point of time the rate of rent was Rs. 2,200/- a month and, therefore, the tenancy was governed by the West Bengal Premises Tenancy Act, 1956 ; however, after the coming into operation of the West Bengal Premises Tenancy Act, 1997, the tenancy being for non-residential purpose and the rate of rent being above Rs. 1,500/- situated in the District of Midnapur, the tenancy was no longer within the purview of the West Bengal Premises Tenancy Act, 1997. 1,500/- situated in the District of Midnapur, the tenancy was no longer within the purview of the West Bengal Premises Tenancy Act, 1997. However, at the time of filing of the suit in the year 1994, the tenancy was governed by the west Bengal Premises Tenancy Act and when the decree was passed by the learned Trial Judge in the year 1999, the tenancy was no longer guided by the provision of the West Bengal Premises Tenancy Act. Again, with effect from July 10, 2001, by way of amendment of the West Bengal Premises Tenancy act, 1997, the tenancy with the rate of rent up to Rs. 5,000/- a month for non-residential purpose situated in the District of Midnapur has been brought within its purview. 10. ONCE it is held that the tenancy was governed by the West Bengal premises Tenancy Act and the rate of rent was fixed at Rs. 2,200/- a month, there was even no scope of passing a direction for payment of arrears at a higher rate unless the rent is reassessed by the Rent Controller. The position, however, would have been different if any increase of rate of rent was agreed to by the parties and were actually paid. In the case before us, undisputedly the tenancy was continuing at the old rate of Rs. 2,200/- a month and no amount in excess to that rate was ever paid by the tenant. In such view of the matter, there was no scope of passing direction for payment of rent at an enhanced rate with retrospective effect from an earlier date when the parties had not agreed to pay at such rate. 11. AS held by a Division Bench of this Court in the case of Ramington rand v. Rajgheria reported in 87 Cal WN 923, the West Bengal Premises tenancy Act has given exclusive jurisdiction to the Rent Controller in the matter of fixation of fair-rent. Even a Civil Court is not competent to decide such question. 11. AS held by a Division Bench of this Court in the case of Ramington rand v. Rajgheria reported in 87 Cal WN 923, the West Bengal Premises tenancy Act has given exclusive jurisdiction to the Rent Controller in the matter of fixation of fair-rent. Even a Civil Court is not competent to decide such question. The Supreme Court has gone to the extent that such a duty to assess fair-rent or increase of fair-rent vested with a Controller or a Court, as the case may be, under different Rent Control legislations cannot be discharged by those authority simply on the basis of consent of the parties but must be adjudicated by the authority invested with such duty to assess by application of its mind on the basis of materials; otherwise, the decision on the question of assessment of fair-rent would he a nullity (See : Prithivi Chand v. Shinde reported in AIR 1993 SC 1929 and Dev Karan v. Monoharlal reported in AIR 1994 SC 2747 ). Moreover, once an application for fixation of fair-rent is disposed of by increasing the existing rent, according to the provisions contained in the West Bengal Premises Tenancy Act, such increase will take effect from the month next to the filing of the application for fixation of fair-rent and not from a date anterior to it. In this case, the plaintiffs want increase of rent from 1989, which is not at all permissible under the law when no application has yet been filed before the appropriate forum. 12. FROM our aforesaid discussions, it is clear that the Legislature has not permitted either the landlord or the tenant to fix fair-rent, of a premises or mode of increase of the fair-rent according to their own agreement unless agreed to and at the same time, accepted by both the parties. Even if, there was such agreement prior to commencement of tenancy, the tenant or the landlord is not bound by such agreement and if any of them is not agreeable to enhance the existing rent or wants to fix the fair-rent, only remedy available to the aggrieved party is to approach before the Rent Controller. Even if, there was such agreement prior to commencement of tenancy, the tenant or the landlord is not bound by such agreement and if any of them is not agreeable to enhance the existing rent or wants to fix the fair-rent, only remedy available to the aggrieved party is to approach before the Rent Controller. Even according to Section 4 (3) of the West Bengal Premises Tenancy Act, 1956, any amount in excess of the fair-rent is not recoverable by the landlord and such provision has been maintained in Section 13 of the new Act of 1997. We find substance in the contention of Mr. Mondal, the learned advocate appearing on behalf of the appellants, that merely because the regional Building Committee of the Bank recommended enhancement of rent, such decision not having been finally accepted by the higher authority and his client not having communicated its decision to increase the rate of rent, so long such enhanced rate is not accepted by the higher authority, the learned court below erred in law in passing a decree 'arrears at the enhanced rate' 13. EVEN if the tenancy came within the purview of the Transfer of property Act during the pendency of the suit till the disposal of the suit, the moment it was found that the lease-deed was unregistered one, the tenancy should be governed as a monthly tenancy terminable by giving a notice under section 106 of the Transfer of Property Act; but so long the tenant has not agreed to enhance the rent by communicating its decision, the landlord cannot, demand arrears at an enhanced rate. If the plaintiffs were not satisfied with the existing rate of rent, they were free to terminate the tenancy so long the tenancy was governed by the Transfer of Property Act; on the other hand, in this case, there was even no scope of filing a suit for eviction as the plaintiffs had all along accepted the agreed amount of rent and no suit for eviction had been filed in accordance with law. 14. WE, thus, find that the learned Trial Judge erred in law in passing a decree for payment of arrears of rent at the enhanced rate. 14. WE, thus, find that the learned Trial Judge erred in law in passing a decree for payment of arrears of rent at the enhanced rate. We accordingly set aside the judgment and decree passed by the learned Trial Judge and hold that at present the tenancy being governed by the West Bengal Premises tenancy Act, 1997 with effect from July 10, 2001, the plaintiff-respondent has now no other option but to apply before the Rent Controller for enhancement of rent if they are of the view that the existing rate of rent is insufficient unless the tenant consents to enhancement and pays at such enhanced rate. The appeal, thus, is allowed. The judgement and decree passed by the learned Trial Judge are set aside. In the facts and circumstances, there will be, however, no order as to costs. 15. IN view of our aforesaid order, the cross-objection being C. O. T. 1480 of 2007 filed by the plaintiff claiming interest fails and the same is dismissed accordingly without any order as to coats.